Payers recover overpayments 50% faster with enterprise technology: study

Enterprise payment integrity technology creates efficiencies that improve claims overpayment identifications and recoveries year-over-year, according to an internal study conducted by ClarisHealth business insights analysts. The study shows that payers that use integrated advanced technology recover overpayments 50% faster, increase recoveries 31%, and increase identifications 21% after the first year of platform adoption.

The findings surpassed the anticipated efficiencies and increases that were projected for early performance and demonstrate the ability of enabling technology to rapidly improve healthcare payment accuracy.

The study looked at key performance insights across payers who had used the company’s proprietary technology platform Pareo® for several years, comparing year-one to year-two performance. These impacts translate to tens of millions in increased recoveries alone. A significant improvement in an industry that has struggled to quickly and meaningfully address healthcare claims payment accuracy.

The Scope of the Healthcare Overpayments Challenge

The U.S. has normalized a healthcare system known for waste. The seminal 2019 JAMA report pegs the estimated annual cost at $760 billion to $935 billion, or 25% of total healthcare spending. At the same time, the projected potential savings specific to claims payment integrity are at least $80 billion.

Healthcare represents around 20% of GDP, with more than half flowing through payers. With rising healthcare costs one of the leading contributors to inflation, the time is now to make a change. Change that signals the ability of enterprise technology to introduce transparency into opaque and complex processes – both within and outside of the enterprise. Payers that take advantage of these new technologies have the opportunity to reposition themselves at the center of the healthcare landscape.

How Payers Approach the Shifting Role of Payment Integrity

Payers understand the scope of the challenge as well as the potential positive impacts of addressing those. But significant barriers to growth and progress still exist.

A 2020 industry report noted that "complex legacy systems and issues with data, governance and culture” could pose challenges to innovation taking hold among health insurers. An informal survey of payment integrity leaders conducted by ClarisHealth in September surfaced several interesting insights that corroborate those findings:

  • More than half of participating leaders (56%) describe their payment integrity organizations’ current maturity level as “developing” or “limited”.
  • The majority (83%) cited access to staffing, analytics or process management technology as their top challenges to maturing their approach.

In payer organizations where payment integrity is still an emerging and developing domain, excessive provider abrasion and less-than-optimal medical savings are the norm. But within this environment of resource constraints and mandates to address healthcare waste, there exists tremendous upside for solutions with proven results. Especially ones that meet payers at various stages of maturity and according to individualized strategies.

Integrated Payment Integrity Technology Proves Its Value to Payers

The key performance indicators revealed in ClarisHealth's impact study hold steady across health plans regardless of size and programming. The payers included represent different aspects of payment integrity program maturity including those that were building from scratch, replacing platforms, expanding internal capabilities, centralizing processes, and adding more service vendors.

Analysts connected the unique ability of enterprise payment integrity technology to integrate data, digitize processes, scale content management, and automate recovery processes to the increased efficiencies and savings experienced by the payers. Analysts were surprised by the level of growth experienced in the timeframe.

“It was exciting to see such an improvement in a relatively short amount of time,” says Alexandra Bowling, Business Insights Analyst at ClarisHealth. “This is just the beginning of diagnostics to help us better understand optimal payment integrity programming.”

This study marks the first time ClarisHealth has undertaken research of this nature. According to ClarisHealth CTO Jim Weathersby, these metrics are the reflection of a core assumption around enabling technology.

“We believe that integrated technology is the key to empowering payers as payment accuracy elevates in strategic significance across the enterprise,” says Weathersby. “These metrics not only prove the effectiveness of the model, they also highlight the scale of the impact that can be made by addressing healthcare payment inaccuracy.”

And it just makes good business sense. Research suggests that “companies that can think in terms of systems, as opposed to point-solutions, stand to outpace others in terms of both revenue and margin growth.” Those that don’t change stand to lose as much as 46% of annual revenue in the coming years.

Making the Case for Transforming Payment Accuracy

End-to-end payment integrity technology puts all the data that powers the program into one place. As a result, payers can track real-time KPIs and other targeted business metrics to aid in strategic decision making and engage key stakeholders. The goal, according to ClarisHealth CEO Jeff McNeese, is transforming payment accuracy entirely.

“Payment accuracy is about more than recovering overpayments,” says McNeese. “That traditional approach loses $0.30 on every dollar recovered and creates perverse incentives to not make inroads on the collective goal. Which is a broader strategic relationship between payers and providers to ensure claims are paid accurately in the first place.”  

ClarisHealth’s mission to transform engagement and transparency in healthcare begins with the belief that payers should have greater control over payment integrity operations. This initial study marks a milestone in proving out this belief, by demonstrating how operational efficiency and visibility can quickly improve payment accuracy programming.

The editorial staff had no role in this post's creation.