Payment integrity emerging as a top cost reduction opportunity for health plans

As cost reduction continues to take center stage, healthcare payment integrity is in the spotlight. Increasingly, health plan executives are recognizing the power of payment integrity functions to add significant value to a health plan’s bottom line by improving the plan’s ability to recover or avoid improper claims payments and improve accuracy of premium revenue.

But, payment integrity is not always an easy landscape to navigate. Discovery Health Partners has had hundreds of conversations with health plans of every size and membership type across the country and a common theme that emerges is that while improving payment integrity is a priority, it is often one that is difficult to understand, manage, and achieve.

Over the last few months, Discovery has made a dedicated effort to understand what trends are shaping that complex payment integrity landscape. Our team of payment integrity professionals is experienced in not only identifying these trends, but also in understanding how they will impact health plans and shape financial performance and the member experience.

In a series of upcoming blog posts, Discovery will be exploring each of 2017’s payment integrity trends including:

  • Amplified focus on prepayment cost avoidance
  • Continued need for postpayment recovery
  • Heightened visibility around the importance of payment integrity with plan executives
  • Uncertainty about payment integrity performance by internal and vendor teams
  • Increased market consolidation and the impact on vendor selection
  • Growing interest in outsourcing the entire payment integrity function to a single vendor
  • Prioritization of business process outsourcing above software solutions

We also recently partnered with RISE to host a webinar on these trends. RISE, the Resource Initiative and Society for Education, is dedicated to ongoing outreach and education for health plans and providers. RISE offers complimentary webinars, white papers, a newsletter, peer user groups, and ongoing updates for plans and providers seeking the cutting-edge of healthcare information.

The webinar, now available on demand, features Discovery President, Paul Vosters, and VP of Strategic Development, David Grice, discussing each of our trends and answering the following questions:

  • Why should your plan increase the focus on payment integrity results?
  • How can your plan be on the cutting edge of these trends?
  • How can your plan mitigate some of the risks these trends present?
  • How is the latest healthcare payer technology changing the way plans approach data and security?
  • How should your vendors support you as you navigate the payment integrity landscape?

Check back often as we post more information about each of these trends. You can also download our 2017 Payment Integrity Trends white paper to read more.

Paul VostersPayment integrity emerging as a top cost reduction opportunity for health plans
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A second look at underpaid CMS premiums could restore millions

 

Premium loss due to Medicare Secondary Payer (MSP) has more impact on the financial bottom line of a Medicare Advantage (MA) plan than many people realize. Though MA plans are on the task – attempting to find and correct errors in member eligibility and CMS premium payments – most are still missing millions of dollars due to hidden challenges in the process.

For this reason, any plan could benefit from a supplemental “lookback” at their MSP files to ensure all the bases have been covered and premium revenue has been maximized. This simply means looking back through the plan’s MSP, MMR, and member eligibility files to look for cues that the MA plan is owed additional premium reimbursement for certain members, either because of inaccurate eligibility information or because of a process issue that was unable to correct eligibility information and restore the premium.

Why supplemental MSP Validation is necessary

The reasons that these cues may have been missed in a first pass are varied and often include:

  • Incomplete data aggregation from the plan’s IT department
  • Section 111 reporting inaccuracies by commercial plans
  • Inability to completely or accurately validate a member’s other insurance
  • Acceptance of ECRS Web denials that should actually result in premium reimbursements

Some of the most common reasons plans are unable to identify or restore underpaid premium are out of the control of the department that is managing MSP validation. Would you even know if your IT department is sending you incomplete data? What if you can’t get another insurer to validate eligibility information for a member? If CMS denies a seemingly legitimate eligibility update, do you know how to overturn that?

How supplemental MSP Validation works

Typically, when a MA plan does a “lookback” across its full MSP file, it can expect to see a spike in premium restorations over an initial validation period of about 4 to 6 months, often bringing in millions of dollars in additional premium revenue.  Restorations will then taper off as the plan maintains a best practices MSP program.

Discovery Health Partners provides a supplemental MSP Validation solution that complements MA plans’ internal efforts by doing this lookback for them.  Again and again, we find that even though most of these plans are working diligently to identify eligibility issues and premium reductions due to MSP, every one of them had been underpaid more than they realized.

In fact, in the last three years, we have recovered $150 million in additional premium restoration opportunities across all of our MA clients. These include plans of all sizes and maturity levels:

  • 100,000-member New York area health plan – $24 million
  • 30,000-member Midwestern health plan – $16 million
  • 20,000-member regional plan – $2.1 million

The amount of potential restoration opportunity for a MA plan is a function of five parameters. The variability of these parameters among our clients has resulted in a premium recoupment range of $11 premium per MA member on the low end to $419 premium per MA member on the high end.

  • The number of identified indications of other insurance on file with CMS for the plan’s MA members
  • The percentage of inaccurate records successfully validated
  • The number of months of actual restoration opportunity there is for each incorrect record
  • Average monthly restoration amount
  • CMS acceptance rate of corrections submitted

Check out our newest infographic, which highlights the impressive results MA plans of all sizes have had with a supplemental MSP validation solution that complements their ongoing internal efforts.  You’ll see why using an outside firm to help with this lookback can yield additional premium recoupment at no risk to your plan.

Paul VostersA second look at underpaid CMS premiums could restore millions
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Delivering quality service to health plans without the babysitting

 

Maintaining a high level of customer service and solution quality is challenging in any industry. And because our customers are in the highly-regulated market of healthcare and health insurance products, the services and outcomes we provide are under almost as much scrutiny as the plans we serve. And when you consider that many of our health plan clients are managing their own large teams of people and multiple vendors, it is increasingly important for vendors like us to deliver results quickly without a lot of babysitting. So how can a client be assured they are going to get the quality results they expect without holding their vendor’s hand the entire way through the project? Look for a vendor that has made attention to these several areas a priority:

Project management rigor

Does the vendor have a project management organization (PMO) that defines and maintains standards for project management within the organization? Even the most straight-forward implementations have many moving parts: staff to coordinate, multiple data files to integrate, and processes to align. The vendor’s PMO can manage these efforts with the goal of increasing efficiency, minimizing costs, and improving overall project delivery time and budget.

Quality management oversight

Having a quality management team involved in the oversight of projects and project quality can drive consistency of and accountability for best practices and validity of the payment integrity work as a whole.  Quality oversight applies to multiple facets of payment integrity, including process rigor, call center outreach, letter generation, and data quality to drive the right level of analytics. A model I recommend is having the quality management team led by General Counsel and/or a Chief Privacy Officer and reporting results to the executive team, board of directors, and clients.  This group should work closely with all departments to make sure quality delivery and client satisfaction are the foundation of every endeavor.

Account management bench strength

Making sure vendors have an account management group in addition to a project manager or sales contact can help ensure projects run smoothly, on time, and that client concerns are addressed effectively with the client’s best interests at heart. This single point of contact should manage all aspects of the client relationship, from implementation through execution and reporting. This includes tailoring projects to meet specific needs and acknowledges that each project and client for that vendor is unique and requires individual attention. Ideally, this team would be empowered to bring in the right subject matter experts to manage the client’s more complex  or individualized needs.

Employees: recruiting and benefits

Bringing on new clients and implementing ongoing solutions for existing clients creates constant demand to grow vendor staff. Making sure that your vendor has a system in place to properly manage and grow the recruiting team should be a priority as it can directly impact their ability to staff and execute client projects. Knowing the vendor has senior-level recruiters in place to implement creative and effective solutions to balance client needs with staff will provide clients with better service and long-term flexibility to support project peaks and staff unique project needs.

Technology power for a strong foundation

To service customers in a data-sensitive industry such as healthcare, security and HIPAA-compliance are critical. Attention to detail and procedure is crucial and the vendor’s technology should reflect an emphasis on security.  Vendor’s technology platforms should be able to provide the most secure results for customers while being able to quickly and cost-effectively scale and support client demands without compromising client expectations. HITRUST CSF is a risk- and compliance-based security framework widely adopted by the healthcare industry as the best practice framework of prescriptive and scalable security controls. I recommend asking your vendor if they are HITRUST certified, which will give you an added level of confidence in the vendor’s strength.

Thrilling clients with great results and outstanding service should always be a priority, but often vendors fall short when they don’t have the internal systems and process in place that make customer needs and outcomes a priority.  By focusing on critical client project priorities such as project management and quality, deep bench strength in account management, careful recruiting practices, and technology foundation, vendors are able to grow and scale seamlessly with their clients and meet and exceed client expectations and outcomes.

 

 

 

Paul VostersDelivering quality service to health plans without the babysitting
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Transforming payment integrity with transparency

As the healthcare industry continues to transform, it has become clear that the need for increased transparency is one of the critical drivers of change. Health plans are being asked to share more information with a broad range of stakeholders in an effort to control costs and drive improvements in efficiency. In the context of payment integrity, increased transparency will enable health plans to enhance processes, increase performance, and transition from recoveries to pre-payment cost avoidance.

Payment integrity has traditionally lagged behind other areas of health plan operations because of the complex mix of internal teams and vendors supporting payment integrity initiatives. With no single owner of these programs, it is difficult to identify common data standards and metrics. This situation leads to a fragmented and inconsistent reporting environment, which limits visibility into program delivery and performance across the organization.

Discovery Health Partners not only embraces this trend toward transparency, we’re developing solutions that lead it.  We view transparency as a cornerstone of our solutions and a central component of both our product strategy and client delivery. We are committed to providing our clients with tools to analyze, evaluate, and manage the delivery of their payment integrity solutions. The key to our strategy is the Discovery Dashboard, a powerful reporting and analysis solution that puts meaningful information at our clients’ fingertips.

We believe the right dashboard solution will give health plans transparency and visibility into their complex payment integrity ecosystem via an integrated web-based solution. It must be able to:

  • Rapidly incorporate data from third-party vendors or internal systems
  • Utilize terminology and data elements that are consistent across solutions
  • Apply the clients’ own language and business structure

A dashboard should also give business users the ability to define their own information perspective and organize data by business unit, funding source, division, or region.

Of course, the best solution will complement technology with deep experience and expertise in payment integrity – taking payment integrity data, reporting, best practices, and metrics, and incorporating them into reporting templates.

To build the Discovery Dashboard, we have worked closely with our clients to identify what is important to them and their organizations. The Dashboard includes a suite of pre-defined standard reports for each solution area, as well as a report-writing tool for generating custom reporting. With our Dashboard, the previously opaque process of payment integrity solution delivery is now visible in detail. Business users are able to evaluate the performance of their payment integrity initiatives, monitor trends, identify outliers and root causes, and take corrective action. Users can also easily drill down from high-level performance analysis to examine case-level detail. Most importantly, health plans have the power to evaluate all of their payment integrity initiatives and drive real improvements in performance.

 

Paul VostersTransforming payment integrity with transparency
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Could MSP validation solutions boost year-end financial results for Medicare Advantage plans?

As Q4 begins (could it be true?), my colleagues and I are busy preparing our 2016 wish lists and calculating the budgets to support them.  As an executive team, we’ll spend the next several weeks taking a hard look at our results for the year so far and make some tough decisions about our financial plan for the next year.

I bet your plan’s executives are in the same boat. They’re reviewing the year behind and planning for the year ahead. Where is the plan succeeding? Where is it falling short? Which new initiatives will make into the next year’s budget? Which will have to wait?

As the year comes to an end, what can your plan do to boost results for the current year or get a head start financially for 2016? Consider taking a look at Medicare Secondary Payer (MSP). CMS premiums have a direct impact on your bottom line and there’s a good chance that you’re not receiving the full premiums you’re owed. In fact, you may be getting shorted by millions of dollars in premiums due to MSP. And even if your plan is already validating open MSP records to ensure correct primacy, you still may not be seeing all the opportunities to restore premium revenue.

My team at Discovery Health Partners worked with 16 Medicare Advantage plans over the last two years to restore $86 million in underpaid premiums. Many of these plans already had teams on the ground validating other insurance and attempting to correct erroneous CMS eligibility information in hopes of receiving premium adjustments. Roadblocks standing in the way of their success range from lack of focused resources and insufficient follow-up to a limited view of open MSP records (hint: you should be looking at ALL open records).

Within a matter of only a few months, we were able to help these plans restore millions of dollars to their bottom lines. This includes $20 million for a 96,000-member MA plan and $32 million for a 550,000-member MA plan. Even a 38,000-member MA plan was able to restore $13.4 million. What would an additional $10 million or $20 million mean to your plan’s financial performance?

By our calculations, Medicare Advantage plans as a whole are missing $2 billion in premium revenue. As MA membership quadruples over the next seven years, the problem (or shall I say opportunity?) will only increase.

If you’d like to learn more about how MSP validation may be able to provide that financial uptick you need at the end of the year, please reach out to me at my email address below. I’d welcome the opportunity to talk about our proven best practices and our low-risk contingency-based MSP solution.

 

 

 

Paul VostersCould MSP validation solutions boost year-end financial results for Medicare Advantage plans?
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Could MSP validation solutions boost year-end financial results for Medicare Advantage plans?

As Q4 begins (could it be true?), my colleagues and I are busy preparing our 2016 wish lists and calculating the budgets to support them.  As an executive team, we’ll spend the next several weeks taking a hard look at our results for the year so far and make some tough decisions about our financial plan for the next year.

I bet your plan’s executives are in the same boat. They’re reviewing the year behind and planning for the year ahead. Where is the plan succeeding? Where is it falling short? Which new initiatives will make into the next year’s budget? Which will have to wait?

As the year comes to an end, what can your plan do to boost results for the current year or get a head start financially for 2016? Consider taking a look at Medicare Secondary Payer (MSP). CMS premiums have a direct impact on your bottom line and there’s a good chance that you’re not receiving the full premiums you’re owed. In fact, you may be getting shorted by millions of dollars in premiums due to MSP. And even if your plan is already validating open MSP records to ensure correct primacy, you still may not be seeing all the opportunities to restore premium revenue.

My team at Discovery Health Partners worked with 16 Medicare Advantage plans over the last two years to restore $86 million in underpaid premiums. Many of these plans already had teams on the ground validating other insurance and attempting to correct erroneous CMS eligibility information in hopes of receiving premium adjustments. Roadblocks standing in the way of their success range from lack of focused resources and insufficient follow-up to a limited view of open MSP records (hint: you should be looking at ALL open records).

Within a matter of only a few months, we were able to help these plans restore millions of dollars to their bottom lines. This includes $20 million for a 96,000-member MA plan and $32 million for a 550,000-member MA plan. Even a 38,000-member MA plan was able to restore $13.4 million. What would an additional $10 million or $20 million mean to your plan’s financial performance?

By our calculations, Medicare Advantage plans as a whole are missing $2 billion in premium revenue. As MA membership quadruples over the next seven years, the problem (or shall I say opportunity?) will only increase.

If you’d like to learn more about how MSP validation may be able to provide that financial uptick you need at the end of the year, please reach out to me at my email address below. I’d welcome the opportunity to talk about our proven best practices and our low-risk contingency-based MSP solution.

 

 

 

Paul VostersCould MSP validation solutions boost year-end financial results for Medicare Advantage plans?
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Eligibility data management: Fixing payment integrity at the source

With all of the demands on your team, your time, and your resources, eligibility data management may not be your first priority. After all, you have to focus on maximizing recoveries and avoiding costs. Which is exactly why you should consider evaluating your current eligibility data management structure and processes. In our experience with over 15 health plans, eligibility data issues are the root cause of between 20% and 30% of payment integrity costs.

Claim recovery

Accurately determining which claims have been paid incorrectly due to eligibility data errors for your plan can streamline your recovery efforts to ensure maximum efficiency and results. We estimate that 20% of a plan’s membership will have other insurance and of that 20%, the other insurance will be primary 17.5% of the time. For a 200,000 member plan, this represents nearly $5.4 million in incorrectly paid claims. We believe with the right solutions and expertise, health plans can expect to recover a significant portion of those claims.

Cost avoidance

Of course, if your eligibility data is accurate and trusted, your plan won’t have to worry about recovering dollars from incorrectly paid claims. You will be able to avoid paying them altogether by paying claims correctly the first time. For that same 200,000 member plan, our experience indicates the savings by avoiding those incorrect payments through the use of accurate and trusted eligibility data is over $13.4 million.

Administrative efficiency

In addition to the recoveries and restorations that go directly to your bottom line, you should also consider the time and expense associated with rebilling or recovering inaccurate claims payments. Identifying, processing, recovering, and rebilling incorrectly paid claims has a significant cost in terms of time, money, and personnel. By eliminating the need to rebill, you save valuable time and energy that can be channeled toward other payment integrity initiatives.

Member satisfaction

In the increasingly competitive consumer driven health insurance marketplace, health plans are focusing on member satisfaction as a strategic priority, and accurate eligibility information is a critical component. Claims that are declined due to inaccurate or out-of-date eligibility data can lead to member abrasion, lost market share, and reduction in STAR ratings.  Eligibility data impacts more areas of a health plan than any other data set.  Eligibility data drives a diverse number of systems and processes include signup, enrollment, care provision, wellness, customer care, and even termination. All of these areas influence your member’s experience with your plan.

Provider relations

Claims denied due to eligibility issues can lead to provider abrasion, increased costs for rebilling, and can damage network affiliations. Provider operations and, more importantly, their revenue cycle management, are largely dependent on accurate eligibility data. Reductions in administrative expense and increases in financial accuracy are passed on to providers, and can deliver substantial benefits through improved provider relations while reducing any potential negative impacts between members and providers .

The Discovery Health Partners team has seen first-hand how creating a single, trusted source of accurate eligibility data has helped health plans improve in each of the above areas and has additional benefits across your health plan and the entire healthcare ecosystem. By leveraging multiple data sources and employing predictive data mining and analytics, we are able to verify and update eligibility status and make it available to claims adjudication systems and other downstream applications. To learn more about our solution and how it could impact your bottom line, visit our Eligibility Management resource page.

 

Paul VostersEligibility data management: Fixing payment integrity at the source
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The right eligibility data management solution

Last month, we identified how eligibility data errors may be undermining your health plan’s payment integrity efforts. Certainly there are many factors to consider when correcting erroneous eligibility data, but the bottom line is this: in order to maximize payment integrity outcomes, health plans need a single, accurate, trusted source of eligibility data.

It sounds simple enough, but, like many health plans, you may be left wondering how to begin addressing this issue.  Although you may already have a team of talented, hard-working individuals, navigating the complex world of eligibility data can be much easier with an experienced partner and a proven service solution.

Let’s take a look at some of the critical components an eligibility data management service solution must have to help maximize recoveries and drive ongoing cost avoidance.

Comprehensive data mining

Accurate eligibility determinations require the seamless integration of data from multiple resources, along with powerful data mining capabilities to identify potential issues. This means your vendor will help you proactively identify more instances of other coverage by utilizing every available, relevant data resource.

  • Examine your health plan’s commercial coverage claims and eligibility information
  • Validate leads, determine primacy, and update eligibility for all other data sources including data-match vendors, Section 111 reporting, MSP files, and provider bills

A proven process

The right solution leverages a proven process to identify potential cases, investigate the appropriate data sources, and correctly apply the NAIC rules to determine primacy. The process should be built on transparency between you and your vendor so that you have insight into each step and a clear understanding of the expected and actual results.

Superior analytics

The right solution relies heavily on advanced analytics to determine primacy and make eligibility decisions. However, the analytics engine needs to be flexible enough to accommodate your plan’s specific data sets and needs. Your vendor should work with you to understand your current data, identify the largest opportunities, and create a strategy and approach that address your plan’s specific priorities.

Transparent reporting

The right solution isn’t a black box. You and your team should have full visibility into your vendor’s performance. A standard report package should include eligibility update and inventory reports that allow you to see progress on a weekly and monthly basis. But, you should also have the ability to customize report content and frequency to meet your plan’s specific needs.

Dedicated partnership

The right solution isn’t from a vendor at all, it’s from a partner. Align your plan with a partner that is dedicated to improving your busi­ness processes and your bottom line. Their team should complement yours in their knowledge, approach, and experience. And their results should be proven, referenceable, and demonstrable.

Addressing eligibility data management can seem like an overwhelming or impossible task among all of your other competing priorities. However, fixing these data errors can eliminate downstream impacts to your payment integrity programs that are likely costing your plan millions of dollars. Next month, we’ll show you just how big those impacts can be in our blog post that will highlight the results of implementing a service solution like the one we’ve described above.

 

For more information…

Would you like to learn more about Discovery’s payment integrity solutions and how they can help you improve recoveries and premium restoration? Just complete the quick survey below for more information and custom demos.

 

 

Paul VostersThe right eligibility data management solution
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The eligibility impact: How and why eligibility data issues affect payment integrity

Over the last two months, we’ve examined how organizational and technology structures can keep health plans from recognizing, understanding, and resolving their payment integrity challenges. This month, we want to spend a little time examining one thing that can be at the root cause of some of those challenges: eligibility.

Eligibility issues impact a multitude of payment integrity areas, including Coordination of Benefits and Medicare Secondary Payer validation, and, to a lesser extent, Workers’ Compensation, Other-Party Liability, and Subrogation. In fact, Discovery Health Partners’ research indicates that approximately 30% of payment integrity costs are driven by eligibility errors. In addition to the financial cost of payment integrity errors, eligibility issues can also have a direct effect on member satisfaction. Claims that are declined due to inaccurate or out-of-date eligibility data can lead to member abrasion and lost market share.

At their core, these issues all stem from the fact that health plans lack a single, definitive resource for making eligibility status determinations prior to paying a claim. This creates tremendous downstream issues as health plans make business decisions and pay claims based on flawed data.

The complex structure of health plans means that member eligibility is updated at multiple points in the claims payment process and is managed by multiple departments across the organization. As a result, it’s often inconsistent, outdated, or inaccurate, and leads to improper claims payments. Until plans are able to establish a single source of the truth for eligibility, these inaccuracies can cost plans millions of dollars. Let’s examine a few of these challenges more closely:

Multiple data sources

The sheer number of data sources feeding the master eligibility file has a significant impact on accuracy. Information comes from the members, providers, CMS, data-match vendors, and other data sources. These feeds are all subject to their own timelines, standards, and information challenges. In addition, these external feeds to eligibility status have a high rate of change, creating a complex hierarchy of overlapping status updates. Plans are challenged to manage these work processes and make a clear determination of primacy and eligibility that can support all of the transactions that rely on this data.

Organizational challenges

The eligibility challenge isn’t just technical, it is also frequently organizational. Eligibility is commonly managed by line of business, meaning that status updates made by one group are not necessarily shared across the organization. For example, changes in a member’s eligibility status might not be effectively communicated between the commercial and government lines of business as the member moves from commercial to Medicare Advantage coverage. With no clear owner of the member eligibility status, managing the data across departments adds an additional level of complexity.

Existing solutions

In addition to being spread out across different departments, responsibility for managing eligibility status is shared by several administrative systems. Plans often make the mistake of addressing eligibility in a single point solution, rather than taking an enterprise view of member eligibility management. Claims and enrollment systems often fail to address eligibility on a consistent transactional basis, and frequently capture crucial updates in notes or text format. Eligibility data is rarely shared between systems, and because there is no single data master, the priority of status changes is unclear.

Looking to the future…

Health plans have the opportunity to dramatically improve their payment integrity performance and member retention by managing member eligibility as a business asset. The ideal solution will provide a complete and integrated picture of eligibility status across membership types and lines of business, while providing validated data for downstream applications. Doing so will require a shift in culture, as well as new technologies. Nonetheless, there are strategies that let you achieve progress in a staged progression, which we will explore in future posts. Managing eligibility data as a strategic asset is worth the effort, as it will result in millions of dollars in recoveries and cost avoidance.

 

 

For more information…

Would you like to learn more about Discovery’s payment integrity solutions and how they can help you improve recoveries and premium restoration? Just complete the quick survey below for more information and custom demos.

 

 

Paul VostersThe eligibility impact: How and why eligibility data issues affect payment integrity
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