The bad news: the bad guys are getting smarter. The good news: so are we.

It can be the small, unintentional errors that expose valuable health data to data thieves.  Filling out social media quizzes that are actually gathering information about you—like your birth month or high school mascot. Holding your building door open for a delivery person with their hands full. Clicking on an urgent email request from a senior executive.

Small errors can lead to massive data breaches. Here’s how we help keep health data safe.

A company’s security is only as strong as their weakest link.  At Discovery Health Partners, we’ve earned certified status for information security by HITRUST for several of our technologies that drive the use of data across our solutions.

One of the parts of HITRUST compliance is user awareness training—reinforcing the procedures everyone needs to follow to ensure that our employees aren’t going to violate your health plan’s data.

Along with processes, tools and technology, we’ve implemented ongoing employee training:

  • Our employees are trained to understand how to handle data in any type of media—whether it’s in an email, a computer monitor, or a printed document
  • We have specific instructions on how to handle data at any point—including destruction of media
  • We’ve educated our team on the many social engineering tactics hackers use (Tips and tricks featured below)
  • We follow up this training with monitoring and reporting to ensure that these safe practices happen—and we can respond quickly if we discover a glitch
  • We also ensure our third-party providers protect your data with tight security protocols, monitoring, and training

While a company can have the latest cybersecurity technology in place, if someone in our building opens the door to let someone in—or clicks on a link in an email that seems to come from HR, they’ve just bypassed that technology.

So as the bad guys get better and smarter, it’s even more important for us to train our employees to be diligent and aware of the latest tricks.

As a recent report on healthcare data breaches reasonably pointed out—while people are a company’s most valuable asset, from a security point of view, they can also be its weakest link.

Learn more about HITRUST certification here.

Tips and tricks

Data breaches are often the result of social engineering, attempts to trick unsuspecting employees into handing over confidential or sensitive data. Social engineering plays on human nature and emotion to deceive someone into providing access to information or deviating from established security protocols. Here are some examples of social engineering and how you can help avoid falling for these attacks.

TIP Be careful on social media. Based on your social networking, hackers may already have a lot of information about you. They may know your name, where you work, your birthday, what position you hold.

TIP You get an email from HR asking you to click a link for an employee opinion survey. Before you click that link—verify the sender by hovering over the email address.

TIP Have at least three algorithms for your online passwords—one for your banking, one for your personal use and one only for work.

Juliet DeVriesThe bad news: the bad guys are getting smarter. The good news: so are we.
read more

4 ways technology is shaping the future of COB

When we think of the future, we tend to think of things like space travel, the next presidential election, and what we’ll have for dinner later tonight. That’s all very interesting, but what about the future of…healthcare coordination of benefits? Okay, maybe it’s not as exciting as humans living on Mars or Oprah for president, but there are some interesting things happening in COB that are changing the way health plans approach this age-old process. Here are four ways technology is changing how we think about COB.

1. A data-driven approach

What do we mean by a data-driven approach? At the most basic, it means to use all relevant and available data sources to identify members with other insurance who could have recoverable claims. This isn’t necessarily futuristic. Don’t we all use multiple sources for this now – eligibility and claims files, MSP files, CAQH data, State Medicaid files, Section 111 reporting?

For the most part, yes. But HOW are we looking at this data? Is it a team of investigators pouring over Excel spreadsheets and printed files, trying to draw conclusions? Do they waste a lot of time investigating claims that aren’t recoverable? Are they calling members to get the information they need? Do they miss potential opportunities to recover claims?

It’s not just a matter of having the data. What matters as well is the speed with which we’re able to get that data. As an industry, when we think about the future of COB, we need to think about fast, automated data integration across multiple sources. In other words, bringing all that data together into a single database that can be queried to quickly and accurately identify claims that are likely to be another provider’s responsibility (see #2 below).

We need to think about refreshing this data faster so we have the latest information at our fingertips at all times so we can make decisions earlier in the process that would allow us to maximize our recoveries and up-front cost avoidance. And we need to think about emerging data sources that can help improve the accuracy of the member profile. For example, is there an opportunity to mine social data (e.g. Facebbook posts) to learn of qualifying life events?

If you really want to get into the weeds about data integration in the health insurance industry, check out this great blog post by data integration company Veristorm.

2. Analytic focus

Wikipedia defines analytics as the “discovery, interpretation, and communication of meaningful patterns in data.” From a COB perspective, we can apply analytics to the data we have to identify members with the highest probability of having other coverage.

Most in the industry are at least dipping their toes into the analytics pool. Much of it today is “rules-based” analytics. For example, we’ll create a simple business rule that says when a member turns 65, they should be on Medicare. This yields information that tells us to analyze whether those members are on Medicare.

Analytics is where things could get really interesting for COB and despite much hype, the industry is just getting started here. When we apply advanced analytic techniques like predictive analytics, we can quickly look at multiple factors (such as age, demographics, disease categories, and much more) to more closely pinpoint members that may require COB. Taking it a step further, machine learning technologies would automatically determine the most successful indicators (or combination of indicators) of other coverage and automatically update the analytic models to reflect that learning.

Even to me, this all sounds very complicated and daunting. Take it from my colleague Steve Forcash, Discovery’s analytics expert, who recently said, “For most organizations, leveraging analytics to drive improvements in payment integrity is more of an evolution than a revolution. I suggest starting small.” For example, start with your internal claims and eligibility data and see what you can glean from that. Find out what works and build on it from there. There are several benefits to advancing the use of analytics in healthcare COB, including:

  • Reducing the cost of COB (less manual effort, less time investigating false positives)
  • Reducing member abrasion (more accurate identification means less validation work)
  • Increasing cost avoidance (denying claims that are another plan’s responsibility)

3. Case management application

Full disclosure: this point is somewhat self-serving because Discovery has a proprietary case management application that we use to deliver COB solutions for our clients. But I feel so strongly that this current capability is also critical for the future of COB, that I couldn’t leave it out.

Though COB is a seasoned, well-oiled machine for most health plans, it does encompass many steps and individual processes. It also demands a “paper trail” to capture all the information that is discovered throughout those processes. A case management application is the perfect way to guide your team through your specific process, while capturing and sharing critical data along the way.

This single data repository should be used to drive all case-related activity so you have fast access to high-level and detailed case data. Our Discovery Case Manager allows you to see activity history, planned activity (case diary), and notes (about investigations, status, phone calls, etc.). You also can identify and manage rebill activity at the provider and claim level, and store and update employer and other insurance information and payer order.

Having all this detail in one place provides you with the digital paper trail that not only supports your recovery work, but that could also allow you to make future claims payment decisions more quickly and accurately. And this brings us to our final point below.

4. Reporting tools

As COB organizations become more sophisticated about their use of data and analytics, their reporting capabilities will improve. Dashboards and reports can be automatically created based on data in your case management tool and/or analytic tools to provide you with easy-to- see information about your membership, COB opportunities, and results.

Having access to more accurate data, the organization will be able to better identify members with potential other insurance, improve the accuracy of forecasting, and analyze trends. Reporting functionality through dashboards and/or standard reports is critical for understanding how well your COB process is functioning and to identify areas for improvement. Even with limited data and analytic capabilities, you can begin to experiment with reports. Important data to track for COB includes:

  • Case inventory
  • Case pending
  • Case status
  • Recoveries

The bottom line is that, wherever your COB program is in terms of technology maturity, there may be opportunities to step that up and boost the performance of your program even further. Most COB programs struggle with issues such as ongoing eligibility/member status errors, member and provider abrasion, and resource constraints. Technology-enabled COB can help address these and other challenges that may be standing in the way of your best year yet!

Learn about more COB trends in the infographic, Five trends in healthcare Coordination of Benefits.

Janetta Dean4 ways technology is shaping the future of COB
read more

4 integration points to keep in mind with your COB vendor

 

It’s common for health plans to manage their coordination of benefits programs internally while using one or more external vendors to provide supplemental COB as a safety net. These vendors come in after the health plan’s COB process to find any missed recovery opportunities.

When selecting a COB vendor, health plans are most interested in partnering with experts whose solutions deliver considerable incremental recovery opportunities with minimal disruption to their existing operations. In fact, the most common question asked by the health plan is, “How will this supplemental solution be integrated into our existing processes?” They want to know that the supplemental process won’t interfere with or duplicate their own work.

As health plans engage with external vendors for supplemental COB, here are the most common integration points of alignment between supplemental COB and health plan operations.

  1. Vendor and health plan communications—This integration point is the announcement of the partnership between the health plan and the selected COB vendor. The health plan will provide written communication explaining services being provided by the COB vendor to internal departments (e.g., member services, provider inquiry, and claims billing) along with information from the COB vendor such as a FAQ reference sheet.
  2. Insurance investigation and verification—This integration point is the most important for minimizing member abrasion. The COB vendor and health plan partner together to customize member Informational Questionnaires (IQ) mail correspondences sent by the vendor. In most cases, the agreed-upon customizations may include adding the health plan’s logo, plan-specific language, and taglines. The COB vendor also should coordinate their member IQ mailings around any of the health plan’s member mailings to avoid members receiving multiple mailings at one time. In addition, the COB vendor should attempt to verify all other health insurance leads by contacting other health plans by phone or using eligibility verification web portals to validate other health plan coverage, rather than reaching out to the member directly.
  3. COB pursuits—This integration point defines the guidelines by which the COB vendor must abide when providing supplemental COB services to the health plan. The identified guidelines at this point may include items such as COB exclusions (e.g., membership, plan, or group) and claims under internal COB investigation. The more specific the guidelines are, the lower the chance for the vendor and the health plan to duplicate efforts.
  4. COB claim recoveries—This integration point outlines the COB claim recovery process between the COB vendor and the health plan.  The finalized recovery process should include the following: frequency of claim recovery file submissions being sent to the health plan, the health plan claim approval/denial terms, and method(s) by which either the vendor or the health plan recovers COB over payments from the provider.

Before health plans engage with an external vendor to provide additional COB services beyond internal COB efforts, it is important to discuss and document integration points and potential points of conflict within each of these areas.

For more information about COB, please visit our resources page.

 

 

Janetta Dean4 integration points to keep in mind with your COB vendor
read more

Four tips for balancing the effects of Medicare Secondary Payer

Medicare Secondary Payer (MSP) is a multi-pronged issue for Medicare Advantage plans. If plans aren’t monitoring the effects of MSP on medical and pharmacy claims as well as premiums from CMS, they could be hurting their bottom line—to the tune of millions of dollars. MSP also introduces compliance responsibilities that plans must regard or else face possible consequences.

This requires a balancing act to ensure primacy information is correct for members with other insurance and to verify that claims are paid and premiums are collected in accordance with the member’s primacy.  Plans should work to identify inaccurate primacy information and build processes that can help correct these errors so they can ensure accurate payments all around.

Let’s look further at each area.

Premium

It’s important to realize that CMS primacy information is not always correct. Medicare Advantage plans should be reviewing CMS information each month to verify primacy to identify underpaid premiums as well as overpaid premiums.

What’s your motivation to verify premium underpayments? Your bottom line! Underpaid premiums often cost health plans more than they realize, and, in fact, Discovery Health Partners has recovered more than $200 million in underpaid premiums for Medicare Advantage plans. When the MA plan moves from secondary payer to primary payer for a member, the plan can recoup underpaid premiums going back 72 months. This adds up quickly!

On the other hand, CMS mandates that plans repay premium overpayments within 60 days. Obviously, this is required to stay in compliance, so plans need to ensure they are checking for CMS overpayments as well.

As plans work to identify and correct primacy errors, we always advise them to do a root-cause analysis to determine why dollars were taken from the plan and identify the entity that “took” the dollars. For example, was it due to a Section 111 reporting issue? You can see this on a quarterly basis if you have constant flip-floppers (members for whom you already corrected primacy but who show up again later as secondary). This could indicate a problem on the commercial side of your own plan.

Once you identify the owner of the problem, you can work with them to make corrections. And you can prioritize the work by which entity or problem affected the most dollars for your plan.

Claims

The financial impact of incorrectly paid claims due to MSP is not as great as the premium impact, but it’s still a worthy effort to verify claims that can return dollars to your plan. As you know, primacy order determines how claims should be paid.

As you update primacy information based on a monthly review of CMS files, it’s important that MSP and claims specialists work closely together. As primacy order changes, claims specialists can make sure claims get adjusted and reviewed. They also should make sure that claims systems are updated in order to pay claims correctly to providers.

You also can recoup overpaid claims (claims that you paid as primary but should have paid as secondary). Usually, you can go back 12 or 18 months to adjust claims and recoup dollars—it depends on contracts with providers or state regulations—which can add up to millions of dollars. It seems that CMS is paying closer attention to how claims are paid and if they follow the order determined by the plan, so if you haven’t focused on this before, now is a good time to change that.

It’s important to look at the full picture across premiums and claims—if you’re getting a reduced premium and paying claims as primary, then it’s a double hit for your plan. If you can correct both, it’s an even bigger improvement to your bottom line.

Pharmacy

Part D plans have an obligation to verify primacy and ensure that member drug benefits are available to them when they need them. Plans that use a pharmacy benefits management firm (PBM) to manage pharmacy claims should be sure to share primacy updates with them and verify that they actually use that information. The PBM should pay claims based on recent verification on the medical side.

It helps to ask PBMs about their processes and how they use the information you give them. Ask them to map out the process so you can see that payments will be correct based on the information you share. Again, CMS is looking at this to ensure pharmacy claims are paid accurately.

Tips and tricks

If you’re uncertain about the performance of your MSP process, keep these tips in mind:

  1. Make it an ongoing process. Member primacy is constantly changing, so you have to keep on top of your monthly reviews.
  2. Check everything. As I said before, CMS may have inaccurate primacy information, so you have to double check that each month. Likewise, make sure your recovered premiums match your expectations each month—if you expect 60 months of premiums back, make sure you get the full 60 months.
  3. Assess. Get to root cause of errors and make sure updates get made.  For example, look for constant flip flops for indications such as Section 111 reporting problems. Also, review TRR 245 and 280s, which notify the plan of a member’s MSP status turning on and off. By reviewing and verifying the daily 245, you can avoid losing dollars instead of recouping after the premium has been reduced.
  4. Validate. Other insurers are your best source of validation information. Consider keeping a database of other insurer phone numbers to make research easier and faster. Use all the information available to you—member surveys, Section 111 responses, CMS reports, etc.

For more on this topic, view our on-demand webinar, Walking the line: balancing claims, premiums, and compliance for MA plans.

 

 

Discovery Health PartnersFour tips for balancing the effects of Medicare Secondary Payer
read more

Should health plans expect more from their subrogation efforts? It’s worth a look!

Health plans have been relying on Subrogation for decades to recover healthcare claim payments that are a third party’s responsibility.  It is typically regarded as a highly manual and time-intensive process that relies heavily on member contact to verify accident and coverage details. It is not often thought of as a center of innovation.

But recent years have seen some health plans and subrogation vendors experiment with information technology and analytics to help improve the identification of claims with subrogation potential, reduce member abrasion across the subrogation process, and improve settlement rates. I recently presented a webinar in which I discussed ways that analytics and technology are heightening our expectations across three core steps of the post-payment healthcare subrogation process: case identification, investigation and resolution, and recovery. Should health plans expect more from their subrogation efforts? We think so and here’s why.

1. Subrogation case identification

Identifying cases with subrogation potential is a delicate balancing act. If too many cases are opened, the result will be excessive outreach to providers (e.g., for medical records) or members (e.g., for information about an accident that could be subrogatable).

The more a health plan or its representatives reach out to providers and members for cases that don’t ultimately generate value (often referred to as false positives), the more those communities get frustrated with the health plan. Additionally, this creates inefficiency, costing the health plan time and money and generating no value from it. On the flip side, if too few cases are opened, then recovery opportunities are lost.

Let’s face it—we’ll never have all the information we need to make a perfect decision about which cases to pursue for subrogation. But we do need to explore ways to gather as much information as we can to make better decisions without irritating our important constituencies or leaving money on the table.

How can we fill in the picture? By leveraging more of the data that is available today and using analytic models, we can rely less on member outreach and manual inspection, while automating and speeding up some of the decision processes. For example, what can social media tell you about your members?  What can you glean from external property and casualty databases? Can you build business rules based on past experiences and observations to generate analytics that more accurately identify cases? Can you improve these models over time as you feed back results from earlier efforts?

2. Subrogation investigation and resolution

Again, this is a typically manual process requiring outreach to providers and members for information about the case. It’s an area ripe for inefficiency and member and provider abrasion. Within this step, we have identified opportunities across four areas that could result in better results with less waste and abrasion.

  • Outreach modality: Modality refers to the optimal outreach methods for patients and providers. Would you expect that a retired, Medicare Advantage plan member in their 60s would be more likely to answer the phone in the middle of the day than a 25-year-old who is likely to be at work? Would you expect traditional outreach methods such as letters and phone calls to work as well for a younger generation fixated on texts and email?These are simple examples of how we can build models that identify the best way—and potentially the best time—to reach out to different types of members. We can incorporate these and other measures into models that help determine the best path to reach members and achieve a response.Modality in an important concept because the member response rate is key to being able to work these cases and bring them to resolution in a timely fashion.
  • Natural language processing for automated document review: Incredible advances have been made in text analytics and natural language processing (NLP), which allow us to read, comprehend, and analyze incoming correspondence (including incoming medical records) and limit the passing of that info onto your staff only when the analytics show there actually may be savings here.
  • Work prioritization: You have an inventory of cases that need to be worked—how do you decide what comes first? Traditional wisdom says to prioritize the biggest cases and the oldest cases. Today, we have the ability to build models that look at the pool of inventory each day and make that determination based on more sophisticated observations in the context of that specific inventory. We may decide to look at when a case is going to court and prioritize that differently only as the court date draws near.
  • Work assignment: Looking at an inventory of cases, we have to decide who gets which cases to work. Individual experiences cause people to have different performance on the same case. There is an opportunity to look at the collective history of employees to determine their strengths and weaknesses and then make sure they are assigned as much of what they are good at as possible.

3. Subrogation recovery

Here, we look to optimize the same four areas that we did in the investigation and resolution step. The same types of analytics that drive investigation and resolution are applicable for the recovery work, where we also need to figure out how to optimize how we assign work and in what order. As an example, we may still be doing outreach to the hospital during recovery except that it’s a different part of the hospital and we’re seeking different information—financial versus clinical. We still have to figure out the best approach and time to contact.

This applies across prioritizing and assigning work as well. The work may be slightly different, but ultimately we should be able to leverage the work done on investigative models for what we’re doing in recovery.

For most organizations, leveraging analytics to drive improvements in payment integrity is more of an evolution that a revolution. I suggest starting small with a very specific problem that you believe analytic models can help you solve. From there, learn from your failures and build upon your successes.

For more information about how to get started on building analytics into your organization, read our blog post, “5 key roles your company needs for data analytics success.”

 

 

 

Steve ForcashShould health plans expect more from their subrogation efforts? It’s worth a look!
read more

5 Key roles your company needs for data analytics success

What roles are necessary in your healthcare organization for successful application of your data analytics? Whatever the size, culture and maturity level of your company, I believe there are five key functions your organization needs to develop models that can help drive solutions to real-world problems.

5 key roles necessary for creating analytics that will drive value for your organization

  1. Data Liaison
    The person in this critical role is someone who really understands your business goals—and can straddle the discussion between business and data. They participate in discussions with your business around your real-world problems and understand enough of the data to realize when a particular problem might be something that can be addressed with the data you can access. In fact, this person is so familiar with your business they might even be able to generate their own list of real-world problems you face that could be addressed with available data knowledge.
  2. Data Architect
    This key technical leadership position understands your big picture—they know what data you have, where it is, and how it fits together. They are current in their understanding of data technologies and can apply that knowledge to your organization’s plans on how it will leverage data.  They help create the blueprint for the environment(s) you need for data science and analytics.
  3. Platform Architect
    Many organizations don’t have data set up in a way that’s really conducive to analytics or big queries. In this IT role, your platform architect will work closely with the analytics team to create the infrastructure needed for effective analytics. They are the person who makes sure your organization has enough “horsepower” for the job at hand.
  4. Data Analyst
    As the extractor of data, this is the person you’re most likely to already have in your organization. The data analyst is often your go-to person for analyzing data sets and reporting results. The data analyst understands SQL, SAS statistical software, and your business goals to manipulate healthcare databases and produce analytic findings.
  5. Data Scientist
    For more advanced analytics against your data sets, the data scientist works to understand real-world problems and writes the models. They work with big data, using various technologies to develop models that convert data into actionable insights. They may also help identify new data sources and work with the data and platform architects to fuse them with other enterprise data sources. This role collaborates with the data analyst to get access to usable data and works with the data liaison to understand what the real-world problem is and build the models that ultimately help drive your value.

You don’t necessarily need five people to fulfill these functions since some of these data analytics roles can be combined. You may have an organization where your data analyst and data liaison roles are filled by the same person, or one person may serve as both data and platform architect. The key is to understand that you’re checking each of these boxes so your company is able to take a singular real-world problem and help turn it into the model that’s going to help drive value.

To learn more about using analytics to drive value, view the webinar on “Payment integrity: Using analytics to drive better results.”

 

 

Steve Forcash5 Key roles your company needs for data analytics success
read more

Calculating cost avoidance: A closer look at one of 2017’s top payment integrity trends

This post is part of an ongoing series about trends happening within the payment integrity space for healthcare payers. This series features contributions from Discovery Health Partners payment integrity experts discussing these trends, why they’re happening, and how they affect health plans. To learn more about all of the top trends, download our 2017 Payment Integrity Trends whitepaper.

Making the business case for prepayment cost avoidance

As health plans more aggressively adopt cost avoidance as a payment integrity tactic, many struggle with the business justification. There simply is no industry-standard method of quantifying cost avoidance.

With pay-and-chase models of recovery, it’s usually pretty simple – you calculate the recovery and if you’re using a vendor, you subtract a percentage contingency fee. It works nicely in a spreadsheet formula and the extra cash looks great in your P&L. But if you’re avoiding—not recovering—dollars, how do you measure the return on investment? How do you calculate the costs avoided?

Health plans have been left to their own devices to determine the right method to quantify the business case for cost avoidance. And to compound this issue, the method of measuring cost avoidance and the business case isn’t consistent across all types of payment integrity. The calculation and return on investment will differ depending on whether you’re looking at coordination of benefits, subrogation, claims analytics, etc. Based on my experience, even among the largest health plans, there is incredible diversity of opinion on how to measure and value prepay. Read on to learn about some examples that I’ve come across.

Claims cost multiplied by estimated months of savings

This large commercial plan with over 40 million members uses average claim cost per member to calculate potential savings from cost avoidance. The plan first identified “leads,” or members suspected of having other coverage, and sent them to Discovery Health Partners to verify other coverage.

Of those leads, 10% have been confirmed to have other primary coverage. The plan estimates that it would have paid claims for those members for 6 months before catching the error. By multiplying the 6 months times a monthly claims cost per member, the plan figures it avoids more than $7 million in erroneous payments.

This method provides a general sense of the value of cost avoidance, which allows this plan to justify the cost of using a vendor as a partner for some of its prospective COB processes. Not all buy into this method, though. Some might argue that not all members would incur the average claim cost in all 6 months, and some of the costs, had they been paid up front, likely would have been recovered on the back end. This method doesn’t account for that.

On the other hand, it accounts for neither the administrative cost avoided by not having to recover on the back end nor the fact that a percentage of recovery efforts are unsuccessful. In the end, this plan felt that these balance each other out and the methodology works for now.

In another example for COB cost avoidance, one of our clients uses the average cost of claims for each member over the previous 12 months and applies that value over the next 12 months.

Costs to consider when calculating ROI on cost avoidance

Once you have identified a method of calculating the value of cost avoidance, you need to understand the costs that are involved in developing cost avoidance capabilities.

  • Vendor fees. How vendors make revenue will depend on the method the health plan uses to calculate cost avoidance. Options could include contingency, transactional (per validation), monthly, and fixed fees.
  • Resources. Subject matter expertise and operational expertise will help ensure you avoid the right costs at the right time with minimal member and provider abrasion.
  • Technology. Software and other programs allow you to integrate the data from correct sources into your systems so you can make timely pre-payment decisions. This could include applications to manage the workstream.

The move to prepay cost avoidance requires a set of skills that health plans need to develop or acquire in order to be successful. These should be considered when calculating the cost. See our infographic for a list of these capabilities.

 

 

 

 

 

 

 

 

Discovery Health PartnersCalculating cost avoidance: A closer look at one of 2017’s top payment integrity trends
read more

Prepayment cost avoidance: A closer look at one of 2017’s top payment integrity trends

 

This post is part of an ongoing series about trends happening within the payment integrity space for healthcare payers. This series features contributions from Discovery Health Partners payment integrity experts discussing these trends, why they’re happening, and how they affect health plans. To learn more about all of the top trends, download our 2017 Payment Integrity Trends whitepaper.

Health plans see value in prepayment cost avoidance

Health plans are making a concerted effort to focus more of their payment integrity resources on avoiding inaccurate claims payments up front, rather than recovering erroneous payments on the back end. There is general agreement that this creates more value for a plan. When done successfully, prepayment cost avoidance allows the plan to avoid 100% of the claim cost (vs. the portion they can recover) and it reduces downstream administrative costs associated with recovery. I think we all can agree that having to work a claim multiple times is obviously more expensive than having to work it once.

In addition to financial benefits, prepayment cost avoidance can help health plans positively affect relationships with providers by reducing the burden on them to rework claims that are the responsibility of another payer. I recently saw a statistic that said providers incur an additional 20% – 30% of the cost of any claim they have to rework. Your providers would welcome a reduction in that cost.

Meanwhile, a focus on cost avoidance makes your members more accountable for ensuring that correct eligibility information is on file. Particularly in an area like coordination of benefits, members should feel more compelled to be proactive about providing the health plan with accurate, current information so their claims will be paid promptly without fuss.

Why the cost avoidance shift is happening now

In my experience, this is probably the biggest trend in the industry today. Why? Because of the vendor fees and administrative costs associated with recovering a claim that was paid incorrectly. At a time when health plans are very focused on reducing administrative costs and managing shrinking margins, executives are paying attention to every source of leakage.

While prepayment cost avoidance is not a new concept by any means, it requires a level of maturity within a health plan’s payment integrity operations that some plans are just now reaching. For one thing, more mature health plans typically have stronger data integration and analytics capabilities that allow them to look across multiple sources of information to make more accurate payment decisions quickly.

At the same time, their experience with postpayment recovery operations has given them some data to build a business case for the shift to cost avoidance. In my opinion, the largest barrier to cost avoidance until now has been the inability to justify the effort—cost, resources, technology, and vendors—in terms of a business case. There is no standard ROI or business model to work with, and every plan I’ve talked to uses a different approach. The fact is that health plans need to spend money to create a prepay cost avoidance capability and that means making sure the right people in the organization understand the value and business case for it.

For more information, see our infographic about capabilities required for successful prepay cost avoidance.

Coexistence with postpayment recovery

While prepay cost avoidance should be part of a plan’s payment integrity strategy, postpayment recovery must remain part of that strategy as well. The ability to make a prepayment decision can be hindered by the availability of information and the dynamic nature of eligibility and primacy information. Information often isn’t available fast enough to decide if a claim should be held or pended, so prompt-pay rules dictate that the plan must pay.

Meanwhile, member eligibility status and primacy are moving targets and constantly change, so payments are based on outdated information. For some payment integrity functions, like subrogation, costs can be avoided only on part of the whole recovery. In that case, only the first-party liability costs can be avoided, while third-party liability costs have to be paid.

Finding the right balance for your plan

In our view at Discovery, prepay cost avoidance and postpay recovery have to coexist as an integrated solution so you can follow the transaction through the whole lifecycle. The goal should be to find the right balance for your organization.

As health plans consider the proper balance of prepayment cost avoidance and postpayment recovery across their payment integrity programs, it’s important to remember that this is largely a cultural decision. A plan has to be ready to adopt prepay solutions, and a lot goes into that decision—including regulatory issues, technology capabilities, data availability, subject matter expertise, and the business case.

 

 

Discovery Health PartnersPrepayment cost avoidance: A closer look at one of 2017’s top payment integrity trends
read more

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
read more

Trends in healthcare coordination of benefits

A changing environment drives the reevaluation of current COB practices

 

Healthcare coordination of benefits (COB) has been a relatively unchanged process in health plans for many years, but advances in data management, analytics, cloud-based software, and digital communications are causing some interesting trends to take shape in the COB world.  These technologies, which have transformed many industries, are making their way into payment integrity processes, where health plan executives are working to address the challenges that cause inaccurate claims payments and to improve the processes that are used to identify, avoid, and recover those payments.

Inaccurate member eligibility and primacy data is often at the heart of payment issues. In fact, with multiple people and processes responsible for updating member status, it’s no wonder we don’t see more payment problems than we do. Too often, member eligibility and primacy are updated based on the narrow lens of a single person or process at a single point in time. Trying to avoid or recover claims based on this data often puts members and providers in the middle, causing abrasion and dissatisfaction. And as we know all too well, member abrasion can directly impact a health plan’s bottom line with members opting for different plans and affecting Star Ratings for Medicare Advantage plans.

As cost continues to be a core issue for health plans, it’s time to look at better ways of controlling costs, correcting payment errors, and protecting premium revenue while shielding members and providers from the fallout. Five key trends – or potential trends – are recurring topics of discussion, research, and tests among health plans and their vendors.  We recently discussed these trends in a webinar that you can watch on demand, “Coordination of benefits: how the latest trends are impacting your plan.”  The trends discussed include:

  • Momentum away from pay and pursue: As payers mature in their overall payment integrity technologies and best practices, they are working to shift more of their COB efforts to avoiding inaccurate claim payments vs. recovering them on the back end. Pre-pay cost avoidance can yield a 40% increase over recovery, so the business case speaks for itself. However, this more proactive approach requires more sophistication in areas of data integration and analytics to quickly and accurately identify claims that are not the plan’s responsibility.
  • Emergence of “matching” services: There seems to be a push among large health plans to require vendors and other health plans to leverage data matching vendors for eligibility validation. We find that this data is most useful for identifying “leads,” or potential cases of other insurance that can be further investigated. Plans can then focus their COB resources more intelligently for a better return on their efforts.
  • Attempts at using analytics: Our industry has a growing appetite to incorporate analytics into COB processes to identify members with the highest probability of other coverage.  Increasing the use of analytics throughout payment integrity generates many potential benefits, including reduced cost of COB and reduced member abrasion. While many health plans are making small steps in this area, there is still a long way to go.  Rules-based analytics can tell us, for example, that a member who is 65 should be on Medicare and we should investigate whether that is the case. But beyond that, predictive analytics and machine learning technologies can help us look at multiple factors (age, demographics, and disease categories) to more closely pinpoint members that may require COB.
  • Balancing COB efforts with risk of member and provider abrasion: Health plans are demonstrating increased frustration with traditional methods of member and provider outreach, which can result in abrasion. As a result, plans and their vendors are looking at new ways to get the information they need while communicating with constituencies on their terms. This may include using a combination of traditional communication channels as well a member and provider portals, mobility, and automation (such as using 270/271 transactions) to exchange information in more productive, cost-effective ways.
  • The need for data integration is outpacing the industry’s ability to provide it: The trend here is simply that the industry is not evolving fast enough to meet the data needs of all parties involved. Bringing together data from a variety of sources, including claims, social media, Section 111, CMS, states, providers, and much more, is necessary to support areas of eligibility, analytics, and pre-pay cost avoidance. But as an industry, we are still largely unable to sustain the high volumes of data, integrate it properly, ensure its accuracy, and access it fast enough to inform payment decisions.

To learn more about these trends and some ideas for moving forward, listen to our on-demand webinar. You can access the webinar from our web site.

Kathleen CortezTrends in healthcare coordination of benefits
read more