Maximizing your COB processes with integrated technology

Primacy and eligibility errors can lead to serious losses and expenses. By some estimates, a third of paid health claims contain errors, and as many as 15% of members have other insurance—representing a staggering $1 trillion in annual waste1. Paying for claims due to incomplete or inaccurate member eligibility not only costs your plan millions in higher payouts and administrative costs, these errors can also generate substantial downstream administrative costs and greatly impact your provider and member relationships.

While Coordination of Benefits (COB) is a common occurrence (the process of determining which plan pays for what portions of a claim), the challenges associated with addressing other insurance retrospectively lead to increased administrative costs and payouts. Plans must go beyond the traditional process of post-payment recovery to an expansion of prospective processes that identify potential primacy conflicts while still in the pre-payment stage.

Things to ask as you evaluate your COB processes:

  • How can we identify more instances of other coverage and maximize our savings from cost avoidance and recovery of overpaid claims?
  • Do we have the data mining technology and expertise to identify Medicare or other commercial coverage?
  • How do our COB processes compare to industry best practices?
  • How do we transition our COB program from recovery to cost avoidance?
  • How can we minimize member and provider abrasion while coordinating benefits?

Data mining, business intelligence, and analytics are at the core of today’s most successful payment integrity strategies, including COB. As part of our connected payment integrity approach, Discovery’s COB solution automates data integration across multiple sources, bringing it all together in a single database that allows for quick and accurate identification of claims and provider responsibility. This means frequently refreshed data with up-to-date information. In addition, predictive analytics and machine-learning technologies analyze and prioritize data, allowing us to flag and take a closer look at members with a high probability of having other coverage. Our goal is to identify and address primacy issues at the earliest possible stage—improving claims payment accuracy, building stronger relationships with providers, and reducing administrative expenses.

To learn how Discovery Health Partners has helped health plans drive cost savings and millions of dollars in recoveries, download our COB case study or visit our Coordination of Benefits solution page.

1 The Office of the Actuary in the Centers for Medicare & Medicaid Services (July 2015)
Ron JonesMaximizing your COB processes with integrated technology
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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
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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
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Discovery announces webinar on payment integrity analytics

Data scientists bring fresh thinking to payment integrity processes

 

ITASCA, IL (August 1, 2018)—Discovery Health Partners, a provider of payment and revenue integrity solutions for healthcare payers, will host a webinar August 8, 2017, to share the principles of data science that are transforming the way payment integrity processes are managed, with measurable impact on recovery results. Titled “Payment Integrity: Using analytics to drive better results,” the webinar features Discovery healthcare payment integrity and analytics expert Steve Forcash, Vice President of Analytics.

The webinar will explore how principles of data science are being applied to real-world payment integrity processes and offer actionable steps for getting started with an analytics agenda:

  • What levers are available in the typical payment integrity business process
  • How data science techniques ensure we pick the right cases, helping maximize client savings while minimizing member and provider abrasion
  • How to identify capabilities that are largely transferable across payment integrity functions
  • How advanced analytics can position postpayment solutions for a shift to prepayment or hybrid pre/postpayment solutions

Seats remain available for this free webinar. To register for the webinar, visit http://bit.ly/Payment-Integrity-Webinar

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About Discovery Health Partners

Discovery Health Partners, a division of LaunchPoint, offers payment and revenue integrity solutions that help health payers improve revenue, avoid costs, and enhance the member experience.  We offer a unique combination of deep healthcare expertise and analytics-powered technology solutions to help our clients improve operational efficiency, achieve financial integrity, and generate measurable results.  More information about our solutions, including Coordination of BenefitsEligibilityMedicare Secondary Payer Validation, and Subrogation is available at https://www.discoveryhealthpartners.com.

 

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Discovery Health PartnersDiscovery announces webinar on payment integrity analytics
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Discovery to speak at MedAdvantage Operational Finance Summit

Session by Discovery Health Partners’ Kathleen Cortez to set the stage for understanding payment integrity’s role and value

 

ITASCA, IL (July  11, 2017) –Discovery Health Partners, a provider of payment and revenue integrity solutions for healthcare payers, will co-sponsor and speak at the Medicare Advantage Operational Finance Summit on July 18-19, 2017, in Chicago. Hosted by Healthcare Education Associates and RISE, the conference brings together Medicare Advantage executives from operations, compliance, membership, and other areas to discuss enrollment and membership operations, accounting and reconciliation, and comprehensive payment integrity.

Discovery Vice President of Operations Kathleen Cortez will kick off the payment integrity track with a discussion of the role and value of a comprehensive payment integrity program for the Medicare Advantage plan.  “Kathy does an excellent job helping stakeholders understand what payment integrity is, how it fits within the MedAdvantage plan, and what value it delivers,” said Paul Vosters, Discovery president.  Payment integrity addresses the accuracy of the transaction occurring between health payer and provider.  It ensures that the health claim is paid correctly—by the responsible party, for eligible members, according to contractual terms, not in error, and free of wasteful or abusive practices.

The session also includes a discussion of payment integrity best practices as gleaned from almost a decade of Discovery’s experience helping health plans manage such programs.

Discovery Health Partners is a member of RISE, the Resource Initiative and Society for Education, an organization dedicated to ongoing outreach and education for health plans and providers.  Discovery frequently speaks and exhibits at conferences managed by RISE affiliate Healthcare Education Associates.

About Discovery Health Partners

Discovery Health Partners, a division of LaunchPoint, offers payment and revenue integrity solutions that help health payers improve revenue, avoid costs, and enhance the member experience.  We offer a unique combination of deep healthcare expertise and analytics-powered technology solutions to help our clients improve operational efficiency, achieve financial integrity, and generate measurable results.  More information about our solutions, including Coordination of BenefitsEligibilityMedicare Secondary Payer Validation, and Subrogation is available at https://www.discoveryhealthpartners.com.

 

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Discovery Health PartnersDiscovery to speak at MedAdvantage Operational Finance Summit
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White paper: 8 Payment integrity trends to watch in 2017

Whitepaper: 8 Payment integrity trends to watch in 2017

Health plans’ focus on cost reduction drives fresh look at payment integrity

Discovery Health Partners estimates that for healthcare payers, payment integrity problems cost 3-7 percent of their paid claim dollars every year. That means, for example, a 500,000-member health plan with costs averaging $3,600 per member per year will pay $1.8 billion in claims, of which $54-$126 million will be wasted expense.

Based on our work with more than 60 payment integrity clients and discussions with nearly three times as many prospects, we have documented eight trends worth watching in the next year.

Download this informative whitepaper today.

Discovery Health PartnersWhite paper: 8 Payment integrity trends to watch in 2017
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Discovery webinar to review 8 key trends in payment integrity

Health plans take a fresh look at payment integrity process, performance, and management

 

ITASCA, IL (May  11, 2017) –Discovery Health Partners, a provider of payment and revenue integrity solutions for healthcare payers, will host a webinar May 18, 2017, at 12:30 p.m. CST to examine top trends in healthcare payment integrity and how they are impacting the way health plans manage the function. Titled, “Top 8 trends in payment integrity—2017,” the webinar highlights observations of the last year gleaned through hundreds of encounters with health plans by Discovery President Paul Vosters, and David Grice, VP of Strategic Account Development, and others within the Discovery team.

“Increased interest in protecting the bottom line is clearly driving increased interest in payment integrity,” notes Vosters. “We see payers exploring prepayment review as a cost avoidance strategy, questioning the performance of their payment integrity function, and rethinking their insourcing/outsourcing strategies.” Vosters and Grice both report that payment integrity has captured the attention of the C-suite based on its ability to impact plan performance.  These and other trends will be explored in the webinar.

Payment integrity is defined as the accuracy of the transaction that occurs between payer and provider. Payment integrity ensures that claims are paid correctly—by the responsible party, for eligible members, according to contractual terms, not in error, and free of wasteful or abusive practices. In our complex and dynamic healthcare environment, realizing good payment integrity is a challenge for both payers and providers.

Seats remain available for this event, hosted by Healthcare Education Associates and open to all members of RISE. Nonmembers may participate for a fee. To register, visit Webinar Registration here.

About Discovery Health Partners

Discovery Health Partners, a division of LaunchPoint, offers payment and revenue integrity solutions that help health payers improve revenue, avoid costs, and enhance the member experience.  We offer a unique combination of deep healthcare expertise and analytics-powered technology solutions to help our clients improve operational efficiency, achieve financial integrity, and generate measurable results.  More information about our solutions, including Coordination of BenefitsEligibilityMedicare Secondary Payer Validation and Subrogation is available at www.discoveryhealthpartners.com.

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Discovery Health PartnersDiscovery webinar to review 8 key trends in payment integrity
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LaunchPoint, parent of Discovery, announces new analytics executive

Steve Forcash brings expertise in payment integrity and analytics as the new vice president of analytics

 

ITASCA, IL (July 25, 2016) – LaunchPoint, a provider of payment integrity and risk management solutions, software, and services for healthcare organizations, today announced it has appointed Steve Forcash as Vice President, Analytics. A healthcare executive with strong experience in data and analytics, Forcash will be responsible for the advancement of LaunchPoint’s analytics vision and strategy operations, while partnering with LaunchPoint’s product strategy, finance, business operations, and information technology teams to assess opportunities, develop learning, and drive analytics adoption rates for LaunchPoint divisions Discovery Health Partners and Ajilitee.

LaunchPoint marked 4,700 percent growth over a five-year period and was named the 100th fastest-growing company on the 2014 Inc. 500 list and #14 in Healthcare. In addition, the firm was recently ranked the 4th fastest growing Chicago-area company on the 2016 Crain’s Fast 50 listing.

“The changing demands of the healthcare industry call for analytic-minded payment integrity executives like Steve,” said Terrence Ryan, LaunchPoint CEO.  “He will help improve payment integrity and risk management case identification and compel data-driven decision making, to benefit LaunchPoint and our clients.”

Since 2012, Forcash has served in senior management positions overseeing analytics and payment integrity operations at Change Healthcare (formerly Emdeon).  During this time, he oversaw gains in revenue per case improvements as well as managed the implementation of medical-record search capability to improve productivity. He also drove double-digit performance improvements to the post-payment audit and recovery organization through the development of analytic-driven claim valuation techniques. Previously, he held analytics leadership roles at MultiPlan, Inc. (formerly Viant), most recently as Vice President of Reporting and Analytics.

“I am passionate about the role of analytics in improving the cost-effectiveness of healthcare in our country. LaunchPoint is a fast-growing company, with advanced tools that allow clients real transparency into the process,” said Forcash. “I am excited about the opportunity to expand on our current capabilities, by adding more advanced analytic resources aimed at driving incremental growth for LaunchPoint clients. “

Forcash received his Bachelor of Arts degree, Cum Laude in Mathematics and Spanish from Augustana College in Rock Island, Illinois. Steve resides in Clarendon Hills, Illinois with his wife and two daughters.

About LaunchPoint

LaunchPoint operates businesses that provide information-driven solutions, software, and services for healthcare organizations. Its two divisions are Discovery Health Partners, a provider of payment integrity and risk management software and solutions for healthcare payers, and Ajilitee, a healthcare information and analytics consulting business. LaunchPoint has been named two years in a row to the Inc. 5000 list, recognized as one of the country’s fastest growing companies. More information is available at www.launchpointcorporation.com, www.ajilitee.com and www.discoveryhealthpartners.com.

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Discovery Health PartnersLaunchPoint, parent of Discovery, announces new analytics executive
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The real cost of the payment integrity challenge

Clearly healthcare is the most interesting and dynamic sector in the U.S. today. We are witness to an unprecedented transformation as healthcare stakeholders embrace new delivery entities and new reimbursement models, shift attention to building relationships with members, and explore new markets. There will be winners and losers in this game, and everyone is placing their bets.

The transformation underway is also forcing payers to prioritize where they are spending their money, and more attention is shifting to a corner of the ecosystem that has been neglected:  the efficiency of the billing transaction process between payer and provider, what we term healthcare “payment integrity,” or to state it more accurately, the lack thereof. As one speaker at AHIP Institute said, “there’s a lot of money changing hands for no apparent reason.”

Payment integrity ensures that a health claim is paid correctly—by the responsible party, for eligible members, according to contractual terms, not in error, and free of wasteful or abusive practices. As every payer and provider knows, determining whether a claim has been paid correctly requires departments full of claims analysts, auditors, and investigators.  And that’s the problem!

What is the cost of this waste and inefficiency?  The Institute of Medicine, a well-respected independent think tank, estimated that 30% of health spending in 2009—$750 billion—was wasted on unnecessary services and care coordination problems, excessive administrative costs, fraud, and other failures.  Focusing on payment integrity specifically, this included $190 billion in wasted administrative cost and $75 billion in fraud.  Earning wide coverage in media such as the NY Times and elsewhere, this report called for a system-wide reform.

More recently, an April 2012 study by Donald M. Berwick, former administrator for the Centers for Medicare and Medicaid Services (CMS), and RAND Corporation analyst Andrew D. Hackbarth estimated that five categories of waste consumed $476 billion to $992 billion, or 18 percent to 37 percent of the approximately $2.6 trillion annual total of all health spending in 2011.  This data suggests a problem of staggering proportions.

We estimate for healthcare payers that payment integrity problems cost them 3-7 percent of their paid claim dollars every year. That means, for example, a 500,000-member health plan with costs averaging $3,600 per member per year will pay $1.8 billion in claims, of which $56-131 MM will be wasted expense.  This hidden leakage is a problem not just for the payers (and their providers) who bear the direct cost of this administrative inefficiency.   It impacts the employers who underwrite the cost of group insurance, members who now shoulder more of the cost of care, and the economy at large as healthcare costs continue to consume more of our GNP.

Improved payment integrity is essential to a real healthcare transformation.   It is also a hidden source of funding for payers that could be put to work to enter new markets, engage with members, and tackle the challenges of reform.   It won’t be easy, and it won’t happen fast, but it is possible, as we’ll explore in future posts. We’ll examine how everything from technology to organizational structure can have a positive impact on payment integrity as we explore best practices, client case studies, and proven solutions. Stay tuned!

 

 

 

 

 

 

 

 

 

 

 

 

Discovery Health PartnersThe real cost of the payment integrity challenge
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Discovery Health Partners wins new healthcare customers

Intelligent Cost Containment Software Delivers Transparency, Control and Savings 

ITASCA, IL (September 19, 2013) – Discovery Health Partners  today announced that it has added new healthcare organizations to its client roster and expanded current customer portfolios, demonstrating demand for effective analytics-driven payment integrity solutions that reduce and contain healthcare spend.

Since January, Discovery Health Partners has won multiple new healthcare clients seeking proven solutions for healthcare subrogation, COB recovery and eligibility services.  They include Paramount Health Care, a large southern integrated health care services system, a leading mid-Atlantic health plan, and a leading western health plan.

Additionally, current client Lovelace Health Plan expanded its partnership with Discovery Health Partners with a Cost Containment Blueprint consulting engagement, which identified new opportunities for cost savings and revenue generation.  Fallon Community Health Plan, another client, extended its relationship with Discovery Health Partners to include Medicare Secondary Payer (MSP) Validation and Premium Restoration in addition to existing services provided for subrogation and COB.

“Discovery Health Partners has been a true partner in every sense for our recovery and cost avoidance programs,” said Karen Eskridge, Chief Operations Officer, Lovelace Health Plan.  “Their team has helped us to reduce erroneous claims payments and improve reporting; working together, we’ve also broken down obstacles and identified new savings opportunities we hadn’t seen before.”

Discovery Health Partners recently published the following client successes:

  • Within the first year, a mid-sized health plan with more than 230,000 members (including 30,000+ Medicare Advantage members) realized nearly $3.5 million in subrogation and COB recoveries.  By adding MSP Validation and Premium Restoration, the health plan recovered an additional $7.4 million dollars in six months. The health plan’s total two-year forecast for these services is nearly $15 million.
  • A community health plan with more than 200,000 members (including 30,000+ Medicare Advantage members) realized incremental savings of more than $2 million with Discovery Health Partners’ subrogation and COB services in seven months. The health plan expects to recover an additional $2.4 million in subrogation claims over the next six to 12 months. MSP Validation and Premium Restoration Services are expected to recover an additional $8.4 million in 2013.
  • Seeking greater transparency and the ability to respond faster to employer group reporting requests, another health plan adopted Discovery Health Partners’ cloud-based subscription software for on-demand analytics and case management tools. As a result, the health plan decreased their resources, support needs, and capital expenditures.

“Our flexible offerings, client advocacy, and leading-edge tools are highly valuable to our clients’ cost management programs,” said Paul Vosters, President and Chief Operating Officer, Discovery Health Partners. “We help clients look holistically at their cost containment efforts, and we will customize a plan and approach to meet their unique requirements. We quantify the results to show the difference we make.”

 

 

 

 

 

 

 

 

 

 

 

 

Discovery Health PartnersDiscovery Health Partners wins new healthcare customers
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