Three ways to tackle the high cost of waste

New research published by the Journal of the American Medical Association (JAMA) estimates that 25% of U.S. healthcare spending, or $760 billion to $935 billion, is spent annually on waste1. According to the study, the greatest source of waste is administrative complexity, which accounts for $265.6 billion in annual waste.

Part of this administrative burden stems from a complex claims adjudication process impacted by legacy or outdated technology, a lack of clear contract or policy information, and no universal way for sharing information (e.g., member’s name, diagnosis code, etc.). These administrative challenges results in data and eligibility errors that are made throughout the claims continuum, resulting in millions of dollars in improper payments.

Life of a claim: Errors along the way

Payment Integrity continuum DiscoveryDespite the best efforts to address waste, administrative complexity in the healthcare system continues. Recent research from JAMA shows that measures to eliminate waste would result in a 25% improvement, but there’s more work to be done. Finding the root causes of errors is the most effective way to ultimately remove waste—and the high cost of it—from health plans’ payment integrity operations.

Here are three approaches to combatting the high cost of waste in your payment integrity strategy.

1. Reduce manual processes

Manual processes are often at the heart of human error. Manual processes are tedious, error-prone, and inefficient, contributing to the high cost of waste in healthcare. When your entire claims adjudication or payment integrity process contains manual tasks, the likelihood of error is high. Reducing or eliminating manual effort in your payment integrity processes will go a long way toward reducing waste.

2. Use technology to your advantage

Technology plays a key role in taking out waste from the payment integrity process. But outdated or legacy technology can create just as much waste as you might find with manual processes. With the right technology in place, you can modernize your payment integrity processes and reduce the amount of time and effort associated with correcting complex claims.

By the same token, emerging technologies like artificial intelligence and machine learning solve traditional payment integrity problems in new and innovative ways. These technologies offer analytics and predictive insights that can optimize your claims payment processes and drive data-driven decisions.

3. Look to a partner for advanced capabilities

A partner can supplement your in-house operations and offer the expertise you need to reduce waste. The right partner will bring robust capabilities that round out your core operations—capabilities like data mining techniques that prevent incorrect and unnecessary payments; industry experts who are up on the ever-changing and complex healthcare landscape; and processes that identify opportunities to correct, recover, and prevent improper payments at all points in the claims’ lifecycle.

The high cost of waste can threaten the viability of organizations throughout the healthcare ecosystem. With a holistic, connected payment integrity strategy built around these three tenets, your organization can improve operational efficiencies and achieve financial integrity by preventing improper payments—all while eliminating waste and generating meaningful results.

To learn how Discovery Health Partners can help you advance into the future of payment integrity, contact us today.

1“Waste in the US Health Care System: Estimate Costs and Potential for Savings,” JAMA, October 7, 2019.
Subrahmanyam ManthaThree ways to tackle the high cost of waste
read more

Insights and observations on the digital healthcare revolution

At our recent Discovery Client Council meeting, we had the pleasure of hosting Wheeler Coleman, CEO and Executive Partner of EC-United and a member of our Strategic Advisory Board. In this guest blog, Wheeler summarizes the key takeaways of his presentation on the healthcare digital revolution.

Survive or thrive

The digital revolution has been a game changer for all industries, and health payers are not immune. Startup companies are creating new business models and blending existing and emerging technologies to leap-frog and disrupt well-established companies and business protocols. There are also well-established companies in other industries that are entering the healthcare industry to the same end—to change the model and dislocate the existing players.

A few good examples of this are Amazon, Google, and Microsoft. These companies see healthcare as an industry ripe for an operational and administrative transformation that they can deliver through their powerhouse of technological capabilities and expansive digital footprint. To survive, payers must take this threat seriously. They cannot take their leadership position or their iconic name for granted. Resting on their laurels will very likely result in a slow death spiral.

Look at a company like Kodak. They were a market leader with a great brand. Did you know that they created the digital camera? But they were so happy with their position that they refused to make changes and ignored the red flags:

  • Hitting a revenue plateau
  • Competing on price / no differentiation
  • Big on data and short on analysis and actionable information
  • Neglected table stakes
  • Too much pride
  • Too deep in their comfort zone

Healthcare payers need to make sure they don’t fall victim to the same pitfalls. They are enjoying large revenues now, and too many are unwilling to reconsider their business models and leverage technology to maximize efficiency.

We’ve seen how this plays out in other industries. The following well-known companies were able to leap-frog the competition and disrupt well-established businesses by creating new models and leveraging existing and emerging technology.

Uber disrupted the taxi and limousine business models and, in many markets, expanded the demand for service by leveraging GPS, e-commerce, and mobile technology.

Netflix disrupted the cable and movie industries and recently their stock increased 20 percent due to increased subscriptions. This happened when 4G was introduced and movies could be streamed to individual homes. They quickly pivoted from shipping DVDs to digitally streaming movies. The outcome has been the end of the video rental business and a cable industry trying to play catch-up.

Airbnb disrupted the hospitality market and transformed how people approach travel accommodations worldwide by allowing people to lease their homes electronically.

These three different companies in three different industries each changed the playing field and caused disruption by using new and emerging technologies, redesigning how services were delivered, and lobbying for new rules and regulations. So, the question for us is not if, but when will this happen to healthcare payers? Those who are reluctant and slow to adopt emerging technology or work with new technology partners could soon find themselves like the Kodaks of the world.

How does this apply in healthcare?

The companies we’ve already mentioned, and so many more, have reset consumer expectations across the board. In healthcare, we must keep up with the evolving demands of the new “digital patient” by harvesting actionable information from all the data that is being generated by the internet of things. To do this, our options must be instant, seamless, and insightful:

Instant—Information is now in all our pockets and consumers demand information in real time. Historically, our industry has taken advantage of batch processing, but we need to change our processes and our information systems to allow for real-time processing.

Seamless—The relationship between payer, provider, and member needs to become real-time. Payers and providers must be able to exchange information in real time without impacting the member experience. The member does not want to know what’s happening behind the scenes.

Insightful—Consumerism and social networks are generating an unprecedented amount of data that we need to be able to harvest and transform into actions. The new generation of analytics (advanced analytics, ML, AI, robotic technology) will allow us to discover noncompliance and fraud more easily than ever before, but only if data is converted to information that triggers action by the payer, provider, or member.

The digital revolution is upon us!

To catch up and better serve consumer demands and stay ahead of competition, companies will need:

Strategic partnerships—Companies must seek non-traditional employees and partners.

Operational excellence—Companies must reduce costs and increase efficiencies.

Emerging technology—Companies must rapidly adopt and embrace new technology.

Healthcare has historically been a slow mover in this regard, but some progressive healthcare organizations have already begun differentiating themselves by providing a more customer-friendly, tech-enabled experience. Still, it’s not too late for those companies contemplating their next moves. The companies that make this a priority and quickly adapt to this inevitable change can survive and rise to the top of their sectors. But the clock is ticking, and for those organizations that continue with business as usual, time is running out.

To learn how Discovery Health Partners can help you advance into the future of payment integrity, contact us today.

Wheeler ColemanInsights and observations on the digital healthcare revolution
read more

5 keys to hiring and keeping top-notch subrogation talent

It takes people with a unique mix of skills and experience to successfully handle complex healthcare subrogation matters involving third-party payers. Health plans that don’t have the right professional resources to identify and pursue recovery opportunities run the risk of leaving millions on the table.

Recruiting and retaining top-tier subrogation talent can be challenging but well worth the effort. Here are some insights and advice on finding the right subrogation staff, based on a recent survey of healthcare subrogation experts.

1. Subrogation experience is important but not critical

When it comes to prior work experience, front-line professionals agree that 1-4 years of experience provides a firm foundation.

What you might find surprising is that past subrogation experience is not the most important hiring criteria. Candidates with experience in related fields such as legal, claims, property and casualty, or medical coding typically have what it takes to review and understand complex medical claims.

Subrogation professionals also agree that regardless of industry affiliations, candidates should have top-notch organizational, multi-tasking, customer service, and communication skills. Additionally, the most successful subrogation specialists are good investigators, analysts, and critical thinkers who can navigate the “gray areas” to solve problems creatively. Solid relationship-building skills and a positive attitude are also must-haves to help subrogation professionals successfully negotiate for their share of limited recovery dollars.

2. Cast a wider net

In today’s tight job market, companies may have to look outside their industries and geographic regions to find top talent. Thanks to technology, more healthcare companies can offer remote work opportunities that will attract the best and brightest from across the country.

The medical and legal fields are good sources for high-quality candidates with transferable skills, since they already understand concepts used in subrogation. Often, healthcare companies can find new talent for entry-level positions at college career fairs. Look for students with backgrounds in legal studies, paralegal, and political science.

Law firms are filled with professionals who can easily apply their personal injury, class action, contracts, property and casualty, health, disability, and reinsurance claims experience to a career in healthcare subrogation. Insurance companies are also a good source of employees who already speak legalese and have mastered case management, handling multiple files at once, and reviewing medical claims.

3. Look beyond the resume

Once you find qualified candidates, you can use pre-screening tests and assessments as well as interviews to determine if someone will be a good fit for your organization. A multitude of online test sites offer customizable tools to measure everything from aptitude and attitude to role-specific knowledge and skills.

Assessments are good predictors of performance and offer insights to a candidate’s likelihood of job success as well as cultural indicators, such as honesty, discipline, and reliability. They can also help you make unbiased employment decisions based on quantifiable data.

Behavioral or problem-solving interviews that examine candidates’ past experiences or present real or simulated problems to solve will reveal insights into candidates’ thought processes, problem-solving skills, and ability to think clearly under pressure. Meanwhile, planned or structured interviews that present the same set of questions to everyone help level the playing field and call out the clear winners.

4. Set employees up for success

Congratulations! After a lot of time and effort, you found the right talent. So how can you keep them with you for the long haul?

Training is a good start to set new hires up for success and help more experienced employees advance their careers. Classroom training can cover in-house case management systems, procedures, and other basics. Side-by-side shadowing provides more in-depth exposure to practical applications. And mentoring is a great way for employees to get immediate feedback and learn tips and tricks of the trade.

5. Follow the leaders

Front-line subrogation specialists say that culture is a key to employee satisfaction. Adobe, Google, Southwest Airlines, and other highly sought-after employers have turned their culture into a competitive advantage by offering a combination of work, lifestyle, and monetary rewards. Challenging work assignments; empowering employees to go the extra mile to help customers; and perks like flexible working hours, on-site gyms, and even dog-friendly workplaces are incentives that the companies use to encourage loyalty.

Don’t forget rewards and recognition. Many subrogation associates see themselves as having a long-term career in the industry. Those who have a defined career path and feel valued are more likely to spend their career with you. Money can be a good motivator, but sometimes all it takes is a shout-out on the company website or positive feedback from an executive to encourage and inspire employee loyalty.

Collaborate with the experts

Even health plans with the best subrogation specialists can benefit from Discovery Health Partners’ deep expertise, advanced technologies, and data-driven approach. Find out how we can help health plans improve their recovery efforts on our Subrogation solutions page.

Heather Rodemann5 keys to hiring and keeping top-notch subrogation talent
read more

Three ways to modernize your COB approach

When health plans think of Coordination of Benefits (COB), the hassles of managing spreadsheets, letters, and phone calls come to mind. These painstaking manual and error-prone methods for identifying other insurance, validating coverage status, and recovering incorrectly paid claims can negatively affect your internal efficiencies, your provider and member relationships, and ultimately, your bottom line.

According to new research, waste accounts for about 25% of U.S. healthcare spending or $760 billion to $935 billion per year –with administrative complexity cited as the greatest source of waste.1 In addition, as many as 15% of all health plan members may hold other insurance coverage.2 Compounding these challenges are continual changes in membership, such as an aging workforce that is eligible for both employer plans and Medicare, and outdated claims processing environments that are ill-equipped to support growing and siloed data.

The convergence of these trends calls for a modern approach to managing your COB program. In today’s competitive marketplace, plans must have the right people, processes, and technology in place to effectively integrate data sources, look at member eligibility holistically, and determine the most successful indicators or combination of indicators of other coverage.

Here are three ways you can improve your COB program and cut down time, money, and paper:

#1: Increase recoveries with technology

There is great manual effort in traditional approaches to COB. Typical COB efforts involve tedious, time-consuming research and member questionnaires and calls—all of which are often ineffective and create member dissatisfaction. New technologies, such as machine learning, predictive analytics, and rules-based analytics, help identify members who have other forms of insurance and other factors that might mitigate inaccurate payments.

#2: Improve cost avoidance

One of the most important keys to success in the modern approach to COB is avoiding inaccurate payments in the first place. Proactive approaches to COB leverage sophisticated data integration, data mining, and data analytics. With technologies that quickly and accurately identify claims that are not the plan’s responsibility, a health plan can resolve claims before paying a dime.

#3: Focus on member and provider satisfaction

Traditional approaches to COB put members and providers in the middle, causing abrasion and dissatisfaction. The modern approach to COB requires that plans and their vendors look to new ways to get the information they need while communicating with providers and members on their terms. This may include using a combination of traditional communication channels, as well as member portals and automation to exchange information in more productive, cost-effective ways.

Core elements of a successful COB program begin with data sources, driven by sophisticated machine learning algorithms to create leads, and matching capabilities which all stand on the foundation of human talent. Without the right team, the technology does not yield the same results.

Discovery’s COB program encompasses all these components and offers both cost avoidance and post-payment, delivering considerable incremental recovery opportunities with minimal disruption to operations. Our COB program uses machine learning-based data mining and modeling to:

  • Identify additional instances of other insurance coverage
  • Validate coverage status
  • Recover any claims paid in error without any disruption to existing claims adjudication processes or existing internal COB validation and recovery efforts

The modern guide to COB - Get the eBook

1 JAMA, “Waste in the US Health Care System: Estimated Costs and potential for Savings,” October 7, 2019
2 Discovery Health Partners’ experience.
Ron JonesThree ways to modernize your COB approach
read more

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
read more