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Save with a 5-phase approach to application manager services

Insights from John Hoffman, Director, Application Managed Services Operations, Payment Integrity Software, Optum

There is an art and science to effective claims adjudication. The science lies in more edits, which can drive 3–5% in cost avoidance. But it also takes experts who can configure your claims editing system properly (the art) to maximize auto-adjudication, enabling you to minimize labor costs and potential audit penalties.


In providing application managed services to support a payer’s claims adjudication, we recommend a five-phase approach. These phases may seem straightforward; however, it is easy to overlook a step, which can make your rules ineffective and unenforceable.


What are the five phases?

  1. Follow protocol for all configuration requests. For each new edit, determine if it requires a new policy and identify how and when you will notify providers. Also identify who internally needs to provide approval. Missing any of these steps will make the rule ineffective and unenforceable.
  2. Gather requirements and approvals prior to development. This includes exclusions: Who needs to be treated differently and why? Document this carefully so that it is immediately available should you have to justify it in the future. Also, do all your stakeholders agree on the requirements? Get their signoffs.
  3. Configure the release and thoroughly test it. Create a test plan process, document it and consistently follow it. How many tests do you have to run? Who reviews the results? Where do you store the results? Again, clear, complete documentation will save you time and hassle when you are audited. Be sure to test the editing solution within your adjudication platform so you can see how the rule impacts your overall process. Communicate the results clearly with stakeholders and secure their signoff for this phase, too.
  4. Go live with a production release. Not sure what or how providers will be affected by a new release? Set a hypothetical profile to see what will happen. You may find that a few providers will need more education before a full release to avoid constant denials. By testing up front, you can confidently go live.
  5. Monitor the release post production. Evaluate the results at a granular level — by provider and facility. Understand what the results reveal beyond the total savings. This enables you to determine if you need to provide more education to providers or adjust the rule to further optimize your desired outcomes.

The key to increasing medical savings, decreasing administrative costs and improving provider relationships lies in accurate, effective, fast claims adjudication.


Do most health plans manage their claim editing software on their own?

This often depends on the size of the plan. Large health plans can dedicate resources and hire experts. Midsize and smaller plans that are serious about generating savings rely on experts to advise their internal staff — or outsource completely.

Think of it this way: Each state you serve has more claim edits than you can imagine. Who on your team can comb through the hundreds, even thousands, of state-specific claims? Auditors will want to know why you aren’t using these edits. It takes a disciplined methodology to ensure continuously consistent rule editing.


What level of support can Optum provide?

Through Optum application management services, payers can have access to a team of experts, including:

  • Product developers, business analysts, quality assurance specialists and technical analysts 
  • Clinical content staff, physicians, clinicians and other industry experts

We offer application service packages tailored to meet each organization’s specific needs, such as:

  • Complete support for a payer’s professional and/or facility claims edit systems 
  • Ongoing research, creation and maintenance of all configurations and updates 
  • Proactive identification of new industry policies to yield even more savings and efficiencies
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John Hoffman, Director, Application Managed Services Operations, Payment Integrity Software, Optum

Insights from John Hoffman, Director, Application Managed Services Operations, Payment Integrity Software, Optum

John Hoffman is a health care operations leader with 10+ years of experience across multiple health care companies and operations functions. John leads our Payment Integrity Software Application Managed Services (AMS) Operations team, which partners with our payer clients to maximize their CES solution. He is responsible for leading a large team, overall client service delivery and savings targets.

Prior to joining Optum, John served as a director in the Operational Excellence organization at EmblemHealth.