Key steps to evolve to a pre-payment strategy

Insights from Erin Schmuker, Vice President, Payment Integrity, Optum

Your transition to pre-payment success can be a natural extension of your post-payment efforts to create a comprehensive payment integrity strategy. How? The first step is to look at all the analytics — the rules or concepts that result in valid overpayments that can be recovered in post-payment. Examine each one to see if you can deploy it earlier: in claims editing, pre-adjudication, post-adjudication pre-payment, for example. Is it reasonable to catch this type of error on the front end, as opposed to the back end? If so, create a plan to deploy it in pre-payment. Using analytics in this way is the single, easiest step to transition to pre-payment avoidance.

What can we do to gain buy-in from our network representatives for this?

Think of it from the provider perspective. You are simply taking an analytic, rule or edit that providers are used to seeing from your health plan during post-payment. They know this situation often results in an error, and they have to repeatedly send money back or agree with your recovery efforts. This gives you a natural engagement point to have a discussion about how to drive prospective avoidance — resolving the error before it occurs. That analytic gets built into the claims editor so the claim is no longer paid incorrectly. That means the provider doesn’t have to deal with it on the back end. Nor do you.

How do we determine what to focus on first?

The key is to create a pre-payment/post-payment loop that feeds one another with actionable intelligence. A successful program will develop and maintain a return-on-investment metric for each analytic. This helps a health plan with limited resources focus efforts and technology on areas that will yield the greatest gains.

What are barriers to creating the foundation for a pre-payment approach?

You need an inclusive dashboard to see and execute on every area of opportunity. Payment integrity touches many areas of an organization, and often each area operates as a silo. If this is the case, you lose that enterprise-wide line of sight. It takes a holistic approach to identify and report on those key metrics. That enables everyone to work from the same strategy for post-payment and effectively evolve to pre-payment as well.

An enterprise-wide approach also enables you to examine root causes of a particular error to move from recovery to prevention. This is the key to increasing claims accuracy and process improvements while reducing administrative and operating costs.

How much time and effort does it take to conduct this kind of analysis?

In a fast-paced environment, it can be difficult to fully look at the factors that contribute to a specific issue. Again, it requires a dashboard view across an aligned organization to identify operational and technology gaps — and then implement solutions to close them. But it can be done by starting the assessment and root-cause analysis needed to see where you are today. You then engage stakeholders from each area to create the strategic plan that will drive meaningful change, from recovery to avoidance.

Do payment integrity vendors provide root-cause analytics?

They can and should. It is important to understand the motivations of each vendor before you choose one to be your comprehensive payment integrity partner. You may find that it is more strategic to choose one partner instead of managing multiple vendors that may not work together efficiently — or may be creating significant provider abrasion from overlapping efforts.

What should we look for in a payment integrity partner?

To provide the transformational support to enable a comprehensive strategy, the right partner must:

  • Fully understand and be able to address your needs
  • Offer the analytics that drive the feedback loop from post-payment to prepayment and back again
  • Be motivated and able to drive avoidance as much as recovery
  • Provide the transparent analytics and insights to understand the return on investment of each aspect of your payment integrity program
  • Measurably increase your efficiency and reduce administrative costs

Look for a transformational partner that offers both sides of the pre/post payment coin — a partner that is philosophically and financially incentivized to move you from pay and chase to avoidance. That will set you on the right path to comprehensive payment integrity success.

In case you missed it

Ask the Expert: Part 1

Key steps to optimize an existing post-payment strategy

The first article explores how to strengthen your existing post-payment recovery model and yield more savings from your post-payment efforts.

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Do we have to use just one payment integrity vendor?

Eighty percent of health plans use multiple claims analysis vendors. With all the different specialties, a range of vendors is appropriate to cast the widest recovery net. However, it is important to oversee those vendors so that each is intentional about the value it provides. That is oversight that a transformational partner can provide: ensuring that all external payment integrity efforts are working in concert, based on your strategic plan.

Erin Schmuker, Vice President, Payment Integrity, Optum

Erin Schmuker is responsible for product development and operational execution for Optum post-payment services solutions. She leads an organization that delivers more than $500M in savings annually to health plans nationwide.

Erin has been in the payment integrity arena for more than 15 years with significant expertise on payer/provider collaboration and retrospective claims analysis. Erin’s division at Optum is continually seeking opportunities to develop services and solutions that help health plans solve the complex problems existing within their payment cycle today.