Maximizing payment integrity success through software

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Host: Welcome to Optum’s Ask the Expert series focused on optimizing payment integrity software, to avoid payment pitfalls. In this podcast, John Hoffman, Director Application Managed Service Operations, Payment Integrity Software, Payment Integrity Optum, discusses how payers can maximize their payment integrity success through software.


How do health plans use software to drive payment integrity?

John Hoffman: Obviously health plan is expected to pay provider claims quickly and accurately. This of course sounds simple, but it's very complex between complex provider contracts, complex or incomplete medical and payment policies, legacy technology, tens of thousands of procedure and diagnosis codes. It's very difficult to pay claims timely and accurately, especially large volume of claims, without the use of software. Even medium-sized health plans are expected to pay sometimes tens of millions of claims per year. It's difficult to do so accurately without the help of software, as you can't have tens of thousands of people processing claims manually.

Typically a health plan's adjudication system is very good at processing large volume of claims, and doing some basic claim validation. They're not good at all the nuances that come with editing and pricing, and making sure those things are accurate. That's really where claims editing and pricing solutions, and software come into play to supplement the adjudication system. To put it simply, claims editing solutions will ensure that claim errors, omissions and questionable coding relationships are flagged and stopped where appropriate.

For example, if a claim comes in with a diagnosis of a broken left arm, but the procedure completed was surgery for a right leg, a claims editor will catch that as making no sense, and flag it for review or denial. On the pricing side, payment methodologies are becoming more complex and expensive everyday from, DOGs to APCs to APGs, to case rates, and more. You really need a flexible pricing tool to help you maintain, update, and negotiate hospital and physician contracts related to federal and state reimbursement guidelines. All those things said, you really can't run a health plan without robust software that helps process claims and ensure payment integrity.

Host: How do health plans stay on top of the constant editing, pricing, and regulatory changes using their software solutions?

John Hoffman: Robust, flexible editing and pricing solutions, with industry-leading content are vital to health plan operations. Editing and pricing guidelines differ by state, and are updated a number of times throughout the year. Health-plan software solutions must be flexible enough to make changes on the fly. You can't have any edits or prices that are hard coded in the software. Since the government can really make a change whenever they desire and they do so consistently, so you need software that has all the content behind it, but can be customized per changes in government regulations, and changes at this specific health plan business level.

The editing and pricing vendors really have to have an army of people that constantly stay on top of these changes. The software is only as good as the content behind it. If the content's out of date, a flexible software solution won't do you any good because you'll be over or underpaying claims. The team of people behind the content for these solutions, are really in charge of staying up to date with all the state by state guidelines, and all the national CMS guidelines, to ensure that the software is always reflective of what our government is saying should be up to date. If you don't have this up-to-date, obviously you'll over or under pay claims which will create provider abrasion. You'll also subject yourself to possible audits and fines from either CES or state regulatory bodies.

Host: How do health plans ensure their payment integrity software is maintained and maximized?

John Hoffman: Yes, so it's really a day to day effort. These are not push-button solutions that you can quote, set and forget. They really require active maintenance on a daily-weekly basis to ensure they're performing as intended, and they are customized to your specific health plans individual businesses and processes, as well as being up to date with health-plan specific medical and payment policies. You really can't license the software, turn it on and walk away. You really have to dedicate a specific team to ensure that it is performing per health plans particular lines of business and policies, or else it'll quickly become obsolete and will not be maximized.

Optum does offer various solutions that will manage and maximize both pricing and editing software on behalf of our clients. If a managed service like that is not right for you, we do always recommend that there is a specific internal team dedicated to staying on top of these software solutions. As there really is a justifiable ROI in both savings dollars and admin costs, if you do deploy resources to manage these.


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In the first podcast of our three-part series: John Hoffman, director, Application Managed Services Operations — Payment Integrity Software, discusses how the right payment integrity software in place is critical when creating a comprehensive payment integrity strategy.