Bridging the divide: Why payers and providers are collaborating to improve care

It’s more important than ever to navigate the complex relationship between payers and providers to streamline efficiency, enhance compliance and improve patient satisfaction.

The relationship between payers and providers has been typically viewed as adversarial, with the prices paid to physicians and hospitals being blamed for skyrocketing healthcare costs borne by the insured, while delays and denials by insurers are blamed for falling hospital revenues.

And while the arguments on both sides appear valid, the reality is that these supposed antagonists are closer than they would initially appear when it comes to revenue and payment integrity.

For payers, the goal of payment integrity is to deliver a great beneficiary experience and achieve member retention, payment accuracy and operational efficiencies, while maintaining compliance. Contrast that with revenue integrity on the provider side, the goals of which are to take great care of patients, maximize the reimbursement to which they’re legitimately entitled, create operational efficiencies and maintain regulatory compliance.

Efficiency and regulatory compliance are directly shared in each scenario. Both sides also want to ensure proper reimbursement while, at the same time, empowering patients and members. The key to this puzzle is accountability, which has savvy payers and providers looking toward bridging the historical divide between them to create mutually beneficial partnerships.

Bridging the divide

It won’t always be easy to identify the shared goals between payers and providers. The prior authorizations sometimes required by payers can be frustrating for providers – even more so now with the push to integrate artificial intelligence (AI) into the decision-making process. Meanwhile, payers are sometimes held accountable for a negative patient experience because of payment and financial challenges that are caused by issues within provider operations.

The patient is often stuck in the middle, not knowing where to turn when they have questions about a bill or need to dispute a charge. It’s a third scenario that plays out far too often to the benefit of no one. The reality is that payers can only compare what was charged against their contract with the provider to ensure the reimbursement was accurate. While a deeper dive would be possible during an audit, that isn’t something that occurs for routine patient questions.

As a result, the unhappy patient reaches out to the provider’s billing department for answers – many of which keep bankers’ hours and are notoriously difficult to connect with. Even when patients do successfully connect, it’s unlikely the billing staff could provide the necessary context for questions about visits or procedures, compounding the patient’s frustrations. The billing department may need to check with coders who have access to patient charts, adding time to any query and taking billers and coders away from their day-to-day duties.

All this goes away when the claim is right the first time. When there is no under- or overcoding, or codes that are missed entirely, providers can maximize revenues in a shorter time frame, ensure a positive patient financial experience and shore up their own financial health. Meanwhile, payers can reimburse the correct amount for member services and avoid the administrative costs incurred when questioning claims and conducting post-payment audits. It’s a win-win for all.

The benefits of internal scrutiny

As disruptive as an unhappy patient can be to normal billing activities, the specter of an audit brings with it a significantly higher concern.

As federal payers have increased efforts to ensure the accuracy of claims, payers and providers share the goal of identifying and eliminating billing risks. In the current fiscal year, the Health Care Fraud and Abuse Control (HCFAC) program and the Medicaid Integrity Program are receiving nearly $2.5 billion, an $80 million increase from Fiscal Year 2022, for their fraud reduction activities.

So far, it has been money well spent. In its 2023 Semi-Annual Report to Congress from the Office of Inspector General (OIG) that covers October 2022 to March 2023, the agency identified $200.1 million in expected audit recoveries and $277.2 million in questioned costs on both the payer and provider sides of the house.

Further, the Centers for Medicare & Medicaid Services finalized a new rule in January allowing audits to be conducted back to 2018, which is expected to claw back $4.7 billion from Medicare Advantage (MA) plans over the next decade. The main area of contention involves upcoding enrolled beneficiaries to make it appear they are sicker or require more intense treatment than their medical records support. The OIG has conducted dozens of audits of most large MA plans, finding $461 million in upcoded charges in the past two years alone. Overcoding could account for as much as 7 percent of all Part C payments, the OIG estimates.

Payers have a fiduciary responsibility to their clients to ensure that beneficiary claims are paid accurately. The federal Employee Retirement Income Security Act of 1974 (ERISA) sets minimum standards for most private industry retirement and health plans to protect those participating in these plans.

Under price transparency rules, hospitals are required to publish prices for certain procedures that payers can check against their contracted and published chargemaster rates to ensure they’re not overpaying for the care of their members.

Providers also can face audits. Overcoding or improper coding, such as more charges for visits and procedures than one physician could reasonably perform in a day, can result in an audit that could create negative headlines and a damaged reputation for a provider or a health system.

A payer-provider partnership that promotes both payment integrity and revenue integrity can bring better patient satisfaction while reducing the chance for a costly audit. Technology platforms and data analytics can play a critical role in this process of being proactive to catch and fix issues before they occur.

Driving cash flow

Billing and claims processes are dynamic, constantly in flux because of new payer contracts, updated guidance, new or amended codes, internal findings and education, and other factors.

Billing compliance and revenue integrity leaders at the provider organizations in this macroeconomic environment must assess and make investments to use technology and data analytics to monitor claims sooner in the adjudication process to catch errors to accelerate cash flow. Don’t be satisfied with the claims being eventually paid, but focus on how fast it can be paid. Similar technology deployed by payers can serve as an important check on providers while monitoring adherence to applicable regulations.

When competition is put aside so payment integrity and revenue integrity can be viewed as complementary processes, payers and providers both benefit through shared goals and collaboration. Providers are paid appropriately and promptly, and payers maintain compliance and avoid overpayments. Importantly, both sides avoid the financial and reputational damage that comes from unhappy patients and even unhappier federal agencies.

Ritesh Ramesh is CEO of MDaudit.

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