Health care payers use a variety of strategies, tools and solutions to fight fraud, waste and abuse (FWA) in their fee-for-service healthcare claims. A key component of an effective payment integrity strategy is to focus on your most productive targets: Who or what should be the focus of your payment integrity program?
Here are some things to think about:
- Your payment policy and your claims adjudication system are designed to prevent inappropriate payments. However, no payment policy is perfect, no adjudication system is error-free, and the “bad guys” are always alert to weaknesses in your business. Your payment integrity program needs to be alert to your greatest weaknesses – the ways in which you leak the greatest amount of money in inappropriate payments.
- No payment integrity program will stop all of the FWA losses. Among other priorities, your goal is to control FWA losses at an appropriate level of loss. A common industry norm is 3% to 5% of your total annual paid. Embark upon a project that risk scores 12 months of historical paid claims using AI-based analytics which look for aberrancy, which is indicative of FWA across all lines, all members, all providers, all claims and all procedure codes. You will gain an enormous amount of insight into the strengths and weaknesses of the integrity of your payments for fee-for-service claims with this kind of project.
- Even when you are using powerful payment integrity technology, human resources are often a limiting factor in stopping FWA that eludes the controls of your payment policy and claims adjudication system. To maximize your results, you need to use your human resources to greatest effect by focusing their attention on the places where your payments are most at-risk.
- It’s easy to be distracted by the notion that your priority should be on addressing member or beneficiary FWA losses, but FWA perpetrated by members or beneficiaries isn’t where you’re leaking the most money. You’re typically leaking the most money to provider FWA and systemic weaknesses, including fraud as well as weaknesses in payment policy which are being exploited by providers, and errors in your adjudication and payment systems.
- The right payment integrity technology enables your limited human resources to most efficiently and effectively target the greatest opportunities for savings. A payment integrity solution with sophisticated technology like explainable artificial intelligence (xAI) and machine learning and robust decision management features and functions will direct your attention to your greatest risks – the most suspicious activity where the greatest amount of money is at risk. FICO’s Payment Integrity Platform, with its core component, FICO Insurance Fraud Manager, is an example of this kind of solution.
The most effective approach to targeting your efforts is to score your claims, providers and procedures for likelihood of FWA using xAI and ML, and then sort your scored results to focus where the greatest amount of money is at risk.
An effective payment integrity strategy, like any part of your payment integrity program, depends upon having stakeholders from areas such as Legal, Claims Operations and Provider Relations on board. Engage your stakeholders in your strategy to maximize the results that you achieve in the mitigation of FWA losses.
Be prepared for change because the people who inappropriately take your money are entrepreneurial. Make sure that your payment integrity solution can keep up with the bad guys. Agile xAI and machine learning are features that will allow your solution to do this.
We welcome your comments. Stay tuned for my next post on health care fraud, waste and abuse.
