No one needs to tell healthcare industry professionals that the claims process is complex. Whether you’re a payer or provider, you face that complexity firsthand every day.
One thing that may be less obvious is that the claims process is convoluted. Current claims processes damage the relationship between payers and providers by causing an inordinate amount of friction between the two. This is evident in the current state of prior authorization (PA) and payment integrity (PI).
Too often, PI acts as a post-claim corrective measure to identify and resolve errors after services have been rendered and claims submitted. But we have an enormous opportunity—with the help of technology and claims experts—to gain insights and apply that information to a new, more effective process that examines claims through PA and PI concurrently.
The Root of the Problem: A Reactive Process
Today, providers first seek prior authorization for services, and upon approval (or in some cases, without seeking one, assuming payment), they proceed with the procedure. When the claim is submitted, however, it often encounters PI rules that weren’t considered during the initial PA process.
Consider a common scenario: a PA is approved, and the provider performs a laparoscopic surgery. After the procedure, the provider submits a claim, which includes separate charges for anesthesia. The payer’s claims processing system might then apply PI rules that deem anesthesia charges as already included in the overall compensation, leading to a denial of the separate anesthesia fee.
This reactive model creates significant back-and-forth, generates rework, delays payments, erodes trust, and frustrates providers and payers, alike.
Connecting Processes to Improve Precision
In reality, PA and PI should be joined at the hip. Easy to write, but more difficult to implement in a real-world scenario.
The key to reducing friction and improving overall precision lies in understanding how PI can integrate with PA submissions.
The future of both processes involves a “First Time Right” approach embedded directly within provider workflows.
Such a system could deliver:
- Denial Prevention: Address potential issues before a claim is submitted
- Payment Precision: Ensure accurate and predictable payments, reducing surprises for providers
- Smarter, Seamless Collaboration: Foster greater transparency and trust across all stakeholders
First Time Right: Payment Transparency
At the very moment a provider submits a claim for PA, what if all relevant PI rules are applied? It would mean that most denied claims become a thing of the past.
Upon PA approval, the provider would have a clear understanding of the final expected payment for that particular claim, including any specific billing requirements or potential denials. If, for instance, anesthesia charges are typically bundled, the system could alert the provider, allowing adjustments to the bill or providing necessary documentation.
That approach could extend to payer portals. While current portals offer basic validation, the next step is to embed comprehensive PI rules.
Imagine a provider enters line items for a surgery, including anesthesia, recovery, and physiotherapy. Instead of waiting for a post-submission denial, the portal provides immediate feedback to indicate that physiotherapy sessions exceed the covered number unless supporting medical necessity documentation is provided.
This “First Time Right” approach, embedded within the payer/provider workflow, allows the provider to add documentation with the initial claim, drastically reducing the need for appeals and lengthy payment cycles. This can accelerate payment, reduce work, and lessen friction among all stakeholders.
Bridging the Trust Gap Through Transparency
A lack of trust frequently plagues the industry, and it stems from a lack of upfront transparency regarding payment. The conflict breaks down like this:
- Providers often feel that payers are unwilling to pay what is rightfully due and that they intervene unnecessarily in medically necessary procedures.
- Payers, meanwhile, sometimes feel the need to intercede due to concerns about potentially unnecessary procedures or inappropriate courses of treatment.
This distrust largely stems from a lack of upfront transparency regarding payment. Frustration and skepticism often result when providers are unaware of the final payment until after they complete their services. Even when the correct payment is eventually received, the protracted back-and-forth diminishes confidence.
By integrating PI rules into the PA process, we can make the workflow and, importantly, payment expectations, transparent from the start.
The Evolving Role of Technology
Achieving the “First Time Right” concept requires significant technological evolution. While claims processing systems are highly sophisticated in applying payment rules, integrating these rules into provider-facing portals presents a new challenge.
Portals are already evolving. Many now allow for the direct attachment of medical documents, a vast improvement over fragmented mail-based submissions.
The next step is to update the portals with PI rules. This means allocating IT resources to enhance portal capabilities, enabling administrators to validate claims against PI criteria in real-time, and providing immediate feedback.
No doubt, this is a significant shift in the way we do business.
But with this strategic transition, payers can move from a reactive “deny and defend” posture to an “enable and ensure” approach.
This will simplify operations and reduce administrative burden, while cultivating a much-needed environment of trust and collaboration that will benefit everyone involved in the healthcare system.
Mitesh Kumar
Mitesh Kumar is Senior Vice President of Practice at Sagility.
