Rapid advancements in personalized medicine, tech-enabled processes for care, sharp swings in utilization and a slew of post-pandemic regulatory changes have left the U.S. healthcare system right in the midst of a “Wild West” environment. For health plan leaders, it underscores the need for processes that shore up payment integrity while ensuring members receive the right care at the right time.
The speed of innovation in healthcare is exciting. However, the pace of advancement, especially around personalized care, presents challenges for health plans, such as how to evaluate the use of biologics or pay for landmark gene therapies such as Hemgenix, which comes with a $3.5 million price tag per use.
Meanwhile, healthcare costs remain above pre-pandemic levels. Now that COVID-19 public health emergency flexibilities have expired, payers must decide how to cover home- and community-based services, among others.
Such an environment also raises the potential for systemic errors, waste and abuse, demanding vigilance from health plans.
Wrangling Risk in a Rapidly Evolving Environment
In healthcare, much like the Wild West, there is a great deal of new territory that has not been properly explored, nor is the right framework in place to govern new discoveries. Innovations have come to market at such a rapid clip that we don’t yet have universal rules around how to incorporate some advancements into care—or how to pay for them.
Even in the case of wearables, which are now commonplace, it is often difficult to incorporate data from these devices into care decision-making, which in turn presents challenges around whether use of wearables should be reimbursed and, if so, for whom. The move toward personalized care enables physicians to prescribe medications for each phenotype of asthma and select precise treatments for skin conditions such as psoriasis based on a person’s genetic makeup. Yet the complexity of specialty drugs makes them especially prone to inaccurate billing or, worse, waste and abuse. As alternative settings of care delivery continue to emerge, this increases the potential for bad actors to take advantage of lack of rigorous controls to prevent improper billing or catch instances of waste and abuse after a claim has been paid.
Whenever change occurs quickly, opportunities to take advantage of weaknesses abound. Now is the time for health plans to identify where gaps in knowledge or processes exist and develop a proactive response to mitigate risk.
Risk-Reduction Strategies for a New Frontier
Getting ahead of risk is challenging at a time when health plans are already navigating the pressures of constrained resources, but there are steps payers can take to strengthen their response. Actions to consider include the following.
- Look for areas where the medical cost trend is increasing. For instance, areas that present high potential for errors, waste or abuse include behavioral health, telehealth, genetic testing and specialty drug claims. Additionally, at a time when healthcare finance leaders expect outpatient volumes to increase by an average 8.3% in 2023, a Kaiser Family Foundation analysis found outpatient visits are now being billed at higher levels of complexity. By analyzing trends in medical billing on a year-over-year basis, health plans can spot categories of spending that are accelerating faster than anticipated—a potential indicator of claim waste or abuse. They can also gain greater insight into differences in utilization patterns as their enrollment mix changes, which could indicate the need for new services and support for specific populations.
- Lean on outside partners for subject matter expertise in emerging-risk areas. No health plan can be an expert on every specialty. That’s especially true when it comes to specialty drugs, which has grown 43% in cost from 2016 to 2021 alone. By partnering with outside experts in areas where gaps in internal knowledge exist, health plans can better position their teams to spot irregularities in CPT code use or volumes that could suggest errors in coding or potential scams. They can also more effectively respond to members’ desire for personalized or specialized care while ensuring the care they receive meets medical guidelines for treatment.
- Organize payment integrity efforts according to the problem the health plan is trying to solve. This helps align team members with specific expertise in tackling specific types of waste and abuse, such as around specialty drug claims. It also strengthens the ability to move beyond postpay integrity efforts toward prepay integrity in areas where health plans are highly vulnerable to improper payment. For instance, dedicate a team to drug-specific payment integrity to be sure your health plan is capturing a big-picture view around specialty drug claims. Members of this team should include a pharmacist, pharmacy technicians, nurses, physicians and data analysts, who can provide a nuanced perspective around specialty drugs billed to the plan. A team with depth in subject matter expertise also can sift through thousands of lines of data and pull out the “needle in a haystack” that doesn’t look right.
Better Protection for a New Era
After every new innovation in healthcare comes the guardrails to ensure such innovation is used responsibly. We’re in the beginning stages of establishing parameters for implementing new discoveries in care and paying for them. By taking a more robust approach to payment integrity, health plans can better protect themselves and their members from the potential for errors, waste and abuse while supporting more advanced approaches to health and better patient outcomes.
Matthew Hawley
Matthew Hawley is executive vice president, payment integrity for Cotiviti.
