6 Steps to a Successful Prepay Strategy

Health plans can take control of their own prospective provider audits instead of over-relying on services vendors with the help of advanced technology and access to proven analytics. 

We’ve written before about why it’s important for health plans to start thinking about moving more of their audit activities earlier in the claims payment process. The potential for increased cost savings and reduced provider abrasion are significant drivers for every future-looking health plan to transition payment integrity efforts to a healthy mix of prepay and post-pay led by both internal and external resources. But with entrenched challenges to achieving this goal, it’s easy to understand why many health plans rely solely on third-party services suppliers for prospective provider audits – if they’re able to focus on this area at all. 

If your health plan is just starting out with this realignment, we put forward six recommendations to progressing on your prepay strategy step by step. However, payment integrity operations vary greatly in sophistication, and this plan is designed to meet you where you are. So, feel free to pursue a slightly different path from current state to full transformation. 

What are the most common prepay audits performed by payers?

• Mismatched CPT or ICD codes 
• Incorrect coding 
• Lack of medical necessity 
• Upcoding and unbundling 
• Missing or wrong modifiers 
• Other coverage 

1. Adopt advanced technology

Strategic directors of payment integrity understand the potential of digital transformation: a greater focus on prepay functions yields a better balance between internal and external functions and improves recovery returns. Breaking down data silos to centralize efforts is the first phase, and adopting advanced technology is key to this goal. 

Instead of multiple technology systems and manual processes that historically characterize health plan operations, you can unite disparate internal payment integrity departments and vendor information under a single technology platform. Especially if that technology supports APIs for real-time data feeds from service vendors, industry databases, provider EHRs and best-of-breed applications, which enables plans to streamline payment integrity operations and support their organization in owning prepay strategies. 

Scalable platforms like Pareo are particularly suited to this task. Because it is designed to get internal and external stakeholders on the same page, service vendors and audit staff can achieve alignment with real-time information exchange and visibility on progress. 

2. Optimize post-pay recovery efforts

While a health plan’s goal is to ultimately reduce the overall retrospective effort in favor of primarily prospective claims validation, successful post-pay recovery is the foundation. In fact, the predictive analytics that form the foundation of prepay concepts often rely on compiling historical results to improve precision. So, start by ensuring you have all areas of payment integrity covered – coordination of benefits, data mining, medical record review, contract compliance, and fraud and abuse detection – and coordinating these efforts between internal and vendor resources. 

This exercise should also help in the effort to evaluate provider claim submissions for trends to identify those providers that could benefit from additional support. Work to engage these providers with education and motivation to improve billing practices and submit clean claims that ensure prompt payment. Your providers want to get claims right the first time, too. 

If you have adopted an advanced technology platform, such as Pareo, its native functionality covers the full spectrum of payment integrity, including functionality that supports two-way communication with providers.  

3. Gain visibility on vendor successes

Because most health plan prepay strategies begin with outsourcing services to third-party payment integrity suppliers, the most successful prospective claims validation concepts may be siloed within those vendors. But the best partnerships are rooted in transparency. Maximizing the mutual value of the payer-vendor relationship starts with increasing visibility on assigned inventory, statuses and results of outsourced efforts.  

Integrative technology streamlines the vendor effort needed to receive claim files, submit audits, and get real-time feedback on denials, while allowing you to create multi-pass situations with lag times measured in hours, not days. Health plans can strategically stack and segment high-performing vendors and mutually develop goals with vendors all while tracking performance in real-time.  

Increased visibility on supplier performance and successes gives you more control over the entire payment integrity continuum and can help you improve cost-effectiveness. Over time, this data also provides insights that can ultimately inform internalization strategies.

4. Aggregate analytics from multiple sources

Once you have optimized post-pay recovery efforts and gained visibility into concepts that can perform well in a prepay environment, Pareo can enable your health plan to maintain a baseline library of concepts best suited to prospective savings. Some algorithms and data sets that support retrospective issues may be insufficient for prospective intervention, and the functionality of Pareo allows you to thoughtfully adjust as needed to accommodate thresholds better suited to the prepay environment.  

Payment integrity technology vendors may also be a source of prepay analytics, like those offered to Pareo clients. Along with concepts developed by internal data science resources and those internalized from outside experts, health plans can develop a robust concepts repository covering both complex (requiring medical record review) and non-complex (data mining) audits and route them directly to the platform for lead validation and adjudication. 

5. Configure workflows to maximize internal resources

At this point, health plans should be in a better position to assign internal resources to managing more prepayment audits. These prepay workflows will likely look different from post-pay recovery workflows, particularly in terms of timelines and provider engagement. 

While retrospective payment solutions may allow time for plan staff to review and validate findings, prepay operates on a much shorter timeline. Flexible, real-time integrations allow you to adhere to stringent SLA performance, maintain common audit and analytic experiences, and streamline disparate data sources. 

Health plans must manage the accuracy of prospective findings and should hold their team to an appeals uphold rate of 90% or greater. Automate as much as possible to reduce the risk of having to pay without review. Pareo leverages machine learning and other applications of A.I. to drive process automation and “learn” over time. 

Additionally, post-pay and prepay team coordination increases in importance. Retrospective recovery efforts will necessarily continue and may be better at spotting long-term trends. Real-time collaborative technology enables prepay operations to ingest post-pay intelligence to educate providers accordingly and adjust prospective validation processes to rapidly prevent future payment errors.

6. Engage providers in the transition

Finally, ensure the prepay program lives up to its promise of engaging providers and reducing abrasion. Proactively communicate with providers to get their buy-in on new policies. If you have already implemented Pareo to support your prepay strategy, leverage the integrated provider communication tool that aligns with your prepay workflow to deliver explanations of payments and denials and supports provider inquiries and appeals. Combined with dashboards that display billing patterns and other relevant analytics, this framework opens new avenues for extending the provider relationship. 

Pareo Helps You Take Control of Your Prepay Strategy 

Pareo empowers health plans to address all lines of business, prepay and post-pay, with solutions in place to continuously evaluate and move post-pay identifications internal and ultimately to avoidance. It is the industry’s only health plan-controlled payment integrity platform that allows you to shape your own strategy and have the advantage of the best technology, best analytics, and integration of all disparate areas – without relying on services vendors.  

Because of this 360-degree approach to payment integrity, health plans can easily transition post-pay analytics to the prepay environment. And, with the ability to track estimated avoidance compared to actual payments and how retrospective-to-prospective analytics reduce leakage post-pay, health plans can prove the ROI of this effort. It’s not unusual for health plans using Pareo to cost avoid in excess of 30% of all plan savings.