Fraud, Waste & Abuse is Not Total Payment Integrity

Don’t settle for “good enough” when a better solution exists.

Fraud, waste and abuse (FWA) is a serious problem, one that can also be seriously misleading for healthcare payers looking to transform their revenue streams. That’s because many health plans mistake strong FWA savings as a holistic program when, in actuality, it’s only a part of the bigger picture. That’s right: only investing in FWA solutions means your plan is leaving money on the table and missing out on total payment integrity.

What is Fraud, Waste and Abuse?

To start, let’s define what FWA is:

• Fraud is an intentional attempt to defraud a health care benefit program.
• Waste is a misuse of resources that leads to unnecessary costs to a health care benefit program.
• Abuse is a mistaken payment for services or items when no legal entitlement to such a payment exists.

Fraud, waste and abuse results in “improper payments” and refers to any erroneous payment made in a government assistance program (such as Medicaid). The American Action Forum states that the current improper payment rate is around 9.8%.

With healthcare costs soaring, payment integrity has become a vital tool for health plans. But many health payers are settling for just a FWA solution, which only alleviates part of the “improper payments” problem.

Total Payment Integrity Offers FWA Solution and More

What are you missing out on when your health plan only invests in a FWA solution? In addition to fraud, waste and abuse (FWA) solutions, other payment integrity components include claims editing solutions, reimbursement analytics, coordination of benefits, subrogation, and more. Some of these areas, such as subrogation, have been woefully overlooked in the past; in fact, one report estimates only up to .3% of recoveries are made on subrogation claims.

FWA solutions do not extend to helping health plans find reimbursement errors or overpayments based on incorrect contracts, policies, member eligibility, clinical audit and coding abnormalities. In our experience, health care plans see a 3-7% return of medical savings annually, just from our payment integrity platform. That means health plans not investing in a robust and holistic payment integrity platform are missing out on substantial savings.

Don’t Overlook the Benefits of Greater Transparency

Another benefit to using a comprehensive payment integrity solution is the transparency it provides to claim processing. Advocates for better communication across the continuum of healthcare are increasingly calling for transparency and greater access to information. With a total payment integrity solution, health plans and payers will have access to streamlined data and metrics surrounding the entire claims life cycle.

This transparency also can have a positive impact on provider relationships. According to Healthcare Finance News, “The more transparent a health plan is about their claims adjudication and payment processes, the better. Clearly defined processes that are consistently followed can foster physician confidence.”

The ability to set and seamlessly communicate clear expectations around claim submission, timing of adjudication, remittance procedures, appeal processes and more can improve operational performance, reduce costs and prevent provider abrasion.

Where to Begin?

As transparency and visibility become key in FWA prevention (and more largely, the issue of controlling healthcare costs), health plans are being driven to find solutions. FWA solutions are eye-catching, but not comprehensive and will at best simply be a silo-ed solution for health plans looking to stop leakage.

Instead, find a solution that encompasses every area of payment integrity, like Pareo. With Pareo, FWA is part of a larger, holistically-minded platform that offers health plans a single solution for total payment integrity.