What Payment Integrity Means for Providers, How to Avoid Claim Issues

July 11, 2023 - Healthcare providers are constantly running into payment integrity tools payers put in place to ensure proper payment. But payment integrity is also crucial for providers if they want accurate, complete, and timely reimbursement.

Of the trillions of dollars spent on healthcare in the US, the National Health Care Anti-Fraud Association (NHCAA) estimates about 3 percent of total healthcare expenditures to be lost to healthcare fraud. That estimate is also on the conservative side, according to NHCAA, and could be as high as 10 percent of annual health outlay.

Payment integrity programs are employed by payers—both public and private—to address dollars lost to healthcare fraud and abuse. But these programs go far beyond fighting fraud; payment integrity in healthcare also reduces payments that occur as a result of incorrect or wasteful billing practices. Programs encompass correct party, membership eligibility, and contractual adherence.

Payers are putting a lot of focus on payment integrity programs in light of new regulations, including the federal healthcare price transparency rules and the No Surprises Act. These new requirements are putting healthcare prices on display for the public to scrutinize (including competitors) and adding to the complexity of medical billing. Value-based care and pay-for-performance models also make it less straightforward to ensure accurate reimbursement.

Payment integrity programs have largely been stood up by payers, but providers need to be aware of how their payer partners are digging into their claims and what they can do to prevent potential fraud and compliance issues. After all, fraud in healthcare is not as clear cut as in other industries and even missteps—including those providers do not mean to take—can result in payment and legal issues.

Ensuring payment integrity before payers catch claim issues also ensures accurate reimbursement in a timely manner and minimizes financial losses from improper payments.

Robust documentation and coding practices

Accurate reimbursement relies on accurate coding and documentation. Medical and billing codes, as well as clinical documentation, provide the data payers need to reimburse providers for all of the care they give to patients. Failing to account for services or describe a clinical encounter in full could leave money on the table, while coding and documentation errors could result in denials, recouped payments, and even legal issues.

Robust documentation and coding practices are needed to ensure payment integrity. At the center of these practices is education.

Providers need to provide comprehensive training and education to not only coding staff but clinicians. Even clinicians should understand the organization’s coding guidelines, documentation requirements, and updates to coding systems (e.g., ICD-10-CM, CPT/HCPCS). This helps ensure that providers have a solid understanding of accurate documentation practices and the importance of coding specificity.

Clear documentation guidelines can help to support training and education. Outlining what the necessary elements are for accurate coding and billing, such as documenting diagnoses, treatment plans, and relevant patient information, promotes consistency across the organization and minimizes errors. Consistency is key as payers use automation and artificial intelligence (AI) to quickly comb through claims and identify outliers.

Healthcare providers can also use documentation templates in the EHR to bolster accurate documentation and coding. The templates prompt EHR users to capture all the necessary information for proper reimbursement and the documentation needed to support it.

Additionally, computer-assisted coding (CAC) systems can use technologies like AI and natural language processing (NLP) to support coding practices. The systems help clinicians and coding staff assign the appropriate codes to patient records while analyzing clinical documentation to suggest potential codes. Hospitals and health system users have already realized the value of CAC systems, with an overwhelming majority of users in a 2019 KLAS report saying they would purchase their systems again.

Claims data analysis

Payers are leveraging AI and other technologies to analyze provider claims to identify improper payments and instances of healthcare fraud. But providers should also be analyzing their own claims to get ahead of errors, denials, and other claims issues. And they can employ the same technologies to ensure timely, accurate reimbursement.

Providers must first establish relevant key performance indicators (KPIs) to get set up for claims data analysis. For payment integrity, they should hone in on metrics around coding, charging metrics, and revenue conciliation. These include discharged, not final billed (DNFB), coding productivity, denial volume, avoidable write-off as a percentage of revenue, and underpayment recoveries.

Next, providers need to ensure they can retrieve the data required to track and monitor selected KPIs. For example, according to the Healthcare Financial Management Association (HFMA), providers need to know gross dollars in DNFB, as well as the average daily gross patient service revenue, unbilled accounts receivable (A/R), and income statement. Together, this information can give providers analyzing DNFB a look into their claims generation process.

Big data analytics solutions can help providers aggregate and analyze revenue cycle data to create KPIs. Data mining services, machine learning algorithms, predictive modeling, and statistical analysis can also help to identify patterns, outliers, and trends that might not be easily recognizable through manual analysis. Providers can build these capabilities in-house if they have the resources to manage large volumes of data. Otherwise, claims data experts can help to provide solutions and knowledge.

Adopting automated claim review systems, AI, and other technology solutions can also streamline payment integrity processes. These tools can identify potential errors or discrepancies in real-time, reducing manual effort and improving accuracy.

Continuous process improvement

Payment integrity is an ongoing process. Health policy and regulation, claim requirements, and payer rules are constantly changing, creating compliance and payment integrity risks even if providers have processes to ensure accurate coding and billing. Continuous process improvement is key to avoiding compliance issues, potential claim denials, and revenue leakage.

Providers should monitor KPIs regularly to understand trends in claims management. They should also set measurable goals to track progress with KPIs and identify areas for improvement. The same data can be used for ongoing claims data analysis to uncover other patterns impacting reimbursement and compliance. In addition to KPIs, providers should be regularly reviewing claims data, billing reports, denial rates, and using data analytics to spot potential errors.

Internal audits and reviews can bolster continuous process improvement efforts for payment integrity. Providers should perform reviews and audits to evaluate compliance with coding guidelines and documentation standards. Audits are also crucial for identifying areas of non-compliance, process inefficiencies, and potential billing errors that could lead to fraud allegations.

Additionally, staff feedback can pinpoint areas for improvement. Clinicians and staff go through coding and billing workflows every day. Providers should discuss workflows, workarounds, and general satisfaction.

Staff feedback is especially important as more administrative staff work remotely. Staff may not feel as comfortable discussing potential coding and billing errors if they do not regularly communicate with compliance officers and other leaders. Some staff may feel more comfortable being a whistleblower. Providers should ensure all staff, including remote workers, are part of payment integrity discussions. Feedback should translate to process improvements.

Payment integrity should be a priority for healthcare providers to prevent fraud, denials, and revenue leakage. Establishing a strategy for payment integrity enables providers to get ahead of claims issues before payers and law enforcement officials spot them.