May 19, 2022

Breaking Down Benefits to Improve Payment Accuracy


Top reasons benefits should be a focus, enabling healthcare payers to further improve payment accuracy

MANAGING DIRECTOR, AARETE

By Erica Nelson


MANAGING DIRECTOR, AARETE

Maria Turner

Benefits are often ignored when it comes to focusing on impactful initiatives to improve payment accuracy. Although benefits are an important component of delivering accurate coverage to health plan members, often other initiatives receive more attention given the immediacy of cost savings. However, healthcare payers should take a closer look at how benefits shape provider actions and can affect exposure to wasteful or inappropriate provision of services and supplies.

Top reasons benefits should be a focus, enabling healthcare payers to further improve payment accuracy include:

HEIGHTENED REGULATORY COMPLIANCE 

Benefits managers are commonly nested under the compliance department. The driving force behind payers’ benefits review comes from regulatory and contractual requirements to provide certain services or risk. The reviews are often driven by 1) penalties from the governing body that sets the rules, whether that be CMS or State regulatory agencies, 2) contractual terms, and 3) dissatisfaction of employer groups or individual enrollees. Having a solid reputation for improving member outcomes ensures customer satisfaction and goes a long way in growing membership, while consistently delivering on essential health benefits to cover a given standard of care that gives regulators peace of mind

UNNECESSARY SERVICE UTILIZATION 

Published benefits give members and providers guidelines on appropriateness of care. Maintaining a website or application of health plan coverages and communicating updates with providers signals that the payer understands the effectiveness of certain procedures and prompts providers to deliver cost-effective high-quality treatments. When providers and members understand covered benefits and service limits, attempts to utilize non-covered services plummets. Once benefits and their associated limits have been established and communicated to providers and members, the utilization of those benefits should be quantified and tracked. As the saying goes, “you can’t manage

what you don’t measure.” Measurement opens up the floodgates for assessment of performance from a quality and cost effectiveness standpoint. If a specific benefit limit is constantly being hit or challenged in appeals, then the payer is in a position to evaluate limits in comparison to those set by other payers in the market, consider whether it is a specific population of members that requires additional care, or investigate if it is an instance of fraud, waste, or abuse. As a result, the outcome results in a reduction of excessive or unwarranted services, while ensuring a more fiscally responsible use of funds for their intended purposes.

COVERED SERVICES REIMBURSEMENT AND PRIOR AUTHORIZATION LIMITS 

Configuration of benefits and their limitations are critical to achieving payment accuracy. Configuration involves setting up the adjudication system to pay only for services covered by the plan design and properly authorized in accordance with medical management requirements which includes tracking of maximum units accumulated over time. This requires that benefit accumulators be set up to properly deny claims in excess of covered or authorized limits. This also requires proper interface with medical management’s prior authorization systems.

Prior authorizations should be strategically set up to reduce waste/abuse and minimize the financial operational burden on the health plan, while still ensuring that member safety requirements are met. To improve utilization and compliance, as well as to minimize payments for wasteful and abusive claims, prior authorization requirements need to be properly communicated and easily accessible to providers and members. 

SERVICES PER MEMBER 

A sick member is an expensive member, so payers typically do everything in their power to enable members to seek preventative treatment which sustains optimal health. However, there are a multitude of factors that can cause providers to overtreat patients, especially if there is a fee-for-service agreement in place. Including appropriate levels of treatment or steps in the treatment process within benefits will guide providers to consider the appropriateness and cost of care before ordering additional tests or performing a procedure. That same guidance can also be used to incentivize treatments for those who may be receiving a lower standard of care, thus creating a healthier member in the long-term. This dual effect cuts costs in the short-term and lowers risk in the long run, a two for one! 

ADMINISTRATIVE BURDENS ON HIGHLY-SKILLED RESOURCES

Physician and nurse wages associated with managing benefits and associated authorizations are some of the costliest. Their clinical expertise and specialized skillset is needed to assess medical necessity of a given treatment or procedure. With an increased focus on maintaining and communicating benefits to members and providers, a payer can reduce its reliance on high-cost clinical services with proper leveraging of benefits frameworks.

While benefits are only one contributing factor to payment accuracy, a health plan should further analyze subsets within benefits to discover cost savings opportunities that also optimize quality of care. The granularity of benefits may seem daunting, but by deploying digital and data solutions such as the use of artificial intelligence (AI), predictive analytics, and the build out of data visualizations and user-friendly dashboards, health plans can simplify processes and analyses to prevent further cost hemorrhaging. These integrated solutions are designed to empower meaningful business decisions yielding measurable results, opening up the door to analyzing areas of the business that are often neglected.

MANAGING DIRECTOR, AARETE

By Erica Nelson

MANAGING DIRECTOR, AARETE

Maria Turner

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