Prepayment Integrity Services serve as the vanguard for employers in mitigating healthcare fraud, waste, and abuse. For public sector employers, engaging payment integrity firms is imperative when handling tax dollars, ensuring claims and payments are legitimate and correct before being processed. These services are distinct from conventional audits, extending a more comprehensive review of claims with a collaboration approach with carriers.
Importance to Employers:
Engaging with prepayment integrity services is vital for public sector employers to ensure the utmost precision and legitimacy in medical claims. This approach is crucial when taxpayers’ money is involved, ensuring each dollar is correctly allocated and spent. Independent reviews of claims facilitate a more in-depth analysis, utilizing advanced methods like complex algorithms, inferential analytics, predictive modeling, and medical claim reviews to optimize carriers’ partnerships, allowing for the true stewardship of finances and addressing potential fraud, waste, and abuse in real-time.
Methodologies:
The technologies and methodologies employed by prepayment integrity services can go beyond conventional audits by leveraging:
1. **DRG Coding Validation**: Ensuring accuracy in diagnoses and procedure codes and their consistency with medical records.
2. **Place of Service Analysis**: Confirming appropriateness in service placements and addressing discrepancies in payment structures.
3. **Medical Drugs**: Verifying the correct HCPCS codes and ensuring adherence to pertinent policies, regulations, and guidelines.
4. **Inpatient Psychiatric Evaluation**: Assessing the level of care in inpatient psychiatric facilities.
5. **Readmissions Scrutiny**: Ensuring that no readmission policies are appropriately applied, and payments are accurately made.
Of course this list is far from exhaustive, and there are myriad ways in which the claims can be analyzed for clinical and financial appropriateness under the terms of the plan at issue.
Case Study: New Jersey’s Approach
New Jersey’s Payment Integrity Program offers a glimpse into the effectiveness of these services. The state, with around 800,000 members, mandated a third-party payment integrity company to oversee medical claims from public workers, following escalating concerns over the rising costs of public worker benefits.
Implementation & Impact:
Launched in February 2021 after overcoming initial delays, the program utilized advanced methodologies and resulted in aggregate savings of over $152M, with approximately $100M from prepayment review and $52M from post-pay review. The reviews focused on several areas, including DRG coding, place of service appropriateness, inpatient psychiatric services, medical drugs, inpatient rehabilitation facility, hospice, and readmissions. The reviews employed complex algorithms, AI, and were overseen by medical directors, ensuring a saving of approximately $17 PMPM.
A description of the program and findings were presented to the State Health Benefits Plan Design Committee, one of the governing bodies of the public sector program, on January 25, 2023:
The Benefit to Public Employers:
For public employers, the introduction of prepayment integrity services equates to significant savings and optimized utilization of funds, achieving efficiency within the initial years of deployment due to the market and carrier concentration. The comprehensive approach not only fosters financial stewardship but also cultivates a collaborative environment with carriers, promoting accountability and precision in medical claim settlements.
Prepayment Integrity Services are crucial for the public sector, serving as a mechanism to safeguard tax dollars against inappropriate medical claims and ensuring optimal allocation of resources. The adoption and implementation of such services, as illustrated by New Jersey's case, validate their efficacy in promoting financial responsibility, enhancing savings, and ensuring the right application of every dollar spent on public worker benefits.
This commitment to meticulousness in claim review and validation is imperative for any region or state aiming to conserve resources and optimize public funds, fortifying the healthcare system against potential vulnerabilities and inefficiencies. The example set by New Jersey demonstrates the tangible impact of such services and establishes a model for other states to implement such proactive measures in their pursuit of excellence in healthcare management.
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