HealthEdge exec's advice to payers on payment integrity reform: Demand more

Ryan Mooney is executive vice president and general manager of payment integrity at Burlington, Mass.-based HealthEdge. He spoke with Becker's about the need for payment integrity reform and how it will be key for digital transformation. With an estimated 25 percent of all healthcare spending attributed to waste every year, payment integrity needs a reboot to create a more efficient future for payers.

Question: How would you describe the current state of the payment integrity system?

Ryan Mooney: It's largely built on contingency, and the contingency model is really at the root of what I think is wrong with payment integrity. If you're on contingency, you have a perverse incentive for things to be incorrect. That's good for integrity companies — it's not good for the healthcare system. Every client you go to says, "You're not gonna find anything here, we run a great shop, we don't have any of these issues." As that has grown over the years, and I've been doing this for 24 years, there's a pretty proven track record that there will be issues. Some things will occur and are almost impossible to escape. Then you're still stuck on contingency. So what happens is quarter after quarter, you're finding the same things over and over again and these problems just persist. The pie of what's being found just gets bigger and bigger and bigger. That's sort of one. 

There are behaviors in payment integrity that would suggest that folks are more concerned with growth than with exposing and identifying issues and fixing them. You have this whole universe of intelligence being pointed only at enriching payment integrity companies versus getting things right. That's really at the root of it. You have a lot of really good smart people who want to find things, who want to identify them, who want to recover them, but in this model, the things that they find are treated as intellectual property. I would call that a black box. You have a payer's data, you know their issues. I remember recovering over $10 million on a contract that was paid out-of-network, because the PIN was 30 digits and the system could only accommodate 28 digits. Just silly things like that, that would be so easy to fix. So easy to communicate back to a payer and say, go make this technical adjustment. But because of this model, it's considered a stream, and it sets a new baseline. You have to grow off that baseline to demonstrate success year after year. You start gathering momentum by identifying these issues without ever getting them right. That's really the core of what I think is wrong right now.

Q: Are payers all using the same model nationwide?

RM: More often than not, the model is based on contingency, or sometimes called gain share, where you identify a dollar — you keep 80 cents, we'll keep 20 cents, or whatever the proportion might be. It's sort of very low risk for payers because I don't have to pay you if there's no value, but over time, when there's an obvious stream of recurring issues, that becomes less and less of a benefit for payers.

Q: Payers are investing more than ever in payment integrity, correct?

RM: Yeah. I think there's a lot of frustration with payers who say, "Quarter after quarter you're finding the same issues and per our contract, I'm not allowed to see them and I'm not allowed to go remediate those things." So what they do is they invest in their own teams, largely to be able to say, "We want to be able to bring more within our four walls, more where we can control things, and we can identify issues and fix them." Then on the other side, as those recoveries increase from the outside vendors and it's on contingency, you're paying more and more and more for largely the same thing.

Q: An estimated $760 billion to $935 billion is wasted annually in healthcare spending. What is the solution to that? 

RM: As many problems as there are, there's that many solutions. You accumulate as many opportunities to positively affect it as there are those that are wasted. Some of them are large scale — configurations of contracts, ability to be able to adjudicate them and data availability. You can get a lot of those root issues right that will eliminate some of the downstream waste. A lot of it is about data management, smart communication and reimbursement structures. And frankly, communication around provider behavior — building trust there, so that there's easy communication and people aren't gaming the system against each other so that they'll net out positively in the end. At the same time, there's contract-by-contract reviews, there's diagnosis-related group by diagnosis-related group reviews. You get good at analytics to be able to identify these issues, decompose them, and put in an edit or go back and reconfigure a contract or whatever that root cause issue might be. It's always active. I heard a great quote from a client once that said, "Running out of ideas in payment integrity would be like surfing to the end of the internet." There's so much change, and there's so much volatility, that there's always going to be new things that you've got to go and fix.

Q: You've been doing this for over two decades. What are some of the biggest trends you've seen, and what trends are you seeing now?

RM: On the positive side, I think payers are getting much smarter about data management and analytics. They're getting the kind of visibility that they need into having just about every aspect of what they do. The folks that are in the seat within a payer know exactly the context, how to be able to fix that and how to be able to communicate about it. That's great. We want to see payers identify more. I think that's probably been a big trend. You get the idea of what's happening with payment integrity vendors and you invest. You see how much money is going out the door, you invest that internally. The internal teams are getting stronger, they're getting savvier, they're getting more technically capable. Two, the nature of the relationship between payers and providers — recognizing there's got to be trust, recognizing you've got to have a happy network. A lot of internal teams will dial back on their aggressiveness and focus more on communication and transparency than they will on exacting all of their recoveries because they want to keep that abrasion low. That's not necessarily anything brand new, but it's been more important in the last four or five years. You see payers saying: we're not necessarily motivated entirely by dollars, we're motivated by improving the system entirely.

Q: What can providers do differently for payers to improve this system?

RM: Transparency means a lot. Consistency means a lot. Communication means a lot. It's just being very clear about what the expectations are, very clear about any incidents that arise, sharing the information as you see it, then adapting to the feedback that you get. Oftentimes, when it doesn't work, you'll get a provider who just won't change their behavior. They know they're over-billing and if they bill incorrectly 10 times, and they get away with it twice, they have a positive advantage. That's the worst sort of behavior you'd see, is when they know they're doing it wrong, but they don't want to adapt.

Q: If you were speaking with the internal teams of the biggest payers right now, what would you be telling them and what would your advice be for them?

RM: Demand transparency. Demand an understanding of the root cause. Yes it's wrong, and thank you for the recoveries, but why? Give me prioritized, actionable opportunities to be able to go and make the system better. We are all part of this healthcare system, we all know what it's like to either be a patient or we know a patient, and to have that kind of information and opportunity to make the system better and not do it, is wrong. Demand that we do it right, open up the transparency and let's start fixing things. There'll be plenty more things to be able to go and find, to be able to grow your business and do more research and development. But for the stuff that we know about, fix it.

Q: Is there technology and innovations that payers can invest in to improve this system? 

RM: Yeah, and I think people are already on the right track. Even the payment integrity market is changing. Some of these demands are starting to manifest where you've got to show me what's going on — I'm going to invest in a workflow platform, I'm going to create my own capabilities to be able to do this work instead of just being totally reliant on someone else. I had a great client that expressed frustration around this. His comment was, "it's clear that I need them more than they need me because I'm not getting what I need. I'm only focused on the things that are within my four walls and I want to put more within my four walls." That's data availability. In a complicated payer, it's having a single platform to be able to create and maintain this in a pretty lean way. You create an edit, you maintain an edit and you put it out to your six platforms, for example. A focus on analytics is very important — help me go find the next. Let's find the outliers. Some of it can be very easy, but there are more complex things. Get the right tools in place, connect it to analytics, make it easy for your teams, show that core value and get that cycle going. Then you can get increasingly complex, but get those fundamentals right first.

Q: Final thoughts?

RM: Internal teams aren't just there to provide recoveries, they are to be the heart of intelligence — to be able to take this whole world of payment integrity and point it toward getting claims right. I wish that they would feel emboldened to demand more because that's the best thing they could possibly do. I'd love to see payers consider those teams as not just a cash cow — they're not just a line item for dollars presented back to the bottom line, but rather a real center of intelligence to be able to make the system better. I feel pretty strongly that if we reconceived payment integrity as not recovery, but intelligence pointed toward accuracy, you could get people thinking differently. I think you would inspire people to do more. It's not exactly inspiring to get back our money like a strong-arm collector. They have such a wide-ranging perspective on the system because they know all the places that it doesn't work.

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