The Challenge:

Committed to constantly improving operations, a national Medicaid managed care organization contacted Optimity to help it increase claims payment integrity. It desired not only to enhance the accuracy of routine payments, but also to avert litigation associated with a dispute involving more than $50 million in claims payments.

Further, the company recognized challenges with provider satisfaction if claims were not paid correctly. It was in everyone’s best interests that Medicaid claims payments were processed smoothly and accurately.

How We Helped:

Getting to the bottom of inaccurate claims payments

With an eye toward streamlining processes and improving data quality, accessibility, and usage, Optimity works with clients to leverage technology in order to develop efficiencies and manage performance. For this project, we built technology that not only helps the company recover leakages in claims payments, but also identifies and corrects their root causes, thereby avoiding similar issues in the future.

First, we created a claims pricing engine that simulates payment of Medicaid and Dual Eligible Special Needs Plan (D-SNP) claims by comparing contract terms with claims data and reporting the expected pricing. Then, working in close collaboration with a cross-functional team composed of claims operations, contract configuration and provider subject matter experts, we examined claims payments from the previous 18 months and identified payment leakages and their root causes.

Informed by this analysis, we proceeded with a number of measures to improve claims payment accuracy and increase efficiency around payment issues. For example, we created a reusable benefits and configuration tool to identify discrepancies against the payer’s requirements. We also developed business and technical requirements to enhance the company’s claims payment issue management system and streamline the ticket submission process.

During our engagement, the company asked us to create a solution to monitor expected recoveries coming in from inaccurate claims payments. In response, Optimity developed business and technical requirements and architecture recommendations for a Claims Payment Integrity (CPI) solution to track and report on claims adjustment data.

Results/Impact:

More money focused on members’ care

The company identified and remedied the potential leakage of $14 million in inaccurate claims payments.

Further, by providing accurate data to both parties involved in the claims payment dispute, we informed a collaborative, fact-based discussion that resulted in an agreement of $11 million in actual payments owed, saving more than $45 million from the amount originally in question.

Moving forward, 70 hospitals will benefit from contract configuration fixes that will avoid inaccurate payments. Plus, the company’s financial reporting required by state regulators for rate setting will be more accurate. And, as a result of our proprietary CPI technology solution, redundant and manual tasks around payment issues and recoveries have been minimized.

The claims pricing engine can be easily adapted for use by other organizations to maximize Medicaid claims payment accuracy for either payers or providers.

Every dollar in recovered payments is a dollar that remains in the Medicaid pool to be used for someone who needs it. And when claims payments are accurate, providers are paid quicker, doctors avoid the frustration of chasing down issues, and leadership in the paying organization can have peace of mind knowing that investments in operations are achieving corporate goals.