The Challenges and Benefits of Prepay Whitepaper

July 13, 2022

A woman smiling and standing next to a whiteboard with payment integrity notes on it

In the healthcare claims industry, payment integrity — verifying and paying claims in an accurate and timely fashion while minimizing fraud, waste, and abuse — is the central goal, so finding the right solution is critical.  Much of the industry operates in the post-pay space, but this approach has major drawbacks.

Drawbacks to Post-Pay


  • A lot of money is lost through waste and error, and try as they might, health plans can never recover all of it
  • It can take months for cost savings to be realized
  • There are far more claims appealed compared to prepay reviews, and many denied claims are not resubmitted
  • Post-pay reviews come with “provider abrasion,” taking money directly out of their pockets and forcing them to spend more time on administrative tasks and less on patient care

Under a prepay model, claims are paid correctly the first time. Prepay also provides more savings, faster turnaround times and an improved provider experience. In a world where 97% of all hospital claims (reimbursed at percent of charge) contain undetected charge errors, a prepay system can consistently identify and remove those errors before network contracts are applied, providing accountability on top of network discounts.

The Prepayment Model:

Key Benefits and Considerations

It’s challenging to transition from an established post-pay system to a pre-pay model. A change like that involves working with multiple platforms and editing tools. Key things to consider as you evaluate your current system and envision a new pre-pay environment could be:

  • Claims-pending status and procedures for routing claims to and from the solution (such as a service bureau or SaaS)
  • Turnaround times and performance guarantees
  • Defensibility of reviews and supporting policies
  • Notification requirements for provider networks
  • Engaging internal stakeholders — claims, finance, network, and medical directors to name a few — on the prepayment solution
  • Defining how to measure savings (cost avoidance) with finance and healthcare economics teams
  • The impact of prepay solutions on other payment integrity programs, including coordination of benefits and claim editing systems

The Immediate Benefits of Prepay

If you’re ready to consider these factors and commit the expertise and resources, transitioning to a prepay solution makes a lot of business sense. Immediate benefits include:


  • Greater claim payment accuracy
  • Reduced provider abrasion by paying the claim correctly the first time
  • Improved savings by avoiding costs vs. paying and chasing overpayments
  • Defined service level agreements, defined turnaround times, and supporting policies that incentivize fast turnaround times
  • Fewer claims appealed and greater defensibility in the event of an appeal. This applies to all lines of business —Commercial, Medicare, Medicaid, etc.
  • An opportunity to complement internal solutions already deployed in clinical review programs or claim processing teams

When the payment integrity process is streamlined, both payers and providers can operate much more efficiently and cost-effectively. With 30 years of experience in both pre- and post-pay claim review and repricing, CERIS is ready to help you manage the challenges of moving to prepayment.

Let's partner to a clear path to greater accuracy and cost savings.

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