Prepayment reviews can save money and increase an organization’s efficiency by reducing the workload and friction of concluding retrospective payment reviews.
With the U.S. possibly facing a recession in 2023, expense control has become a priority for many businesses. Recent layoffs at tech firms such as Meta (formerly Facebook) and Peloton could be a portent of cutbacks to come.
While payers may have enjoyed decades of robust profits, they are not immune from these financial pressures. Two major payers recently announced layoffs of hundreds of employees. Another major payer-provider system reported a multibillion-dollar loss for the first nine months of 2022. Belt-tightening is likely on the horizon for even more insurers.
Layoffs tend to be the most visible response for large organizations to cut costs during a downturn, as well as cutting benefits or perks and restricting travel for work purposes. While those approaches can and do save money, they come at the risk of sapped employee morale and lost productivity.
There are ways to take a more holistic approach toward expense reduction by increasing the efficiency of the overall organization. For a health insurer, that focus is the tens of millions of claims submitted and processed daily.
Better Management of Payment Review Today
Faulty billing practices are commonplace in the insurance sector. Various studies conclude that hospital billing errors occur anywhere from 7% to 75% of the time. According to the White House Office of Management and Budget, nearly a quarter of Medicare fee-for-service and Medicaid claims were incorrect last year.
Reviewing provider payments is a critical function of health insurers. However, reviews of claims for errors, overcharges or other issues are almost entirely retrospective, after the claim has been paid. Reviews usually take weeks – if not months or even years – after a claim has been filed.