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e-Book
Payment Accuracy and the American Healthcare System
Summary
As the U.S. shifts to value-based care models, getting reimbursement claims accurate from the get-go becomes ever more important.
“Life, Liberty and the Pursuit of Happiness.”
This famous phrase is perhaps the most well-known excerpt from the U.S. Declaration of Independence. Indeed, promoting a healthy, long life has been at the forefront of family and political discourse in the United States since the founding of the republic.
There’s Only One Problem: The price of delivering healthcare to stay healthy has become increasingly burdensome.
The cost of healthcare in the U.S. economy in 2018 was estimated to be $3.65 trillion. That’s why it doesn’t matter where you sit in today’s healthcare ecosystem: For consumers, for healthcare providers, and for payers, it’s not only about improving health outcomes, but also finding a way to rein in costs.
But keeping the growth of costs in check is a challenging proposition when the estimated average inflation rate for medical care in the United States between 2000 and 2019 has been 3.39%, some 60% higher than the 2.13% U.S. inflation rate over the same period in the overall economy.
How Payment Accuracy Reins in Healthcare Cost
And while the science and medicine of healthcare continue to advance, it’s less obvious how to make the same kind advances when it comes to healthcare costs. The flashpoint here is the process by which payers—insurance companies, government agencies, and the like—reimburse providers: hospitals, doctors, labs, or clinics.
That’s where payment accuracy comes in. When payers produce bills for reimbursement that are accurate, there’s less administrative cost for both payers and providers.
The U.S. healthcare reimbursement system has evolved to provide three general kinds of checks on claims reimbursement. These are buttressed by healthcare IT systems, as well as automated or physical audits. These checks on the accuracy of a claim can occur at any one of three points, or a combination:
1. Pre-Submission is the newest kind of accuracy check at the point of submission—when the provider submits a claim for a service, medicine, or device.
2. Pre-Payment checks occur before money is sent by the payer to the provider.
3. Post-Payment Audit and Recovery checks and audits have long been the most common. They occur when a payer verifies a claim’s accuracy after reimbursement.
Driving accuracy earlier in the payment cycle lowers administrative costs--and reduces friction, or abrasion, between payers and providers. When bills are checked and verified early in the payment cycle, there are fewer underpayments that irritate providers. Conversely, there are fewer overpayments which compel payers to ask for a portion of their money back, a process known as clawbacks and a noted source of provider/payer tension.
