What Is Payment Integrity in Healthcare?

The United States’ healthcare system is a massive industry. The Centers for Medicare and Medicaid Services (CMS) reports that after a 2020 spending increase of about 9.7%, it reached over $4.1 trillion in expenditures. When one considers nearly 80% of medical bills contain errors, it’s possible that a lot of money spent on healthcare is essentially wasted. 

Increasing costs and unnecessary spending can be a troublesome combination for self-insured employers who could otherwise spend thousands of dollars on a single employee under traditional private insurance contracts. The frequency of billing errors suggests a largely unmet corporate need for help reducing the waste of redundant or inaccurate healthcare charges.   

Luckily, these errors create opportunities for newer practices to emerge that ensure more accuracy and integrity in the claims reimbursement process. Industry professionals refer to these practices as payment integrity measures. 

But what is payment integrity in healthcare? This blog post will define payment integrity and discuss its specific role within the healthcare system.

What is Payment Integrity in Healthcare?

Payment integrity in healthcare includes a comprehensive plan designed to scrutinize billed items during the payment process and identify errors or verify costs. It features both pre-pay and post-pay strategies that encompass the entire reimbursement process to ensure the proper parties are billed for the correct amounts, as patients are frequently overcharged.

For example, a patient could be overcharged during an emergency room stay for which they are double- or triple-billed for the same drug when the revenue codes don’t match resource consumption. Either way—big or small—errors can create expensive mistakes.

Core Philosophy: Accountability

The core philosophy of payment integrity in healthcare is accountability. The objective is to hold hospitals and practices accountable for the amounts they bill patients. While it’s not unusual to overcharge patients, hospitals are surprisingly consistent in their lack of undercharging. 

In a nutshell, payment integrity is about double-checking the math of medical bills. It includes a thorough review of each line item on claims data and coding to scrub for billing errors and inconsistencies.

Main Benefits: Transparency and Savings

These practices benefit employers and employees alike: they not only produce significant savings on annual healthcare spend but will also provide all parties with a better understanding of the healthcare reimbursement process by pulling back the curtain that obfuscates it. Greater transparency means better healthcare trends for the future.

Health plans considering a payment integrity strategy to help mitigate rising healthcare costs should be aware of how payment integrity works. Some powerful methods of payment integrity include: 

• Eliminating balance billing 
• Identifying all billing errors
• Reducing stop-loss premiums
• Facilitating greater transparency
• Advocating for health plan and members 

While payment integrity has many benefits for employers and employees, as with any cost savings strategy, it’s important that you apply the proper practices for your specific needs.

6 Degrees Health’s Payment Integrity Solution

Now that the question “What is payment integrity in healthcare?” has been answered, you’ll need the best payment integrity solution. 6 Degrees Health’s Clean Claim Reviews are an industry-leading payment integrity solution with a far broader scope than typical clinical reviews. 

Clean Claim Reviews evaluate every line item billed to ensure that patients are on the receiving end of zero billing errors such as drug markups or duplicate items. It also includes a post-payment review of hospital bills, Diagnosis-related Group (DRG) validation, mine data, and verifying medical necessity.

6 Degrees Health is an industry leader in cost containment solutions. We work with TPAs and brokers to promote transparency in the billing process and give patients more agency in the reimbursement process. For employers seeking to circumvent industrywide pricing errors, 6 Degrees Health could help you save up to 40% on your healthcare spending. 

Want to know more about the benefits of cost containment?  Speak to a representative today to find out how our reference-based pricing model can help you realize the true benefits of healthcare.