EP480: Payment Integrity Meets Health System Boasts, Such as Our Rates Are 2x Medicare, With Kimberly Carleson

You know that episode from this spring with Eric Bricker, MD (EP472) about stop-loss provisions as a way for some hospitals so inclined to make more money without (technically, at least) raising rates—like, they can substantially increase the overall revenue from plan sponsors (the ones not paying attention, at least) while still able to claim they are net-net 0% increase or are very much still 2x Medicare, for example?

For a full transcript of this episode, click here.

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Well, today we stumble on a few more strategies to do the same thing in the show today with Kimberly Carleson. So, spoiler alert.

Now look, all this matters. It big-time matters. Anything that has to do with health systems and their billing of plan sponsors matters because as we have heard from multiple guests multiple times—the shows with Shawn Gremminger (EP448); Cora Opsahl (EP452); Claire Brockbank (EP453); Marilyn Bartlett, CPA, CGMA, CMA, CFM (EP450), to name a few—we have heard over and over again that usually almost 50% of plan sponsor costs have something to do with members going into the hospital and/or getting care somewhere that is under a hospital’s umbrella. Fifty percent!

And today we learn that up to 80% of hospital bills may contain some error, with 25% to 30% of those errors being significant. I just asked AI, and it said that approximately 5% to 10% of total hospital spend by plan sponsors might be attributable to billing inaccuracies or excessive charges.

My guest today, as I have mentioned twice already, Kimberly Carleson also mentions a few stats about just the magnitude of some of these mistakes. I mean, 5% to 10% of 50% of total spend is a lot of money.

Okay, so let’s discuss what we discuss today, Kimberly Carleson and I. We start out kind of digging into the where, why, and how many of these errors come to be. Then we talk about some advice for those who work at health systems who may be interested, for real, in redressing some of the stuff that we discuss.

And this whole conversation—and also Kimberly’s advice for health system leaders—is particularly relevant for anybody looking to do direct contracting with plan sponsors, of course, because … yeah, with a carrier in the middle of some of this stuff, it might not be entirely clear to many plan sponsors the magnitude or the member impact of these billing mistakes. However, in a direct contract? Yeah, expect eyes on. So, it certainly would make good sense to get ahead of some of this stuff as, I don’t know, I know nothing really.

But after talking to Kimberly and after talking with Dawn Cornelis (EP285) a few years ago, for sure, some of this stuff can be chalked off to weird complexities and not repeatable kinds of excusable mistakes. But a good deal of it kind of seems like—how shall I say this?—preventable. It seems to fall into a category of “Why is this happening?” and it’s pretty darn obvious it’s a problem, and yet it still persists.

Where this conversation heads next is getting into advice for plan sponsors, which I will summarize for your convenience right now and maybe add a couple of supplementary points.

Advice for plan sponsors that comes up in this conversation with Kimberly Carleson, number one (and this is a biggie): Have a third-party audit of claims. The point comes out pretty clearly in this show, but in that earlier episode I mentioned, the one with Dawn Cornelis, it also, this point comes out just as strongly.

And right now in the time-space continuum in 2025—I don’t know how you could even argue with it—get a third party to audit your claims who isn’t owned by the same company as your ASO (administrative services only) or TPA (third-party administrator) or whoever is processing the claims.

Julie Selesnick was on the pod last spring (EP428), and in that episode, she says, Look, it is the very definition of a conflict of interest if you, as a fiduciary, hire somebody and expect them to accurately audit themselves.

On this exact same topic in that recent Take Two episode with Justin Leader (EP433) about “The Mystery of the Weekly Claims Wire,” he talks about an example where a TPA was using a branch of their own company to audit basically their own claims, and they found $21,000 in errors.

This wasn’t even enough to cover the fee for finding those errors, which, in this case, was $25,000, right? They spent $25,000 to find $21,000 total. Meanwhile, the employer, they then got a third party in the mix who found all the actual errors; and it summed up to 20 times that. The third-party auditor found over $400,000 in errors that they then recouped for the plan sponsor.

So, yeah, first piece of advice for plan sponsors: Don’t do that. Get a different payment integrity vendor. You need somebody else to audit claims other than the person who is doing the claims.

Second piece of advice that comes up in the conversation that follows with Kimberly Carleson … I’m just gonna give you the advice, but you need to listen to the show to get the real full gist of it: contract amendments that the TPA or ASO or health plan that they cannot negotiate to pay for charges that are not legally billable. Right. And this one is interesting for more than just payment integrity purposes. I’d say it’s also interesting for direct contracting purposes and for TPA RFPs (requests for proposal).

Again, Kimberly and I talk about this at some length; and the whole thing just reminded me of something that I had seen Cristin Dickerson, MD, write. She wrote, “It is not just about what percentage of Medicare is paid. It’s about the codes charged. While an imaging center may charge one or two codes for an exam, I see hospitals charging eight codes. Those eight codes, even paid at 200% of Medicare, are ridiculous.”

This is just also, if you start thinking about it, why you gotta watch it with those RBP (reference-based pricing) contracts. And Dr. Dickerson gives a really good example of even if you have an expert who limits code payments to some agreed-upon amount, there are many cases where that just doesn’t work and hospital billing systems are able to bypass the controls.

Now, what I just said is a little wonky. If you didn’t understand it, do listen to the pod and then come back and you will totally understand it. But, yeah, bottom line, don’t accidentally agree to pay for stuff that should be free or shouldn’t be billed for in the first place as per the law. That is piece of advice two that comes up in the conversation that follows.

And then piece of advice three is know your rights as a plan sponsor. There is the CAA, the Consolidated Appropriations Act. There is the no gag clauses rules. Plan sponsors have an absolute right to the itemized bill, and they don’t have to pay until they get one and it is deemed clean.

Plan sponsors have a right to the hospital contracts the TPA/ASO/health plan has negotiated. And look, having a right and actually getting those rates, which some deem a trade secret, are two different things. So, it is increasingly up to the plan sponsor to run a clean RFP (request for proposal) using best practices like Claire Brockbank talked about in that episode (EP453) from last fall.

If an RFP bidder clearly admits they don’t have transparent business processes or they have all kinds of trade secrets that impede your access to transparent information, and if they don’t seem to be so inclined to change, then it’s on us, really, to exclude them from the RFP if they don’t meet the terms.

Ann Lewandowski talked about this a little bit in the whistleblower episode (EP476), just how the Department of Labor definitely excuses ERISA plans during a contract period who are using a vendor who, it turns out, is not doing things as per ERISA requirements.

But that leeway ends at contract renewal.

My guest today, as aforementioned, is Kimberly Carleson. She is the CEO of US Beacon, where the mission is to meticulously review and optimize medical bills.

Also mentioned in this episode are Eric Bricker, MD; Shawn Gremminger; Cora Opsahl; Claire Brockbank; Marilyn Bartlett, CPA, CGMA, CMA, CFM; Dawn Cornelis; Julie Selesnick; Justin Leader; Cristin Dickerson, MD; Ann Lewandowski; US Beacon; Keith Passwater; Havarti Risk; Erik Davis; Autumn Yongchu; and Tom Nash. 

You can learn more at us-beacon.com and by following Kimberly on LinkedIn.

Kimberly Carleson is the founder and CEO of US Beacon, a nationally recognized medical claims integrity review company that protects the financial interests of self-funded health plans and their members. Her journey into healthcare reform began from a deeply personal place. When her husband was diagnosed with stage IV cancer, Kimberly became immersed in the realities of medical billing and quickly noticed something alarming: Nearly every claim they received contained questionable charges.

Determined to uncover the truth and advocate for patients like her husband, Kimberly began to dig into the fine print, line by line. What started as a personal mission turned into a professional calling. She launched US Beacon with one goal: to ensure medical claims are compliant, transparent, and accurate before they’re paid.

Under her leadership, US Beacon has grown into a trusted, independent firm that uses CMS guidelines, NUBC standards, and nationally accepted coding regulations to identify ineligible charges, billing irregularities, and waste that most hospitals use for billing guidelines. The company works exclusively for the plan, not the provider or insurer, and maintains its independence, free from private equity or carrier influence.

Today, Kimberly is a respected voice in healthcare cost containment, known for her relentless pursuit of fairness, transparency, and compliance. With a strong commitment to fiduciary duty and patient advocacy, Kimberly continues to lead US Beacon with the same purpose that started it all: fighting for what is right—one claim at a time.

08:36 What’s the magnitude of the lack of payment integrity within healthcare?

12:11 EP285 with Dawn Cornelis.

12:46 How is lack of coordination a main culprit of lack of payment integrity?

13:42 How does reading the records reveal whether health plans are being overcharged?

15:43 A real-world example of how reviewing the charges can drastically reduce your healthcare costs.

18:32 Do you have a right to a review of your claim?

19:37 EP370 with Erik Davis and Autumn Yongchu.

22:08 How can contracts contradict what can legally be charged?

23:46 EP472 with Eric Bricker, MD.

25:04 How can hospitals update their billing to have better payment integrity?

28:44 Advice for hospital executives and their finance teams.

29:03 Advice for plan sponsors.

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Ann Lewandowski (Summer Shorts), Andreas Mang and Jon Camire (EP479), Justin Leader (Take Two: EP433), Andreas Mang and Jon Camire (EP478), Stacey Richter (EP477), Charles Green (Bonus Episode), Ann Lewandowski, Peter Hayes, Yashaswini Singh, Dr Kenny Cole, Dr Eric Bricker