This episode is part of the "Inches Are All Around Us" series because … yeah, you'll see why fast enough. So, last week or two weeks ago, if you listened to that episode about clearinghouses with Zack Kanter (EP497), you may or may not recall. And if you didn't listen to that episode, no worries. Just go back and soak it in when you have a sec.
For a full transcript of this episode, click here.
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But in that episode about clearinghouses, I said something about how self-insured employers are bringing a knife to a gunfight if they do not have real programmatic, integrated payment integrity programs.
Because an arms race is afoot whether or not the self-insured employer or other plan sponsors recognize they're in one. The arms race, by the way, is with revenue cycle management (RCM).
Here's a quotable quote that my guest today, Mark Noel, says in the conversation that follows. Spoiler alert, I suppose, but around the 27-minute mark or something he says (and some light editing by me), but he says: It's an arms race. It's a tug-of-war. It's a zero-sum game.
Because you have the RCM folks on the front trying to maximize revenue, and you have the self-insured employers and plan sponsors on the back end trying to pay as little as they need to. And so, it is imperative that the payment integrity vendor is keeping their policies up-to-date as of the minute because these things change all the time, and the rev cycle management side is gonna be up-to-date.
So, right … on one side you have RCM, the RCM industry—a $140 billion behemoth, by the way, that is already larger than the U.S. auto industry and growing five times faster. These RCM vendors are using programmatic clearinghouses as discussed two weeks ago. Plus, they're ever more sophisticated with automatic tools to maximize every cent of revenue they can squeeze out of a claim. That is their job.
On the other side sits the self-insured employer, often relying on less sophisticated processes and/or maybe even vendors who are effectively phoning it in. Because they have an incentive to not do a great job here because … right: perverse incentives. Who is surprised? No one is surprised.
Listen to the show with Justin Leader (EP433) on the mystery of the weekly claims wire.
So, prepayment integrity is what I talk about today with Mark Noel, my aforementioned guest today. Mark is from ClaimInsight, who I do need to thank, by the way. I need to thank ClaimInsight for donating some financial support to help Relentless Health Value here cover expenses.
But here's gonna be the three prepayment integrity revelations that Mark Noel brings up in the conversation that follows.
Revelation 1: The small-claim gold mine, I'm gonna call it. We often obsess over the—for good reason, don't get me wrong—but we obsess over the million-dollar babies or the cancer case, right? These high-cost claimants. But 80% of claims volume is actually small claims, right? Not 80% of the spend but 80% of the volume.
Overpaying or double billing on thousands of, like, $200 claims adds up to millions of dollars in wasteful inches very quickly. Stan Schwartz, MD, talked about this on an earlier episode (EP486) from a little bit of a different angle, but same result applies.
Revelation 2: The "conflict of interest" trap. It is a fundamental business mistake to hire the same company to do the work as you do to check the work.
Asking a TPA (third-party administrator) or an ASO (administrative services only) to report on their own errors is like asking for a tax penalty audit from the same person who filed your return, right? It is just an inherent conflict of interest. It's almost not fair to either party. Just … yeah. So, that was Revelation 2.
Revelation 3: The perverse incentives of many things, but one of them is shared savings that we talk about today. Many carrier contracts allow them to earn shared savings on the back end for fixing errors that they didn't catch on the front end, right?
So, this means that they actually have a perverse incentive to let errors through initially so that they can get paid a second time to recover money that they should never have spent in the first place.
Maybe I'm saying the quiet part out loud now. I do not know, but in the light of day, these revelations are kind of stark and fairly unimpeachable. And this matters because ultimately prepayment integrity, maybe just payment integrity in general, isn't just a financial issue for the plan. It is a bulwark for members. We live in a world where 41% of Americans have medical debt.
Ensuring that a claim isn't wrongly expensive, which the member's paying a part of here in a lot of cases, it's a fiduciary and probably moral imperative, just like has been said 50,000 times on this podcast. Plan sponsors must demand unconflicted expertise at the table—transparency, trust that can be validated.
Mark Noel, my guest today, has worked in payment integrity for about 25 years, both on the health plan and on the TPA side, as well as working with self-insured employers. Mark is CEO over at ClaimInsight.
The show today is sponsored by Aventria Health Group with an assist from ClaimInsight.
Also mentioned in this episode are AMPS; ClaimInsight; Zack Kanter; Justin Leader; Stan Schwartz, MD; ZERO.health; Tom Nash; Chris Deacon; Dawn Cornelis; and Kimberly Carleson.
For a list of healthcare industry acronyms and terms that may be unfamiliar to you, click here.
You can learn more at claiminsight.com and follow Mark on LinkedIn.
Mark Noel is senior vice president and general manager of Advanced Medical Pricing Solutions (AMPS) ClaimInsight business unit, where he oversees all aspects of sales, marketing, operations, and implementation. Mark has more than 25 years of experience in the healthcare industry, working with both providers and payers to ensure claims are billed and paid accurately. Before joining AMPS, he led implementations and client success for an early-stage start-up (OODA Health), setting up their first revenue-generating clients, which led to them being acquired by Cedar for $425 million in 2021. Prior to OODA, Mark spent over 10 years at Cotiviti, where, as one of the founding implementation team members, he implemented their largest and most complex clients. His experience also includes various operations and management positions at Zelis, ApolloMD, and IDX Systems. Mark is an alumnus of Champlain College with a degree in business management.
06:03 How millions of dollars can be recovered per year from smaller claims under $500.
07:46 EP486 with Stan Schwartz, MD.
09:10 How to get to payment integrity prepayment.
11:20 How payment processing efficiency is necessary to payment integrity.
13:59 How TPAs fit into the claims payment process and how they can add to payment integrity.
15:59 LinkedIn post from Chris Deacon.
16:50 EP433 with Justin Leader.
17:04 LinkedIn post from Justin Leader.
17:10 How shared savings incentives can be perverse incentives.
23:05 How employers are doing retrospective reviews.
24:29 How employers should be negotiating their TPA contracts.
25:41 EP285 with Dawn Cornelis.
25:43 EP480 with Kimberly Carleson.
27:40 Why it's imperative that payment integrity vendors are up-to-date on all policies.
31:13 What should self-insured employers do to assess their payment integrity?
Recent past interviews:
Click a guest's name for their latest RHV episode!
Gary Campbell (Take Two: EP341), Zack Kanter, Mark Newman, Stacey Richter (INBW45), Stacey Richter (INBW44), Marilyn Bartlett (Encore! EP450), Dr Mick Connors, Sarah Emond (EP494), Sarah Emond (Bonus Episode)