Skip to content


Mandy Fogle is a pre-sales consultant for Shift Technology’s healthcare business.

In this instalment of the “Four Questions with” series we talk to Mandy about the value health payer organizations can achieve by rethinking their approach to identifying and dealing with improper payments.

Shift Technology: Before we delve into the concept of prepay improper payment detection, can you tell us a little about the current strategies health payer organizations are employing and the limitations of these approaches?

Mandy Fogle:  Right off the bat, it’s important to realize that payment integrity, improper payment detection or fighting Fraud, Waste and Abuse (FWA), are siloed functions at most health plans. As such, they are viewed as discreet activities versus a cohesive strategy that works together to benefit the organization. Today, what most plans would call prepay activities are simply basic checks that determine if the patient and the procedure are covered, and if the provider is recognized. 

Anything much beyond that, in terms of whether or not the payment is legitimate, is not being identified in these initial checks. Improper payments or FWA are typically caught on the back end, after payment has occurred. In these situations it is up to the SIU to investigate and if the payment is determined to be improper chase down reimbursement. It, unfortunately, is not a very efficient model. 

And because, as we discussed earlier, these functions often work in a silo, the findings of a postpay investigation rarely impact prepay checks. Health payers find themselves in a seemingly endless cycle of “pay and chase” which benefits no one.

Shift Technology: What then, in your opinion, is driving health payers to rethink how they approach prepay payment integrity, improper payments and FWA?

Mandy Fogle: What’s interesting to me is that the industry has already made some early attempts to break down the silos between prepay and what’s being learned in postpay investigations. For example, we are seeing some cases where providers engaging in suspicious billing are being placed on a prepay watch list, which is great in theory, but not necessarily great in practice.

In the scenario I’m describing, all of a provider’s claims are being flagged before payment is approved. And when all claims are reviewed, typically including medical record review as part of the process, health payers experience added time, expense and provider abrasion. 

I think this dilemma is at the foundation of wanting a new approach. Pay and chase can be effective at understanding what schemes are out there and which providers may need a little more scrutiny, but it’s not great at effectively stopping or recouping losses. Basic watch lists and rule sets based on information from postpay investigations may help eliminate some improper payments, but this approach is inefficient and can create new problems. 

In this environment, health payers are seeking solutions that truly allow them to change the game. To have pre and postpay strategies working in concert to empower approaches that can easily identify the types of claims raise concerns while still allowing providers to be paid on proper claims.

Shift Technology: So, how do you envision health plans bringing prepay and postpay strategies into alignment?

Mandy Fogle: As we’ve discussed, prepay checks are mostly concerned with “can this claim be paid” as opposed to “should this claim be paid.” Bridging pre and postpay strategies into a more cohesive system requires health plans to apply the “should this claim be or have been paid” question at both ends. 

Let’s look at postpay first. In our approach to postpay review we are attempting to answer the question “should this claim have been paid?” To do so, we not only look at the individual claim but also at the provider (or provider networks). For example, looking for schemes that may be related to kickbacks where a primary provider consistently refers his patients to a certain radiology team or to a surgical center. We may also see evidence of consistent diagnosis and consistent referral where there may be possible patient sharing.

It’s important to remember that improper payments are not limited to providers. They may be related to members who are doctor shopping, and/or looking for prescriptions from different providers.

So how do we apply the “should this claim be paid” approach to the prepay world? It’s important to remember that with standard approaches and typical rules plans are simply not able to understand the big picture. We’re still mostly at the “can this claim be paid” stage.

But when we create a closed loop system that applies postpay learning to prepay claims we become much more effective at understanding what’s really going on with a claim and whether or not it requires a little more scrutiny prior to being paid. And we can do it in a much more precise way that limits provider abrasion and ensures that legitimate claims are paid in a timely manner.

Shift Technology: It sounds like there’s a lot of benefit from taking a comprehensive approach to improper payment detection. What do you believe may be holding plans back from adopting these strategies?

Mandy Fogle: I think there’s some real concern that an increased focus on prepay will stretch their resources. They're worried about the ability to manage and investigate the number of claims that may be flagged for review. It’s a big change management issue.

The other issue I’m seeing is one of technology. Current approaches to prepay are focused around rules engines and relatively simple white and/or blacklists. They are not up to the task of identifying complex schemes and that's what we're seeing in the industry now, really complex fraud schemes.