Roundtable Reflections: Executive Insights on Reducing Costs and Improving Quality of Care from Healthcare Leaders
In late March 2022, Codoxo hosted a Healthcare Executive Roundtable to discuss the impacts of COVID-19 on cost containment strategies and hear how payment integrity leaders are re-envisioning their cost containment plans and fraud, waste and abuse for the years ahead.
Panelists included:
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- Kurt Spear, Vice President of Financial Investigations and Provider Review, Highmark, Inc.
- Chris Hammond, Compliance and Investigation Director, Blue Cross Blue Shield South Carolina
- Patrick Stamm, Former COO Shared Services, United Healthcare
The panelists kicked off the session by highlighting five trends that reflect the impact that COVID-19 has had on the healthcare cost containment and payment integrity landscapes. Not only are these trends rising in importance now, but they will become even more pervasive in coming years:
1. Continued rise in AI adoption and innovation
2. Telehealth transitions from pandemic response to standard care delivery platform
3. Predictive analytics paves the way for more cost-effective care
4. Closer attention will be paid to payment integrity
5. Increased cloud adoption brings a focus on security
Below we’ve recapped the candid discussion focusing on the impacts of the pandemic and how it has shifted the industry to think differently about medical costs, telehealth, virtual care and investments in technologies related to fraud, waste and abuse. Also, our panel touched upon the cost impacts COVID-19 has created due to declining population health and fluctuations in the utilization of healthcare services.
Post-pandemic, healthcare costs to increase
The U.S. spends $3.8 trillion annually on healthcare, but a significant portion – up to $380 billion – is lost to fraud, waste and abuse. What’s more, the cost to treat patients is expected to increase 6.5% this year, slightly higher than pre-pandemic, according to PwC’s Health Research Institute.
Panelists agree that healthcare spending will increase in 2022 due to care deferred during the pandemic coming back into the system. They also agree that the backlog of deferred care will impact population health. While many different drivers are impacting healthcare costs, the top drivers are undoubtedly COVID-19 testing and treatment and staff shortages.
With many kinds of COVID-19 care and treatments being approved, Stamm says health plans have to get an understanding of the policies around payment, plus medical or virtual care, and how that’s going to be incorporated into the larger regime post-COVID-19.
“There are a lot of people dealing with symptoms of long COVID-19, and we are probably not prepared to really understand what those claims consist of,” Stamm said. “So, we will need to figure out payment policies, in terms of what is acceptable for labs and testing. Labs have gone up a fair amount, and it’s going to be important to know where those costs are going and not getting caught.”
While overall utilization of healthcare is still down about 3-4%, utilization in lab work has increased dramatically by 15%. Stamm says the increase in lab work is an area that healthcare providers need to keep an eye on, especially because it is driving an abundance of fraud.
Some of the issues Highmark observed with COVID-19 care and treatment is up-coding of services, such as ordering respiratory panels or billing for full patient evaluations when only a COVID-19 test was necessary.
At Blue Cross Blue Shield South Carolina (BCBS SC), Chris Hammond says they saw a significant uptick in COVID-19 testing costs. Staff shortages during COVID-19 have also impacted access to care, which is creating a backlog that’s expected to last for at least two to three years.
“Pre-COVID-19, South Carolina ranked in the lowest quartile for the health outcomes of its residents, so these staff shortages are creating a backlog of people who are not receiving the appropriate care,” Hammond said. “This is troublesome when you think about population health and the cost involved with deferring care for those who have chronic or worsening health conditions.”
COVID-19’s impact on virtual care and telemedicine
As a result of COVID-19, virtual healthcare is now the new norm. A McKinsey analysis revealed that telehealth utilization is 20 to 38 times higher than before the pandemic. Virtual care and telemedicine can help save people time visiting doctor’s offices, reduce COVID-19 exposure risks and increase access to care. But while virtual care has its benefits and can be delivered at a lower cost, it opens up greater opportunities for fraud, waste and abuse.
Codoxo’s own study found between 10% to 15% of non-compliance with CMS-recommended telehealth codes, underscoring the importance of detecting potential fraud, waste and abuse, plus the need for provider education.
Since the use of telemedicine increased, Highmark has kept an eye on evaluation and management (E&M) upcoding, where providers claim to provide a higher level of service than actually delivered. Other areas that Highmark is tracking for E&M upcoding are abuses under the return-to-work testing, unnecessary lab tests and unbundling of lab codes.
Hammond says BCBS SC is seeing a similar trend in E&M upcoding and will continue to monitor the issue. “We have drive-thrus for COVID-19 tests or vaccines, yet we see E&M codes being billed, when there shouldn’t be,” said Hammond of BCBS SC. “E&M upcoding is something that we will continue to watch for the foreseeable future.”
All panelists agree that flexibility played a key role when managing cost containment issues during the pandemic. Hammond says BCBS SC worked to find a healthy balance between its responsibilities as an organization against provider abrasion. BCBS SC continued to mine data and flag outliers, but was more sensitive to medical record requests.
At Highmark, Spear says audits were paused or delayed to accommodate healthcare providers’ staff shortages, where people from the billing department were pulled to support the front line.
“We are also figuring out what we can outsource or co-source within payment integrity with our partners,” Spear said. “The challenge is always making sure we can drive savings for what we are paying for the service.”
Investments in tech, automation, AI, ML
The adoption of AI, machine learning (ML) and automation in the healthcare industry is growing. In tandem, healthcare payers, agencies and pharmacy benefits management are increasing their level of investments in these technologies. The value proposition is clear: they can deliver transparency across the payment spectrum and create a unified view across claims, providers and patients for proactive payment integrity.
Spear of Highmark says AI and ML are helping to tackle complex issues such as getting accurate billing, code auditing and finding complex areas that historically relied on manual discovery, a point that’s extra useful in light of staff shortages.
“AI has the potential to help with these cross-functional transparencies through a unified view of the data and insights,” Spear said. “It can also help us flag claims sooner, closer to when the claims are paid, and move detection and intervention upstream in the payment cycle.”
To better communicate the value of payment integrity programs to providers and customers, Highmark is looking to AI and other technologies to create a more unified and holistic approach.
AI’s potential for early detection and automation is one reason that BCBS SC is investing in the technology.
“Fraudsters are always trying to stay steps ahead of us. With COVID-19 being pretty new, there’s not a lot of history to learn from,” Hammond said. “So instead of using the old standard-based fraud algorithms that are in most of our software packages, the use of AI and machine learning gives us the opportunity to detect these trends a lot sooner.”
As the healthcare industry invests more in AI and ML, Stamm says it will be important for the industry to work off the same dataset.
“We want to make sure that organizations that are interested in, and actively working on, healthcare cost containment are coordinating regularly and are on the same page,” Stamm said.
Power in collaboration
COVID-19 wreaked havoc across the world, and the healthcare industry was not spared. The pandemic caused staffing shortages and drove people to defer much-needed visits to the doctor. There were some upsides though – COVID-19 also drove adoption in virtual healthcare and accelerated the adoption of AI and ML.
Moving forward, it’s important for healthcare industry leaders to join forces to unlock the power of AI, ML and automation – this is the spirit of Codoxo’s roundtable. It’s time more healthcare companies work together and break through silos to transform the industry and provide more effective and affordable care.
Click here to learn more and watch the Healthcare Executive round table on-demand.