Rethinking Payment Integrity: Why Prevention Is a Strategic Advantage

Rethinking Payment Integrity: Why Prevention Is a Strategic Advantage

Marla Ludacka-Dragovich

Vice President, Payment Integrity, Claritev

The High-Cost of Recovery

First, recovery dollars aren't a true representation of money the payer recoups. This is because there is a cost to every dollar recovered that needs to be subtracted from the recovery amount. These costs can include:

• Time and effort expended to identify and then recover inaccurate payments
• Provider and member abrasion that recoveries can create
• Possible disputes and reconsiderations from providers
• Potential vendor fees
• Administrative work required to document the recovery

There's also the possibility that despite identifying an inappropriate payment, it may not be able to be recovered.

Prevention Is More Valuable Than Recovery

So while seeing recovery figures can be briefly reassuring, they don't tell the whole story. The real success of a payment integrity program should be measured by its ability to stop improper payments from happening in the first place.

Everest Group research shows that pre-payment (overpayment prevention) approaches deliver higher ROI than post-payment recovery by enabling cost avoidance and reducing downstream administrative burden. Supporting this, vendor research shows that shifting from reactive appeals to proactive prevention can deliver significantly higher returns-often 3-5× ROI-while traditional appeals recover only a portion of denied amounts and require substantial administrative effort. This is because prevention stops improper payments before they occur, avoiding the additional effort required for rework and appeals, which do not guarantee full recovery.

What to Look for in a Pre-Pay Payment Integrity Program

When implementing a pre-pay payment integrity program, payment integrity leaders should consider the following.

• Types of edits identified. Programs that rely solely on automated, industry-standard edits can catch clear-cut, black-and-white errors, but they may miss more complex or contextual issues that require clinical or analytical review.
• Risk of provider abrasion. Technology-only approaches, especially those attempting to move beyond basic edits, can generate false positives. This may lead to provider friction, increased inquiries, and payment disputes.
• Impact on claim processing times. Understand how much time the program adds to the overall adjudication workflow. Could the additional review jeopardize compliance with prompt-pay requirements?
• Flexibility and growth of edits. A strong program should not rely solely on static rules. It should continuously expand and refine the types of issues it detects based on emerging patterns, payer policies, provider behaviors, and regulatory or industry changes.
• Capability to score claims for likelihood of error. Does the program include predictive analytics or scoring models that help prioritize which claims warrant deeper review?
• Detection of anomalous provider billing behavior. Beyond claim-level issues, effective programs should identify patterns at the provider, billing group, or member level, including unusual or suspicious billing trends.

Ultimately, a strong pre-pay payment integrity program should balance accuracy, speed, and provider relationships to drive sustainable cost containment.

Clarity in Action

Going forward, payment integrity leaders should prioritize stopping overpayments before they occur, as prevention can ultimately deliver greater value than recovery. At the same time, not every improper payment can be avoided, making it essential to maintain a balanced payment integrity strategy that pairs strong pre payment controls with targeted post payment solutions to address residual risk.