Trends driving payment integrity to a critical inflection point

Increasing medical spend and care utilization are putting significant pressure on health plans to drive ongoing payment accuracy and policy management. This is due to several factors:

• An aging population — From 2025 to 2030, the number of people 65 years or older is projected to grow by 12.41%.¹ With a larger population of older adults than ever before, the demand for and utilization of healthcare services is expected to increase.
• Higher acuity patients — The prevalence of chronic conditions is rising, with the percentage of 20–44-year-olds with obesity increasing from 32.7% to 40.9% from 2009 to 2020.² A less healthy population means higher medical spend.
• High-cost drugs — More patients are using specialty drugs and therapies, such as GLP-1s, which are often more expensive. From 2021 to 2023, employer healthcare dollars spent on pharmacy increased from 21% to 27%.³
• Inflation — Healthcare is growing as a share of gross domestic product, with medical inflation higher than the overall inflation rate in June 2024.⁴ This, coupled with a shortage of healthcare workers, puts additional strain on health plans to find alternative ways to manage spend.

The regulatory environment is constantly evolving, and with a new administration in place, it’s challenging to know what the future may look like. There are several policy areas payment integrity leaders need to keep an eye on: 

• Price transparency — The Hospital Price Transparency Rule, the Transparency in Coverage Rule and the No Surprises Act not only encourage but require health plans and providers to show members accurate pricing information before or at the point of care. There are also executive orders directing the Department of Health & Human Services, the U.S. Department of Labor and the U.S. Department of the Treasury to ramp up price transparency enforcement, with a focus on disclosing actual prices rather than estimates, making prices comparable across organizations and including prescription drug prices.
• Prior authorization reform — Prior authorizations are more regulated than ever. State and federal scrutiny is primarily focused on two areas: minimizing provider administrative burden and delays in care, and regulating the role of artificial intelligence (AI) in coverage determinations. More regulation, in addition to heightened provider abrasion around prior authorization, will lead health plans to reevaluate and prioritize other cost management levers, including payment integrity interventions.
• Uncertainty around Medicare and Medicaid — Plans for spending cuts are underway. It’s expected these cuts will heavily impact Medicaid and primarily focus on addressing fraud, waste and abuse. Other regulations, such as the 2024 Medicare Reimbursement Final Rule and Inflation Reduction Act, include Stars ratings redistribution, which would likely impact revenue and shift more financial responsibility for prescription drugs to health plans. The financial outlook for Medicare and Medicaid plans is unclear, leaving health plans to prepare for potential financial headwinds without transparency or data.

These regulatory changes and unknowns put increased pressure on payment integrity teams to rethink their strategies.

With rising cost pressures, payment integrity interventions remain critical for health plans, but they are often associated with increased member and provider abrasion. And as the healthcare industry evolves, members and providers are demanding more from health plans. Members expect transparency into the cost of care at the point of service — or even before, as they’re scheduling an appointment. 

Providers want more transparency into health plan claim requirements so they can submit claims correctly the first time, avoiding downstream denials and delayed payments. They’re also looking to health plans for tools to help them manage payment integrity interventions. 

Demands for more transparency up front put pressure on health plans to rethink the status quo of payment integrity. This is forcing payment integrity teams to consider shifting interventions and information into the provider workflow to help providers submit claims correctly the first time.

As technology advances, we expect it to play a significant role in modernizing and facilitating a more integrated healthcare payment ecosystem. It is also raising provider expectations that interactions happen more quickly and further upstream in the claim lifecycle, compelling health plans to consider real-time interactions enabled by API-based data integrations, higher interoperability standards and real-time editing at claim submission. This could support providers in submitting accurate claims from the start.

And with recent breakthroughs in AI, organizations are exploring more effective ways to drive more operational efficiencies. For example, providers are using AI to help them submit accurate claims, respond to denial letters and submit appeals. However, some providers are using it to submit fraudulent claims.

This is driving payment integrity teams to consider using AI to help make interventions more targeted and precise, identify new sources of overpayments, enable higher quality and more consistent reviews, improve efficiencies and enhance experiences for all stakeholders involved. 

These trends are putting immense pressure on health plans to balance rising spend while mitigating provider and member abrasion. Emerging technologies have the power to make it possible, which is driving health plans to reevaluate their approach to payment integrity. At Optum, we’re defining the future of payment integrity as payment precision — helping health plans achieve payment accuracy at claim submission.

Payment precision is about facilitating correct, efficient and prompt claim submission from the start to help minimize downstream denials and delayed payments. To do this, we must shift interventions, such as health plan edits, payment policies and more, further left — from pre-pay into the provider workflow.