Innovations in payer tools help reduce incorrect claims

Innovation is abundant in health care today. From new technology to virtual visits to clinical trials, people across the medical spectrum are finding new and better ways to deliver care.

The payer space is also seeing tremendous change. And innovations from Optum are helping drive more efficiencies and growth.

“We’re taking a holistic approach to payer innovation so we can tackle multiple challenges and yield a better benefit for payers and their partners,” says Paymon Farazi, chief product officer for OptumInsight. “The question we ask with every innovation is, ‘how can we drive increased value for the investments our clients have already made?’”

Farazi recently hosted a webinar that covered some of the new tools Optum uses to improve payer and provider collaboration and reduce incorrect claims.

The webinar highlights innovations in audit services and out-of-network negotiations. It also looks at provider education and communication.

Using innovation to provide ROI for payers

Innovating better payer solutions is about more than just finding ways to save money. It’s also about reducing abrasion for providers and improving the health care experience for members. Ultimately, all of this translates to better health access and outcomes.

Creating these innovations requires a unique understanding of the pain points and market trends payers are facing today. That’s why Optum invests significantly in technology and talent that uses data, analytics and health care expertise to drive efficiency and growth for clients.

“Through our expertise and insight-driven technology, analytics, platforms and services, we are powering transformation and ROI for our clients and markets,” Farazi says. “We cannot create solutions that do not drive better outcomes for you.”

With this approach, Optum has invested upwards of $300 million in more than 100 new product initiatives that:

  • Identify and generate revenue growth
  • Control medical expenses
  • Mitigate and reduce administrative costs
  • Boost engagement with providers and members
  • Make business easy and more efficient

Increasing savings with robust audit services

One of the areas where Optum continues to innovate is audit services. These tools help payers review medical records and judge whether a claim should be paid.

Optum has been providing these services for some time. Yet Farazi says, “There’s always something new you can do to drive value.”

Some of the biggest innovations Optum has made to audit services include:

  • Real-time detection of suspect claims. Optum has created a system that avoids large (usually daily) batches of claims that require review. Instead, it uses single transactions or micro-batches. Real-time detection shortens the timeframe between when claim information is received and when a decision is made.
  • Faster, easier implementation. Optum has found ways to use more standardized versions of data to help clients quickly onboard and implement the audit tools. This includes using X12-based integration options.
  • Broader, more accurate claims. Optum is developing more machine learning models to help complement the typical rules-based approach to claim processing. This allows payers to focus on which claims to pursue, reduces false-positives and cuts back on unnecessary medical records requests. 

Improving out-of-network negotiations

Another focus for Optum is the out-of-network negotiation process for payers. “That’s an area that’s ripe for improvement,” Farazi says.

One new approach is to use Medicare reference-based pricing. This claim pricing method references the U.S. Healthcare Medicare Program pricing guidelines to create reasonable reimbursement rates for out-of-network billed charges. With this offering, Optum provides recommendations for plan language, custom rule implementation and full appeal management support.

“This should help create significant cost savings to the traditional PPO wrap approach,” Farazi says. “I see this as a major lever for payers as you think about driving down medical expenses.”

Optum also provides a member advocacy solution that conducts direct provider negotiations for out-of-network claims. Ultimately, this offering reduces a member’s financial liability for out-of-network bills. So the member ends up paying a fair price for health care services.

Boosting provider education

One of the newer tools Optum is offering payers is provider education, which aims to change provider billing behavior. These behavior changes lead to reduced medical costs and better experiences for everyone in the payer ecosystem.

“This tool is a real step toward partnership with the providers,” Farazi says. “It helps avoid unnecessary administrative abrasion as well as that endless payer and provider back-and-forth.”

Optum provider education can:

  • Identify opportunities for education by analyzing current provider billing behavior.
  • Determine the most effective method for educating providers based on campaign and provider demographics.
  • Analyze provider behavior and billing trends to figure out whether the education is working.
  • Escalate providers that don’t demonstrate change to appropriate departments.
  • Give an end-to-end view of the billing process and show a complete picture of how the education program is affecting cost.

These provider education tools create real value for Optum clients, Farazi says, including:

  • 48% decrease in administrative costs related to medical record requests
  • 84% decrease in denials
  • 93% decrease in appeals
  • 50% decrease in regulatory complaints

Developing the provider communication gateway

Building on the provider education tools, Optum is working to shift further left into the claims and payer workflow with the Provider Communication Gateway. This product helps identify claims errors earlier to improve efficiency and reduce costs.

“Provider education is improving and we’re proactively responding with phone calls, emails and webinars. But it’s still a slow process and it still waits for the problem to happen,” Farazi says. “The Provider Communication Gateway is an opportunity to push into the workflow and show where the errors are happening.”

The Provider Communication Gateway provides informational messages within the billing system where the provider coders are working. The messages identify problems with claims, along with a reason code or an error code. This helps prevent coders from submitting a claim that creates a red flag down the line.

“I’m excited about this tool,” Farazi adds. “Given the value on both sides of the equation, I’m optimistic about its potential.”

To hear more about innovations in payer tools and how they are reducing incorrect claims, watch a recap of the webinar: Payment Integrity Avoidance: Stopping Incorrect Claims from Being Created Through Payer/Provider Collaboration. You can also reach out to our team at to learn more.

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