Latest / Becker’s Payer Issues Podcast / Insourcing vs. Outsourcing Payment Integrity: Striking the Right Balance for Your Health Plan

Transcript

Insourcing vs. Outsourcing Payment Integrity: Striking the Right Balance for Your Health Plan · Becker’s Payer Issues Podcast

• 0:00
  Hi, everyone. This is Lucas Voss with the
• 0:01
  Becker's Healthcare Podcast. Thanks so much for joining
• 0:04
  us today. We have a very exciting topic
• 0:07
  and, more importantly,
• 0:08
  a very exciting
• 0:10
  guest. I'm very thrilled to be joined by
• 0:12
  John Espens, VP Strategy at Cerus,
• 0:14
  who will talk to us about trade offs
• 0:16
  of outsourcing versus internalizing payment integrity solutions. It's
• 0:20
  almost like a philosophical
• 0:22
  discussion, I feel like, John. Thanks for being
• 0:24
  here today.
• 0:26
  Thank you for having me.
• 0:28
  Absolutely. If you could give us just a
• 0:30
  brief introduction to yourself and sort of your
• 0:32
  overview of your work in in health care
• 0:34
  for the audience.
• 0:35
  Sure. Happy to. Well, as you said, my
• 0:37
  name is Jona Spence, vice president of strategy
• 0:40
  here at Cirrus Health. Maybe a little bit
• 0:42
  on Cirrus First. So Cirrus offers a number
• 0:45
  of payment integrity solutions to our health care
• 0:47
  payer partners,
• 0:49
  ensuring, obviously, that claims are paid accurately and
• 0:52
  saving them money.
• 0:53
  As far as my background,
• 0:56
  I would say, like most people in the
• 0:58
  industry, I didn't plan to go into health
• 1:00
  care Mhmm. But rather it kinda found me.
• 1:03
  I started out,
• 1:05
  actually right out of college performing
• 1:07
  collections on behalf of hospitals,
• 1:09
  but it gave me an interesting perspective of
• 1:11
  hospital billing. And then I quickly moved over
• 1:14
  to the insurance side of the industry,
• 1:16
  where I've held a number of different roles,
• 1:18
  hospital negotiations
• 1:20
  to client management,
• 1:22
  to today in my current role of, vice
• 1:25
  president strategy where I act as member of
• 1:28
  the executive leadership team, ensuring our strategy closely
• 1:31
  aligns with that of, the needs of our
• 1:33
  clients, and then, of course, addressing any market
• 1:36
  changes.
• 1:37
  And you mentioned the most important part, saving
• 1:39
  people money. Right?
• 1:41
  Yes. Always. Yeah. That's the the key piece.
• 1:43
  Well, for us to dive into this, I
• 1:45
  think we have to set the stage a
• 1:46
  little bit for where we are today and
• 1:48
  and what everything looks like from your perspective.
• 1:51
  So I I wanted to start with that.
• 1:52
  For for payers,
• 1:54
  what are some of the benefits and and
• 1:56
  drawbacks
• 1:57
  to insourcing right? And then also, what are
• 1:59
  the main factors
• 2:00
  that really tend to influence health plan leaders'
• 2:03
  decisions to insource to go that route or
• 2:05
  not if they choose to?
• 2:08
  Thanks. Yeah. I might start with a few
• 2:11
  benefits
• 2:11
  to in sourcing first. Yeah. Absolutely.
• 2:14
  Yeah. So maybe starting off with probably the
• 2:16
  most obvious benefit being the ability to have
• 2:19
  just complete control of the program operations.
• 2:22
  So as a payer, you know, the vendor
• 2:25
  partner really should be an extension of their
• 2:27
  internal program,
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  but the reality is they're giving up some
• 2:31
  level of control when they in source or
• 2:32
  outsource rather.
• 2:34
  We see it from time to time where
• 2:36
  a policy changes or even a a payer's
• 2:39
  philosophy
• 2:40
  around PI changes,
• 2:41
  and they just need to make a change
• 2:43
  very quickly,
• 2:44
  you know, in how they're doing things. So
• 2:46
  for example, a payer may need to go
• 2:48
  from being less provider centric to very provider
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  centric,
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  maybe to help with a star rating or,
• 2:54
  you know, contracting efforts.
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  But in a fully in sourced program allows
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  them to make those changes
• 3:01
  very quickly
• 3:03
  so that they can satisfy their own company,
• 3:05
  strategy.
• 3:07
  Another benefit to insourcing, I would say, is
• 3:10
  consistency.
• 3:11
  We've seen some payers in the industry split
• 3:14
  up their payment integrity services,
• 3:16
  between multiple
• 3:18
  vendor partners,
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  and it ends up causing differences
• 3:22
  in their work product.
• 3:24
  And, eventually, it causes confusion among their provider
• 3:27
  community.
• 3:28
  Mhmm. So an in source program,
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  the payer knows what's going out their door.
• 3:32
  It's consistent,
• 3:33
  and then in turn, it cuts down on
• 3:35
  the provider noise. And that's that's the goal
• 3:37
  of any good PI program is gonna make
• 3:39
  sure that our provider community is happy.
• 3:42
  Now, of course, on the other hand, I
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  would argue the drawbacks
• 3:45
  of a program that's a 100% insourced considerably
• 3:49
  outweigh those of the the benefits.
• 3:52
  Mhmm. Maybe a little biased.
• 3:54
  One draw drawback probably being the cost of
• 3:56
  the program.
• 3:57
  The reality is vendors can, you know, offer
• 3:59
  these services much cheaper than payers,
• 4:02
  you know, when they do, you know, try
• 4:04
  to perform these themselves internally.
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  It's just been proven time and time again,
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  vendors drive a much higher ROI
• 4:10
  than building that internally.
• 4:12
  Mhmm. So if you think about building out
• 4:15
  a full PI program, you need to really
• 4:18
  have knowledge and expertise,
• 4:20
  and those people don't come cheap.
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  But even then, the cost of staffing a
• 4:24
  PI program is more than just, you know,
• 4:27
  a person's salary or even the one and
• 4:29
  a half times the person's salary as we
• 4:31
  kinda calculate
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  the cost of employing someone.
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  Now there are tools and resources
• 4:37
  that those employees will need for that program.
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  And a vendor partner already has those in
• 4:42
  place. They have the experienced staff and or
• 4:45
  tools in place that you'll need,
• 4:47
  to stand up a program.
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  And that's that's a big benefit too, I
• 4:51
  think, being able to have Yeah. In house.
• 4:53
  Yeah.
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  Yeah. Well and then real the reality is
• 4:57
  what they're doing is they're spreading the cost
• 4:59
  of that knowledge across multiple payers. Mhmm. So
• 5:02
  you you're able to spread the cost with
• 5:05
  essentially your competition.
• 5:07
  And then I would say I'll touch on
• 5:09
  just one other, you know, drawback,
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  probably the largest drawback, and that is,
• 5:14
  you know, definitely worth mentioning, and that is
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  the loss of knowledge. You
• 5:18
  know,
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  you lose, I'll say, the entrepreneurship,
• 5:23
  when you in source a program.
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  So I've personally seen partners who completely in
• 5:29
  sourced their PI programs
• 5:31
  that just a few short years later have
• 5:33
  come back to the market looking to reengage
• 5:36
  with vendors again.
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  And it it's not because they aren't finding
• 5:40
  savings. Right? But because they recognize that they
• 5:42
  aren't finding anything new.
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  So things change rapidly in our industry. We
• 5:47
  all know that,
• 5:48
  and ventures are eager to innovate. Right? They
• 5:51
  have to go out and find the next
• 5:53
  big thing to remain competitive. Yeah. You have
• 5:55
  to provide that innovation to be able to
• 5:57
  say, hey. We we need that next step.
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  What's next here?
• 6:00
  Exactly. And how do we do that? We
• 6:02
  do that through collaboration.
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  But you're not gonna go collaborate with
• 6:05
  your your competition. Right? You're not gonna call
• 6:07
  it Exactly.
• 6:08
  Yeah. Aetna's not gonna call United, we'll say,
• 6:11
  and say, hey. What are you doing? So
• 6:14
  vendors are able to provide that collaboration across
• 6:16
  the industry
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  with you know, and doing it delicately without
• 6:20
  kinda sharing any trade secrets.
• 6:22
  So Yeah. And, again, maybe a little,
• 6:25
  biased in this regard, but in sourcing just
• 6:29
  unintentionally
• 6:30
  creates a lack of innovation.
• 6:32
  Yeah. It's very interesting. I didn't think about
• 6:34
  that, and that's certainly something that's that's a
• 6:36
  sort of an added an added factor that
• 6:38
  people should be thinking about as well. And
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  one of the things I think that that's
• 6:41
  very interesting that you've you've mentioned a a
• 6:43
  couple of times here
• 6:45
  in our intro question was the fact that
• 6:47
  that control is control of operations is such
• 6:50
  a big piece of this conversation.
• 6:52
  Being able to control the process, being able
• 6:54
  to control the insourcing approach, how does this
• 6:58
  added control provide more flexibility
• 7:00
  in responding to market changes, and how does
• 7:03
  it ultimately impact cost, which is the most
• 7:06
  important piece?
• 7:08
  Yeah. No. You nailed it on the head.
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  Right? The importance of control comes down to
• 7:12
  costs.
• 7:14
  You know, let's say a concept you've you
• 7:16
  know, a payer has implemented is wrong or
• 7:18
  it receives a lot of pushback from provider
• 7:20
  community.
• 7:21
  You know, correcting that mistake can be very
• 7:23
  costly if you don't act quickly.
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  So and, obviously, there's a an administrative cost
• 7:29
  associated with overturning a concept.
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  You know? Ideally, you have a vendor partner
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  who you could trust, you know, to do
• 7:36
  it right the first time, but you don't
• 7:37
  wanna be touching a claim more than once.
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  And so if something like that happens,
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  when you have complete control,
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  you can act quickly
• 7:48
  and fix it to cut down on cost
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  as much as possible. And that's just, you
• 7:52
  know, one example.
• 7:54
  Yeah. You're able to to react quickly,
• 7:57
  react to change, being able to do that
• 7:59
  and and have that added control. I think
• 8:00
  that that's really key,
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  to be able to to create that that
• 8:03
  flexibility
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  too, for for an organization.
• 8:07
  And along those lines and I know we've
• 8:08
  we've touched on this a little bit too.
• 8:11
  This space is constantly evolving. There is constant
• 8:14
  innovation like you've said. Right? We need to
• 8:16
  be able to do that to be able
• 8:18
  to move forward,
• 8:19
  regulatory,
• 8:20
  technology,
• 8:22
  the market. Right? The market changes. Those things
• 8:24
  are are key components.
• 8:27
  What are some of the things that you're
• 8:28
  watching today that are important to you,
• 8:31
  and what are what's your advice for health
• 8:33
  plan leaders that really want to maximize this
• 8:36
  process of of insourcing
• 8:38
  in the environment that we're in today?
• 8:42
  Yeah. No. It can be difficult to keep
• 8:44
  up with all of the changes in the
• 8:46
  industry.
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  You know, if insourcing is something that a
• 8:51
  payer is passionate about, I think staying in
• 8:54
  front of conferences
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  is always a good way to do that.
• 8:59
  Again, I think this is where a a
• 9:01
  vendor partner can be a big help.
• 9:03
  Sirus, we partner with different law firms and
• 9:07
  entities that help us kinda stay
• 9:10
  abreast of what's happening and changing.
• 9:12
  Of course, the biggest trend we're probably all
• 9:14
  of us are watching right now is the
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  transition
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  of government oversight in health care Yeah. After
• 9:19
  the election.
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  You know, it's safe to say we all
• 9:23
  expect to see a change in priorities of
• 9:25
  CMS, especially,
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  and potentially some new legislation because of it.
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  You know, we can make assumptions on where
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  we think those priorities will lie in the
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  future,
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  but,
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  I'll maybe save those for another day. But,
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  you know, as a payer community,
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  yeah, we just we need to be intentional.
• 9:42
  And, again, I think collaboration is key,
• 9:45
  just to ensure that we are consistent in
• 9:47
  our application
• 9:48
  in the industry as a whole
• 9:51
  and as
• 9:52
  a payer community.
• 9:54
  And then another one I'd say, which is
• 9:56
  still worth calling out, you know, we've seen
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  a few things come out of the last
• 10:00
  big security hack in our industry,
• 10:02
  but I do expect there will be a
• 10:04
  a lot more regulatory changes to come out
• 10:07
  of that unfortunate situation.
• 10:09
  So we continue to watch that one closely
• 10:11
  as well,
• 10:12
  to just kinda see what the impact will
• 10:14
  be as we expect some more security
• 10:17
  requirements and things come out of that.
• 10:20
  I think, personally, I think we already have
• 10:22
  our next episode, Janna. I think that that
• 10:25
  that should be it. That should be the
• 10:26
  next episode. I think that's a great topic
• 10:28
  to discuss in terms of what what's next
• 10:30
  for for this space.
• 10:31
  Yeah. So much so much to discuss.
• 10:34
  So many things that that we've mentioned here
• 10:36
  have implications for for a ton of organizations.
• 10:39
  John, I wanna just leave you and give
• 10:40
  you some time if there's anything else that
• 10:42
  you wanna mention that we didn't touch on
• 10:44
  that that might be important for folks that
• 10:45
  are listening today,
• 10:47
  for for their own, operations or in general,
• 10:49
  their own interest. Is there anything else that
• 10:51
  you'd you'd like to mention?
• 10:53
  No. Not really. I'd just say, you know,
• 10:56
  one, thank you for having me. And then,
• 10:58
  of course, I'm always happy to make myself
• 11:00
  available.
• 11:01
  Collaboration and consulting is what Cirrus is known
• 11:04
  for, but it's something I'm also personally passionate
• 11:06
  about. So if anyone in the industry,
• 11:09
  feels the need to reach out, please do.
• 11:11
  I always welcome any dialogue and open to
• 11:14
  just talking about what makes sense in the
• 11:16
  industry.
• 11:17
  And we talked about partnerships. It's important to
• 11:19
  engage vendors for innovation.
• 11:22
  It's important to talk about talk about, talk
• 11:24
  about innovation, talk about, talk about these things
• 11:27
  with partners that that you can trust. I
• 11:29
  think that's really key to drive innovation. Janna,
• 11:31
  thanks so much for your time today and
• 11:32
  and for the great discussion. This was awesome.
• 11:35
  Thank you.
• 11:36
  And I'd also like to thank Sarah's for
• 11:38
  sponsoring this episode today. You can tune in
• 11:40
  to more podcasts from Becker's Healthcare by visiting
• 11:43
  our podcast page at beckershospitalreview.com.