healthcare claims data

The Story in Your Data

  • May 7 2024
  • Adit Parasuram

Using Claims Data to Uncover the Truth About Your Health Plan Spend

The Critical Need for Data

Now, more than ever, engaging with your claims data is a critical aspect of health plan management. Behind every doctor's visit, prescription filled, or procedure undergone lies a treasure trove of information waiting to be explored.

Claims data provides intelligence that is likely unavailable from another source. More than just a collection of numbers and codes, this data can unveil a powerful narrative. It’s your key to not only understanding patient health, treatment patterns, and healthcare trends but also lowering your health plan spend.

Too often, employers miss out on the value their claims data can provide. This can happen for several reasons:

  • A lack of awareness of what’s available
  • Trust in someone else, such as their TPA or ASO, to handle their data processing properly, openly, and honestly
  • A shortage of know-how on how to analyze their data in a way that delivers relevant insights

Today, with the latest amendment to ERISA, the Consolidated Appropriations Act (CAA), overlooking the narrative hidden in your claims data can lead to significant legal repercussions. Under the CAA, it’s an employer's responsibility to ensure they’re being a responsible fiduciary. Along with that comes the expectation that employers will monitor their claims data to protect against waste, fraud, and spending abuse that can occur with health plan expenditures.

In this post, we’ll provide insight into the many valuable insights you may not know are hiding in your claims data. We’ll also discuss how this intelligence can keep you out of legal trouble and compliant with the CAA.  

What Your Data Can Tell You

Your claims data is a vital tool your team can use to monitor how your health plan dollars are spent. It's a window into the efficiency and integrity of your healthcare expenditure. By analyzing this wealth of information, your team can: 

  • Track precisely where your health plan dollars are allocated, ensuring they're used effectively to benefit your members.
  • Uncover hidden taxes, fees, waste, and fraudulent activities that may otherwise go unnoticed. 

Additionally, delving into your claims data provides a crucial opportunity to validate the accuracy of your formulary pricing, ensuring that you nor your employees are overpaying for essential medications and treatments. In essence, your claims data is not merely a resource; it’s a strategic imperative that allows you to optimize your health plan operations and safeguard your financial interests.

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How Your Data Insights Can Help You

Harnessing the power of data insights isn't just about understanding your healthcare expenditure; it's about leveraging that understanding to drive meaningful action. By properly analyzing your claims data, you’ll gain the ability to make informed decisions that can directly impact your bottom line. Here are a few ways your claims data intelligence can be useful:

  1. One immediate benefit is the opportunity to cut costs without compromising on the quality of care provided to your team. Armed with a comprehensive understanding of where your health plan dollars are allocated, you can identify inefficiencies, negotiate better rates with providers, and implement targeted cost-saving measures. This not only ensures that your employees receive top-notch care but also underscores your commitment to fiscal responsibility. 
  2. Insights in your claims data can enable you to educate your employees on how to improve their health experience. With regular, detailed analysis of your claims data, you’ll be able to track employee health interactions and see where improvements can be made. You’ll be able to encourage generic prescriptions over higher-priced name-brand medications. You’ll also be able to steer your employees toward telehealth visits for non-emergent needs and urgent care facilities, when it makes sense, over trips to the emergency room. 
  3. In a regulatory landscape shaped by the CAA, the need to maintain fiduciary responsibility is paramount. Your data insights can serve as a compass, guiding you toward compliance with CAA expectations and shielding your organization from legal risks.

As you consider all the possibilities of what you can glean from your data, keep in mind … under the CAA, it’s an employer’s responsibility to ensure they don’t sign contracts restricting their data access. If you’re stuck in a contract that stands between you and your data, look for the first chance to get out. Then, prepare to monitor the data provision details of any future contract negotiation more closely.

How To Make the Most of Your Data

Once you have your data secured, the next step is to determine how to use it most efficiently for analysis and action. Health Cost IQ’s (HCIQ) SaaS platform, HealthAnalytIQ, offers access to the Opportunity Discovery Module (ODM). This module actively mines medical and pharmacy claims data to identify inconsistencies like some already discussed in this post, such as costly, avoidable, and systemic inefficiencies within health plans.

Employers and organizations use ODM to identify and quantify opportunities for cost reduction in precise dollar terms. It can be deployed for ongoing containment initiatives and is ideal for plan and formulary design. You can catch, address, and correct overpayments before they happen!

Use this tool to:

  • Uncover payment integrity issues and inefficiencies. For example, the quality of most medical services is equal from provider to provider. Significant price variations between the places of services where treatments are rendered are indicators of questionable reimbursement practices. This is just one of the red flags of wasteful spending that you’re equipped to address with the help of ODM.
  • Analyze your emergent and non-emergent ER claims. By tracking your organization's emergent and non-emergent ER claims in ODM, you can identify trends in how your employees seek care and redirect them to more cost-efficient options when it makes sense.  
  • Track your health plan’s efficiency (or inefficiency). HCIQ’s ODM will provide your company with a percentage rating of how efficiently its health plan is operating. View your company's rating every month and see which months are operating more efficiently than others. This rating can be viewed across several disciplines, including clinical lab services, pharmacy spending, administered drugs, immunizations, and more. 

Additionally, ODM can be used to access prescription drug savings opportunities, total spending, potential savings opportunities for medical and pharmacy claims, and health plan inefficiency ratios by month, quarter, and year with benchmarks. 

Our primary goal at HCIQ, particularly with our ODM tool, is to ensure our clients are not spending unnecessarily and to prevent waste from occurring. To learn more about how we follow through to meet this goal and for a demo of our Opportunity Discovery Module, connect with a member of our team today. Contact HCIQ.


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