Discover how this award-winning managed care plan partnered with Alaffia to launch a defensible payment integrity program that saves millions of dollars.
Challenge
Building a payment integrity program in a complex environment
After 20 years in healthcare finance and claims operations, the VP of Operations at this managed care plan knows how much revenue payers routinely lose to billing errors and unsupported charges. So, when she joined the team in 2024, her first order of business was to stand up a rigorous payment integrity program.
At the time, the plan’s 20-person claims operations team was processing a high volume of Medicaid claims efficiently and compliantly. However, without a process in place for itemized bill review (IBR) or complex claims review (CCR), they had no way to determine if every dollar going out the door was actually owed.
The VP of Operations had a hunch that they were sitting on millions in potential savings: both from past and future bills.
The problem? Building out pre-pay and post-pay processes would be a massive undertaking for her team. It would require them to scrutinize each line item across their thousands of monthly bills, cross-reference their findings with plan-specific policies, and validate complex claims against medical records, which is all slow, subjective work.
Between claims processing, appeals and grievances, and encounters, her team was already at capacity. Adding payment integrity to the mix wasn’t realistic. Plus, she knew that attempting this high-stakes work without the proper expertise could result in missed savings and costly appeal noise from providers.
To maximize savings with minimal provider abrasion, she decided to bring in outside expertise. She specifically needed a partner who understood the unique regulatory and payment rules of her region.
Luckily, a colleague soon connected her with a white glove vendor who was reinventing the payment integrity space: Alaffia. When she sat down with the team and saw their solutions in action, she knew Alaffia could give her company the high-touch, personalized service that vendors rarely extend to smaller payers. She knew Alaffia was an ideal partner for their health plan.
“I knew we were leaving savings on the table from improperly billed charges. But we didn’t have the time, resources, or systems to create an in-house payment integrity program.”
Solution
Streamlined pre- and post-pay reviews, powered by AI
Alaffia partnered with the managed care plan as an extension of the plan’s team, combining dedicated operational expertise, clinical and coding review, and AI-enabled technology to build a repeatable and defensible framework for identifying and realizing savings.
The engagement began with the implementation of a comprehensive post-payment audit program. Alaffia worked closely with the plan’s VP of Operations to establish the operating model, configure review workflows, and align the program to the plan’s policies, coding guidelines, clinical criteria, and reimbursement requirements. The team also incorporated state-specific rules necessary to account for the region’s unique billing and payment requirements.
Ahead of go-live, Alaffia coordinated with the plan and its provider network to establish the operational infrastructure required to support the program, including secure and automated transfer of claims, medical records, and other supporting documentation.
Once implemented, Alaffia launched a three-year historical review of paid claims to identify previously missed payment integrity opportunities and quantify recoverable savings.
Through its managed services model, Alaffia performed both itemized bill review (IBR) and complex claims review (CCR) by:
- Applying AI-enabled review logic: Evaluating claims against plan-specific reimbursement policies, coding requirements, clinical criteria, and configured payment rules.
- Prioritizing claims for review: Triaging opportunities based on complexity and risk, allowing straightforward issues to move efficiently through the workflow while directing clinically complex cases to deeper medical-record review.
- Developing defensible findings: Producing case-specific recommendations supported by traceable evidence from the medical record, claim data, and applicable policy.
- Providing expert clinical and coding validation: Routing findings to Alaffia’s in-house clinicians and coding experts to validate, refine, and finalize determinations before they were issued.
- Managing the audit lifecycle: Supporting the operational processes required to move findings from identification through provider communication, dispute resolution, and ultimately recovery of validated savings.
The findings from this audit exceeded the VP of Operations’ already ambitious recovery targets. Alaffia not only identified straightforward opportunities such as duplicate charges and routine services billed separately, but also uncovered more complex, clinically nuanced issues through detailed medical record review including unsupported levels of care, services that were not substantiated by the documented clinical intensity, and charges that exceeded what the underlying care and documentation supported. “My team, who had never seen these audits before, was floored by the value Alaffia immediately delivered,” she shared.
As post-payment recoveries began rolling in, she and Alaffia turned to the next phase: a pre-payment process to capture savings proactively. For this complex implementation, Alaffia embedded directly into the plan's claims adjudication workflow and worked with their claims vendor to build the integration. Together, they created the system to flag claims in real time with Alaffia's best-in-class selection logic, so the right claims could be reviewed prior to final adjudication.
Soon after, Alaffia expanded IBR and CCR capabilities to incoming claims, extending the program from retrospective recovery into ongoing pre-pay cost avoidance. Because Alaffia manages the end-to-end audit process, the plan can realize savings with minimal operational lift from its internal team.
Rather than requiring the plan to review or approve individual findings, Alaffia provides monthly and quarterly reporting on program performance, emerging trends, and key areas of opportunity. The team also proactively surfaces new savings opportunities based on claim patterns, provider behavior, and audit results; helping the plan continuously evolve its payment integrity strategy without adding internal administrative burden.
“Alaffia is the ideal partner,” she explains. “We know they’re always in the background finding savings, but we rarely have to touch the process ourselves.”
The benefit she didn’t expect? A meaningful change in how providers bill. Alaffia's payment recommendations are so defensible that providers rarely appeal them, and rarely win when they do, while also actively learning from their past errors. Their billing habits improve with every audit, reducing the number of dollars the plan has to fight for.
“Working with a payment integrity partner always runs the risk of provider abrasion, but Alaffia has actually strengthened our provider relationships. Now that they’re being audited, they’ve started to learn more about proper coding practices and improved their billing habits to our benefit.”
Results
Millions in realized savings and an overturn rate under 1%
With Alaffia, the plan took their payment integrity program from zero to one, recovering millions. Today, the team consistently exceeds their pre-pay and post-pay goals, uncovering more savings every quarter without straining internal resources or jeopardizing provider relationships.
The numbers speak for themselves:
To capture even more savings, the plan recently expanded Alaffia’s scope to include audits for Diagnosis-Related Groups, Ambulatory Surgical Centers, and Enhanced Ambulatory Patient Groups. The VP of Operations is also exploring the platform’s AI capabilities for appeals and grievances, as well as ER claims review.
She’s confident that wherever she takes the payment integrity program, she can count on Alaffia’s flexible team to answer her questions, adjust timelines, and update processes as needed.
“The entire Alaffia team is incredibly knowledgeable and responsive — even when it comes to the nuances of our specific markets. We’re expanding our services because working with them has been that good.”
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