The Imperative for Collaborative Payment Integrity

For health plans, the mission is clear: ensure every healthcare claim is paid quickly and accurately, controlling fraud, waste, and abuse (FWA) without compromising valuable relationships with providers. For Medicaid, it’s also about equity and access. For Medicare and commercial plans, it’s about cost control and a great member experience. It’s a balancing act.

Both public and commercial plans have mostly relied on auditing claims after paying them. Auditing claims after payment does catch errors, especially on complex claims, but it’s reactive and hard on providers. Now, payers are moving to pre-payment solutions that build trust, efficiency, and positive outcomes for everyone involved. 

FWA isn’t minor – it’s massive.

Waste, fraud, and errors add up—fast. Estimates put losses between $68 billion and $230 billion annually in the U.S. alone. Broad estimates suggest FWA, plus other forms of waste, could account for up to 25%–30% of total U.S. healthcare spending, a staggering $760 billion to $935 billion wasted per year. So, there’s major motivation to make sure each claim is right, upfront.

Payment integrity must scale, but stay intelligent, equitable, and provider-friendly.

The shift to Pre-pay Claim Review.

Pre-pay detection prevents improper payments before they happen, eliminating costly take-backs and reducing provider abrasion. Key benefits include:

• Direct ROI: Every dollar prevented is a dollar saved,  versus pennies on the dollar with post-pay recoveries.
  
• Smoother operations: Automated risk scoring reduces manual reviews, lowering administrative costs.
  
• Provider partnership: Fast, accurate payments promote provider confidence and participation, helping sustain high-quality care networks.

For Medicaid, pre-pay detection also preserves equity and access by reducing provider stress and ensuring participation in underserved areas. For Medicare and commercial insurers, it protects network strength, brand, and member experience.

Building trust with Explainable AI. 

Providers don’t trust denials they can’t understand. Traditional denial processes can feel like black boxes, leaving providers frustrated and leading to repeat issues.To build trust, providers need clear, actionable explanations for why claims are flagged or denied. 

Explainable AI addresses this directly. Unlike “black box” decisions from traditional machine learning models, Explainable AI offers transparency by providing clear, actionable insights. With an AI-enabled pre-pay model, providers gain access to: 

• Claim insights: Learn why a claim was flagged, whether it was a billing pattern, frequency of service, or coding discrepancy.
• Key drivers: Understand the direct risk factors, such as geographic anomalies or prior claim histories.
• Resolution guidance: Receive clear recommendations on how to correct and prevent future issues.

While valuable, Explainable AI does not operate in isolation. Rather, it integrates into workflows to augment human expertise, not replace it. By flagging specific, high-risk claims for further investigation, expert reviewers are directed to where attention is most needed, ensuring complex cases receive human oversight while allowing straightforward claims to be processed without delay.

This builds trust, accountability, and shared ownership of payment integrity goals.

The value for all stakeholders.

Comprehensive payment integrity offers universal benefits:

• Cost avoidance: Preventing errors up front leads to higher savings than post-payment recoveries.
• Streamlined operations: Automation decreases manual workloads and appeals, lowering administrative burden.
• Stronger provider relationships: Transparent reasoning builds trust and reduces disputes.

For Medicaid, these savings can support programs addressing social determinants of health (SDoH); for Medicare and commercial payers, savings translate to better member benefits and increased financial sustainability.

Practical steps to move forward.

Explainable AI has the potential to transform the relationship between payers and providers by fostering trust, transparency, and collaboration. But realizing this potential requires more than just implementing the technology, it demands thoughtful strategies to ensure providers feel supported and engaged. Here are three practical steps to help organizations move forward and maximize the impact of Explainable AI in their workflows:

1. Implement transparent, explainable solutions. Adopt Explainable AI models that make decisions clear for providers. This tells the “why” and “how,” not just “no.” It gives providers real feedback they can use.
2. Treat providers like allies. Equip providers with education and practical support that outlines why a claim is incorrect; build constructive feedback mechanisms and trust.
3. Show off your wins. Communicate not just financial savings but share stories of faster payments and provider satisfaction.

Looking ahead: Smarter, friendlier, more transparent

A collaborative, prevention-focused payment integrity strategy is the key to a healthier system. It reduces waste, supports providers, and builds a foundation of trust. Paying claims right the first time means less waste, better relationships, and more resources dedicated to patient care. AI-driven FWA tools are more than technology upgrades, they are strategic levers for a smarter, fairer, and more efficient payment ecosystem. It is a strategic shift where prevention is the priority, partnership is the method, and trust is the ultimate outcome.