< + > The Payment Integrity Reckoning

The following is a guest article by Mark Noel, SVP and GM of ClaimInsight at AMPS

Why transparency and defensibility have become non-negotiable for health plans — and what it takes to build a program that actually holds up.

Payment integrity is at an inflection point. Scrutiny is increasing across the industry, and the structural vulnerabilities that many health plans have operated around for years are surfacing. The consequences are no longer theoretical.

The core issue is not whether savings are being generated. It is whether those savings are accurate, explainable, defensible, and ultimately realized. For many plans, the honest answer to at least one of those questions is uncomfortable.

This piece is for the health plan leaders who are asking hard questions about what their payment integrity program is actually producing and what a better model looks like.

The Structural Problem No One Wants to Name

For years, the payment integrity market has operated on a deceptively simple value proposition: find claims savings, report the numbers, collect the fees. Vendors compete on volume. Health plans track “identified savings” as the headline metric. Everyone moves on.

The problem is that identified savings and realized savings are not the same thing and that gap has become one of the most consequential blind spots in health plan finance.

When a claim is adjusted and an appeal follows, the logic behind the original decision matters enormously. If that logic is opaque, buried in a proprietary algorithm the health plan cannot explain, reproduce, or defend, then the finding erodes. An overturn is not just a lost dollar. It is a signal that the original savings never really existed.

This is the structural problem the industry has avoided naming directly: a meaningful portion of reported payment integrity savings is, under scrutiny, not durable. And health plans that cannot see inside their own programs have no way to know how much of their book falls into that category.

Four Ways Health Plans Absorb the Cost

The financial and operational consequences of this model are well distributed, which makes them easy to underestimate. They don’t show up in a single line item. They accumulate across four vectors.

1. Appeal Erosion

Provider disputes and insufficient clinical rationale reduce identified savings after the fact. The gap between what was reported and what was collected is often larger than plans realize and rarely tracked rigorously enough to surface the full picture.

2. Missed High-Dollar Opportunities

High-cost inpatient claims are among the largest drivers of medical spend and among the most likely to receive generalized review rather than the clinical depth they require. Volume-based processing systematically underperforms on the cases where precision matters most.

3. Administrative Friction

Dispute volume drives resource strain, internally and across provider relationships. When adjustments aren’t defensible, every challenge takes longer, requires more documentation, and strains the relationships that operational efficiency depends on.

4. Unpriced Reputational and Regulatory Risk

As industry scrutiny intensifies, the inability to explain how claim decisions were made creates real exposure. Regulatory inquiries, provider disputes that escalate, and the reputational costs of decisions that appear arbitrary under examination are all downstream of the same root cause: a lack of transparency into methodology and outcomes.

The Transparency Gap: Why Opacity Is No Longer a Differentiator

Many legacy payment integrity models were built around proprietary, algorithmic logic. The pitch was straightforward: trust the black box. For a period, this was commercially viable. The market didn’t demand accountability at the claim level, and most health plans lacked the internal capability to interrogate vendor methodology in detail.

That era is ending and faster than most plans have recalibrated for.

The transparency gap is a practical liability across multiple dimensions.

Accountable. When a plan cannot independently validate how a payment decision was made, it is wholly dependent on the vendor’s interpretation. This is not a partnership, it is a dependency. And dependencies are vulnerabilities during disputes, audits, and litigation.

Provider relationships. Providers are sophisticated counterparties. When they challenge a claim decision and the health plan cannot articulate a clear clinical or contractual rationale, the dispute escalates, the relationship strains, and the original finding often fails. Transparency is a prerequisite for defensibility.

Regulatory scrutiny. The regulatory environment for payment integrity practices is not static. Plans that rely on opaque vendor logic and cannot demonstrate that their processes are clinically grounded, consistently applied, and fully documented are poorly positioned as that environment evolves. What is currently a performance risk can become a compliance risk without meaningful advance notice.

Legacy vs. Modern: The Standard Has Shifted

The gap between where payment integrity programs operate today and where they need to operate is best understood by placing the two models side by side.

Legacy model:

• Opaque, proprietary algorithms
• Savings identified (gross), not realized (net)
• High appeal overturn rate
• Vendor-owned methodology
• Volume-based edits
• Limited auditability

Modern standard:

• Transparent logic, explainable at the claim level
• Savings realized after appeal, not just identified upfront
• High uphold rate, findings built to withstand challenge
• Plan-owned decisions, vendor is tool, not authority
• Clinically precise, case-specific review
• Full claim-level defensibility

The move from one model to the other is not just a technology upgrade. It is a fundamentally different philosophy about what a payment integrity program is for. Legacy models optimize for finding discrepancies. Modern programs optimize for findings that hold up and for the financial, operational, and institutional credibility that comes with them.

The High-Dollar Claim Problem Deserves Special Attention

The case for a more rigorous, transparent model is most acute in the context of high-dollar inpatient claims. These are the cases where the financial stakes are highest, appeal risk is greatest, and clinical nuance has the most direct influence on outcome validity.

High-cost claims represent a disproportionate share of medical spend for most health plans. They are also the cases most likely to receive inadequate depth of review under volume-driven models, because generalized rules and algorithmic processing are poorly suited to the complexity these claims actually contain.

A claim involving an extended inpatient admission, complex procedure coding, or uncommon clinical scenario does not yield to a standardized edit. It requires physician-level review, case-specific analysis, and a working understanding of how coding and reimbursement standards apply to the actual clinical record at hand. These are not capabilities that scale through automation alone.

When findings are clinically grounded, clearly documented, and built to withstand challenge, the result is not just higher savings but more durable savings. The financial difference between “savings identified” and “savings realized” is largest precisely where clinical depth is most often absent.

What Health Plans Actually Need to Demand

The question is not whether the payment integrity market will change, it is whether individual health plans will lead that change or follow it. Plans that continue to accept opaque, volume-based programs without demanding claim-level visibility will absorb the costs of that decision for as long as they remain in that posture.

At minimum, every claim adjustment should be:

• Explainable — The health plan should be able to state clearly and specifically why any given claim was adjusted, in clinical and contractual terms a provider, regulator, or judge could evaluate.
• Grounded — Adjustments must be anchored in clinical evidence, coding standards, or contract language, not statistical pattern-matching. Clinically grounded decisions hold up under scrutiny.
• Reviewable — The health plan, not only the vendor, should have meaningful visibility into how outcomes are produced. This is what separates a plan that owns its program from one that rents another organization’s black box.
• Realized — The ultimate measure is not the number at the top of the funnel. It is the number at the bottom, after appeals, after disputes, after the program has been stress-tested by real-world challenges.

The Right Starting Point: Visibility, Not Disruption

For health plan leaders who recognize the problem but are uncertain where to begin, the answer is not a vendor replacement or a program overhaul. The right starting point is simpler and considerably less disruptive: an independent view of what your current program is actually producing.

There is almost always a gap between what is suspected and what can be demonstrated at the claim level. Plans that operate without independent validation of vendor performance are, in effect, accepting reported savings figures without review. That is a posture that creates financial risk, not manages it.

An independent, physician-led review of a targeted sample of high-dollar claims can surface a precise picture quickly: where is savings potential being left on the table? Where are existing findings at risk of not holding up on appeal? Where does the current program’s logic diverge from defensible clinical or coding standards?

This kind of analysis does not require operational disruption. It delivers immediate financial insight, produces data to support internal decision-making, and creates meaningful leverage for vendor conversations, whether the outcome is optimizing an existing relationship, adding targeted capabilities, or making a broader program change.

The Bottom Line: A New Bar for Payment Integrity

The health plans that will lead on payment integrity in the years ahead are not the ones with the most vendor relationships or the longest list of edits. They are the ones that know, at the claim level, what their program is producing and can demonstrate that every dollar of savings is accurate, defensible, and real.

That standard is not aspirational. It is increasingly the baseline expectation, from regulators, from providers, and from plan leadership that is asking harder questions about where reported savings actually go.

Health plans that adapt to this reality will gain materially: higher net savings, greater internal confidence in outcomes, stronger positioning with providers and regulators, and meaningful control over how medical spend is managed. Those that don’t will continue absorbing costs that are easy to overlook until they’re not.

The question is not whether savings are being generated. The question is whether you know, with confidence and specificity, how those savings are produced and whether they will hold up when challenged.

Getting that answer is the first step. And it is available faster than most plans expect.

About Advanced Medical Pricing Solutions

AMPS is a healthcare cost savings technology company helping organizations take control of rising healthcare costs while delivering a better, more supported member experience. With over two decades of experience, we bring together medical claims strategy, payment integrity, and pharmacy benefits into a connected ecosystem designed to reduce costs, improve accuracy, and support the people behind every claim. Through our three solutions (ClaimInsight, PriceDynamix, and Drexi), we deliver Healthcare Cost Savings, AMPLIFIED. For more information visit www.AMPS.com or www.ClaimInsight.com

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