In healthcare, timing is everything. And when it comes to DRG (Diagnosis-Related Group) payment integrity, there’s a massive shift underway—away from traditional “pay and chase” models, and toward smarter, faster, more cost-effective pre-pay solutions.
At Machinify, we understand what it takes to modernize high-stakes decisions with AI. Our pre-pay DRG optimization offers a powerful playbook for any health plan ready to stop reacting and start getting ahead.
Here’s what you should be thinking about if you want to build a payment integrity operation that’s fast, precise, and built for the future.
The Problem With “Pay and Chase”
Traditional post-pay audits are slow, expensive, and frustrating for both payers and providers. Health plans pay claims up front, then attempt to claw back overpayments weeks or months later. Meanwhile, providers face the administrative burden of retrospective reviews, appeals, and disputes. Nobody wins.
In fact, administration accounts for more than 40% of the cost of delivering care to patients in hospitals. Beyond the cost, almost one-third of providers report negative experiences with payer audits, damaging payer-provider relationships.
The financial upside of adopting better technology is massive—and the operational efficiency gains are hard to ignore.
Why Pre-Pay DRG Solutions Matter
The benefits of moving to pre-pay DRG reviews aren’t just theoretical. Machinify’s work proves it. By identifying errors before payments go out the door, payers can:
- Lower costs through immediate, measurable cost avoidance.
- Reduce provider abrasion with fewer audits and a more collaborative, automated workflow.
- Alleviate administrative burden by catching issues early before they snowball into manual reviews and appeals.
- Accelerate impact with no lag between issue detection and financial realization.
This is not a small step forward. It’s a leap.
What it Takes to Make the Shift
So how do you make the leap from retrospective audits to real-time intelligence? Here are the five pillars that matter most when evaluating pre-pay DRG solutions:
1. Data Integration & Claim Selection
Start with your foundation: data. You need tight integration with your claims systems and a smart, selective approach to targeting claims for review.
Ask the hard questions before choosing a solution:
- How are claims identified for review?
- What metrics define success? Change rate, savings per review, MR thresholds?
- What insights drive claim prioritization?
The ability to select the right claims, at the right time, makes all the difference.
2. Document Acquisition & Review
You can’t review what you can’t retrieve. A strong pre-pay solution must streamline document acquisition and give providers visibility into the process. Even better? One that layers in AI to make chart reviews fast, accurate, and scalable. Turnaround time isn’t just a metric—it’s a competitive advantage.
3. Provider Engagement
Technology is important, but so is trust. Your platform should reduce friction between payers and providers, not introduce more. That means:
- Clear communication and dispute resolution mechanisms
- A footprint of existing provider relationships
- Transparency that builds confidence in the process
If you’re creating value with your provider partners, you’re on the right track.
4. Flexible, Configurable Workflows
Every health plan is different. Your pre-pay DRG platform needs to flex with you whether you’re insourcing, outsourcing, or somewhere in between. Can workflows evolve post-implementation? Can analytics and reporting adapt to your priorities? If not, you’re not future-proof.
5. Implementation & Support
Speed to value is key. You want a solution that can be deployed quickly, with responsive support and low lift from your internal teams.
Ask:
- How fast can this go live?
- What’s the typical response time for support?
- What level of ongoing guidance do we get?
A trusted partner doesn’t just sell you a product—they stay in the game with you.
Real Results: a Case Study in Scale
Machinify’s work with a multi-state health plan covering 17 million lives is proof of the impact of pre-payment models.
The challenge: outdated internal systems, inefficient outsourced reviews, and rising provider abrasion.
The solution: a hybrid model combining Machinify’s AI-powered SaaS platform with flexible outsourced support. The plan used Machinify’s tech to review itemized bills and DRG claims at speed and scale—while managing part of the operation in-house.
The result: game-changing performance.
- ~$400M in annual cost avoidance
- Claim reviews with pay/pend decisions in less than one second
- 99.3% of all reviews approved without issue
- Significant improvement in provider relations and efficiency
Over four years, this wasn’t just optimization, it was transformation. And it delivered over $1 billion in cost savings.
The Takeaway: Pre-Pay DRG Isn’t the Future, it’s Now and it’s Powerful
The market is shifting fast. The smartest health plans aren’t waiting, they’re acting now. They’re investing in AI, automation, and analytics to turn pre-pay from a pilot into a powerhouse. But technology alone isn’t the answer. You need deep clinical expertise. Flexible infrastructure. Transparent provider workflows. And a partner who understands the realities of operating at scale.
At Machinify, we believe decision automation should be fast, accurate, and accountable. That’s why we build platforms that mirror what’s working in the most advanced health plans today. Because, like in healthcare, getting ahead of the problem is always better than chasing it down later.
To learn more about how Machinify can improve your DRG payment integrity program, contact us today.
