Prepay itemized bill review delivers $5.2M in savings


A large health plan in the Midwest was concerned about overpayments on in-patient claims being paid at a percentage of billed charges.

To review and process inpatient claims, payers require itemized bills, a line-by-line cost breakdown outlining each of the services, procedures, and supplies used during a patient’s care visit. By unbundling the claims into the detailed view, payers can conduct reviews on the statement and associated medical record to verify the accuracy of services rendered and detect any discrepancies, per their unbundling policy. An unbundling policy is a documented payment policy that recognizes appropriate, federally regulated billing guidelines while also addressing specific payer reimbursement policies. It defines items and/or services which are included in a bundled payment and are not separately reimbursable.

While the payer had an established and published unbundling policy, the language was vague and therefore wasn’t consistently applied within the payer’s reimbursement methodology. This necessitated the payer to suspend payment from some providers when bills were received and to audit itemized statements along with the distinct revenue codes on the post-pay side to ensure compliance. It also caused considerable appeals and contributed to provider abrasion, as the policies were not specific enough to understand intention.

Human Ingenuity

As the inflated and erroneous reimbursement posed a significant financial burden, the client came to EXL Health to help revise their unbundling policy. EXL Health leveraged our deep domain expertise to implement concise, comprehensive language to ensure clear and enforceable terms. Once the new unbundling policy was shared, the client needed to ensure compliance while improving their existing program. In need of a quick solution, EXL Health proposed a prepay auditing program of high dollar claims, consisting of a two-phased approach to accommodate the client’s urgency and allow time for EXL to build out the permanent workflow.

During the first phase, the client identified applicable claims, requesting and collecting the itemized bills from the providers before sending them directly to EXL for review. Once received, EXL’s team of registered nurses reviewed the charges against the published unbundling policy, collaborating with the provider’s clinical and coding teams when appropriate. All qualified claims received a second-level review by EXL’s quality control experts to ensure the identification of maximum relevant overpayments. The EXL team also reached out to on-hold providers for education, mitigating future abrasion and operational inefficiencies. After two-and-a-half months and reviewing over $22M in billed charges, the project was ready for phase two.

At this time, EXLMINE™, our digital audit workflow solution, was ready and configured specifically to our client’s needs. While the client continued to identify the claims, EXL took point from there, leveraging EXLMINE™ to find greater savings opportunities. EXLMINE™ hosts many tools to support the audit process with speed and accuracy, including optical character recognition (OCR) and natural language processing (NLP). Additionally, EXL reviews provider’s billing practices and creates a customized, data-driven algorithm to select claims with savings potential and performs monthly query updates to capture new billing practices as well as charges related to emerging technology.

The EXL team leveraged these digitally enabled solutions to streamline the operational processes, obtain greater insight on selections, and advise the client with data-led recommendations. For example, the team provided recommendations based on historical findings with provider payment trends and claims with the potential for clinical savings, which would require an in-depth hospital bill audit during the post-pay process. All pre-pay audits were completed within three-to-five days and the client received detailed savings with rationales and references applicable to their payer policies.


The client realized savings during the first month of the two-phase process, with these savings continuing to increase throughout the program.

  • $2.6M savings in first six months
  • $5.2M total program savings after a year and a half (despite client-imposed provider exclusions)
  • 731 itemized bills audited over that same time period/li>
  • $10k average in overcharges per review
  • 173% of annual projected savings reached by the end of 2023