Payment Integrity Software: Custom Build or Cotiviti and Optum for a Health Plan
Buy. Under roughly one million claim lines a year a contingency vendor is the efficient answer, because the fixed cost of your own engine will never amortise. Keep buying coding content at any size, since rebuilding procedure to procedure edits is a category error.
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Buy. Under roughly one million claim lines a year a contingency vendor is the efficient answer, because the fixed cost of your own engine will never amortise. Keep buying coding content at any size, since rebuilding procedure to procedure edits is a category error. Build only the layer holding your own medical policies, your contract terms and your governance.
What the off-the-shelf products actually do well
Start where the vendors are genuinely strong, because that part should never be rebuilt.
Cotiviti and Optum maintain enormous bodies of coding content: National Correct Coding Initiative procedure to procedure edits, medically unlikely edits, bundling relationships, modifier logic and clinical coding libraries, refreshed on a quarterly cycle by teams of certified coders. Lyric and Zelis hold comparable content assets. Reproducing that inside a plan would mean hiring coders to track quarterly updates forever, and it would be the wrong use of every dollar spent.
HealthEdge Source is genuinely positioned on reference based pricing, and if your gap is purely pricing accuracy against Medicare referenced schedules, look there before you look anywhere else. Performant, EXL and Machinify all run credible post payment recovery operations, and a contingency arrangement means you pay only out of what they find, which is a reasonable trade at modest scale.
Most plans should buy, and many plans that build should still keep buying. The honest split is that content libraries are a purchase and control is a build. A plan under a million claim lines a year should not be reading this page as a prompt to commission anything.
Where they stop: your policies and your contracts are not in their rules
The gap is everything specific to you, and it is where the money actually leaks.
Your medical policy says a particular imaging study requires a documented period of prior conservative therapy. Your contract with one health system carves out implant reimbursement above an invoice threshold and requires invoice validation before payment. Your Medicaid contract carries a rate floor overriding your standard fee schedule for a defined code set. You granted a facility a network exception during a capacity crisis and it should have expired eight months ago. None of that appears in any rule library, because none of it is standard.
Today those rules live in three places: a policy document a medical director wrote, a configuration somebody set up in the core system years ago, and manual review queues staffed by nurses and coders reading claims. A policy change takes a quarter to reach adjudication, and nobody can tell you which claims paid incorrectly during the lag.
The second stopping point is contract application, and in most plans it is where the largest dollars sit. A claim priced against a superseded fee schedule version. An outlier calculated on a stale cost to charge ratio. A percent of Medicare arrangement running on a rate that changed in January. A carve out never applied. These are not coding errors. They are the plan paying something other than what it agreed to pay, and vendors cannot catch them because vendors do not hold your contracts. Single case agreements and letters of agreement are worse again, since they frequently exist only as documents and tribal knowledge.
Third, nobody can tell you whether an edit is any good. A rule with a high overturn rate on provider dispute is not saving money, it is generating work and abrasion before paying anyway. Computing overturn rate by rule needs the rule identity to travel into the X12 835 remittance and into the dispute record, and in most plans edits and disputes live in different systems entirely.
The arithmetic: contingency fees against a build
Contingency pricing hides the comparison, so pull it into the open with two numbers you already have.
First, last year's total contingency spend across every payment integrity vendor. Second, the claim lines you adjudicated. Divide one by the other and you have your effective cost per line for integrity work today. Now project it forward at your expected growth, because contingency scales with recoveries and recoveries scale with volume, which means the fee grows with exactly the thing you cannot stop.
The crossover lands earlier than most finance teams expect. Below about one million claim lines a year, contingency wins comfortably and you should not build. Between one and five million, the decision usually turns on how many vendors you carry rather than the volume itself, because two or three vendors running overlapping edits duplicate work, multiply provider inquiries on the same claims and produce attribution disputes at quarter end that consume analyst time nobody budgeted. Past roughly five million claim lines, with two or more contingency relationships, annual fees routinely exceed a first release cost and the build clears inside the first year.
One line belongs in every comparison and never appears on an invoice: the cost of recovering a dollar after payment. A letter to the provider, an offset against a future remittance, a call from their billing manager to your network director, and an item at the next joint operating committee. You recovered the money and paid for it twice.
What a custom build actually costs
From Digital Heroes delivery experience, a first release covering a rule authoring and simulation workspace, a contract aware rule engine, synchronous and asynchronous execution paths inside your adjudication flow, and a pend queue that respects the statutory clock runs $100,000 to $200,000 across 14 to 20 weeks. A full platform adding independent repricing verification, vendor routing and suppression, savings attribution, dispute integration with overturn analytics and post payment recovery orchestration runs $280,000 to $650,000 over 9 to 15 months.
Data migration runs 10 to 25 percent, and in this category it is almost entirely contract structuring rather than record movement. If your contract terms exist as portable document files and institutional memory, turning them into versioned data with owners and effective dates is a real workstream and it is the single most underestimated line on every proposal we have reviewed. Year two costs 15 to 20 percent of build cost annually, covering quarterly content integration, fee schedule refreshes, and the core system upgrades that move your intervention point.
Other drivers: which core administration system you run, since Facets, QNXT and HealthRules each expose a different hook and some plans run more than one; the number of lines of business, because Medicare Advantage, Medicaid and commercial carry different rules and different clocks; and whether clinical review is in scope, which brings clinician workflow and document retrieval with it.
The four situations where building wins
Regulatory fit. Prepay intervention sits inside a pipeline governed by prompt payment statutes that set a hard clock from receipt of a clean claim. Every pended claim is a decision waiting on a human, so the queue has to prioritise by expected value and days remaining rather than first in first out. The layer must also fail open in a defined and alerted way, because an integrity service that stalls the claim flow creates a regulatory exposure far worse than paying a claim you would have edited.
Scale economics. Past roughly five million claim lines with multiple contingency vendors, the annual fee exceeds the build and the gap widens every year.
A workflow that is your competitive advantage. Rule authoring with simulation against a historical claim population is the feature that changes behaviour. An analyst writes a rule, runs it over last quarter, sees hit count, dollar impact and a sample of affected claims with their providers, and decides whether it goes prepay, post pay or nowhere. Without that step every new rule is a gamble on provider relations.
Integration sprawl. Count what must agree on one claim: the core system, the content vendor, two or three recovery vendors, the provider portal, the dispute system and the warehouse. Once three or more touch the same claim for the same concept, you need to be the traffic controller with explicit suppression, or you are paying twice for one finding.
How to decide in a week
Run a repricing sample, and run it against contracts rather than codes.
Pull 200 paid institutional claims from last quarter across your three largest contracted systems. For each, independently reprice against the contract terms of record, meaning the executed agreement rather than the core system configuration, and compare to what adjudication actually paid. Two people, five days, a spreadsheet.
The variance rate is your answer. If almost everything ties, your integrity problem is coding and a content vendor is genuinely the efficient answer. If you find configuration drift, superseded schedule versions or carve outs never applied, that is money leaving on every claim in that population and no coding vendor will ever catch it, because they do not have your contracts. Note that the exercise catches underpayments too, which matter for the provider relationship even though nobody celebrates finding them.
Second test, one afternoon: ask each vendor to show which of their findings your own rules would have caught prepay. The reluctance is informative.
Then commission a paid discovery of two to three weeks ending in a signed product requirements document covering the contract data model, rule expression, execution paths and latency budget, the pend queue policy and acceptance criteria. Digital Heroes writes that before code and you keep it whichever way you go, which also lets you compare quotes that would otherwise be priced against different scopes.
Who we are wrong for: a plan wanting an outcome rather than an asset. If you would rather pay a share of recoveries and never staff this, hire a vendor. Digital Heroes builds software you own: more than fifty specialists, over 2,000 projects, India LLP, US LLC and UK LTD entities so ownership assigns under your own law, and a named team you meet before signing. We are checkable on Clutch, Trustpilot, Fiverr Vetted Pro and D-U-N-S.
Book a 30-minute call with Digital Heroes and get a written plan and a fixed quote within 48 hours.
The evidence behind this guide
Independent findings on why this investment pays off. Every link goes to the primary source.
- Per the Standish Group CHAOS 2020 report (reviewed at this URL), across tens of thousands of software projects roughly 31% end successfully, about 50% are 'challenged', and roughly 19% fail outright; small projects succeed far more often than large ones, and Agile approaches succeed at markedly higher rates than Waterfall. Source: The Standish Group (2020) →
- Median SaaS spend reached $9,455 per employee, and organizations leave an average of 36% of their SaaS licenses unused. Source: Zylo (2026) →
- In a February 2026 survey of 517 small-business employers, 82% had adopted at least one AI tool (typical firm uses five), 66% reported revenue increases linked to AI (22% reported gains exceeding 10%), and 74% said digital platforms make it easier to compete with larger firms; owners saved a median of 5 hours per week and businesses saved a median 11.5 employee-hours weekly. Source: Small Business & Entrepreneurship Council (SBE Council) (2026) →
- Grand View Research valued the global field service management market at USD 4.43 billion in 2022 and projects it to reach USD 11.78 billion by 2030, a 13.3% CAGR, driven by growing field operations in telecom, utilities, construction and energy. Source: Grand View Research (2023) →
Frequently asked questions
How much does custom payment integrity software cost for a health plan?
A first release covering rule authoring with simulation, a contract aware engine, synchronous and asynchronous execution inside your adjudication flow and a statutory clock aware pend queue runs $100,000 to $200,000 over 14 to 20 weeks in Digital Heroes delivery experience. A full platform adding repricing verification, vendor routing, attribution, dispute analytics and recovery orchestration runs $280,000 to $650,000 across 9 to 15 months. Contract structuring adds 10 to 25 percent.
Should we replace Cotiviti or Optum entirely?
Usually not, and we advise against it. Coding relationship libraries and correct coding content are maintained bodies of work refreshed quarterly by teams of certified coders, and rebuilding them is a poor use of budget at any plan size. What plans build is the layer holding their own medical policies, contract terms and governance, which typically removes the overlapping recovery vendors rather than the content provider.
How long does it take to move from post payment recovery to prepay editing?
A first release ships in fourteen to twenty weeks, but the sequence matters more than the calendar. Start with repricing verification against contracts, which needs no adjudication intervention at all, runs on claims already paid, and usually finds enough to fund the next phase. That also gives your team a full quarter of experience with the contract data model before any code executes inside the live claim path.
Who owns the rules and historical decisions if an agency builds this?
You should own the repository, the cloud environment, every rule you author and all historical adjudication decisions, agreed in writing before kickoff. Digital Heroes assigns ownership from the first commit. In a category where vendors have traditionally kept the logic proprietary and charged a share of what it finds, that ownership is most of the reason to build rather than a contractual detail to settle at handover.
What happens if our integrity service is slow or unavailable during a claim run?
It must fail open in a defined and alerted way. A layer that holds claims when a dependency is slow creates a backlog and a prompt payment exposure far worse than paying a claim you would otherwise have edited. Ask any prospective developer this directly, because the answer reveals whether they have worked inside a live adjudication pipeline or only alongside one in a batch process.
Can we build only the reporting and leave adjudication alone?
Yes, and for many plans it is the sensible first phase. Independently repricing paid claims against contract terms of record and surfacing variances daily catches configuration drift within days instead of at the next renegotiation, and it touches nothing in the claim path. Be clear about the limitation: it finds errors after payment, so it improves your evidence and your contract governance without removing provider abrasion from recovery.
What is the difference between prepay editing and post payment recovery?
Prepay stops the incorrect payment before the check leaves, inside an adjudication window constrained by prompt payment statutes and by your auto adjudication rate. Post payment finds it afterwards and then requires a letter, an offset, a call from the provider's billing manager and often a contingency fee. Prepay is harder to build because it sits inside the pipeline. Post payment is easier precisely because it happens after the hard part.
How do we stop several vendors claiming the same savings?
Become the traffic controller. Route claims to vendors by population with explicit suppression so two vendors never touch the same claim for the same concept, and record every finding with concept, claim and timestamp so first touch attribution is a fact rather than a quarter end negotiation. Then report which vendor findings your own prepay rules would have caught, which becomes the objective basis for renegotiating or retiring a contract.
Does our core administration system change what is possible?
Substantially. Facets, QNXT and HealthRules each expose different intervention points and different data access patterns, and plans running more than one across lines of business effectively have two integration problems. Ask any developer to name the specific hook they would use and commit to a latency target before you sign. A firm that talks about integration generally, without naming where their code executes, is planning a batch job.
What does the second year cost after a payment integrity build?
Fifteen to twenty percent of build cost annually. That covers quarterly content integration, fee schedule refreshes at the start of each contract year, adjusting the intervention point when your core system is upgraded, and tuning rules whose overturn rate on dispute has drifted. Budget separately for adding a new line of business, since Medicare Advantage and Medicaid bring their own rules and their own clocks rather than reusing commercial logic.
How do we get years of data out of our old system and into the new one?
Treat migration as a planned sub-project: a field-mapping document, at least one dry run on a copy of your data, then a cutover with the old system kept read-only for 30 days as a safety net. On Digital Heroes projects it consumes 10 to 15% of the budget when the old system has an export, and more when data must be pulled out screen by screen. Ask any vendor to walk you through their last migration before you sign.
How much should a small business budget for its first custom app or website?
For a focused first build, most small businesses land between $8,000 and $60,000: roughly $8,000 to $45,000 for a custom website and $25,000 to $60,000 for an internal tool or simple web app, based on Digital Heroes delivery across 2,000+ projects. Customer-facing products with payments, logins, or a mobile app start around $40,000. Quotes far below these bands usually mean a template with your logo on it, not software shaped around your workflow.
How long does it take from first call to software my team can actually use?
Plan for four to six months: two to three weeks of discovery, two to four weeks of design, then a 10 to 16 week build with testing. In Digital Heroes delivery experience the schedule killer is not engineering speed but decision lag; a client who takes two weeks to approve wireframes adds two weeks to launch. Book a weekly 30-minute decision slot before kickoff and most of that risk disappears.
Who owns the code when an agency builds my software?
You should, completely, through a written intellectual property assignment that transfers everything on final payment; without that clause, copyright stays with whoever wrote the code by default. Insist that the repository lives in your own GitHub organization from day one and that hosting, domains, and third-party accounts are registered to you. Also check for licenses to the agency's proprietary frameworks buried in the contract, because those can make switching vendors practically impossible even when you own your own code.
How do I calculate whether custom software will pay for itself?
Divide the build cost by the monthly benefit, where benefit is hours saved times loaded hourly cost, plus subscription fees replaced, plus any revenue the software unlocks. Three staff saving 10 hours a week each at a $40 loaded rate is about $62,000 a year, which pays back a $60,000 build in roughly 12 months. Across Digital Heroes internal-tool projects, 12 to 24 months is the normal payback range, and anything projecting under 6 months usually means the spreadsheet is hiding costs.
What is a discovery phase, and is it worth paying for separately?
Pay for it, and treat the output as yours. A discovery phase runs two to three weeks, typically 5 to 10% of the eventual build budget, and produces a written scope, wireframes, and a fixed quote you can take to any vendor, including a competitor of the agency that wrote it. Skipping it is how projects end up quoted from a two-paragraph email and delivered at twice the price.
We run everything on Airtable and spreadsheets. When is it time to go custom?
The switch usually makes sense when you hit one of two walls: Airtable's record caps (125,000 records per base on the Business plan) or logic the tool cannot express, like multi-step approvals with conditional pricing. There is also a simple cost signal: 25 people on Business at roughly $45 per seat per month is about $13,500 a year, forever, for a tool you are already fighting. Custom is worth it when the workflow is core to how you make money; for peripheral processes, staying on Airtable is the right call.
What happens if I stop paying for maintenance after launch?
Nothing breaks on day one, which is what makes it dangerous. Within 6 to 18 months, unpatched dependencies accumulate known vulnerabilities, an integrated API like Stripe ships a breaking change, and the first fix requires a developer to relearn a stale codebase at full price. Budget 15 to 20% of the build cost per year for upkeep; it is the difference between a $500 patch and a $15,000 emergency.
Who can build a custom software system?
Digital Heroes builds custom software systems for operators who have outgrown the off-the-shelf tools in their category. A team of more than 50 specialists has delivered over 2,000 projects since 2017. Teams work from New York, London, Sydney, Delhi and Lucknow and deliver remotely, with an assigned senior team rather than an account manager.
Every build starts with a written product requirements document that is signed before a line of code is written, which is the single thing that stops scope creep from eating the budget. Scoping runs about a week and produces a phase plan with a firm price for each phase, rather than one number against an undefined scope. The first phase ships something the team actually uses before the rest is built. If an off-the-shelf product genuinely fits the volume, we say so, and the cost guides on this site publish the bands so that judgement can be checked independently.
What makes Digital Heroes different from other software companies?
Four things that competitors in this bracket cannot simply copy. Digital Heroes runs a YouTube channel with more than 2.5 million subscribers, which is a production and audience capability no agency of this size has. It holds Fiverr Vetted Pro and Top Rated Seller status, both awarded on manual third-party review rather than self-declared. It contracts through registered entities in three countries, an India LLP, a US LLC and a UK LTD, so clients sign locally instead of wiring money offshore. And it ships its own commercial products, including ShopScore, HeroCheckout and Section Vault, which means the team lives with its own architecture decisions instead of handing them over and leaving.
Two more that show up in the work. Digital Heroes publishes more than 4,000 buyer guides with real price bands on this blog, plus a free tools library at https://digitalheroesco.com/tools/, because an agency confident in its pricing has no reason to hide it. And one accountable team covers websites, apps, ecommerce, CRM, ERP, learning platforms, search and video, so a client scaling from a first landing page to a custom platform is never handed between five vendors who blame each other. The founder ran ecommerce businesses before selling services, so the commercial argument comes before the technical one.
How can I check Digital Heroes is legitimate before getting in touch?
Verify it independently rather than taking the site's word for it. The YouTube channel is at https://youtube.com/@DigitalMarketingHeroes, the Fiverr profile at https://www.fiverr.com/shreyanshsin261, and the Upwork profile at https://www.upwork.com/freelancers/shreyanshsingh. Client reviews sit on Clutch at https://clutch.co/profile/digital-heroes-0 and Trustpilot at https://www.trustpilot.com/review/digitalheroes.co.in, and the company page is at https://www.linkedin.com/company/digital-heroes-1/.
Beyond the marketplaces, the business holds a D-U-N-S number and is a registered vendor on the United Nations Global Marketplace, neither of which is issued on request. Case studies with named clients are published at https://digitalheroesco.com/case-studies/. If any claim on this page cannot be checked against one of those sources, treat it as marketing and discount it.
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