The Hidden Costs of PI Vendor Consolidation for State and Regionally Focused Health Plans

By: Steve Palma, President of Penstock

Over the past few years, the payment integrity (PI) industry has been changing. Behind the scenes, mergers and acquisitions have transformed the industry’s biggest players into national giants. For state and regionally focused health plans, those shifts are starting to feel more personal. The question cropping up more and more: Are you still getting the service and attention you were promised—or have come to expect?

The Impact of PI Vendor Consolidation on State and Regional Health Plans

The payment integrity space has seen a wave of consolidation in recent years. Established vendors are being absorbed into larger healthcare conglomerates. From the outside, these mergers look like opportunities for scale, efficiency, and integrated innovation. But inside consolidated PI firms, the reality can feel very different. Account teams are often reorganized. Priorities shift toward enterprise-scale contracts. Resources are redirected to serve the top of the book. As a result, state and regionally focused plans—once valued clients—are increasingly finding themselves deprioritized.

Is It Time to Reevaluate Your Payment Integrity Partner?

If you’re working with a PI firm today, here’s a quick gut check:

• Have your support channels gone quiet? If your longtime account manager is gone and responses take longer than they used to, you may be slipping down the priority list.
• Are your processes starting to feel cookie-cutter? When tailored workflows get replaced by generic templates, it’s a sign your vendor is optimizing for scale—not for your needs.
• Do innovation and strategy feel out of reach? If product updates are slow or seem designed for someone else’s problems, you’re probably not the client steering the roadmap.
• Is it harder to get clear answers? If you can’t see what’s being worked, how issues are prioritized, or where dollars are being recovered, transparency may be on the decline.
• Are they capturing only the obvious wins? You don’t know what you don’t know. Some vendors stop at the easy stuff. At Penstock, we’ve found millions in mission-critical recoveries even after large PI firms told clients they’d seen it all.

If you answered “yes” to any of the above, it may be time to step back and ask the bigger question: Is your PI vendor still treating you like a partner—or just a line item?

The Real Cost of Being Deprioritized By Your Payment Integrity Partner

The cost of being overlooked goes far beyond slower service. When your plan isn’t getting the attention it deserves, the risks multiply:

• Missed or delayed savings opportunities
• Underperforming recoveries that go unchallenged-often due to generic or outdated audit recovery services.
• Lack of operational transparency
• Stagnant audit approaches that overlook complex or nuanced savings
• Innovation that stalls—or never shows up

The bottom line: one-size-fits-all models don’t work for regional and state-based health plans with diverse populations and distinct operating realities.

Strategies for State and Regional Health Plans Navigating PI Consolidation

At a recent industry event, survey data revealed that nearly 50% of health plans were actively exploring new PI vendors. Their most common complaints? Poor service, lack of innovation, and feeling like a small fish in a big pond.

Here’s how regional plans can stay proactive:

1. Require comprehensive audit performance reporting: Demand transparency. Your vendor should provide clear metrics on volume, findings, financial impact, and timing—not just general summaries.

2. Review trends and hold vendors accountable: Don’t just file away reports. If results plateau or decline, push for answers. Ask what’s being missed—and what they’re doing to improve.

3. Work with multiple vendors to drive competition and performance: No single partner is best at everything. Using two or three audit vendors allows you to compare strengths, rotate priorities, and ensure no stone is left unturned.

4. Promote high performers—and rethink pass order: If a vendor consistently delivers results, move them earlier in the audit workflow. If another lags, consider reducing their role. Attention follows accountability.

When It Comes to Your PI Partner, Don’t Settle for Less

Consolidation isn’t inherently bad. Scale can bring efficiency. But for state and regionally focused plans, the hidden cost is often attention. If your PI vendor is too big—or too distracted—to notice when your needs change, it might be time for a second look.

Most national health plans engage multiple PI partners to broaden their reach, cover different claim types, and push innovation through competition. Regional plans don’t need to scale to that extent—but adding even one additional partner can provide fresh insight, faster resolution, and real financial impact.

Because in payment integrity, recovered dollars are just the start. The true value lies in partnership—and in having a team that sees your plan, not just your claims.