Claims Management News

Is Health Information Technology ‘Imperative for Payers’?

Dr. John Patrick mentioned the important role that health information technology and specifically the Internet can play in strengthening the healthcare industry.

By Vera Gruessner

- Health information technology remains a key aspect of maneuvering the health payer industry toward automating workflows and improving medical claims management. However, some insurers are still having difficulty with adhering to member privacy controls.

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The health payer Centene, for example, lost six hard drives at the end of last month, which contained the personal data of 950,000 members. The corporation is searching through its many health information technology systems to retrieve the misplaced files. The information contained laboratory data from the last six years and it included patient names, dates of birth, member identification numbers, health history, and social security numbers.

Another insurer that has had technological troubles is Blue Cross and Blue Shield of North Carolina. Enrollment issues were the biggest culprit of improper health information technology capabilities. Blue Cross and Blue Shield experienced an onslaught of calls from consumers concerned about wrong billing information, inability to make payments, and enrollment in plans they did not opt into.

Stronger health information technology solutions may be a necessity for the health payer industry due to some of the issues experienced by these insurers. However, it is also essential to control for costs and The Commonwealth Fund discovered that the use of expensive technologies within the healthcare industry could be contributing to the elevated prices seen throughout the field.

The fee-for-service payment system throughout the nation is bringing more doctors to order tests and utilize CT scans, MRIs, and PET scans more often than technology use found in other countries, The Commonwealth Fund report found.

The Hamilton Project also published a report showing that medical spending related to the adoption of innovative technologies rose from 1998 to 2011. In fact, one-third of all Medicare spending were due to the implementation of new technology and medical devices in 2011.

When it comes to investing in new technology and ensuring providers and payers obtain value for their dollar, the Hamilton Project urges Congress to prohibit insurance tax subsidies on highly paid workers and change Medicare requirements to stop covering treatments that have “insignificant health benefits at high cost.” Finally, the Hamilton Project advises the Centers for Medicare & Medicaid Services (CMS) to use reference pricing.

Along with new technologies, the costs of prescription drugs are also making an impact on raising prices throughout the healthcare industry. With the use of new innovative payment models like value-based care models, bundled payments, or accountable care organizations, payers and providers may be able to get closer to stabilizing rising medical costs.

Dr. John R. Patrick, author of Health Attitude: Unraveling and Solving the Complexities of Healthcare, argued for a number of steps that the federal government can take to reduce rising healthcare prices. For example, allowing Congress to negotiate drug prices could go a long way to cutting the costs associated with prescription medication. Additionally, results show that accountable care organizations can ultimately reduce healthcare spending, Dr. Patrick explains.

“The first thing Congress should do is remove the restriction on Medicare from negotiating drug prices. This should not require any debate. The other thing Congress can do is support the spread of Accountable Care Organizations,” he stated.

“Right now, we have half or more of Congress saying we need to repeal the Affordable Care Act. When they say that they’re really making a political statement. There are problems with the Affordable Care Act that need to be addressed and people are frustrated with it. However, repealing the entire reform act would be throwing away the baby with the bathwater.”

“If you peel back the onion and look at the elements of the Affordable Care Act, you find things that are helpful. One of them is the Accountable Care Organization, which reverses the fee-for-service system. This is going to lower the cost of healthcare over time. The most recent report I saw indicated the savings from the ACO model were $418 million.”

“The other hopeful part of the Affordable Care Act is an increased focus on patient safety and quality. People die every year from medical errors and people do go to hospitals and acquire infections. I think the Affordable Care Act, while needing a lot of surgery itself, has elements in it that will lower the cost and improve the quality of care,” Dr. Patrick concluded.

In addition to these points, Dr. Patrick mentioned the important role that health information technology and specifically the Internet can play in strengthening the healthcare industry. In particular, a greater reliance on IT and automated processes could actually reduce healthcare costs, according to Patrick.

“We’ve seen what’s possible when we use Amazon, eBay, and many other successful and profitable websites. We know that Internet technology is very highly scalable. It didn’t used to be back at the beginning,” Dr. Patrick began. “Technology has evolved. People have mastered the technique of being able to create scalability on the Internet so that an organization can simultaneously serve millions of consumers.”

“I mention that as a backdrop because it begs the question – why can’t we do that in healthcare? I came from a world where you click and something happens. When I got into the world of healthcare, I found there was no place to click.”

“The healthcare industry is plagued with paper, post-its, clipboards, mailings, multiple blank sheets, and redundant information that adds no value whatsoever but does add cost,” he clarified. “If companies like Amazon and others utilized the technology approach of the healthcare industry, they would be bankrupt.”

In order to learn more about how health information technology can benefit the payer industry, HealthPayerIntelligence.com spoke with Kimberly Branson, the ‎Vice President of Business Architecture & Strategy at health insurance company Medica.

When asked how important information technology is to the health payer industry, Branson answered, “Information technology is an imperative for payers. From a core administration perspective, the core responsibility of a health plan or a payer is to finance healthcare.”

“The way that it’s done is pretty complex between the payer and the provider. Having information technology that helps to automate workflow and automate the transfer of information within and in-and-out of a health plan is critically important,” she continued. “In an age where the industry is becoming even more and more focused on government oversight and compliance, improving automation improves quality, which improves your plan’s capability on ensuring compliance as well.”

“Technology, from my perspective, is as important as the people and is as important as the process.”

When asked whether member portals and patient engagement solutions are able to improve the quality of care, prevent disease, and thereby lower medical costs, Branson responded, “From a payer’s perspective, mobile solutions to communicate with membership allows for a level of transparency between the health plan and the member.”

“Those are table stakes. You have to be able to communicate especially when it comes to financing healthcare. Members interact primarily with a payer around their benefits, their eligibility, covered services, claims, and more,” she explained. “However, there is also an opportunity in the ACO models that providers and plans are working on together where data exchange between payer and provider and transparency of both those sources to the member can impact decisions that a member makes.”

“There is a lot happening in the digital space whether it comes to wearable technologies or apps on our smartphones. This helps inform us as individuals about the choices that we make every day around our health, our wellness, and fitness.”

“There’s a budding interest in the payer and in the provider space around how to integrate that type of personal data into data that a provider has and a payer has so that there is a more comprehensive view of a member both for the member and the provider in helping to deliver better care and manage health and wellness in a different way,” she clarified.

When asked about the biggest advantages and disadvantages from adopting health IT tools, Branson explained, “The only thing that I could say is really around advantages. I can’t even think about a disadvantage that we’ve experienced in our decision to invest, deploy, and operate our health plan using a core administrative system, which is the epicenter of the ecosystem that we’ve built.”

“The tool itself is very innovative, very integrated, and it supports the complex transaction of eligibility, invoicing, and claims payment in a way that is automated that I’ve not seen before. And I’ve been in this industry my entire adult life.”

“What we can do within configuring this new technology that HealthEdge offers to automate and process is revolutionary,” Branson exclaimed. “We have improved our auto-adjudication by 30 points and we have high and consistent finance and process quality scores from the first audit we did after implementation. In fact, one of our external auditors said it was the cleanest new core-admin system they’ve ever done. It’s a very unique piece of technology.”

When asked about any strategies or technologies Medica has implemented to reduce rising healthcare costs and boost quality improvements, Branson answered, “There are two types of costs within a health plan that a payer tries to influence.”

“One is the cost of care delivery itself or how much we pay for the healthcare that’s delivered to our members and the second is our administrative costs,” she continued. “Typically, administrative costs of a health plan are pennies on the dollar compared to what a health plan pays for the delivery of care.”

“One of the things that is so critical and which the HealthRules system actually helps us enable is the integration between care management initiatives and information and how healthcare is reimbursed – AKA the claims payment.”

“In addition to that integration between how care is managed and the technology that is used to manage the care within a health plan and how claims are paid, the rich level of data that’s available through that integration can then be integrated with other types of data – whether it’s pharmacy data, health risk assessment data, or other types of data.”

“We can then use that within the health plan to help inform case management initiatives, but even more importantly can use with the member and the member’s provider to help identify and illustrate opportunities for different types of care to be delivered. It’s all about the right care at the right time at the right place. Having the ability to share that information with additional ease benefits everyone,” she concluded.

When asked if Medica is striving toward adopting value-based care payment models or sticking with fee-for-service reimbursement, Branson clarified, “We’ve been dabbling in value-based reimbursement models for quite some time including total cost of care models. We continue to evolve our relationships with care systems within our market in working together.”

“The secret sauce that’s going to crack this problem is when providers and payers can get around the same table and talk about how to solve the cost of care problem in a way that leverages the strength of both organizations and achieves strategic objectives for both organizations.”

“What we’re finding is that there’s more appetite from our organization and from the care systems that we interact with to do new and different things. Since we’re talking about technology, one of the things that’s been so fun for me in the work that I do in helping to support those conversations and those relationships is leveraging the technology that we’ve purchased and implemented from HealthEdge.”

“The advanced capabilities around configuring complex business rules that drive different types of patient liability and provider reimbursement based on outcomes and behaviors is – again, there is no other technology that I’ve seen that does it with this level of elegance and ease.”

“For example, we’re able to automate bundled payments. Bundled payments in legacy technology is a provider problem. They have to figure out how they’re going to bundle services and what the ancillary providers are that they’re going to work with, say, for a knee replacement,” she continued.

“They have to figure out how to gather all that information before they submit claims to the payer because the payer really doesn’t have any way to connect the anesthesiologist, the physical therapist, and the pre- and post-operative visits because it all comes in on different claims,” she explained.

“With the HealthRules technology, you can actually build configuration logic into the technology itself that bundles what a knee replacement is and the claims system does that. Claims flow in the way they naturally do between a provider and a payer but this system is smart enough to be able to identify differing claims and can actually create a reimbursement based on a bundled payment,” Branson concluded.