Optimizing Healthcare Claims Processing

Transcription

1 Optimizing Healthcare Claims Processing Table of Contents The Drive for Operational Excellence in U.S. Healthcare 2 Healthcare Administrative Simplification: The CAQH Initiative 3 AMA s Heal the Claims Process Campaign 4 Axway Claims Optimization Overview 4 Customer Success Story 6

2 The Drive for Operational Excellence in U.S. Healthcare Simplifying administration, lowering costs, and increasing customer satisfaction are key objectives for U.S. healthcare payers and providers alike as they increasingly embrace the Accountable Care Organization (ACO) model. According to a November 2013 article in PBS NewsHour, about one quarter of U.S. healthcare costs are associated with administrative expenses, largely due to the nature of the U.S. multipayer healthcare system, in which expanded consumer options and associated price competition come at a significant cost (most other countries have a singlepayer system). A November 2013 Fiscal Times article outlines that the U.S. multipayer system including overlapping public programs such as Medicare, Medicaid, state plans, and programs for veterans racks up a health administrative cost of $606 per person, more than twice that of France, the country with the second highest health administrative costs. Administrative costs in the U.S. totaled an estimated $156 billion in 2007, with projections to reach $315 billion by A 2013 Global CEO Survey by PricewaterhouseCoopers (Figure 1) found that the top three investment priorities across all industries included: Improving operational effectiveness Growing the customer base Enhancing customer service However, senior healthcare executives indicated a higher priority for operational excellence than executives at other industries. What are CEO s top three investment priorities over the next 12 months? R&D and innovation Manufacturing capacity Securing raw materials or components Enhancing customer service New M&A / joint ventures / strategic alliances Filling talent gaps Growing your customer base Implementing new technology Improving operational effectiveness Other Other Healthcare CEOs: 1% All CEOs: 2% 0 20 % of CEOs Healthcare CEOs All CEOs Figure 1. Global CEO Survey by PricewaterhouseCoopers 1 S. R. Collins, R. Nuzum, S. Rustgi, S. Mika, C. Schoen, and K. Davis, How Health Care Reform Can Lower the Costs of Insurance Administration, The Commonwealth Fund, July

3 Healthcare Administrative Simplification: The CAQH Initiative The Council for Affordable Quality Healthcare (CAQH), an industry-wide collaboration initiative and nonprofit alliance of health plans and trade associations, aims to simplify healthcare administration by: The CAQH initiative will make it easier for physicians and hospitals to access eligibility, benefits and claim information for their patients at the point of care. Promoting quality interactions between plans, providers, and other stakeholders Reducing costs and frustrations associated with healthcare administration Facilitating administrative healthcare information exchange Encouraging administrative and clinical data integration The CAQH initiative includes the Committee on Operating Rules for Information Exchange (CORE) and intends to make it easier for physicians and hospitals to access eligibility, benefits and claim information for their patients at the point of care. CORE operating rules will enable providers to submit a request, using the electronic system of their choice, to obtain a variety of coverage information for any patient and from any participating health plan. Providers will receive more consistent and predictable data, regardless of health plan. Indeed, key operating-rule solutions delivered by the initiative include the removal of paper-based exchanges and the automation of (1) payments based on electronic funds transfer (EFT), (2) enrollment, and (3) coordination of benefits (COB) between business partners. A recent CAQH study 2 found that the initiative has produced meaningful results, including: For health plans: Average annual savings of $2.6 million for each of the health plans participating in the study 33% increase in eligibility verification, with no additional staffing For providers: 10-12% decrease in claims denials Savings of 7 minutes (or $2.60) per eligibility verification 2 To learn more about the Heal the Claims Process TM campaign, National Health Payer Report Card, and the new Administrative Burden Index, visit the AMA website at 3

4 AMA s Heal the Claims Process Campaign According to the 2013 NHIRC report, 9.5% of medical claims processed by U.S. health payers are inaccurate. In fact, the AMA estimates that more than $43 billion could have been saved if commercial payers had consistently paid claims correctly since Even with initiatives like CAQH, there remains a great amount of administrative inefficiency across the industry. The processing of claims is the single largest business cost, as well as a key determinant of the customer experience. In 2008, the American Medical Association (AMA) launched the Heal the Claims Process campaign, with the goal of improving the healthcare billing and payment system. According to the AMA, billions of administrative dollars could be saved if payers sent a timely, accurate, and specific response to every claim received. In fact, the AMA estimates that healthcare providers spend up to 14% of revenue on the claims accounts-receivable process.the National Health Payer Report Card (NHIRC) is an annual measuring stick for AMA s campaign. The NHIRC report has examined the performance of the nation s largest health payers claims-processing performance related to denials, timeliness, accuracy, and transparency. According to the 2013 NHIRC report, 9.5% of medical claims processed by U.S. health payers are inaccurate. The AMA estimates that $12 billion a year could be saved if payers replaced unnecessary administrative tasks with automated systems for processing and paying medical claims. In fact, the AMA estimates that more than $43 billion could have been saved if commercial payers had consistently paid claims correctly since Additionally, the report card found that poor performance of administrative tasks within health plans avoidable errors, inefficiency, and waste in the medical-claims process related mostly to manual mistakes cost an average of $2.36 per claim for healthcare providers and payers. 2 Axway Claims Optimization Overview As organizations look to eliminate inefficiencies and lower claims-processing costs, there are important complexity considerations. For most healthcare payers and providers, a particular claims process is likely dependent on the different parties involved. For instance, the process to adjudicate claims with Medicare is different than for workers compensation claims, or for reconciling with other thirdparty payers. Many healthcare organizations serve as both payers and providers, thereby adding another layer of complexity; for example, when patient members vs. non-members receive care at the providers facilities. Additionally, mergers and acquisitions or different business units using different technology approaches often force the claims-processing environment to be managed by concurrently employed, heterogeneous systems. 4

5 Complexity notwithstanding, organizations pursuing claims-optimization initiatives have a number of objectives: Eliminate most if not all error-prone, manual processing Provide visibility and governance for multiple claims-process tracks to enable better exception management, self-service, and business reporting Increase the speed and efficiency of accounts receivable cycles Rather than taking a rip-and-replace approach, leverage and extend legacy systems through a solution that enables the customer to evolve and replace outdated technologies over time Axway Claims Optimization provides a modular integration and data-flow analytics solution that can flexibly connect with multiple external parties and internal systems, while also providing the visibility, alerting, and issue-resolution capabilities that enable optimal claims-processing intelligence and streamlined processes. Axway Claims Optimization includes the following capabilities, which can be modularly deployed as required: Key Features and Benefits Intuitive Web Dashboards Lifecycle Monitoring Correlation Rules Engine Robust Reporting & Alerting Auditing Process Flow Design & Standards-based Translation Improve governance and transparency and lower IT support costs with real-time visual representations of system and claims-process health via KPI dashboards (can be used by business and third-party constituents with minimal training). Visual depiction of a detailed claims-level lifecycle showing completed round trip processes such as claims generation, acknowledgment, and payment. Reduce claims-problem resolution time and costs, improve responsiveness, and decrease accountsreceivable cycles with claims-event monitoring, non-event detection, and proactive notification of process disruptions (including automatic initiation of corrective actions). Identify trends and opportunities through on-demand or scheduled reporting (e.g., PDF, XLS) distributed to technical and business personnel (internal and third parties). Easily set exception thresholds and send SMS or alerts to subscribed personnel. Drive service-level compliance by controlling claims data-flow changes as audit events. Rich library of standard EDI and B2B formats enables you to quickly respond to new claims processes (e.g., EDI 835, 837, 277 documents) or to evolve from legacy translators by making it easy to define, maintain, simulate, print, and deploy new maps and integration processes. 5

6 Multiple Communication Protocols Trading Partner Management Application Integration Accommodate virtually any partner or business requirements for communications, while reducing the fragility of unreliable and unmanaged processes (such as FTP). Lower trading-partner support costs and on-boarding cycles through the use of flexible templates defining communication and document agreements between internal business units and external parties, such as third-party payers, Medicare, etc. Leverage and extend existing applications and systems of record with both data retrieval and publishing (i.e., push-pull integration). Key technical and deployment attributes of Axway Claims Optimization include: Data cache retrieval for huge datasets (64-bit in-memory database) Mobile-ready with HTML5 web dashboard user interface Portal and cloud ready Application-agnostic event collection through the use of universal agents High-availability architecture Support for multiple operating platforms and databases Full security standards arsenal for authentication, confidentiality, data integrity, non-repudiation, DMZ traversal, encryption, and certificate management Complete B2B/integration protocol library and format-standards support On-premise licensed, hosted, and managed-service deployment options Customer Success Story Background One of the largest not-for-profit payer/providers in North America (the HMO hereafter) provides both health insurance coverage and healthcare delivery. The HMO structure includes: 7 regions 38 hospitals 611 outpatient facilities 17,000 physicians 9 million members The HMO offers a number of plans and often functions as a leading provider for non-member patients in communities where it has facilities. Their core clinical, claims and billing, and accounts-receivable business system is distributed over 6

7 30 instances across this payer/provider s facilities and regions. In scenarios where billing is based on care for non-member patients, third-party payers pay as a single entity even though the billing and accounts receivable is spread across these multiple systems. In addition, the HMO currently employs multiple technology components as part of the claims process, such as EDI translation, payment splitting and routing, and an internal adjudication system for member claims. Opportunity Given the complexity of their environment and divergent claims processes, the HMO needs to improve their ability to: Ensure that the proper sequence of steps takes place for member-claims processing involving the HMO s adjudication system (the HMO currently does not have visibility into this process). Reconcile payments from third-party payers to ensure they are properly applied to the HMO s billing and AR system, as well as verify that payer-remittance messages balance with bank deposits. Currently, this process is primarily manual, requiring many staff hours to achieve balance and reconciliation, and greatly inflating accounts-receivable cycles. Provide a central repository and lifecycle view for individual patient-claim details across all of the HMO s claims-process flows. Solution Approach The HMO s approach to addressing these claims-processing optimization opportunities includes several principles: Rather than replacing existing systems, the HMO is seeking a solution that leverages their existing claims-related technology and processes through a layered around approach. The solution must be able to collect and integrate event data from multiple systems. The solution must be able to display the right information to the right people using visual representations of claims-processing data. The solution must conform to all data security requirements around user authentication and access management. 7

8 The HMO is deploying Axway Claims Optimization, which includes: 1. Visibility into the HMO s treasury-management operations for claims processing to ensure that third-party payer-remittance information balances with ACH bank deposits across the HMO s multiple accounts-receivable systems. Metadata is received from all relevant claims-processing systems and presented via web dashboards, lifecycle views, and graphical process flows for business and technical personnel across the HMO. Alerts are generated based on exceptions to pre-defined conditions. For example, high-level web dashboards (Figure 2) present data such as number of payments reconciled per payer and/or per region for a specific timeframe, as well as payment-amount information by provider type. Figure 2. Sample Axway Sentinel Web Dashboard Additionally, business-level lifecycle views present total claims and payment amounts available at each step of the process. The reconciliation process is fully automated, with errors highlighted in red and alerts auto-generated and distributed to subscribed personnel. 8

9 2. Central repository and presentation engine for individual claims for each of the HMO s claim-processing flow types (for instance, internally adjudicated claims, Medicare-submitted claims, etc.). Transaction metadata is extracted from multiple electronic documents (such as EDI 837) and data types and visually presented showing detailed claims-level lifecycle steps and the completed process (Figure 3), including: Claim generated Claim acknowledged Claim paid and received at the HMO s financial institution Payment split and applied to the appropriate HMO accounts-receivable system Figure 3. Sample Axway Claims Reconciliation Web Dashboard 9

10 3. In the scenarios where HMO members receive care at HMO facilities and claims are internally adjudicated, Axway Claims Optimization ensures that all processing steps are completed end-to-end. Information is collected from relevant claims-processing systems and visually displayed (Figure 4). KP EDITS metadata EDI metadata NEDI metadata Splitter/Router metadata Diamond metadata Axway B2Bi KPHC Resolute PB/HB NCAL / SCAL Splitter reports 835 processed and split KP EDITS reports claims and payments processed 837 and 835 meta data extracted from EDI archive NEDI reports 835 and 837 processing Diamond reports adjudication process TRACK B 835 Splitter/Router 835 (2/5) NEDI (1/2) KP EDITS Diamond Internal claims 837 Figure 4. Project Value and Benefit for the HMO The HMO expects to realize the following key benefits of deploying Axway Claims Optimization: Significant reduction in cost-per-claim, through the elimination of error-prone manual processes Shortened accounts-receivable cycles Value of existing legacy systems leveraged and extended Enhanced transparency of claims processing for both internal and third-party personnel For more information, visit Copyright Axway All rights reserved WP_OPTIMIZING_HEALTHCARE_CLAIMS_EN_AXW_052814