Case Study. ConnectiCare. ConnectiCare. Insurer Meets HIPAA 5010 Mandate; Cuts EDI Processing Time

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1 Case Study ConnectiCare ConnectiCare Insurer Meets HIPAA 5010 Mandate;

2 Business Challenge A decade ago, IT departments around the world labored to stave off the impact of Y2K - the potentially devastating consequence of computer applications being unable to recognize the year 2000 as the new millennium dawned. Imagine having to solve what some have called Y2K to the 10th power. That was the challenge facing ConnectiCare, a highly ranked health. Insurance plan serving 240,000 people in Connecticut and western Massachusetts. ConnectiCare, like health plans and providers throughout the United States, needs to comply with the ever-evolving regulations issued under the Health Insurance Portability and Accountability Act (HIPAA). New HIPAA 5010 standards for processing transactions between providers and plans go into effect on January 1, Healthcare industry participants also need to comply with HIPAA 5010 in order to adopt the vastly expanded diagnosis and procedure codes in the International Classification of Diseases (ICD-10) code set, which they are required to use by October The new procedures and codes affect virtually every type of transaction in which ConnectiCare participates, including receiving claims from providers over other cloud providers because it offers the ability to scale as a platform during peak hours. Platform scalability was preferable to Infrastructure-as-a-Service (IaaS) which would require additional effort to set up IaaS images among other constraints. Until 2003, ConnectiCare handled these transactions largely through manual, paper-based, expensive, and time-consuming processes. That s when it adopted Microsoft BizTalk Server 2002 software for connecting systems and business partners. With BizTalk Server, ConnectiCare moved to transaction processing based on electronic data interchange (EDI) protocols. It handled about 80 percent of its transactions through BizTalk Server. Most of the rest were paper-based transactions submitted by providers, with conversion to EDI handled by trading-partner companies with connections to ConnectiCare. For more information about Nimbo success stories, please visit: This system worked well until 2010, when the looming HIPAA 5010 and ICD-10 requirements led ConnectiCare to reconsider how it handled EDI transactions. Its system had been conceived an implemented long before the development of the new federal requirements, so there was no surprise in the fact that the system didn t support them. The company would need to adopt a new technology solution, or face the risk of federal fines for noncompliance - or worse. Without a satisfactory EDI solution in place, /blog

3 ConnectiCare might be forced to move back to paperbased transactions - which Manager, IT Applications Support and EDI, ConnectiCare, estimates would require the payments staff to increase by 1000 percent to handle the workload. By 2010, we were operating with about 89 percent of transactions handled as straight EDI, 10 percent of transactions being converted from paper to EDI by our partners, and just 1 percent of transactions being keyed in by our own staff, says Gadomski. Even a spike in that last percentage to 3 or 5 percent would have been a major problem, because we weren t staffed to handle it. If the majority of transactions fell back to the paper based system this would be a major setback. We re using Microsoft technology to make one of our most mission-critical business processes more productive, efficient, and cost-effective. Solution ConnectiCare considered its options. The company looked at webmethods integration software, but that software didn t offer the HIPAA 5010 and ICD-10 compliance that ConnectiCare needed. And the specialized skillset needed to maintain webmethods software would drive up costs and limit options, in comparison to the relative ease with which ConnectiCare could staff operations for the solution based on Microsoft.NET Framework and BizTalk Server. Besides, says Gadomski, we had been using BizTalk Server for years. It met our needs and we were thoroughly pleased with it. When Microsoft announced that the then-new version of BizTalk Server - Microsoft BizTalk Server would support the new federal standards, ConnectiCare made what Gadomski calls an easy decision. It decided to stay with BizTalk Server and upgrade to the newer version. The ConnectiCare solution also used the BizTalk Server Enterprise Service Bus Toolkit, a set of tools, libraries, and database components running on Microsoft SQL Server 2008 R2 data management software, and, as the foundation for the solution, the Windows Server 2008 R2 operating system. To assist with the upgrade process, ConnectiCare selected Nimbo as its implementation partner. The Microsoft Gold Certified Partner specializes in delivering solutions that address highly technical challenges of information flow within and between companies - exactly what ConnectiCare wanted. The most time-consuming challenge facing ConnectiCare and Nimbo was to rewrite all the EDI maps already in place, in order to conform to the new HIPAA specifications and ICD-10 codes. Nimbo used an offshore development model, and completed development and acceptance testing at ConnectiCare in seven months, in April There was no issue with anything, says Gadomski. It all worked fine. Given the enormity of the work, I was pleasantly shocked. There s a huge opportunity for us to expand our level of business intelligence by taking full advantage of this solution. We ve only just begun to tap into that The solution works by accepting incoming EDI claims for ConnectiCare directly from healthcare providers, clearing houses, or third-party administrators. The claims are received by BizTalk Server, which validates the EDI structures, applies the HIPAA transaction guide edits, and then maps the incoming data to the company s own forms and processes. BizTalk Server forwards the claims content to the company s adjudication system, which evaluates it and returns a response: either an acceptance of the claim, or a rejection of the claim with proper error reporting. The data is converted by BizTalk Server into outgoing EDI format, and sent directly to the provider, or indirectly through the clearing house. /blog

4 ConnectiCare also uses File Transfer Protocol (FTP) and Secure Socket Layer (SSL) encryption with the solution for the exchange of files with providers and others (the previous version of the solution could not handle FTP). The company uses the auditing and workflow notification capabilities of Microsoft BizTalk Server 2010 to track errors and send notifications via when files are not transferred correctly Nimbo extended the solution for ConnectiCare with a business intelligence dashboard based on Microsoft Office SharePoint Server 2007 collaboration software. The dashboard makes it possible for managers and executives to track processes and measure them in real time, including the rate, status, and disposition of incoming claims. The dashboard is also used to capture secondary claims data - data that indicates how much a competing plan is paying on a claim when it is the primary insurer and ConnectiCare is the secondary insurer. Benefits By relying on Microsoft technology and the expertise of Nimbo, ConnectiCare succeeded in achieving full compliance with federal requirements, boosted its risk avoidance, and moved nearly all of its EDI transactions to a lower-cost directconnection model. It also gained a new tool for business intelligence and reduced transaction processing time. CUTS TIME FOR COMPLIANCE ConnectiCare became compliant with both HIPAA 5010 and ICD-10 content requirements 8 months ahead of the deadline. The implementation process with Nimbo took seven months from the start of development to the launch of the fully operating solution. We implemented and began testing our 5010 maps far faster than I would have anticipated without Microsoft and Nimbo, says Gadomski. We would never have been able to ramp up to 5010 this quickly with another EDI environment. By upgrading to BizTalk Server 2010, we saved significant time and cost that would have been required otherwise. INCREASES DIRECT HANDLING OF EDI, SAVES $100,000 While ConnectiCare adopted the BizTalk Server 2010 based solution to become compliant with federal standards, that s not the only benefit it gained from the upgrade. For example, ConnectiCare gained the newer software s support for FTP and SSL encryption. It is using those capabilities to handle more of its EDI transactions through direct-connection with its healthcare providers and other external companies, rather than going through trading-partner companies. Gadomski estimates that 99 percent of ConnectiCare EDI transactions now are handled directly, up from 80 percent with BizTalk Server The direct-handling model for EDI transactions is a winwin, says Gadomski. Our costs have decreased by $100,000 or more a year. We no longer have to deal with the costs of scanning claims, handling paper, or supporting virtual private network connections. Our providers and members get faster and more accurate resolution of payment claims. We ve always been highly rated for fast, accurate payment using BizTalk Server 2010 and adopting more of a directconnection EDI model means that we can continue to provide this level of service, and even grow market share, as business volumes increase, without having to add staff, adds Gadomski. CREATES PLATFORM FOR BUSINESS INTELLIGENCE ConnectiCare sees another set of benefits from its uses of dashboards as part of the expanded solution for EDI. For example, the company now tracks claims data in real time, including data on how it is settling those claims. That information is also available in report form to be used by ConnectiCare actuaries in setting rates for coverage. Data on secondary coverage now can be used more effectively to analyze competitive practices and the cost of doing business. There s a huge opportunity for us to expand our level of business intelligence by taking full advantage of this solution, says Gadomski. We ve only just begun to tap into that. /blog

5 SUPPORTS REDEPLOYMENT OF LABOR Costs are down and productivity is up in the IT department at ConnectiCare, thanks to its use of the expanded EDI solution. Formerly, processing EDI claims would start each day by 6 a.m. and continue as late as 2 p.m. The technicians who supervised the process needed to be available throughout that time to troubleshoot, confirm the company s daily totals with figures from its trading partners, and handle other issues that arose. The direct-handling model for EDI transactions is a winwin. Our costs have decreased by $100,000 a year or more our providers and members get faster and more accurate resolution of payment claims. Now, claims processing is faster and more accurate, with the daily run completed by 9 a.m. Gadomski credits troubleshooting support in BizTalk Server Before, when file transfers failed, it could take four or five hours a day to figure out what had happened, he says. Now, BizTalk Server 2010 takes me right to where the issues are. I don t waste time pulling files to figure this out. That four-to-five hour troubleshooting now takes just 30 minutes a day. Gadomski puts the newly freed time to good use, addressing IT projects for which he didn t previously have time, such as cost-of-business analysis. We re using Microsoft technology to make one of our most mission-critical business processes more productive, efficient, and cost-effective, says Gadomski. We re gaining business intelligence on which we ll ultimately make better, more profitable, business decisions. AVOIDS RISK OF CRIPPLING BUSINESS Perhaps the biggest benefit to ConnectiCare of its early compliance with HIPAA 5010 and ICD-10 is the risk avoidance it has achieved. We could talk about the massive amounts of money it could have taken to become compliant on a truncated schedule much closer to the deadline, or about the fines and additional costs we d have incurred if we were noncompliant past the deadline, says Gadomski. But the bottom line is that it would have crippled the business. I don t see how we could have continued effective operations otherwise. How can you put a figure on that, or on the peace of mind that comes from knowing you re free of that risk well before the deadline for compliance? For more information about Nimbo success stories, please visit: /blog