Implementing End-to-End Process Controls To Assure HIPAA 5010 Compliance Executive Summary Client: Health Insurance Payer Industry: Healthcare Insurance Challenges: Compliance mandates were costly to achieve Fines due to insufficient audit documentation Missing transaction acknowledgements Poor error detection and reconciliation Solutions: The Infogix Controls Solution Results: Real-time monitoring and tracking of claim transactions Reduced the processing of invalid and duplicate claims Addressed audit requirements to account for all submitted claims Reduced time and cost to detect and account for EDI transactions Increased profit margins for certain classes of claims Infogix Reduced Costs, Improved Visibility and Grew Profit Margins with Real-time Controls for Leading Insurance Payer With over 13 million members, this major insurer spans multiple lines of business across several subsidiaries. It offers healthcare medical plans that include HMO, PPO, dental, supplemental Medicare, indemnity, pointof-service (POS), and group life and disability insurance. Its members span across employers, Medicare recipients, government, and individual consumers in the U.S. As the largest customer-owned and one of the top five healthcare insurers in the U.S., the insurer s Electronic Data Interchange (EDI) transmissions are critical to effectively managing processes across claims adjudication, membership, enrollment and payment processing. The insurer processes about 176 million claims a year, with an average of $160 million paid in claims per day. To comply with transition to HIPAA 5010 to drive administrative simplification and transparency, the insurer implemented vendor specific solutions and processes to exchange health information between its clearinghouses, providers and other service vendors. Transitioning from HIPAA 4010 to 5010 required a new coding set that allowed for more specific classification of healthcare services. Designed to decrease the need for supporting documentation of claims, the overarching goal was to streamline claims processing with more precise pricing, fewer claims rejects and reduced administrative expenses. The transition has not been without its challenges, however, and it has meant a significant financial investment for providers and insurers.
For this insurance payer, compliance mandates had hindered operational efficiency and drained substantial amounts of capital from its businesses. Explosive growth in the volume of transactions, the aggressive transition to HIPAA 5010, and the integration of new systems and decommissioning of some legacy systems led to associated risks with EDI transmissions. For this insurance payer, compliance mandates hindered operational efficiency and drained substantial amounts of capital from its businesses. Explosive growth in the volume of transactions, the aggressive transition to HIPAA 5010, and the integration of new systems and the decommissioning of some legacy systems led to associated risks with EDI transmissions. The Challenge Each day, the insurer receives millions of EDI transactions from healthcare clearinghouses and providers. Transactions come in as batch files where they were validated and transformed into individual transactions. The claims transactions then passed through complex sets of processes and systems for adjudication. Concerns included: Operational Risks: delayed adjudications, missing claims and duplicate submissions Transmission Risks: inconsistent acknowledgements and invalid file formats Compliance Risks: lack of historical documentation for audit and compliance The insurer translated each large file into flat files with multiple records for use in its claim payment process, integrating with clearinghouses and vendor EDI packages. The insurer was required to send timely claims received (A0) and claims accepted (A1) responses to its trading partners. The high volume of EDI transactions made it virtually impossible to manually reconcile transactions as they moved from one system to another. Moreover, the insurer missed certain acknowledgements to its clearinghouses and was unable to detect and correct errors in a timely fashion. With regards to claims process, the insurer was often unable to account for missing claims. The process of identifying lost claims was daunting, and the insurer could not afford to slow down the claims process to remedy the situation. Additionally, the insurer did not have sufficient documentation to account for historical claim information to satisfy internal audit and the National Association of Insurance Commissioner s Model Audit Rule (NAIC-MAR), resulting in fines. The insurer turned to Infogix for assistance, and it was decided that the Infogix Controls Solution would provide the needed control, support and visibility.
The Solution Infogix identified a list of the key processing points across the insurer s claims workflows that have significant data transformations and system boundary handoffs. The Infogix Controls Solution was deployed at these control points, as denoted by tick and equals symbols in Figure 1. The Multi-Step Claims Flow (Figure 1) Claims Process Flow Pre-Process Core Process Adjudication Routing Claims IN (PP1) (PP8) (PP15) (PP22) (PP2) (PP3) (PP9) (PP10) (PP16) (PP17) (PP23) (PP24) (PP4) (PP11) (PP18) (PP25 (PP5) (PP6) (PP12) (PP13) (PP19) (PP20) (PP26) (PP27) (PP7) (PP14) (PP21) (PP28) Claims OUT Figure 2: Infogix Control s across Claim Workflow Infogix deployed nine control points within the multi-step process. The Infogix Controls Solution provided capabilities that included: Control Detecting empty files and timeliness of incoming batches Detecting incomplete, duplicate and inaccurate transmissions Determining and reporting claim counts by clearinghouses and vendors Analyzing batches and out-of-sequence batches for potentially missing EDI transactions Visibility Tracking and monitoring the claims flow across key processing points in near real-time (see Figure 2) Detecting and accounting for missing claims during claims processing Monitoring timeliness of acknowledgments and reporting on missing responses
Analytics Measuring provider performance by percentage of incomplete claim information submitted Developing metrics for incorrect EDI transmissions to measure performance of trading partners Generating sophisticated management reporting Generating claim audit data as it happens (Figure 2) Sample Claim Audit Trail Report (Figure 2) Pre-Process Pre-Adjudication Process Core Adjudication Process Routing Process 1 7 8 12 14 17 18 22 28 Claim Lifecycle Claim ID Claim Type Location Time Stamp Location Time Stamp Location Time Stamp Location Time Stamp Location Time Stamp Location Time Stamp Location Time Stamp Location Time Stamp Location Time Stamp Complete? CL20001 P 07:45:01 AM 07:56:05 AM 07:58:01 AM 08:01:21 AM 08:01:50 AM 08:05:01 AM 08:06:21 AM 08:07:49 AM Yes CL20004 I 07:51:01 AM 07:56:05 AM No - @ PP8 CL20005 CL20006 I P 07:51:01 AM 07:45:01 AM 07:57:05 AM 07:56:05 AM 07:59:11 AM 07:58:01 AM 08:02:31 AM 08:01:21 AM 08:03:50 AM 08:10:01 AM 08:11:21 AM 08:11:49 AM Yes 08:01:50 AM No - @ PP17 Figure 3: Claim Audit Trail Report This sample audit trail report shows how the Infogix Controls Solution provides real-time visibility into a highly complex claims processing system. The Results The Infogix Controls Solution delivered the insurer significant savings in time and costs associated with claim processing and analysis. The solutions help detect errors earlier in the workflow, before they become bottlenecks to downstream systems, and ultimately improve service level agreements (SLAs), especially for high priority claims. The insurer has been able to effectively utilize the Infogix Controls Solution to: Monitor and track claim transactions Reduce the processing of invalid and duplicate claims Successfully address audit requirements to account for all claims that are submitted to its gateway Significantly reduce the time and costs to detect and account for EDI transactions Increase profit margins for certain classes of claims Save more than 30% of internal audit cost related to NAIC-MAR Infogix also helped the insurer to eliminate errors that threatened its reputation as a low cost and consistent service provider.
The insurer has significantly reduced time and money while increasing its profit margins for certain classes of claims. It further saved more than 30% of its internal audit costs related to NAIC- MAR. The Infogix Advantage Infogix is a pioneer of automated data integrity controls and predictive analytics which enable the world s leading enterprises to operate efficiently, minimize risk, maximize revenue and manage the customer lifecycle. With over 30 years of industry knowledge in multiple verticals, we take a collaborative, partnership approach to every customer relationship to create a shared vision for mutual success. Infogix solutions easily and nonintrusively integrate into your everyday operations and have a proven history of delivering a rapid return on investment. For more information, call +1.630.649.6800 (U.S., Canada, and International), or visit www.infogix.com. Learn how Infogix Controls can save you time and money. Visit www.infogix.com or call 1.630.649.6800 (US, Canada. and International), +44 1242 674 137 (UK and Europe). twitter.com/infogix facebook.com/infogix linkedin.com/company/infogix plus.google.com/+infogix Copyright 2014 Infogix, Inc. All rights reserved. Company, product, brand, and mark names and logos herein are the property of their respective owners. For a list of Infogix trademarks, visit: www.infogix.com/legal