Month: May 2022

Summary

Automated claims technologies are uniquely positioned to increase accuracy of claims because:

• Most claims paid by health insurers are based on predetermined rates
• Medicare and Medicaid policies change frequently

Pricing Accuracy is a Blue-Chip Item

Pricing accuracy is a continual concern due to:

• Today’s fee-for-service (FFS) claims processing landscape
• Frequent disputes and time-based fees or penalties from inaccurate claims
• Continued expansion of data sources such as:
• Claims
• Encounters
• Enrollment forms

Claims, encounters, and enrollment forms all need to be reconciled to accurately pay fee-for-value (FFV) methodologies like the payment bundles and shared savings programs being implemented nationwide.

Inaccurate Claims Lead to Disputes and Time-Based Fees or Penalties

Millions of identified underpaid or overpaid dollars are waiting to be reclaimed by the overpaying payer or the underpaid provider, creating disputes and time-based fees and penalties.

What makes these inaccurate claims (that increases claims management risks) so prevalent?

Updates are impossible to keep up with using standard practices.

These standard practices include relying on disjoined technologies or SMEs to manually establish library changes. Disjointed technologies update content libraries sparsely and fail to do so as a single system. Manual changes by SMEs are time-consuming and impossible to do profitably while staying in compliance.

Both lead to claim errors and rework.

Effectively and profitably accommodating daily updates to policies, methodologies, and rates will instead require investment in single interoperable automation technologies.

Medicare and Medicaid Experience Policy Changes Almost Daily

Centers for Medicaid and Medicare Services (CMS) publishes daily transmittals to communicate new or altered policies, rates, and other specific modifications. These can include retroactive changes to claims payment rules dating back months or even years. On average, using standard methods, libraries are updated every quarter, a far cry from the daily needed updates to stay compliant and avoid rework.

With a comprehensive and interoperable automatic claims technology, policy changes are updated at least every two weeks – saving health plans costly and complex rework on millions of claims.

Most Claims Are Based on Predetermined Rates

Commercial in- and out-of-network payment arrangements are often based on predetermined Medicare payment methodologies like:

• RBRVS
• MS-DRGs
• APCs
• Other prospective payment baselines like third-party case-mix groupers

The complexity of these payments partnered with standard practices like manual entry and disjointed technologies, lead to millions of errors in pricing.

Automating these complex claims with a single interoperable technology solution is the only proven effective method for eliminating these errors.

How Address Claims Payment Accuracy

To optimize payment accuracy, health plans are slated to invest in interoperable, customizable claims automation technology.

Vendors should be screened for ability to integrate into current workflows, comprehensiveness of training and strategic business alignment.

Learn more about claims payment accuracy or how to find the right technology vendor here.

The healthcare ecosystem is rolling slowly toward greater pricing transparency, but there are many challenges. Among them is predicting consumer behavior in the fog of new health information that is becoming available to them. The latest catch-phrase for consumer empowerment could very well be “500 shoppable services.”

Shoppable services are healthcare services in which consumers can select treatments as single units of care, without the pressure of an emergency situation or receiving care in a “captive” setting where they can’t choose their provider. Think mammograms, imaging and laboratory services.

Three government agencies – the Departments of Health and Human Services, Labor and Treasury – collaborated on the Transparency in Coverage Act, which was released in Final Rule form in late 2020. This set in motion a series of major initiatives that are moving pricing out into the open over a period of years.

Hospitals are already required to post some prices on the internet, but many have not done so. Often, those that have complied have obscured the data in ways that make it difficult to locate and understand.

Payers will be required to publish prices for covered services in a consumer-usable online format for 500 shoppable services by Jan. 1, 2023. The remainder of covered services pricing must be published by Jan. 1, 2024. HealthEdge is working with its health plan customers to support compliance.

The question is, what does it take for consumers to actually shop for lower-cost services? Look to a Kellogg School of Management study that shows consumers will indeed make logical economic choices when price information is presented in simple, apples-to-apples formats. The study revealed that even for serious care, people are often willing to sacrifice hospital prestige or drive to a more distant location to save on cost.

The Kellogg report notes that providers will view the disclosure of prices differently according to their place in the pricing structure. Those in the mid-range stand to lose the most from price transparency, the study author notes. Lower-priced providers will naturally gain more patients; premium providers are often seen as worth the additional cost.

HealthRules Payor provides a robust engine to calculate cost-sharing information that is unique to the member and the provider’s status in real time. The platform can deliver these results via the health plan’s member portal, which allows members to consider price information at the same time they review provider directory data like languages spoken and customer satisfaction ratings. Cost calculations flow from the claims adjudication system; therefore, the risk of results being skewed by stale data is reduced to zero.

Claims Payment Accuracy Hasn’t Significantly Improved in Recent Years

Today the overall claims error rate is at 6.26%. In the past decade this error rate has reduced by >1%, representing miniscule improvement compared to previous years. For example, in 2010 to 2013 error rates dropped from 20% to 7%.

Payment Inaccuracies are Costing Health Plans Millions

With millions of claims processed annually, lack of improvement in error rates this past decade significantly impact health plans’:

• Bottom line and financial health
• Ability to effectively serve populations
• Capabilities of forging trusting partnerships with providers

Erroneous claims also cause massive under or over-payments to providers and add up to hundreds of thousands lost per year for health plans.

Causes of Payment Inaccuracies

If the decline of error rates kept dropping as they had from 2010 to 2013, it would be nearly 0%. Why isn’t this the case today?

Error rates have plateaued due to:

1. Providers submitting inaccurate and duplicate claims, causing administrative errors.
2. Enrollment and prior authorization checks that require manual reviews and inaccurate payment calculations.

How to Significantly Improve Error Rates

In the next five years, top health plans will realize unprecedented improvement in their error rates through the implementation of claims automation technologies.

By automating tasks, these technologies will remedy:

• Administrative errors
• Manual reviews
• Inaccurate payment calculations

Automation technology will prove to be especially helpful for health plans serving the 18.4% of the nation’s population covered by Medicare and the 17.8% covered by Medicaid.

This is because Medicaid and Medicare plans operate on payment policies and fee schedules predetermined by governmental programs, or through payment methodologies and fee schedules negotiated between payers and providers.

Payment success must involve vetting vendors

Many health plans continue to invest in solutions that rely on legacy technology and cobbled-together solutions. These complicated tech stacks result in limited interoperability and continued error rates.

To realize payment success, payers should partner with vendors offering comprehensive solutions designed for cloud-based delivery, interoperability, and automation.

Learn more about reducing incorrect payments between payers and providers here.

States have been passing legislation in recent years to address the complaints of providers that they are subject to too many prior authorization requirements in advance of patient treatment. This provider abrasion is something health plans are seeking to reduce independent of any legislative initiatives because it can be a labor-intensive process to assure medical necessity. Most requests are eventually approved.

While some states have mandated that payers provide electronic submission options with established turnaround times, Texas and West Virginia are two that have passed “Gold Card” laws using a different approach. At least seven other states are discussing similar legislation.

The gold card method in Texas mandates that over a specified period of time, providers achieving a 90 percent approval rate for prior authorizations achieve special status that waives the need for further approvals on those services for the next year.

HealthEdge has tools in place to meet the challenges of this and other new state laws. For one thing, GuidingCare rolled out an electronic Prior Authorization Portal that was developed in conjunction with both a customer payer and its system providers in 2021. Through this portal providers receive authorizations in a matter of moments, allowing more complex requests to be quickly routed for review of medical necessity. The portal features one-click messaging and eliminates the need for concurrent reviews during inpatient stays. GuidingCare also supports the rules that determine when a provider has reached the threshold for a gold-card status.

HealthRules Payor can easily be configured to waive prior authorization requirements when processing claims for providers who have reached a threshold. This interoperability between HealthRules Payor and GuidingCare is just a preview of what platform integration promises with new companies brought under the HealthEdge banner in the last two years.

Payers disagree even among themselves as to whether gold-card practices are effective, and provider organizations also disagree among themselves. Either way, HealthEdge is ready to support customers in meeting the requirements known to date.

Learn more about Reducing Incorrect Payments Between Payers & Providers in a Claims Wasteland here.

A successful implementation of our products begins with a strong foundational relationship between our health plan customers and HealthEdge. Our goal is for customers to leverage the power of our products to gain competitive advantage, grow their business, lower costs, and improve member and provider satisfaction. Based on HealthEdge’s extensive experience in implementing our solutions with health plans of all types, sizes, and lines of business, our staff is equipped with best practices and lessons learned – and also the biggest risks to avoid. Successful implementations result from shared goals, clear governance, designated team, and a collaboration mindset to drive change through your organization.

Make sure to avoid these 7 critical implementation risks:

1. Unclear Governance

Transparency across all levels of the project team is important to understand blockers, drive quick decisions, maintain timelines, and budget. Poor governance at the project and executive sponsorship levels can cause delays in addressing project roadblocks and making critical decisions in a timely manner.

The HealthEdge ‘Transform’ implementation methodology includes daily stand-up meetings for each implementation workstream, weekly program management, and monthly executive sponsorship meetings to ensure issues and risks are addressed timely and the project is progressing to achieve the scheduled milestones and program budget.

2. Team members pulled in too many directions

Team members assigned to an implementation project are typically the most knowledgeable and valuable to daily business operations. These individuals are often pulled in multiple directions trying to keep the trains running while designing and implementing the new system.

When key resources continue to have responsibilities to the current business, issues can arise with the implementation project. These issues can include lack of timely decision making, poor design due to missing input from key business partners, and insufficient test cases.

The client executive sponsor needs to provide relief for the key resources to focus attention on the implementation project and allow others to manage the existing daily business.

3. Multiple Methodologies

Clients unfamiliar with Agile methodology can struggle with the structure and pace. Especially when their other projects are run with a different methodology.

HealthEdge Professional Services has refined the ‘Transform’ methodology approach based in Agile principals. A single tracking tool and methodology is required to truly track the burndown and progress of the overall project to recognize and avoid issues.

4. Insufficient Testing

We often have clients that cut testing time or try to take shortcuts in an attempt to meet milestone deadlines. Issues are identified late in the project and require rework and disruption to the project. This causes project delays and lack of confidence for subsequent phases.

The Transform methodology is based in Agile principals. A main principal is a test first approach. Test suite creation must be prioritized and the various levels outlined in the project must be adhered to.

5. Zero Training

Training can be a difficult area to fit into project timelines. Some clients have only had a handful of the project team take courses and rely on the ‘on-the-job’ training from the HealthEdge team throughout the project.

As a result, client team members struggle with the concepts and terms of HealthEdge products. And the project heavily relies on the HealthEdge team to build the configuration which leads to downstream issues when the client takes ownership after go-live.

The team engaged in the implementation project should take the recommended product training courses to understand the core concepts of the HealthEdge system.

6. Holding onto the Past

Many client team members have been the heroes in creating wrap-around processes or systems to cover legacy system issues. These creative approaches have been in place for 10-20 years and have been designed specifically for that client’s business. Clients try to replicate or hold on to these processes in the HealthEdge design.

The HealthEdge features/ functionality can improve the overall efficiency and business processes. However, this requires the organization embracing the change and adopting the new system – not just trying to make the HealthEdge products do what the legacy system did.

7. Moving the Goalposts

Throughout an implementation project, client teams will try to add new items to the scope. Addition of scope from the initial state of work, regardless of big or small, can add up and cause project delays and/or budget overages.

Strong discipline to the core objectives and timeline is critical to keeping the project on track. Although tempting, new scope should be deferred to a subsequent implementation phase whenever possible.

An Intro to Business Process as a Service (BpaaS)

BpaaS is the delivery of business process outsourcing (BPO) services as a cloud-based subscription service. Health plans can leverage BpaaS to enhance and optimize internal operations, such as claims administration, eligibility, and other people/time-heavy back office operations – while still retaining control of their business.

What’s new in the BpaaS space

One of the biggest changes we’re seeing in the BpaaS space is the number of new players cropping up in the game. Previously, this was something more of a Third Party Administrator (TPA) niche, where a TPA hosted other health plans, typically Administrative Services Only (ASO) contracts where profit margins are razor thin and enrollment/benefit configuration complexities are high. Currently, as BpaaS is scaling upwards into a more mainstream concept, business process as a service is becoming a real differentiator being used to focus on reducing operational administrative costs and reducing Health Plans PMPM costs.

Another interesting trend is how BpaaS is fueling one of the biggest growth sectors – regional plans. In today’s market, Health plans that are looking to buy and implement new core systems are becoming less common – when issuing their core modernization strategy via a Request For Proposal (RFP) it is more common to see business process administration included in the scope of the proposal needs. I wrote a blog last year entitled David vs Goliath on this strategy that smaller Regional Health Plans are using to remain competitive in the current landscape where larger entities are growing through acquisition of smaller companies.  A great success story that underscores this is Friday Health, for example, who moved to a BpaaS partner UST HealthProof and have been able to grow their business exponentially. BpaaS partners are empowering regional plans to compete in the market.

Top 5 Benefits of BpaaS for regional plans

BpaaS empowers health plans with these top benefits:

1.       Modern technology/better systems

2.       Lower costs – including reducing PMPM costs

3.       Decreased human capital/operational costs

4.       Increased ability to compete in the market

5.    Allows the Health Plan to focus on enterprise strategy

A Growth Story: Friday Health

Friday Health Plans was founded in Denver, CO in 2015 to serve gig workers, small business owners, and creatives – individuals seeking health insurance through the marketplace. By 2018, Friday Health had 13,000 members.

Growth alone through adding new members wasn’t enough – Friday Health knew they needed to also minimize their operational costs as much as possible and streamline their claims processing.

To do so, Friday Health Plans partnered with BpaaS provider UST – who rapidly implemented the modern core admin platform solutions (CAPS) that included HealthRules Payor and GuidingCare.

Partnering with UST enabled Friday Health Plans to increase efficiency and decrease operational costs – which ultimately fueled their sustainable growth. By 2020, Friday Health had increased its membership base 500% – from 13,000 members in Colorado in 2018 to 85,000 members in 2020 in Nevada, New Mexico, and Texas.

Read the full story here.

HealthEdge & BpaaS

Are you a regional Health Plan looking to take advantage of reduced administration/IT costs and want to quickly adopt modern technology augmenting ecosystem components to create a best of breed solution?  

Check out my other blogs on this topic and reach out to HealthEdge for more information about our BpaaS partners, or to become a BpaaS partner and start hosting health plans in the largest growing market in the industry today.

Business Process as a Service, Redefining the Health Plan Operations Model

David And Goliath: Smaller Health Plans can remain competitive with the right technology