claims modernization for the reform era - pega · claims modernization for the reform era ......
TRANSCRIPT
Claims
Modernization
for the
Reform Era
Elizabeth Hart, Healthcare Principal, Pegasystems
Terry Weber, Healthcare Executive, Pegasystems
March 30, 2011
2
Speaker Introduction
Elizabeth Hart
25 years in Healthcare
Plan, Consultant and Vendor roles
Business and Technology perspectives
Terry Weber
25 years designing claims systems
5 years consulting to Plans
Transformational strategies for
State and National Healthcare
entities
3
Heard of Pega?
CSAR
ASD
CHATS
PIE
APOLLO
GUS
MAPD
RATE
QUOTE
EXPRESS
NC
MMIS
MEMBER
HEALTH
REQUEST
IT I.T.
PAS
BCBS
ENROLL
I.T.
DEMAND
BLUE
LYNCS COF CVS
FPFW
4
Pega Healthcare
Over 60% of the Blues
7 of 8 Largest Health Plans
2 of 4 Largest PBMs
Leading Providers
State & Federal Agencies
Top Pharma & Life Sciences
International Healthcare
Founded in 1983
30% YOY Growth
AHIP Member &
Blues Supporter
Active / Supported
Healthcare Community
Comprehensive Suite of
Healthcare Solutions
HIPAA 5010 & ICD-10
Embedded
5
Business Drivers are Changing
Healthcare legislation is driving substantial & urgent change • Insurance exchanges; MLR mandates; eligibility & premium rules
Compliance is becoming pervasive • ICD-10, Reform, Medicare
Market growth is in high-customization / high-touch segments • Individual Business, ASO, Medicaid
Growing support for new delivery & provider payment models • Patient Centered Medical Home & ACOs
• Pay for Performance & outcomes-based reimbursement
Increased focus on retention & service excellence
Heightened competition for National business
6
Investments are becoming modular
“Healthcare payers are now seeking models that enable them to leverage existing environments & investments by integrating new incremental technologies & applications to complete the required technology portfolio needed to support the emerging market.” Janice Young, IDC Health Insights, September 2010 New Technology Models for the Reforming Healthcare Payer Market
Investment budget moving to areas supporting revenue growth
“ Nearly half of healthcare payers in a 2010 directional survey indicated no additional planned investment in core administrative applications (beyond ICD-10 compliance). Healthcare payers will divert technology resources from core administrative investments to sales, care management, and provider management applications.” Janice Young, IDC Health Insights, January 2011 U.S. Healthcare Payer 2011 Top 10 Predictions
Investments must be funded by quick ROI
“ Clearer linkage of IT investments & business results is becoming an imperative for IT organizations.” Joanne Galimi, Gartner, December 2010 Strategic Technology Map for U.S. Health Insurers
The Market is Responding
7
Positioning for Success
Maximize investment on differentiating capabilities
Create end-to-end visibility & control
Ensure legal auditability
Facilitate innovation for benefits and provider contracts
Accelerate compliance response
Improve business & IT collaboration
Gain accuracy and efficiency in load processes
Reduce costs & gain productivity
8
Claims Approach - Stay the Course
Alignment with Future Business Drivers Do Nothing
Description In-house
system
3rd party
system
Maximize investment on differentiating capabilities = q Some ability to target investment toward
future business drivers
Create end-to-end visibility & control q q Siloed in claim transaction processing
Ensure legal auditability q q Siloed in claim transaction processing
Facilitate innovation for benefits and provider contracts q q Enhancements are slow and costly
Accelerate compliance response q q Enhancements are slow and costly
Improve business & IT collaboration q q Old development methodologies with
long cycles
Gain accuracy and efficiency in load processes q q Siloed in claim transaction processing
Reduce costs & gain productivity q q Enhancements are slow and costly
9
Claims Approach – System Replacement
Alignment with Future Business Drivers Replace System
Description Modernize
3rd Party
System
Maximize investment on differentiating capabilities = = Some ability to target investment toward
future business drivers
Create end-to-end visibility & control q q Siloed in claim transaction processing
Ensure legal auditability q q Siloed in claim transaction processing
Facilitate innovation for benefits and provider contracts = q Enhancements are slow and costly
Accelerate compliance response = q Enhancements are slow and costly
Improve business & IT collaboration q q Old development methodologies with long
cycles
Gain accuracy and efficiency in load processes q q Siloed in claim transaction processing
Reduce costs & gain productivity q q Enhancements are slow and costly
10
Claims Approach - Transformation
Receive Claims
Gateway / Pre-
Adjudicate
Eligibility Member & Provider
Business Edits
Determine
Benefit
Price Calculation
Payment
Calculation
& Pat Resp
Recon / Update
Post Adj Financials EOB/EOP
Claim System Business Functions
Reduce costs in
Pre-adjudication
correcting claims to
improve automation
Automate enrollment
processing. Extract
eligibility determination
rules.
Extract business
rules to reduce costs
and increase
business agility
Post-adjudication claims
correction to increase first
pass automation reducing
costs
• 2000% improvement in enrollment cycle time
• 1,400 group contracts & 5,000 subgroups enrolled in 14 days
• Elimination of group enrollment inventory
• 90% STP for Enrollment Applications
• 98% reduction in inventory / backlog
• 50% automated resolution of duplicates
• 20% improvement in first pass rate
296% reduction in exception FTEs
75% reduction in training costs/efforts
100% automated resolution of ITS deferrals
• Automate authorization receipt and processing
• Clinical edits
• Increase flexibility and management of business rules
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Claim Processing Focus Needs To Shift
Receive Claims
Gateway / Pre-
Adjudicate
Eligibility Member & Provider
Business Edits
Determine
Benefit
Price Calculation
Payment
Calculation
& Pat Resp
Recon / Update
Post Adj Financials EOB/EOP
Claim System Business Functions
HIPAA
mandates
Future benefits
requests
(Wellness, etc)
Future Provider
Reimbursement models
(P4P, Outcomes, PCMH)
Future Patient
Responsibility
benefit changes
Ongoing ITS
enhancements
Future payment
changes (ACO,
PCMH)
Areas of greatest
change to claim
processing capabilities
Small future change
Ongoing Mandates
Extensive potential change
12
Focus on Key Supporting Processes
Receive Claims
Gateway / Pre-
Adjudicate
Eligibility Member & Provider
Business Edits
Determine
Benefit
Price Calculation
Payment
Calculation
& Pat Resp
Recon / Update
Post Adj Financials EOB/EOP
Claim System Business Functions
Product
Design &
Approval
Quoting &
Selling
Configuring
Benefit Rules
Product
Process
Modeling Optimum Pricing
Terms
Negotiating with Providers
Configuring Reimbursement
Models
Provider
Contracting
Process
13
Product & Benefit Plan Loading Issues
Challenges
No end to end workflow of benefit plan loading
No traceability from what is design & sold to claim configuration
Managing large volumes of benefit plans
Replicating and modifying plans leading to errors
Speed to change to adapt to future including non-claim based benefits
Recommendations
End to end benefit loading process management
Traceability from design to payment
Managing Plan terms for enterprise availability
Layer cake to customize Plans
Built for Change
Design
Products
DOI
Approval
Benefit terms “Chiro”,
medically necessary,
Words - No codes
Selling &
signed
Quote
3 page word based summaries
and custom notes in margins
constitute “legal’ document
Determine
Benefit
Manually configuring
Benefit Determination
Rules
Word Document Word Document
Manually configure legacy claim
system screens using several
code types and legacy logic
No legal traceability from contractual “word” documents and code based rules of legacy claim system Product
Process
14
Provider Contracting Issues &
Future Reimbursement Models
Price Calculation
Terms such as NICU,
bed type, etc. Not
connected to Hospital
charge codes
Numerous fee schedules
negotiated with variations by
location, specialty, POS,
network, etc
Reimbursement models such as
Pay for Performance, Outcomes
based, Medical Home, ACOs
require new capabilities
No legal traceability from contractual “word” documents and code based rules of legacy claim system
Challenges
Little ability to model optimum future provider contracting models using ICD-10
and new reimbursement models
No end to end Contracting & Pricing workflow
No traceability from what is negotiated to what is configured in claim system
History of lawsuits and damages against Plans
Volume of fee schedules key problem for large Plans
Ability to rapidly change to meet future pricing models
Recommendations
End to end provider contracting process management
Ability to model future state reimbursement methods to optimize payments
Provider pricing engine external to claim system
Modeling Optimum Pricing
Terms
Negotiating with Providers
Configuring Reimbursement
Models
Configuring Future
Reimbursement Models
Modeling optimum Provider
contracting models using
ICD-10 & new
Reimbursement models.
15
Next Steps for Claims Transformation
Receive Claims
Gateway / Pre-
Adjudicate
Eligibility Member & Provider
Business Edits
Determine
Benefit
Price Calculation
Payment
Calculation
& Pat Resp
Recon / Update
Post Adj Financials EOB/EOP
Claim System Business Functions
Product
Design &
Approval
Quoting &
Selling
Configuring
Benefit Rules
Product
Process
Modeling Optimum Pricing
Terms
Negotiating with Providers
Configuring Reimbursement
Models
Provider
Contracting
Process
Retain and control
these business
functions that
differentiate you in
the market
Commodity Functions
Outsource for
cost reduction
Or
Insource for
revenue
stream
16
Summary
Deploy BPM solutions external to claim system to reduce
costs and improve business agility with incremental
initiatives
Prioritize solutions for end-to-end provider contracting
and modeling to optimize contract terms and future
payments
Prioritize solutions for end-to-end product design, sales
and benefit loading to streamline processes and
accelerate configuration
Take strategic approach to the remainder of claim
calculation process – outsource or insource depending
on size / claims strength
17 © 2011 Pegasystems Inc.
Thank You
Elizabeth Hart
(617) 866 - 6292
Terry Weber
(205) 586 - 4303