Achievable Payer Priorities for 2012 Whitepaper

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emids Payer Practice emids is a healthcare technology solutions and services provider. We provide efficient tactical and strategic solutions through

partnerships to:

1. Optimize Process in Core & Care systems;

2. Create solutions to Improve Efficiencies; and,

3. Offer Provider- and Member-centric solutions

emids accomplishes this through deep domain experience in the provider and payer space, proven methods and an accelerated

global delivery model* to deliver superior solutions.

Our core focus Compliance and Mandates-ICD-10 Transition

BPO Enabled Solutions-Claims Processing/Repair, Appeals and Grievances, Benchmarking and Auditing

Webservices - Connecting Core and Care systems

Care and Core Analytics & Business Intelligence

Managed Care Product Configuration and Implementation

Legacy Systems Modernization-Business Configuration, Interfaces/Extracts and Reporting

Migration Analysis

Core and Care System impact analysis

NPI Analysis

Mandates, Compliance and Regulatory

Assistance

Non voice BPO Operations

Application Services

Core System

Implementation,

Custom Development

and

Testing Services

Business Services,

Business Process

and

Business

Intelligence

Analysis & Business Services, BPO

Membership

Management

Provider

Management

Reimbursement

Management

Care

Management

Core Product

Management

Claims

Management

Customer

Service

Financial &

Risk

Management

Billing &

Revenue

Management

Platform-specific Application Services Business Intelligence & Data Management

Core Claims Systems Analytics, UM/

CM/DM Analytics

Contact Center Analytics

Networks Analytics

IT Project Portfolio & Resource

Analytics

FACETS/QNXT, Argus, NetWorX,

CareAdvance, MeDecision Implementation

Payer to Provider Interconnectivity Services

Member/Provider Portals

Mobile Apps

EAI Design & Implementation

E-Solutions (Billing/Broker/Plan)

Customer Service Solutions

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5-Point Problem Statement Plaguing the Payer

Many healthcare payer solution vendors position themselves as having the one true answer to the problems plans faced in the flow

above. Many payers have invested millions of dollars in making their IT solutions handle the heavy lifting processes. Some key

players in the marketplace are:

Argus

TriZetto

VIPS

Emdeon

DST

McKesson

Cerner emids provides services that maximize efficiencies across products and platforms.

To ICD or not The October 2013 deadline for transitioning to ICD-10 is fast approaching, but the alarm is not sounding, just yet. With healthcare

reform looming, competitive marketplaces and a stagnant economy, it’s easy to see why payers and payer enabled tech companies

are considering cost-efficient options to survive the ICD-10 transition.

As a payer, there are 3 ICD-10 migration options:

1. Upgrade or remediate current systems 2. Replace or consolidate current systems 3. “Neutralize” the transition process

Payer Services

Transaction Management

Risk Management

Business Intelligence

Content Management

Member Services

Enrollment

Provider Credentialing

Eligibility

Claims Administration

Repricing Transactions

Adjudication

Settlement

EOB/EOP Presentment

Hosting & Workflow

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What Is Neutralization? One of the most appealing options is neutralization, which may delay the expense of the transition and reduces the immediate

operational impact. In this option, codes are converted from ICD-10 to ICD-9 outside of the core administration system, using pre-

identified crosswalks. Claims are processed as ICD-9 codes.

Pros of neutralization Delays the expense of the transition

Enables minimal compliance within the October 2013 deadline

Minimizes the operational impact of the transition

Cons of Neutralization Limits your ability to leverage the power of ICD-10 to gain a competitive advantage

Risks financial impact o If payments are not clearly defined under current contracts, if model contracts are based on new or old codes

(services using DRGs), or if payments are based on maps that may not be equivalent, you may risk losing funds due to inaccurate payments

Increases possible complexity and need for repeatable steps o ICD-9 codes do not perfectly map to ICD-10 codes, using analytics o Still have to complete a second conversion to truly accept ICD-10 codes with your core administrative platform at

some point in the future

Lack of refined data o ICD-9 doesn’t offer the rich data required to stratify member populations and drive targeted campaigns based on

new evidence-based models. The lack of code detail in ICD-9 also eliminates the ability to refine risk adjustment models, which can be easily accomplished with ICD-10

Question #1 Does your strategy to acquire and maintain membership rely on cost or new benefit plans that offer perceived value?

If your membership strategy is based on innovative new products, neutralization may not be the right choice. Transitioning to ICD-10 can complement your membership strategy by enabling value-based benefits with short-term impact

Question #2 Does your strategy rely on sharing risk with providers?

If you plan to share risk with providers, neutralization may not be the right choice. ICD-10’s detailed codes allow you to implement reimbursement programs that include incentives for your network providers to help reduce waste and duplication and improve clinical metrics

Question #3 Does your strategy rely on subrogating claims?

If you differentiate between medical and medical health benefits and need more accurate subrogation, neutralization may not be the right choice. ICD-10 includes supplemental codes for “place of occurrence” and “activity” allowing you to more accurately subrogate claims

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Considerations Understand the true cost of neutralization

Plan for scalability when looking into new systems replacement

Evaluate the business cost to membership, provider and care management, and operations

Evaluate the cost of completing the conversion twice

Identify true timelines to complete neutralization versus remediation

Provide adequate time to build a working crosswalk that can be used to do a better job than just neutralize

ACO Accountable Care Organizations (ACOs) are provider- based organizations that take responsibility for meeting the health care needs

of a defined population with the goal of simultaneously improving health, improving patient experience and reducing per capita

costs.

How providers organize themselves as “accountable” entities is expected to vary based on existing practice structures in a region,

population needs or local environmental factors. Within the ACO structure itself (i.e. subject to the direct authority of the ACO’s

governance), ACOs are likely to vary widely with respect to the components of care delivery directly included. Payers can work on

their care management systems and network managements systems to capture and measure some key Performance Indicators.

Four key improvements from an ACO approach that will yield quick ROI:

Avoidable emergency room visits continue downward trend, 7 percent better than market

Following evidence-based medicine continues to improve, 6 percentage points better than market

Bending medical cost trend, 2 percentage points better than market

Better managing diabetes will improve long-term health and lower medical costs

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Health Plan Supports for ACOs Improve the population health discipline through leading edge IT Solutions harnessing their current in-house solutions

Maintain advanced analytic capabilities, using data from multiple sources and perspectives including claims, surveys, and medical records with benchmarks

Apply experience at evaluating and managing risk

Apply experience at working with diverse provider networks

Health plans must have a leadership and management structure that supports and maximizes the efficiencies of clinical and

administrative systems.

Health plans must have defined processes to:

Promote evidenced-based medicine

Report the necessary data to evaluate quality and cost measures – this could incorporate requirements of other programs, such as the Physician Quality Reporting Initiative (PQRI), Electronic Prescribing, and Electronic Health Records, and coordinate care

Health plans must demonstrate they meet patient-centeredness criteria, as determined by the compliance and mandate teams.

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Fraud Waste and Abuse Payers and providers are aggressively building a super intelligent system to minimize “waste”. Improvements in fraud, waste and

abuse can be achieved by combining the best of rules-based tools with innovative pre-pay analytics. Using this combination of rules

and analytics as a real-time monitoring device will be more valuable than ever for our payer partners. One size does not fit all in this

critical area, so its ideal to develop a proprietary strategy.

Prevention helps remove unnecessary costs from healthcare by identifying claim aberrance and catching potentially fraudulent,

abusive or wasteful claims early in the claim lifecycle—even pre-adjudication.

Key Flags could be Provider Alerts

Emerging Patterns & Trends

Member Alerts

Duplicate Payments

Features Multiple fraud-identification tactics detect aberrant claims:

o Proprietary database and data mining systems

o Data-driven predictive analytics

o Clinical aberrancy rules and alerts

Can operate in various positions within the claims life-cycle:

o Pre-adjudication

Fiancial Performance

Predictive Modeling

HIT Health IT

EHR, Performance and Quality of

Care

Provider Management

& Network

Care Management

Evidence Based Care

ACO

Compliance

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o Post-adjudication/pre-claim payment

o Post-claim payment (retrospective)

Experienced investigators track and analyze abnormal claims data

Automates manual processes

Onsite medical director and staff clinicians

Benefits Improves savings opportunities by identifying both known and unknown fraud schemes

Adapts to your current and future business needs

Increases likelihood aberrant claims are detected

Saves time and improves efficiency

Features Identifies erroneous payments for deceased or sanctioned providers, as well as those whose medical licenses may not be

valid (as well as identifiny known bad addresses)

Recognizes violations of standard/non-controversial coding issues and indisputably aberrant billing practices

Leverages existing payment processes and "group rules" integration to hold or redirect payments for payment integrity

review

Validates provider data in real time

Mines data from multiple databases, which are continually refreshed, for greater accuracy and fewer false positives

Benefits Helps you maintain or expand your profit margin by reducing improper payments

Avoids workflow disruptions and conserves valuable IT resources by capitalizing on existing payment management

processes

Helps preserve strong provider networks by avoiding delays for valid provider reimbursements

Reduces wasted time and resources through fewer false positives

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Payer Analytics

Large payers have a matured BI Shop and are heading into an “interconnective intelligence” space between their providers. More of

this vertical is being swept by a wave of interoperability needs. Core (claims adjudication systems) and care management systems

are being developed and improved to provide a higher level of analytics.

The ideal approach is to identify a comprehensive data model that applies to both the systems. Healthcare payers and providers are

using clinical analytics to lower healthcare. The payer respondents are analyzing data from a wide variety of sources, including

laboratory data, pharmacy data and claims data. By improving care coordination, through health insurance exchanges and other

means of data sharing, payers can access information that will help them establish preventive and wellness guidelines, capture and

track user experience ratings and identify areas in which fraud, waste and abuse can be targeted and eliminated.

Clinical analytics can also help reduce healthcare costs by providing data for the creation of integrated wellness programs. These

programs may reduce hospital admissions by allowing patients to receive preventive care, which is less expensive than treatment

and interventions. Payer respondents also looking at and analyzing data across all of their insured patients, particularly identifying

causes that put patients at risk for readmission. Additionally, payer organizations are analyzing data directly tied to the cost of care,

including underwriting policies, identifying instances of fraud and abuse, and predictive modeling.

One area of data sharing that does not seem to be in place is sharing between payers. Could that be the next wave?

Web Services With many components of the Patient Protection and Affordable Care Act already implemented, it is increasingly urgent for payers

to successfully complete the transition to a value-driven healthcare system that rewards top performers and high-quality standards.

Provider Profiling

• EBM Outcome Tracking

• Practice Revenue to Value Indexing

• Variance analysis at each severity level (DRG)

Care Analytics

•Case Management •Evidence-based disease & condition clinical reference •Treatment (Guidelines/Pathways) plan

Re-ad Propensity

• Behavioral Health

• Case Analysis and PBM

• Raw data from claims, PBMs, laboratories and HRAs

• Recurrence score model based on specialty

• Safety, Quality and Consumer Experience

Treatment Prediction

•Risk Classification •Continuing Medical Education programs •Drug Interaction

Risk Prediction

• Treatment Prediction

• Integrated care performance data (Therapy to Treatment)

• Drug reference and drug interaction checker tools

• RSPC Models or molecular diagnostics (for Specialty Care)

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Integrate Enterprise Systems to Drive Administrative Efficiency and Reduce Costs

The best core enterprise systems automate the benefits administration of payer organizations -- member enrollment, premium

billing, claims administration, customer service and other functions. The leading care management applications streamline and

improve the delivery of member care, specifically case management, disease management and utilization management.

By integrating enterprise systems, health plans can more efficiently manage health programs in new member-centric settings such

as patient-centered medical homes and accountable care organizations.

Payers are further integrating core and care management systems with applications that automate administrative tasks and reduce

manual configurations associated with network management. These applications improve

contract modeling; and,

price-variation discovery and help avoid the costs of manual intervention further downstream

Ideally, healthcare payers integrate all of these systems with constituent web-based applications that automate transaction

processing and information exchange with external constituents, thereby enhancing the coordination of benefits and care delivery.

Such web applications can markedly improve health plans' interaction with consumers, providers, employers and brokers.

Leverage Outsourcing and Customer Service only where necessary Business process outsourcing (BPO) presents an additional, highly effective strategy for improving on the gains of integrated,

efficient enterprise systems. Medical-loss ratio rules require that at least 80 cents of every premium dollar be spent on direct patient

care, and BPO services can help minimize the amount that payers spend on administration.

Administrative efficiency has increased demand for BPO services, prompting 40 percent of the payers to plan on increasing

outsourcing of business processes to drive down costs. Quality is an issue with inexperience and big foot-printed service providers.

Cost-effective offshore, onshore and hybrid models can help lower the cost of many administrative functions, including front end-

services such as

Imaging

OCR/scanning

Enrollment and

Claims processing

Application hosting and management

since the benefits can go well beyond lower, more predictable costs.

Application services can accelerate implementations, speed the resolution of software issues, and improve software performance

and reliability.

Additionally, customer service can be a key differentiator. Successful health plans can improve member loyalty (experience) by

demonstrating concern about their health issues and providing easy, fast access to care. Exceptional customer service can position

payers to successfully brand their health and wellness programs, assuring members that not only is their doctor looking out for

them, but so is their health plan.

Regardless of how healthcare reform evolves, payers will gain competitive advantages and build membership by shifting priorities

toward streamlining administrative processes, improving patient care management and adopting new healthcare delivery models.