Putting the “P’ in Interoperability: Payer Problems

Putting the “P’ in Interoperability: Payer Problems

Attention: open in a new window. PDF | Print | E-mail

In previous articles, we have argued that disorganized systems within the hospital networks have kept caregivers from accessing and using critical patient data effectively. In this final installment of our three-part series on interoperability, we’re addressing current challenges from the perspective of the healthcare payer (i.e. Insurers, including Centers for Medicare and Medicaid Services (CMS), commercial insurance, employer plans, and third party administrators). We’ll take a closer look at how this current lack of interoperability impacts payers, and then we’ll discuss how connected and integrated medical data can provide better coverage for patients while helping to lower the overall cost of care for all involved.

How interoperability currently impacts the payer environment:
Rising cost of chronic disease management has led to increased costs for insurance companies and other payers. In addition, healthcare reform and the Affordable Healthcare Act have forced payers to take on an increased patient population which was not previously insured, with little to no documented historical data. Payers are struggling to set premiums based on unknown parameters, and have consequently increased premiums over the years, to the dismay of both providers and patients.

As records from physicians and patients don’t always sync, one major consequence of the current lack of interoperability comes from errors in patient records that lead to incorrect billing and reimbursements. If insurance companies do not receive accurate admission, discharge and transfer messaging from providers who are managing a patient’s chronic condition, they’ll be faced with readmission, claim denials or back-office rework. In addition, improper documentation of patient testing records can lead to duplicate claims, which have become a common problem in the payer setting.

Current health plans tend to focus more on the cost to treat patients rather than patient outcomes, but this is changing, and payers, along with the CMS, are looking for ways to make providers more accountable for performance and patient care. Many private payers currently follow CMS guidelines for issues of penalties and reimbursement, but would benefit from having their own set of data to make accurate claim decisions. Interoperability may offer one path to achieving these goals.

Benefits of Interoperability to Payers:
By developing standards of interoperability with providers via a health care data exchange, providers and payers can maximize efficiencies, cut costs, and also learn from patient data to improve coverage offerings.

Current efforts to achieve interoperability through investing in health information exchanges appears to primarily benefit providers, as it facilitates the sharing of patient data with other providers. However, the collaboration and improved data movement can also benefit payers in many ways. Some of these benefits include:

  • Automates current paper claims processing: Healthcare payers frequently request documentation to support claim processing and identify improper payments. This is typically sent via mail or fax for review, which makes the process costly and time consuming. Electronic submission of claims would contribute to the automation of the current paper process, and would give payers quicker access to supplemental data. Streamlining and improving claim processing and adjustments benefits the payer, provider and patient, as well as the environment.
  • Provides a more secure exchange of patient data: Electronic communication is much more secure than mail or fax to transfer sensitive medical records, patient history and data, as well as clinician notes and signatures. With proper IT security measures in place, payers will not have as great of a burden to protect sensitive patient data, and payers will have a secure, trusted way to communicate with providers.
  • Increases accuracy of claims data: As the information sent and received from the patient and provider are added to a centralized database, payers can now see more up-to-date patient information in order to have a better picture of the patient’s overall condition. In addition, interoperability would give payers better data on new patients brought in from other providers for more accurate claims processing. Payers could then set standards to streamline future claims processing and mitigate future risks.
  • Improves provider accountability: As healthcare reform holds more payers responsible for improving member outcomes and lowering costs, electronic data integration will help give payers adequate information to reduce fraud, lower costs and enhance patient care. Payers can take a harder line on providers when considering paying for duplicate testing, readmission and other errors – savings which they could eventually pass along to patients as well as providers in the form of lower premiums.
  • Can improve future coverage: With better data to make decisions on claims, payers can begin to analyze trends in patient history and conditions, leading them to recommend preventative measures such as education, screenings and immunizations that can help patients at high risk for serious medical conditions or events.
  • Benefits national interoperability: As health information exchanges grow larger, it will benefit large payers that manage patients across state lines. Continued integration between multiple providers and payers, as well as between multi-state payers and providers, will help to provide consistency and standardize processes. This could lead to the eventual realization of nationwide interoperability.

Payers Need to Play their Part
The current lack of interoperability within the healthcare system affects everyone involved. While providers have stepped forward, with the help of vendors and the government, to work toward a system of interoperability, payers must be open to collaboration to make this a success, and thus play an essential role in this process. When all three groups — patients, providers and payers — start to share more information electronically, they will allow for a continuum of care for patients who deserve the best coverage and care available. Despite the initial lack of financial incentives for payers, interoperability can save them time, money and resources. While the primary benefit of interoperability for payers involves more efficient, cost-effective and accurate claims processing, as health care interoperability evolves, additional benefits will continue to emerge for all parties.