Plans Push IT

The ever-changing landscape of managed care is prompting some health plans to take another look at their information management solutions.

A system that can accommodate growing membership rolls and automates well the claims and benefits processes may not be able to handle market and regulatory changes. The revamping of code sets, for example, and the growing support for consumer-directed healthcare products such as healthcare reimbursement accounts (HRAs) and healthcare savings accounts (HSAs) put pressure on older software solutions. In trying to meet the demands of today’s changes and tomorrow’s trends, health plan executives need to look at next-generation solutions.

Increased Demands
Faced with having to completely reconvert their old system or look to other platforms, ADVANTAGE Health Solutions Inc. in Indianapolis, Ind., chose to upgrade its existing information management system, says Vicki F. Perry, president and CEO.

Originally operating as an HMO under a PPO network owned by four Catholic health systems, ADVANTAGE was split off as a separate HMO entity in May 2000. Perry was hired in 1999 to oversee the spin out and to run the new HMO.

But she also inherited an early version of an information management system developed by Phoenix-based QCSI (Quality Care Solutions Inc.). The old QMACS system, “is the non-Web enabled platform that was marketed by QCSI on a licensing fee basis,” she says, “and the majority of their clients are still on it.”

Perry, however, foresaw rapid growth for her HMO, which, in fact, grew from 20,000 members in 2000 to more than 620,000 as of January 2005. Revenues also grew by leaps and bounds from $14 million to $200 million during the same period. “You see why we need to be efficient,” she says.

Perry was unconvinced that the current system was configurable enough to accommodate either membership growth or the different types of contracts and payment options that would be needed in the future. In late 2002, she assembled a team to weigh the options and evaluate suitable products. The chosen solution had to offer both scalability and functionality. It also had to be able to handle both capitation and fee-for-service contracts, as well as have a menu of reports and EDI imports and exports. All of those functions had to be easy to use, she adds.

The Money Factor
Cost was another consideration. “Return on investment was a huge factor,” says Perry. Not only was the cost of systems conversion and maintenance a factor, but the avoidance of costs through greater efficiencies also was paramount. After weighing the options, Perry says the organization determined that QCSI’s QNXT system not only offered the greatest scalability and functionality, but was the “lowest cost-ownership option.”

Because cost and risk were such significant factors in this business decision, the organization decided to delay implementation of the new system until ADVANTAGE could become a beta site for QNXT. “There was value for both organizations to enter into a partnership,” says Perry. “They worked with us side by side. They provided training, helped us find a new server host and helped us manage the conversion process.” Plus, the conversion team from QCSI also became the support team for ADVANTAGE. In addition, Perry notes, “We were able to reduce our cost of conversion by 50 percent—well into a six-figure savings.”

No major problems arose during the conversion process, she says, except in “using the functionality to move members and attach them to their health plans and primary care physicians. We had to pull back and not do transfers until that anomaly was addressed.” Even so, the conversion that began in April 2004 took only about seven months to complete. “We were literally able to enter 90 percent of eligibilities by November,” Perry says.

Running on a standard Windows-based platform, QNXT is user-friendly even for infrequent users, she notes. “It’s a very intuitive system. You can easily navigate through a member or employer profile, and it offers more capability for electronic management of provider relationships and contract affiliations.”

Perry admits that not all of the system’s modules are in use. Those that are being used include health claims processing, EDI and auto adjudication, premium billing, case authorization management, benefits administration, advanced automated COB, contract management, call tracking and an ITS EDI interface system which supports the processing of claims between health plans across geographic boundaries.

While the current system has proven effective for today’s health plan needs, Perry says ADVANTAGE is in the process of upgrading to QNXT version 2.6. This updated version can support consumer-directed healthcare initiatives like HRAs and HSAs. It also has integrated claims repricing capabilities and offers a fully-integrated medical case management tool that supports use of evidence-based guidelines.

Tools for Tomorrow
Upgrading to version 2.6 will put Perry ahead of the curve as consumer-directed healthcare initiatives gain a firmer foothold on the health plan landscape. But she’s not alone in planning ahead.

Joseph S. Smith, vice president of private programs and CIO for Arkansas BlueCross BlueShield (ABCBS), says two affiliates of this nonprofit mutual insurance company are migrating to Amisys Advance Release 2 from Harrisburg, Pa.-based Amisys Synertech Inc.

Health Advantage, the largest HMO in Arkansas, is the beta site for this latest version of the Amisys information management software. All Health Advantage migration should be completed by August, Smith says. BlueAdvantage Administrators of Arkansas, a sister company and third-party administrator (TPA) that processes claims and manages benefits for self-insured groups, should complete its migration in October. By the end of 2005, ABCBS will be managing claims for nearly 400,000 members on the Amisys Advance 2.0 system.

For Smith, the advantage of deploying Amisys Advance 2.0 is that it delivers high first-pass rates, reducing the cost of manual processing and offers tools that enable payers to service flexible spending accounts (FSAs), as well as HRAs and HSAs.

System Overhaul
Health Advantage had previously been the beta site for Amisys 3000 version 10. But the decision by Hewlett-Packard to sunset its mainframe-based operating system presented Smith with a challenge. “The Amisys system we got engaged with in 1993 was designed to run on the HP 3000 platform,” he explains. “As part of our Y2K strategy, we migrated our TPA business from a digital DEC platform to the HP 3000 platform. Then Hewlett-Packard made an announcement that as of December 31, 2006, they would cease to support the HP 3000 operating platform. That was a defining moment for many customers.

“[QNXT is] a very intuitive system. You can easily navigate through a member or employer profile, and it offers more capability for electronic management of provider relationships and contract affiliations.”

—Vicki F. Perry
ADVANTAGE Health Solutions Inc.

“We were looking to stockpile parts and staff, which would give us another year or two of glide path. But then HP said, ‘We have the 9000 series available and Amisys Advance will run on that system.’” Smith notes that because the HP 9000 series runs on a Unix platform and uses an Oracle database, migrating to Amisys Advance 2.0 will give him a Web-native GUI front-end written in Java. Because the core system will use an open architecture, it can easily be integrated with other systems.

According to Smith, about 90 percent of claims on the HMO side and about 75 percent on the TPA side are already being run through the Amisys system, “untouched by human hands.” To facilitate the processing of these claims, ABCBS has set up what it calls the Advanced Health Information Network (AHIN) which links doctors offices and hospitals to ABCBS. “AHIN is our front door for providers,” he says.

Claims entered over this online network are translated into HIPAA-compliant, electronic transactions. Should an error in a claim be uncovered by a built-in alert, that claim will be “filed” in a special “folder” so the provider can correct the error online, Smith says. Once claims successfully pass through the AHIN, they are translated into EDI files that run through the batch paperless process. “The computer is doing all the ‘paperwork’ and completes the claim,” Smith says. “The lion’s share of those claims is completed in the batch paperless process.” On average, clean claims are processed in about two days, and all claims are completed within six days. Smith adds that accuracy is about 99.8 percent.

Smith also is very much aware of how important it is to have a system like the new Amisys Advance, that can accommodate self-directed healthcare funds. Select Data Service Administrators, a wholly-owned subsidiary of ABCBS, is the “preferred solution” that links ABCBS with preferred financial institutions that serve as custodians of these accounts.

Using a service delivery manager distribution engine developed by a third-party vendor, ABCBS can separate out claims based on membership and the financial institutions handling their self-directed accounts; then it packages them up and sends them directly to those financial institutions. “Most large companies with 401(k) plans and HSAs already have leading financial institutions that they use,” Smith says. “But if they don’t have a link with a financial services company, we can offer them our preferred solutions.”

Carving the Path to the Future
The efficiencies gained by both Perry and Smith are now being realized by Trevor Stewart, senior vice president of Cayman General Insurance Company Ltd. (CGI)

Located on the island of Grand Cayman in the British West Indies, Cayman General Insurance was founded as a property and casualty company, but in 1999 began focusing on healthcare as well. To provide members with electronic transmission of claims and to reduce administrative costs—which were about 25 percent of the company’s revenue—CGI teamed up with three separate vendors.

“When we started working with Plexis, we were their first insurance company and their first company in the Caribbean. They had to go through hoops to develop the front-end piece for us.”

—Trevor Stewart
Cayman General Insurance

The first vendor to come on board was Ashland, Ore.-based Plexis Healthcare Systems, which developed a processing system for CGI that offered point-of-care claims settlement. Stewart says he first became aware of Plexis when the CEO of a network provider in Miami informed him that they had just signed a contract with Plexis and that its product might meet the needs of CGI.

After visiting an installation in Texas, Stewart says he was impressed. Before Plexis, the system he had been using was a quasi-manual system and the response time was not good. “We were looking for more flexibility,” he says. In the summer of 2001, CGI began installation of the Plexis Claims Manager Benefits Administration Software for processing and claims paying. On Jan. 1, 2002, the system went live.

Combined Solutions
Interestingly, while the Caymans do not have income taxes, companies that import technical personnel are required to pay costly work permit fees. Not being able to find enough technical talent locally to provide in-house support, and not wanting to keep importing technicians as the company grew, CGI looked to technology for its answer.

“The computer is doing all the ‘paperwork’ and completes the claim. The lion’s share of those claims is completed in the batch paperless process.”

—Joseph S. Smith
Arkansas BlueCross BlueShield

About a year after installing the Plexis system, CGI signed a contract with Brac Informatics Centre, a local technology service provider that took over the management of the Plexis system. But CGI also wanted to provide a direct link to providers. To accomplish this, Stewart says the company enlisted the services of NY-based Mitan Technologies, which formed a strategic alliance with Brac Informatics. “What we provide to doctors is access to Plexis,” Stewart says. “Plexis is hosted by Brac Informatics. Mitan uses the Internet and provides the software that links the two.”

By providing point-of-care claims settlement, physicians and payers can keep track of each claim and know exactly where it is in the process. “When patients walk into a doctor’s office, the provider can verify eligibility electronically,” Stewart says. “When payment is to be made at the end of a session, this amount goes against the Plexis database, is recorded as a claim, and the provider can see how much the patient should pay as copay.” Once payment is made, the provider also can see on his screen that the claim has been adjudicated.

“We still cut paper checks,” Stewart adds, “but the electronic data transmission allows the provider instant information about claims adjudication. Also, it allows us to instantaneously manage the business, i.e. where claims are and how many people are on the system.”

Meeting Unusual Challenges
Not surprisingly, there were some challenges in getting this unique system up and running. “When we started working with Plexis, we were their first insurance company and their first company in the Caribbean,” Stewart says. “They had to go through hoops to develop the front-end piece for us. It was a challenge.”

Another hurdle Plexis faced was designing a system flexible enough to handle currency conversions. “Since Cayman has its own currency, U.S. dollars—while used in the Islands—are still considered a foreign currency,” Stewart explains.

Even so, the new system has resulted in both gains in efficiency and cost savings. Recalling how slow the processing of claims was when using a manual, paper-based system, Stewart says CGI is now able to turn claims around in a day rather than weeks, and that it takes only three days to get checks out rather than three weeks. In addition, the system has reduced CGI’s administrative costs by 40 percent and its use of paper by 30 percent, he says.

Regardless of size or location, managed care organizations and health plans of all types populate a landscape in flux. The forward-thinking ones look beyond today’s needs in selecting information technologies that represent real solutions for tomorrow’s challenges.

Richard R. Rogoski is a free-lance writer and contributing editor to HMT. Contact him at rogoski@aol.com.