It’s time for health plans to step up
By Dan Spirek, TriZetto, September 2011
Flexible, scalable technology solutions can position payers for long-term success in the post-reform healthcare market.
One evening, novelist James Fenimore Cooper was reading aloud to his wife, who lay ill in bed. After a few chapters, though, he threw aside the book, saying, "I could write you a better book than that myself." His wife, knowing that Cooper hated even writing letters, challenged him on the spot to try, which he did with gusto. And so began his writing career, a success by any measure.
Like Cooper, healthcare payer organizations have an opportunity to respond successfully to a challenge: In this post-reform market, health plans must step up, take a leading role in complying with reform mandates, dramatically increase administrative efficiency and improve the cost and quality of care. To be successful, payers must act quickly to leverage technology to comply with requirements beginning to take effect under the Patient Protection and Affordable Care Act. These requirements include free preventive care, a ban on rescissions and extended coverage of dependents. Further, payers must improve patient-care processes and streamline administrative functions, placing a higher priority on managing health than on managing claims.
TriZetto's point of view
Health plans can meet this challenge with smart decisions today regarding software and services. The best software and services are scalable and flexible for payers of all sizes, helping health plans increase administrative efficiency, improve the cost and quality of care, and seize the opportunities of reform to make enterprise-wide improvements and grow profitably.
In 2010, payers were challenged with integrating new costs into their economic models as a result of expanded coverage, restrictions on annual/lifetime limits and the elimination of rescissions. Significantly, flexible and scalable enterprise-wide administrative solutions helped health plans of all sizes respond quickly to implement required configuration changes. As the next wave of requirements takes effect through 2013, payers need to respond to new compliance challenges and opportunities. In particular, to meet the new medical-loss-ratio (MLR) requirements, health plans should look for ways to:
• Maximize efficiencies through greater system integration and automation;
• Enable seamless interactions with providers, members and other constituents; and
• Drive increased healthcare value with automated, value-based programs.
The best claims administration, care management and constituent-engagement solutions offer flexibility, automation and integration that can position payers to address these challenges and comply with MLR requirements. Not to be forgotten, however, are the challenges of meeting HIPAA 5010 and ICD-10 requirements and embracing the larger opportunities that compliance brings.
Core systems can leverage ICD-10 compliance
As payers upgrade their core administration systems to comply with HIPAA 5010 and ICD-10 mandates, they have an opportunity to use the rich patient-care data within their systems to drive more sophisticated care- and incentive-management programs. The new diagnosis and treatment codes can help health plans pivot from their traditional role as claims-management organizations to a new, greatly expanded role as service organizations.
In this emerging healthcare environment, ICD-10 coding can help payers place renewed emphasis on customer service, value-added products and operational efficiencies. Like any industry in the midst of change, the payer industry will find that pivoting requires additional IT investment. Investing in technologies that leverage ICD-10 coding to optimize healthcare management will help these organizations capitalize on new opportunities and gain long-term rewards. Compliance with the ICD-10 mandate presents health plans with a larger opportunity to improve administrative efficiencies and:
• Pursue avenues to increase Medicare and Medicaid reimbursement;
• Refine payment policies for groups (e.g., diagnosis-related and ambulatory-patient);
• Increase the amount of data used to help the underwriting team manage risk;
• Support value-based benefit and value-based reimbursement programs (such programs use software and service solutions to encourage proven, individually appropriate medical services and discourage unwarranted variations in care); and
• Improve claims subrogation.
TriZetto keeps a close eye on reform mandates to ensure that its products are optimized to help health plans meet changing requirements and seize competitive advantages. TriZetto can support payers in effectively navigating new standards, regulations and positioning to take advantage of the many opportunities that lie ahead.
"Today, loving change, tumult, even chaos is a prerequisite for survival, let alone success," writes business author Tom Peters.
Health plans that quickly change, adapt and leverage technology to comply with mandates likely will be the first to improve patient-care processes and streamline administrative functions. They also will be best positioned to become service organizations that manage member health and wellness as well as managing claims.