Track Two, Session 2

1
Track Two, Session 2 The Role of Technology In
Improving Efficiency in Provider Reimbursement
2
Speakers

• Paul Caliendo, President/CEO
• Preferred Medical Claim Solutions (PMCS)
• Scottsdale, AZ
• Paul Sabina, President
• Insurance Design Administrators (IDA)
• Oakland, NJ
• Nick Rosenstein, President
• Interactive Payer Network (InterPayNet)
• Cleveland, OH
• Moderator Al Szabo, Senior Vice President
• Preferred Medical Claim Solutions (PMCS)
• Chicago, IL

3
Todays Technology

• Advancements in the last five years.
• Electronic claim submission has risen to 60 of
  HCFAs to 70 of UBs.
• HIPAA compliance changed data submission,
  tracking and reporting.

4
Todays Technology

• Global outsourcing contributes to a significant
  cost reduction in converting paper claims to an
  electronic format on behalf of administrators
  automating data verification.
• EDI repricing became prevalent for PPOs and
  other managed care organizations in 2005.
• Technology drives claim suspension and extraction
  capabilities facilitating faster turn around from
  external vendors and advance payment component.

5
Results

• Improved efficiency in processing medical claims
  and Provider reimbursement.
• Marginal improvement in claim accuracy.
• Marginal improvement in cost of claim submission,
  routing, adjudication, and provider remittance.
• Reduction in customer service.

6
Claim Systems

• Operating platforms that have embraced new
  technologies

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What are the Problems facing the TPA Industry?

• Client Retention /Growth
• Reinsurance Premiums Rising
• Competition from major Carriers offering
  comprehensive programs
• Negative impact of fragmentation vs. single
  source
• TPAs are expected to do more for less
• Multidimensional vs. One dimensional
• IT solutions are lagging
• Integration
• HIPAA Compliance
• IT resources
• Solutions are more sophisticated because the
  problems are more complex
• Silo approach

8
Insurance Design Administrators A Case Study

• IDA searched for a business partner to provide
  solutions.
• TPAs only have so much resource dollars to pay
  for new technology.
• TPAs with limited IT resources delay new
  technology implementation.

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Insurance Design Administrators A Case Study

• Reduction/diversion of staff .
• Claim turn-around-time improved by 5 business
  days through EDI connectivity.
• Reduction in cost to administer claims.
• Claim cost reduction using advance funding.
• Out-of-network results based on 5-year history
  reflect 72 of our claims reflect a reduction off
  billed charges. (Average savings varied by state
  and provider specialty).
• In-network results after a 2-year history reflect
  86 of physician bills were paid at 92.5 of
  the PPO reimbursement fee schedule.

10
Insurance Design Administrators A Case Study

• Before efficiencies 44 employees/950 lives per
  employee
• After efficiencies 30 employees/1,466 lives per
  employee
• Reduced employees by 32 and increased production
  by 54 per employee.
• Manual input vs. electronic.
• Average turnaround time from receipt to Provider
  reimbursement.

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Technology Links All Major Participants in the
Acceleration of the Payment Settlement Cycle

• Providers
• Clearinghouses
• PPO Networks
• Payers
• Financial Entities

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Enhancements/Future Developments

• EDI technology solutions to facilitate rapid
  claim processing
• Auto eligibility recognition
• Front-end claim editing rejection to providers
• Claim conversion, routing and loading
• Auto re-pricing and auto adjudication
• Advance funding of provider remittance regardless
  of in or out-of-network settlements
• Capitalizing on the benefits derived from
  proliferation of HSA accounts
• Real-Time EDI payment settlement
• Interoperability Standards as critical as HIPAA
  EDI Standards
• Utilization of existing financial transaction
  infrastructure