Payer-Provider Collaboration Increased EDI
HCT: How has Blue Cross Blue Shield Michigan (BCBSM) been able to work with so many in the provider community to get such a high rate of electronic media?
Debbie Fritz-Elliott: In the early 90s, we targeted efforts to significantly raise electronic claims submission rates. With the help of our consulting partners, we examined root causes of paper claims submission and analyzed business data to define opportunities. This resulted in identification of several drivers. BCBSM had certain policies requiring paper submission or attachments for certain benefits. Most of the paper claims were being generated from electronic billers, unnecessarily, due to outdated edits or misconceptions. Thousands of lower volume providers neither had the capability to submit electronically, nor were willing to pay for service. Most providers submit claims to multiple payers, which needed central routing.
BCBSM took several steps to address these barriers. We reduced paper requirements by eliminating certain outdated benefit policy rules. We conducted proactive outreach sessions through targeted marketing campaigns. We developed and promoted a provider billing product that submitted all payer claim types in a standard format. We mailed provider report cards that described the cash flow impacts of paper submissions, coupled with ongoing monitoring/reporting processes to enable our marketing team to grow electronic data interchange (EDI) rates. Finally, we expanded clearinghouse services.
The largest increase in electronic submission growth was achieved through the clearinghouse service. This became a win-win for providers and BCBSM by allowing all claims to be centrally routed. In return for a higher rate of BCBSM EMC, routing to other payers respective destinations was offered as a key incentive to automate their submissions. The small and midsized provider offices that did not find it as economical to implement a solution for a single payer began rapidly changing from paper to EDI.
These combined initiatives allowed BCBSM to significantly grow in electronic submissions from 55 to 86 percent.
HCT: What are the peak percentages in the last few years?
DFE: In the late 80s, BCBSM was averaging between 50 to 55 percent electronic claims submission rates. In the 1990s, through initiatives just mentioned, BCBSM increased our rates from 55 to 86 percent. In 2004, the current rate averages around 86 percent. In the future with additional standardization, we anticipate our ultimate goal of 100 percent electronic submissions.
HCT: Can you talk about the benefits and obstacles for both parties?
DFE: Providers can expect faster, predictable payments. They experience 100 percent accountability for claims during processing and payment. Claim quality will be higher due to extensive EDI front-end editing. Cleaner claims result in fewer resubmissions. Additionally, EDI allows for electronic remittance to auto-post accounts receivables. Electronic claim submission experience results in administrative cost reductions for providers by eliminating manual steps.
Payers experience administrative cost savings by avoiding manual handling or vendor keying charges and reduced customer service costs. This allows BCBSM to collaborate with providers on more complex health care issues by enabling more routine processing to be handled electronically.
HCT: Can you talk about some obstacles in payer-provider collaboration?
DFE: During the HIPAA transition period, providers have been challenged to meet the new demands and complexities of the HIPAA transaction sets, compliance editing, and numerous translations. BCBSM is monitoring this activity closely to support the providers in an effort to minimize the temporary fallback to paper submissions.
Many provider offices submitting smaller claim volumes remain concerned about the cost of entering into the electronic submission space. They are looking for costeffective solutions.
Providers have to choose software or equipment for their office, and finding the right partners for that space is challenging. Some payers have tried to assist decision making by providing lists of effective companies that meet performance criteria, free basic hardware/software for claims submission, and Web-based entry tools. At one time, BCBSM offered software tools to help ease entrance to EDI.
Lack of a mandated standard for claims attachments and front-end edit rejects are proving to be another challenge to providers.
Although standard HIPAA formats have been implemented, they allow some flexibility in data content. Payers were allowed to implement only minimum necessary responses. If these transactions can be enriched, providers will be more likely to take advantage of EDI integration in their business processes, minimizing cost and gaining processing efficiencies.
HCT: How did Capgemini and BCBSM collaborate to address the acute care facilities and their requirements related to HIPAA?
Don Hodgson: BCBSM offers its own product, Electronic Processing of Insurance Claims (EPIC). This product was collaboratively modified by Capgemini and BCBSM, with pilot facilities defining functionality and editing capabilities. As a result, more than 500 edits exist in the product, which dramatically improves quality of submissions. The robust functionality resulted in 26 percent of BCBSMs facility claim volume being collected with a high first-pass rate.
HCT: What technical solution was chosen for BCBSM to become HIPAA TCS compliant?
DH: BCBSM chose a wrapping strategy common in industry to insulate legacy systems from having to undergo significant changes and to leverage the EDI tools that were already in place. From a provider perspective, BCBSM modified the direct data entry tool, Web-DENIS, in incorporating the HIPAA requirements. As a clearinghouse service, BCBSM offers two alternative formats to ease the HIPAA implementation efforts for providers and their vendors. These formats were based on the widely used national standard format and the uniform billing 92 format (UB92).
HCT: Did you have a specific strategy for supporting HIPAA transactions, and how are you handling the transition? What benefits have been achieved?
DFE: BCBSM dedicated resources to work externally with trading partners for readiness. Statewide seminars were jointly held with government carriers to communicate in larger forums. BCBSM partnered with Michigan Department of Community Health to offer free compliance testing tools. We focused on top volume submitters readiness. These strategies enabled us to meet compliance milestones and make significant progress.
DH: Capgemini assisted BCBSM in determining how to handle a brand new environment, while maintaining the old. We knew that not all partners would become compliant at the same time, nor would they be ready as of this past October. To allow for optimal readiness, BCBSM established a way to handle both old and new transactions simultaneously. This dual system strategy was critical during migration to allow necessary time frames and steady progress. This avoided adversely impacting operations with turnkey or datedriven models.
HCT: And are you already seeing results in the process?
DFE: Our provider migration into the HIPAA-compliant environment is nearly complete for the facility, dental, and pharmacy lines of business. The professional line of business is a bit more challenging, as there are larger numbers of trading partners. We expect to wrap up the claim submission (837) migration in 2004. The marketplace is still learning and has a way to go to reach implementation, in terms of the remittance transactions (835). The other transaction sets will fall in line behind the claims/remittance. Priority for their business will vary depending upon the partner.
HCT: Does BCBSM anticipate growth in the use of EDI transactions with their trading partners?
DFE: We definitely expect this to grow over time. I think that right now, everybodys still fine-tuning the conversion process. The standardization should make it easier for providers who havent automated to now choose reliable solutions because vendor products must be compliant. I would hope this eventually drives costeffective solutions for providers to leverage other transaction expansion. We expect the eligibility transactions to be high priority for facilities as they look to integrate this capability with patient management systems. Discussions weve had on this topic indicate, with the current priority of claims, that partners neither have the time nor the funds to integrate this yet. It is fairly complex to write the software interfaces and accommodate all the requirements to really move forward with these other transactions, but eventually these will emerge as new priorities. Providers and payers both have much to gain with EDI integration.
HCT: How do you see EDI, Web/Portal, EAI, and the clearinghouse working together in providing future benefits?
DFE: I think there are different audiences for different tools. I see all the tools still being needed right now. In my opinion, we have been successful in raising all our electronic rates by supplying multiple ways to submit and extract information. For example, Interactive Voice Response (IVR), Web, and pure EDI all have their unique place in the health care delivery process, depending on provider type or need. There is not a single way to tackle these issues, as user needs vary. Through standardization though, in terms of format and data content, trading partners will get more predictable and accurate information. I eventually see the technologies coming together over time as we commented earlier about the integration opportunities. Blending front-end processes such as registration, where eligibility checking can happen simultaneously by using the 270/271, will be a major focus in the future. I envision the continued need to have a dynamic data exchange (DDE) or a Web application interface where people in back offices can research information to reduce administrative costs for both parties. I anticipate over time that there will be some natural shift in volume from DDE to EDI to reduce manual intervention and for processing increased transaction volumes. Eventually it will be computer-to-computer integration of eligibility, claims, remittance, and eventually clinical information. Momentum will build in the future for integrating EDI, but I think its going to be a slower migration process and Im not sure were ever going to get to just a single tool or way to supply information.
HCT: Im going to take you through some transaction sets and Id like you to talk about perceived benefits for payers and for providers in terms of each one.
835 Claims Remittance
DH: We observed that this is a value to the payer because it cuts down on status inquiries. Providers ability to post payments automatically has been enhanced due to the enriched data content of the 835 transaction set. Another major benefit to the provider is that the 835 transaction will be an enabler for automating the process of coordination of benefits (COB) claims between payers.
270/271 Eligibility Inquiry Transactions
DFE: The benefits of this transaction are reciprocal for both parties. This is what is so good about two organizations using the EDI process. Providers can immediately verify patient financial responsibilities at the time of service and we as a payer can obtain a cleaner claim. Use of this transaction will truly allow each party to benefit from proactive receipt of timely information versus reacting to problems arising from lack of information at the time of patient services.
278 Referral and Pre-Authorization Transaction
DH: We have observed that the use of the 278 referral by providers effectively leads to more timely claims adjudication, as claims are not paid unless the referral is authorized. If there are delays in filing referrals, it leads to increased administrative costs for both parties. There are gains for both sides if referrals are properly processed electronically.
And, again, in this space, I think the patient or the consumer gains because hopefully theres not a lag time in rendering care because theyre able to move that referral along more quickly and obtain approval to proceed.
276/277 Claims Status Inquiry
DH: I personally think this gives everybody the opportunity to know the status of the claim at any given time, and hopefully be able to make corrections more rapidly and cut down on the number of times a claim may have to be submitted for processing.
HCT: I want you both to gaze into your crystal ball now. Overall, how do you view the future of B2B transactions between payers and providers?
DH: As more data is exchanged between trading partners in an integrated, standardized manner, and at an increased speed of delivery, the administrative burden will be removed both for payers and providers. It will enable better decision making at the point of care. Eventually it is conceivable that the health care industry can become a paperless environment.
HCT: What do you believe to be the future of the clearinghouse services?
DFE: The clearinghouse may evolve to be a little different in the future. From my perspective, standards will allow direct exchanges between trading partners. However, I believe there will be a convenience factor, where a clearinghouse brings extra value to a provider by supporting editing, routing, and reporting functions. Over time, I believe the clearinghouse functions will evolve into new services around data integration, aggregation, and business intelligence.
DH: Summarizing, I would say that Capgemini assisted BCBSM to accomplish a major push to become compliant in terms of meeting the HIPAA mandates. Thats only the first stage. After migration is complete, this will begin a maturity lifecycle in the industry where transactions will become more content rich, utilized, and integrated over time. This cycle will occur over the next several years its not going to happen overnight.
