Whitepaper Exposes Healthcare Administrative Waste

Practical Steps for Cutting Healthcare Costs through Existing Infrastructure & Collaboration



The U.S. economy transmits over 18 billion electronic payments each year, yet approximately half of all healthcare financial transactions are still paper-based. Costs of paper, printing, postage and labor for manual processes in healthcare are estimated to add up to nearly $30 billion a year in waste. As healthcare reforms are considered in Washington and in all 50 states, administrative savings represent a bright spot—low-hanging fruit—that could help pay for longer-term reforms. To help inform this dialogue, Emdeon, in cooperation with the Center for Health Transformation, unveiled an important whitepaper at the HIMSS 2009 Annual Conference in April. The whitepaper, "Taking the Paper Out of Paperwork: How Electronic Administration Can Save The U.S. Health System Billions", looks at the gaps in the industry that keep it dependent on manual processing—and offers practical steps for breaking this costly and inefficient cycle. "In these trying economic times, combined with the specter of unsustainable spending, Medicare insolvency and runaway growth in Medicaid, we must find those IT solutions that can not only save lives but can also lower costs," said Former House Speaker Newt Gingrich, founder of the Center for Health Transformation. For more of the Speaker's message, view the video foreword to the whitepaper. The whitepaper provides a step-by-step roadmap for both payers and providers and highlights best practices that are delivering tangible results today. This pragmatic approach leverages technology and infrastructure that already exist—and provides a vision for a new kind of industry collaboration. Recommendations outlined in the whitepaper include:

For Payers
* Develop and pilot reimbursement programs that reward quality healthcare practice and results, including electronic information exchange.
* Ensure all future information technology development is done according to industry standards.
* Collaborate around multi-payer functionality, understanding that providers want a single resource for interacting with health plans.

For Providers
* Keep abreast of federal funding opportunities for health information technology.
* Include process re-engineering for an electronic end-to-end eligibility, claims and payment process in electronic medical record (EMR) implementation strategies.
* Work with medical societies and specialty groups to advance national standardization goals.

Download the whitepaper.

Emdeon Readies for Implementation of New HHS Rules

HHS Issues Final Rules on HIPAA v5010/NCPDP D.0 and ICD-10 Implementation; White House Action Puts Timeline in Question
Early in January 2009, the Department of Health and Human Services (HHS) finalized two important sets of rules regarding EDI transactions. The rules, set to go into effect in March 2009, could be subject to change after the White House issued a memorandum stating it will further review any regulations that have been published but have not yet gone into effect.

HIPAA v5010/NCPDP D.0
On January 16, 2009, HHS issued its Final Rule on modifications to administrative simplification regulations under the Health Insurance Portability and Accountability Act (HIPAA). These rules update the HIPAA electronic transaction standards to the X12 standard, Version 5010 and the National Council for Prescription Drug Programs (NCPDP) standard Version D.0. The Final Rule changed the compliance date from April 2010 (in the proposed rule) to January 1, 2012.

The Final Rule introduces a compliance timeline for HIPAA v.5010/NCPDP D.0. Under the new HHS compliance timeline:
• Covered entities should have designed, developed and tested their own systems prior to January 1, 2011.*
• Trading partners should have tested the interchange of transactions and implemented connections using the revised standards by January 1, 2012. *
* These dates could be subject to change pending review of the Final Rules by the White House.

ICD-10 Implementation
HHS also issued final rules for implementing a revised version of the International Classification of Diseases Clinical Modifications and Procedure Coding System (ICD-10 CM and ICD-10 PCS) as a HIPAA standard code set. The agency received numerous comments expressing concern about the move to ICD-10, but it determined that the transition was necessary to address challenges with Medicare. The compliance deadline for ICD-10 is October 1, 2013. *

* This date is also subject to change pending White House review.

Emdeon Readies for the Transition; Gap Analysis Guides the Effort
HHS issued proposed rules in August of 2008 and received extensive input from industry organizations and individual payers, providers, vendors and others. Emdeon worked with several key industry and standards organizations to prepare comments and also submitted its own comments on behalf of its customers and business partners.

Since then, Emdeon mobilized an experienced team of subject matter experts to analyze the potential impact of the regulations and to develop a comprehensive approach to the transition.

The first step was to conduct a data gap analysis for all of the HIPAA transactions that Emdeon supports. Project teams were formed for each transaction type for Version 5010 and NCPDP Version D.0. Specific transactions include the following:

X12: 5010
• 837 Health Care Claim: Professional
• 837 Health Care Claim: Institutional
• 837 Health Care Claim: Dental
• 835 Health Care Claim: Payment/Advice
• 270/ 271 Eligibility/Benefit Inquiry and Information Response
• 276/ 277 Health Care Claim Status Request and Response
• 278 Health Care Services Review– Request for Review and Response (Referral Certification and Authorization)

NCPDP: Pharmacy
• D.0 Claims & Encounters
• D.0 Eligibility
• D.0 Referral Certification & Authorization
• D.0 Coordination of Benefits

Emdeon’s internal gap analysis between 4010A1 and 5010 for the X12 transactions and between V5.1 and D.0 for the NCPDP has been completed and is unchanged by the Final Rules. Once the gap analysis and business requirement documentation are complete, Emdeon will share HIPAA Guidance reports with its customers, just as it did for 4010A1 and the NPI, and provide shared roadmaps for implementation.

Commitment and Customer Support
Emdeon’s 5010 Transaction Teams and 5010 Steering Committee are finalizing action plans and deploying resources to address the changes required in the new regulations. Emdeon will work with early implementers to help ensure their needs are met.

Emdeon remains committed to meeting and exceeding the compliance deadlines and supporting its customers and business partners in their implementation efforts through progress updates, educational resources, simplified reporting and consulting services. The company’s overall goal is to be ready to test well in advance of HHS deadlines.

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A Drug Spend Containment Strategy for Medical Pharmacy

Driving integrated, electronic solutions across the payment life cycle, Emdeon leads the industry with transaction solutions that increase the efficient flow of information among members, providers and employers—and help reduce costs, improve healthcare business processes, and strengthen stakeholder relationships. Through a technology partnership with NovoLogix and the power of its MedRx PrecisionSM application, Emdeon is now delivering enhanced capabilities to immediately impact the estimated $2.1 billion in excess payments currently spent on medical pharmacy claims. Together, Emdeon and NovoLogix are leveraging the latest technology innovations to bring the pricing accuracy and administrative efficiencies that are standard in the pharmacy benefit world to the processing, pricing, payment,and remittance distribution of drug claims paid under the medical benefit.

Consider what MedRX can Deliver
MedRx Precision offers consistent re-pricing and claim edits for injectables, infusables and other pharmaceuticals paid under the medical benefit. Its precise NDC-level data automated drug review applications aids in preventing excessive or inaccurate quantities, streamlining the billing process as a whole. The aggregate NDC-level data across all drugs and services allows for detailed reporting, adds visibility into utilization and dispensing trends data to obtain rebates on all appropriate drugs for claims paid under the medical benefit (consistent with pharmacy benefit rebate strategies). MedRx Precision’s uniform administrative and clinical edits help reduce error rates and can bring even more cost savings to the bottom line. The next generation technology, applications and proven practices, applied to the physician office and home health services, can consistently deliver savings.

Additional Emdeon and NovoLogix MedRX Precision Savings Benefits
With medical benefit pharmacy spend at $36 billion and growing annually, the Emdeon and NovoLogix MedRx Precision collaboration delivers the pricing sophistication and automated efficiencies that health plans, payers, and other partners need to capture drug savings—right from the start.

• A one million member plan spends approximately $118 million* per year in Medical Pharmacy (this spend is not managed by the PBM). Industry experts expect this number to increase 10-20% per year due to the growth of the biotech pipeline. Emdeon has partnered with NovoLogix to provide a direct savings solution for this specific area of spending.


• This solution can save a one million-member plan up to $7 million per year* without changing contractual rates with its provider network.


• Effective January 1, 2008, the Deficit Reduction Act (DRA) mandates that NDCs must be submitted in order to collect rebates for physician office drug claims. MedRx Precision offers a simple and cost effective solution for this mandate.

Interested in more information on this partnership solution? Contact your account manager today or email us at moreinfo@emdeon.com.
*NovoLogix estimates for private health plans based on 2007 IMS data.

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Effective Care Management Programs Succeed in Reducing Medical Costs at Health Plans: An Interview with TRICARE North-Health Net Federal Services

TRICARE North–Health Net Federal Services recently implemented Emdeon Hosted Health Service Review to help improve care management for consumers and providers. The added efficiencies from automating the historically manual and time-consuming process of receiving and responding to requests for referrals and authorizations are discussed in the following interview with TRICARE North–Health Net Federal Services’ Mark Sconce, EDI marketing representative and Jimmie K. Ramos, senior systems analyst.

What factors influenced TRICARE North-Health Net Federal Services' decision to implement a hosted Health Services Review (278) transaction solution?

[Mark Sconce:] A number of factors played a role, but essentially, we recognized the available savings for both providers and our health plan.

[Jimmie K. Ramos:] Improving information accuracy up front, early in the Referral and Authorization process, was also top priority for us because it impacts the entire downstream process. With paper requests, there are the obvious issues with legibility of individuals’ handwriting and key data that is often missing. The drawbacks associated with paper requests result in numerous callbacks or correspondence with providers in order to collect the necessary information.

You chose to partner with Emdeon for your hosted electronic 278 solution. How did you determine that Emdeon was a good fit?
[Mark Sconce:] We have a large provider population so Emdeon’s network of connected providers made them (Emdeon) a good fit….a one-stop-shop to roll-out the hosted electronic 278 to the largest possible number of providers.

[Jimmie K. Ramos:] Emdeon’s existing relationships with providers were definitely a factor in our decision. Since many providers currently submit claims to Emdeon, it’s a logical step for providers to move to an electronic 278.

From an IT perspective, Emdeon is close to plug and play. Emdeon eliminates providers’ needs to invest in technology solutions to communicate with payers securely; and they enable providers to engage in EDI at low cost, within a short time.

How has TRICARE North-Health Net Federal Services benefited by implementing electronic referrals and authorizations?
[Jimmie K. Ramos:] By migrating the Requests for Referral and Authorization to an electronic transaction, we’re able to offer improved service to our providers. By applying HIPAA EDI standards to the process, data is clearer, more concise and specific– effectively removing a layer of subjectivity. That can have a direct correlation to the quality of care a patient receives.

[Mark Sconce:] Absolutely. Efficiency and processing time have dramatically improved. Before we began accepting the Requests for Referrals and Authorizations electronically, we would receive requests via fax. Those would get processed, printed and sent for keying into the system, all before it even reached the analysts desk who can act upon them. With EDI, data goes directly to the analysts who need to work it. Providers can check the status online without ever picking up the phone.

For us, the turn-around time for processing and responding to hosted electronic requests has decreased dramatically and the entire process has become far more efficient.

To learn more about how Emdeon Hosted Referral and Authorizations can reduce costly, manual processes and simplify your business, contact Jay Ratcliffe, Director, Product Management at 707.527.0499.

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Medicare Secondary Payer- Mandatory Reporting

Managing the complexities and achieving compliance

What is Section 111?
Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) requires group health plans (GHP) and liability (including self-insurance), no-fault & Workers’ Compensation insurance to determine Medicare entitlement of their members and report on those active covered individuals to Medicare. The quarterly reporting will help the Department of Health and Human Services (HHS) identify situations where the group health plans or no-fault, liability and Workers’ Compensation and self-insurers, not Medicare, should be the primary payer for participants entitled to Medicare. For plans that do not have an existing VDSA/VDEA with CMS, electronic registration is from 4/1/2009 to 4/30/2009 via the Coordination of Benefits’ (COB) website. Liability (including self-insurance), no-fault & workers’ compensation insurance plan registration begins 5/1/2009 and end 6/30/2009.

In exchange, the Coordination of Benefits Contractor (COBC) will provide payers with the Medicare entitlement information for those individuals in the payer plan that can be identified as Medicare beneficiaries. Detailed information about Section 111 and its implementation can be found on CMS’s website through the links referenced below.

Challenges and the silver lining
Although Medicare-eligible members are only a small portion of payers’ overall membership base, management of these members can require system modification and increased administrative costs in 2009 and 2010. Section 111 reporting presents significant challenges in data collection & exchange, system and coordination of benefits process modifications, reconciling potential conflicting information and responding to anticipated increase in Medicare demand letters. The initial and ongoing effort could consume the time and focus of multiple resources.
However, there is a potential silver lining. Section 111 allows the reporting entity to query the Medicare Eligibility Database to identify Medicare entitled/enrolled members. Consultants report that approximately 700 to 2,000 out of every 100,000 members under the age of 65 are not identified by a health plan.* There are prospective savings due to early and efficient identification of Medicare members who were previously difficult to identify. Increased use of crossover claims make it more cost effective with a focused identification of the primary and secondary payers.

So where can we go from here?
Emdeon is working together with payers to provide a service that quickly and cost effectively enables payers to meet the MSP mandatory reporting obligations. Payers can meet the Section 111 reporting mandates by leveraging Emdeon’s experience in data hosting, electronic data interchange and history of successful partnerships with government and commercial payers. Have questions or are interested in more information on Emdeon’s Section 111 Medicare Secondary Payer Mandatory Reporting service? Email one of our product management experts, Sanju Pratap.

Other useful links:
MMSEA Section 111 Reporting
Mandatory Reporting Registration Resource

*Source: Huron Consulting Group

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Workers' Compensation Simplified by Electronic Transmission of eBills and Claim Attachments

Applicable law or proposed law in many states, including Texas, California, Minnesota, Iowa, Maine and Georgia requires electronic transmission of Workers’ Compensation bills. While electronic transaction rates are extremely high for other lines of business, Workers Compensation (WC) claims have historically been very difficult to transmit electronically due to the high percentage claims which require claim attachments.

Receiving WC claims and their attachments via paper causes a number of challenges for payers. Lost efficiency due to required manual handling, decreased accuracy from claims paired with incorrect attachments, storage and retrieval, and timely adjudication while waiting on requested documentation are just a few of the “opportunities” in the WC line of business.

Emdeon’s current beta test in Texas of a new capability to transmit electronic claims, or eBills, and their accompanying claim attachments, offers the potential for dramatic improvements to WC administration. By streamlining submission and bill processing for jurisdictional ASC X 12N 837 Workers’ Compensation bills, Emdeon eliminates the barriers that had previously complicated the acceptance of eBill traffic from healthcare claim subscribers, thereby helping deliver clean bills to payers.

With this new solution, Emdeon offers the ability to reduce the amount of manual bill processing that often depletes staff productivity for both healthcare payers and providers. Additionally, Emdeon’s electronic processing solution helps reduce the potential for error.

Emdeon WC eBills & Attachments simplifies provider submission of WC bills to payers by integrating bill attachments into existing provider workflows for submission of electronic (837) claims. The electronic link between the claim and attachment enables WC payers to receive bills electronically, versus on paper, improving efficiency and decreasing administrative costs. Emdeon’s process for eBills follows current provider and payer workflows for sending/receiving any other electronic group health or government claim.

Attachments can be sent by two methods: either uploading an electronic attachment, or printing a bar-coded fax cover sheet. The bill and attachment are processed and linked, then sent to the payer. Providers also receive claim status reports and ERAs for the WC claims.

This new capability represents another example of how Emdeon enhances the value of its industry leading healthcare information network to deliver innovative services to the marketplace. To learn more about Emdeon WC eBills & Attachments, contact your account manager, call us at 877.EMDEON.6 (877.363.3666), or email us at moreinfo@emdeon.com.

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