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Healthcare Reform: Payers – HIXs and Eligibility

In healthcare, it’s a common occurrence to find your organization having to make an investment, unplanned in many cases, in order to comply with a new regulatory requirement due to Health Reform.  When faced with a new compliance need, I have heard many wistfully ponder the question of ROI, yet are already resigned to another initiative to add to an already burdened organization.  What I then help folks understand is that you can get a ROI on this “required” investment, but it won’t be easy and it’s not obvious.  The answer comes from stepping back from the specific requirement, reviewing how the impacted part of the business runs today, analyzing the changes needed and examining how the requirement could be a catalyst for something bigger.  Most of the time, the focus is on the individual activities and tasks performed today and how they need to be tweaked, new steps shoe-horned in, an extra report run, etc.  Our typical response mode is to focus on the micro and don’t rock the boat.  By stepping back and examining the greater context or macro view of business activities and processes which will be impacted by the regulatory change, the organization can do two things.  One, comply and two, by expanding the focus, and yes, investing more, effect a longer term change that improves service levels (customer satisfaction) and reduces the cost to serve, effectively generating a return to offset that dreaded investment.

To help illustrate this, let’s focus on an effort underway by the Payer community to prepare for the forthcoming Healthcare Reform Health Insurance Exchanges (HIXs).  A primary engagement point between the payers and the HIXs deals with eligibility and premium information.  For any payer, a common daily activity is the receipt and handling of eligibility data from their many clients, particularly employer health plans.  While the 834 does exist for this very purpose, the complexity of the transaction, along with the various sources, such as HRIS solutions, HR staff, 3rd parties, etc. have led to a myriad of formats and mechanisms to facilitate this exchange.  Typically, these many feeds will either go directly into the underlying claims systems that support the membership in question or through a conversion process that spits out a proprietary eligibility load file or an 834.  This conversion process is somewhat of a one off with each client/feed, becoming a separate job that must be run, trouble-shooted and maintained.  Many are reacting to the HIX challenge by just setting up new jobs, thankful that the HIXs will be using 834s and trying to figure out the use of the 820 for the premium.

So what’s the broader or macro view and opportunity here?  In most cases, the payers are using a complex and expensive set of services set up years ago that focus on only EDI transactions.  Again, the opportunity that has presented itself is one of being able to step back, look at the broader context and, albeit a greater investment, drive change in how the organizations handle transactions in general.  As many payers wrestle with the need for greater access to, and accuracy of data, they are looking at establishing Data Governance, Master Data Management, ETL platforms, Data Repositories, Data Warehouses and delivery mechanisms.  An enabler to the aforementioned is the deployment of a data and transaction backbone, an Enterprise Service Bus (ESB).  And here’s the link: ESBs can not only support the organizations data consumption, but it can handle the operational transactions, both internal and external.  Furthermore, abstraction can be fully supported, meaning that a standard is developed for introducing eligibility data into the transactional platforms that consume it.  The ESB would accommodate the knowledge needed to interpret the inbound side of the 834 or 820, transforming it per established business rules and pushing it on its way to one or more destinations.  The beauty of such a setup is that it can be done incrementally.  In other words, you don’t need to change everything out at once.  The new and the old can co-exist, while migration occurs.  The organizations commitment up-front is to establish the new foundation and implement first those changes driven by the regulatory requirement.  An added benefit is that you tend to end up with a single interface into the transactional platforms for each core transaction and/or set of master data.  So, when it comes time to upgrading the underlying platforms, you have a minimal number of interfaces to worry about.

Given the multitude of offerings in the market today, any payer organization can do the above.  By multitude, I mean solutions for any budget and varying complexities of environments, along with many of the traditional technology stacks, such as IBM, Microsoft and Oracle.  So, if you’re willing to step back and look at the broader opportunity, a change driven by regulatory requirement can be leveraged in a way that benefits the company, the customers and, over time, provide the return you seek.

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2 thoughts on “Healthcare Reform: Payers – HIXs and Eligibility

  1. John Bradshaw Post author

    Steve, thank you for your comments. I agree with everything you said. That challenge of supporting the additional/incremental expense always needs a sponsor. For an investment on the level required to establish an ESB foundation and initial use case (HIX integration), you require senior-level business sponsorship and a compelling business opportunity. While the need, value and awareness has been there, to your point, in most cases it takes an external event, like the introductions of HIXs, to get the attention and support needed. While the required integration could technically be supported by leveraging existing means, the opportunity and challenge is to take advantage of the situation to drive the change that is in the best interests of the organization in the long term. Once the foundation and initial use case are in, value being derived (and advertised), it will be easier to make the case for migrating the legacy services bit by bit.

  2. Steve Sisko

    This is a great idea and one that every single payer I’ve ever worked with – directly or indirectly – has thought about and/or tried at one time or another. But I don’t think the advent of “health care reform regulations” and health insurance exchanges change anything though. In most cases, using an ESB-based approach to consuming and producing enrollment and eligibility transactions doesn’t need HIX as the impetus, there’s enough value to payers with moving their current enrollment/eligibility sponsors/submitters to an ESB architecture.

    To me, the real issue is the time and expense to build the ESB and all the adapters and operationalize it all while managing current production and working on complying with the myriad of other initiatives like the HIX iteself, ACO’s, ICD-10, etc.

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