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Status Report - October 2001

In a ten month timeframe, a group of operations executives from the major healthcare organizations (both payers and providers) in Massachusetts have agreed to move towards:

• Metrics: Implementing a common set of reports that objectively measure the performance of the provider payment process. Next steps involve piloting a proposed report template at several providers/health plans and developing education programs in cooperation with Massachusetts-based healthcare trade associations.

• Intake Edits: Implementing a set of consistent intake edits among all payers to facilitate a common definition of a "clean claim". Next steps involve performing analyses to identify the most frequent problem edits and convening a workgroup to work towards common definitions and rules.

Background

In 1995, the Massachusetts Health Data Consortium organized a program called the Affiliated Health Information Networks of New England. This program was initiated to focus on facilitating collaboration among regional healthcare organizations (payers, providers, government agencies, vendors, consultants, etc.) for the purpose of creating a standards-based, secure healthcare information infrastructure. The principal vehicle for the Affiliated Networks has been the CIO Forum, which has had a track record of success over the last six years.

Last year, the members of the CIO Forum recommended that a parallel group be created of the operating managers of regional healthcare organizations. This group would focus on the impact of electronic data interchange (EDI) on the business processes of each enterprise.

As a result, the Consortium organized an initial meeting of the "Operations Forum" in December 2000. Members of the Operations Forum consist of health plan and provider executives responsible for the claims functions in their organizations. Also attending are representatives from the Massachusetts Medical Society and Massachusetts Hospital Association. (Attachment 1 is a list of the members of the Operations Forum.)

The Operations Forum agreed on a Mission Statement that committed the group to focus on administrative simplification beyond HIPAA mandates. Specifically, the Operations Forum would allow regional healthcare organizations to collaborate on improving the business processes related to claims generation, submission, editing, payment and posting.

The Operations Forum chartered two workgroups: the Metrics Workgroup and the Intake Edits Workgroup. The Metrics Workgroup was tasked with developing a set of measures that would objectively characterize payer and provider performance related to the provider payment process. The Intake Edits Workgroup focused on documenting the field-by-field payer requirements that define a "clean claim".

Metrics Workgroup

In the course of three meetings, the Metrics Workgroup had wide ranging discussions that served to emphasize the different perspectives that Payers and Providers have with regard to measuring the performance of the provider payment process.

One of the attendees characterized these differences as: "Payers speak Greek. Providers speak Latin. How can we expect them to understand one another?"

Both sides expressed frustrations with the current state-of-affairs. Providers are frustrated about claim denials, the unwillingness of payers to disclose data edit rules, and the confusion caused by complex payment rules. Payers are frustrated by the volume of duplicate claims submitted and the way that providers characterize the magnitude of the problem.

However, both sides identified some mutual benefits that could be obtained by working together. Payers and Providers both want a process that is more predictable, less expensive, and less prone to conflict. They would like a process that would allow them to better manage their business relationship.

There was agreement that the development of a set of mutually agreed upon and mutually understood metrics could contribute to these benefits. The starting point could be some reporting templates and definitions related to the provider payment process.

Two report formats were constructed, one focusing on measuring Claims Turnaround Time Analysis and the second focusing on Claims Denial Analysis. These formats appear below:

Report 1: Claims Turnaround Time Analysis

PERIOD COVERED ______ to ______	Paper Claims: Paid	Paper Claims: Denied	Electronic Claims: Paid	Electronic Claims: Denied	AllClaims: Paid	AllClaims: Denied
Average Provider Submit Time/Claim (days)
Average Provider Submit Time/Claim $ (days) (if possible)
Average Payer Turnaround Time/Claim (days)
Average Payer Turnaround Time/Claim $ (days) (if possible)
Total Turnaround Time/Claim (days)
Total Turnaround Time/Claim $ (days) (if possible)
#/% of Claims Paid in less than/equal to 30 days
#/% of Claims Paid in less than/equal to 60 days
#/% of Claims Paid in less than/equal to 90 days
#/% of Claims Paid in less than/equal to 90 days

Report 2: Claims Denial Analysis

PERIOD COVERED ______ to ______	Denial Reason 1	Denial Reason 2	... .	Denial Reason "N"
# of Claims
% of Total Claims
Claim $
% of Total Claim $

The Operations Forum reviewed the work of the Metrics Workgroup. There was a consensus to take the following action steps:

• Pursue a pilot of these two report formats with multiple health plans and providers with the objective of better understanding the practical issues involved in generating the reports

• Pursue discussions with appropriate membership organizations (MMS, MHA, MAHMO) about creating educational programs that can facilitate an understanding of objective measurement of the provider payment process and to promote the cooperative agreements made at the Operations Forum

Intake Edits Workgroup

The Intake Edits Workgroup conducted the following detail analyses:

• Based on a review of each payer's "scrubber" report, for each edit category (e.g., , demographics, eligibility, diagnosis, bill format) examples of payer-specific reasons for rejections were identified. For example:

• Based on a review of each payer's manual and interviews with their IS staff, the EDI requirements and data validation rules were documented for each field on the UB-92 inpatient claim form. It should be noted, that not all of these requirements/ rules are "fatal" edits that result in a claims rejection.

The Operations Forum reviewed and discussed these comprehensive analyses. There was agreement that the Operations Forum's objective should be to come up with a set of rules/edits that are consistent (i.e, useable by all payers) and effective (i.e, will result in an accurately paid claim). The following action steps were agreed to:

• Each payer will do an analysis of the frequency distribution (by volume) of the "top five" reasons for claims rejection.

• The Intake Edits Workgroup will synthesize these analyses and identify a category of edit to focus on (e.g, demographics, policy#, etc.)

• The Intake Edits Workgroup will focus on a few specific data elements in this category and work together to agree on a set of edits that meet the requirements of consistency and effectiveness