HMIS [Health Management Information Systems]:

Linking Payers and Providers

December 2009Dennis J. Streveler

2009 UPDATE

• Deflation of computer costs continue• Emergence of mobile phone technologies• Near ubiquity of Internet connections and the

emergence of “cloud computing”• New “open source” applications for

healthcare• Further progress with the Electronic Medical

Record and Telemedicine

2009 CHALLENGES REMAIN

• Support and sustainability of computer systems in many environments is still poor

• Healthcare systems, especially payer information systems, remain among the world’s most complex systems

• Reliability of communications channels is often over estimated

Four Goals of HMIS

June 21, 2007

Three components required:

SYSTEMS INTEGRATION!

1. These 3 components must be thought of as ONE effort, since they will closely interlock with each other.

2. The development of these 3 components must be synchronized with each other – having one advanced component while the others lag will not provide the desired result!

Integration enhances synergy through inter-operability!

What is a claim?Provider Payment Method

Claim Content

Capitation A “claim” may consist of a roster of patients for whom capitation payments are due

Fee-for-Service

A claim will include a (detailed) itemization of the services which were performed.

Per-diem Payments

A simple claim itemizes only the number of inpatient days spent at each level of care.

Case-rate payments

A claim includes only a simple categorization of the case-rate being billed .

DRG-based payments

A claim will include the DRG category, which is computed based on various aspects of the patient’s condition upon admission and upon discharge.

BASIC PROVIDER SYSTEM FUNCTIONALITY

1. Enrollment, patient registration and eligibility checking

2. Appointment scheduling3. Claims creation and submission4. Payment processing5. Contract monitoring and negotiation6. Business-unit management7. Inventory management

ADVANCED PROVIDER SYSTEM FUNCTIONALITY

1. Electronic Medical Record2. “Health Passports”3. Clinical Guidelines and Protocols4. Telemedicine (telehealth, teleconsultation)

PAYER SYSTEM FUNCTIONALITY1. Beneficiary Management: Registration and eligibility2. Premium contribution collection3. Contracting and contract management4. Claims adjudication and management5. Fraud detection and provider profiling6. Provider payments7. Utilization management8. Case management9. Quality management10. Fund management

THE ELECTRONIC LINK BETWEEN PAYER AND PROVIDER

1. Sharing of patient eligibility and rosters2. Transmission of claims to the payer3. Transmission back of anomalies and errors4. Transmission of payments from the provider

to the payer5. Transmission of utilization management and

quality assurance data from payer to provider (“the report card”)

OPTIONS FOR “THE LINK”

1. Point-to-point connections2. Passive “hub” for switching transactions3. A “smart” central clearinghouse which does

some edits and audits of information as it is passed through.

CONNECTIVITY OPTIONSOPTION 1: Inefficient point-to-point communications

OPTION 2: A “star network” clearinghouse

Provider 1

Provider 2

Provider 3

Payer 1

Payer 2

Payer 3

Provider

1

Provider 2

Provider 3

Payer 1

Payer 2

Payer 3

HEALTH INSURANCE CLEARING

HOUSE

Project GuidanceComponent Cost Guidance

Timeframe Guidance

Payer Systems

These systems are highly complex and highly individualized. Expect a Payer System to cost a minimum of US$1 million. Midrange systems will cost approx. US$10 million. The most sophisticated systems will cost US$20 million or more.

Extremely ambitious:24 months

Average timeframe:42 months

Complex system timeframe:60 months or more

Project GuidanceComponent Cost Guidance Timeframe

Guidance

Provider System (100 bed hospital)

Provider systems are far more “standardized” than are Payer systems. A current rule-of-thumb cost estimate for a midrange system is in the range of US$1,000 per bed, or US$100,000 for a midrange system for a 100 bed hospital.

Extremely ambitious:12 monthsAverage timeframe:18 months

Provider System (5 physician clinic)

Clinic Information Systems are now becoming commoditized. Prices range up to US$50,000 for a high-end CIS, and far less for mid- and bottom-range systems.

Ambitious:4 monthsAverage timeframe:6 months

Cost Guidance

Component Cost GuidanceTimeframe Guidance

Electronic Link between Payer Systems and Provider Systems

It is impossible to estimate the cost of constructing this interface, as requirements and specifications vary wildly depending on a complex set of environmental, technical, organizational and political factors.

Likely timeframe:1-2 years or more

IN CONCLUSION

1. Three synchronized HMIS activities must occur to optimize the electronic flow of information to support provider payments:

a. Providers must have systemsb. Payer(s) must have systemsc. The systems must be able to “talk to each other”

IN CONCLUSION

2. Costs and implementation timeframes can vary widely based on environmental, technical, organizational and political factors.

3. It has become nearly impossible to implement a modern strategic purchasing protocol (provider payment scheme) without employing modern information systems!