Thanks to "medical loss ratio" (MLR) mandates that establish administrative cost caps on payers, the customary transaction processes between providers and payers are no longer practical. With that in mind, FierceHealthPayer recently caught up with Jay Eisenstock, manager of Provider eSolutions at Aetna (pictured) to learn how "going electronic" has not only simplified administrative transactions at the large insurer but also improved efficiency and reduced expenses.
FierceHealthPayer: What prompted Aetna to invest in new IT advancements?
Jay Eisenstock: Let me start by saying it's been a long journey. HIPAA regulations went into effect in 2002, and when you look across the industry at that time, there wasn't a high level of adoption of electronic transactions. We were probably in the high [60th percentile] in terms of electronic claim adoption, which was probably still industry-leading at that time. So we look at that and the opportunity we have by trying to get more providers to use electronic transactions, and it became pretty much strategy from that point on to try to enhance our transactions and build them out with greater functionality. And we've seen significant increases in that.
FHP: What type of IT advancements has Aetna adopted so far?
JE: When you look at the enhancements across the board, significant changes in the actual redesign of our provider website is one big piece that changed radically. When you looked at websites for a lot of companies (not just in healthcare), a lot of those websites started off being basically just electronic brochures, and we were probably no different at that time. We recognized that there was an opportunity here to really put the tools out there for providers to be able to communicate with us much more effectively and be able to exchange information with us.
We also have done a lot of work in making the transaction (the administrative transaction specifically) much more usable so that providers would be encouraged to utilize those electronic transactions versus the manual or paper transaction.
FHP: How long did it take and how much did it cost to implement those provider-based technologies?
JE: I can't really discuss the cost, but I can tell you that it's evolving. If you look at the original HIPAA transaction and codes implementation that started in the late 90s - 2000, we're still working it now.
FHP: Has Aetna recouped any administrative savings from "going electronic"?
JE: Yes, significant, but again I can't talk specifics for our health plan. What I can tell you is when you look across the board at things such as electronic claims, we were in the high 60 percent of claims back in 2003, and currently we're in the mid-80s. So that's significant growth in one of the most widely used transactions out there. So you can imagine the cost-savings not only to Aetna as a health plan but also to providers who utilize those transactions electronically because there's no printing and mailing costs, no phone calls, and significant increases in accuracy when they submit those transactions electronically.
FHP: In what ways have electronic transactions improved efficiency at Aetna?
JE: Well, like a lot of things that you do manually, if you're writing things on paper (and even if it's computer-generated), that paper has to come to the health plan, and it has to be scanned and processed; there's a lot of steps involved in doing that. And of course, each step adds costs and also increases the likelihood of some sort of error in the process. So that's one major thing in terms of efficiency.
Because of that, when the claim comes in electronically, there's much fewer claims that are rejected, and providers get paid for [those approved claims].
FHP: Have the providers you work with been willing to embrace the new technology tools?
JE: By and large, they are. One of the things that I talked about when I gave the presentation at the World Congress 3rd Annual Executive Forum on Superior Customer Service for Commercial Health Plans and Government Programs last week is that we created a tool, the EDI calculator. A provider office can run that tool off of our website, either using industry standard numbers for what it costs for staff, what it costs for printing, postage, etc., or they have the ability to enter specific data for their office. And we've found that that has been pretty well-received by providers, by and large, big and small.
When they look at that they say, "Wow; it really does make a difference when you figure out all the different points in the process within their office that are manual and apply this little tool to show what the savings could be by going electronic." It's really eye-opening.
FHP: Were there any obstacles to implementing electronic transactions?
JE: There are several, many of which hopefully the industry is beginning to address more and more. If we talk about it from a claims perspective, one major barrier within the industry is that the provider systems they have are not often up to date, and if they're not up to date, they can't take advantage of this or the capabilities that the transactions offer.
And there are several reasons why a provider system is not updated. One is there is competing priorities right now within the industry. We've got a lot of things going on, HIPAA-mandated changes, ICD-10 on the horizon, Meaningful Use. It's not necessarily a priority to update their system.
Sometimes, these processes are disruptive to the workflow. I often kid, but for smaller provider offices, it's often true that the person who takes the checks to the bank may be somebody's aunt, or mother, or mother-in-law. And an important part of their day is taking those paper checks and going to the bank and seeing someone that they know there. So when you say, "Why don't you take that out of the process and do everything electronically," that's a big change.
And beyond that, you've got accounting and other issues that need to be automated as a result of receiving these transactions electronically or submitting them electronically.
FHP: Why is collaboration with providers important to implementing and utilizing new technology tools?
JE: I can give you several examples. I mentioned earlier that we did a total redesign of our website, and before we actually built that out, we did focus groups, and we did a lot of work informally with different groups of providers--different sizes, different types--because what we wanted to be able to do was build tools that were going to be useful, not what we thought would be useful. That took a fair amount of work and a lot of outreach, but I think it's paid off, especially as we saw the adoption of a lot of the things we put on the website.
Secondly, right now, when you look at the administrative transactions that are required under HIPAA, like the electronic remittance advice, when that transaction was built out back in 2000 as part of the HIPAA regulation, it was very lacking. Specifically, the status codes that come back on that transaction are not very useful for a lot of providers. This is a gross exaggeration, but in some instances, it will come back with a message that says the claim was not paid. And that's obviously very frustrating for a provider because they don't have enough information. Whereas with the paper equivalent of that transaction, we don't have the limit imposed by that regulation so we, as an industry, can provide much more detailed information.
So what's occurring now, which I think is very helpful, as the operating goals under health reform are being adopted, is there's a lot more interaction between payers, providers, and vendors trying to understand some of the limitations that are in those transactions so that they can be corrected, if you will, as part of the operating goals going forward.
So that example of the electronic remittance advice, there's work groups that are looking at that and saying, "Okay, what is the kind of information that will be most useful for everybody in the chain," which will make it much more efficient and, I think, much more readily adopted.
FHP: How will the various health reform provisions influence payers' willingness to adopt electronic transactions and other IT advancements?
JE: From a payer's perspective, we're required and the penalty is very steep. So I think that when HIPAA came out, there were some implied penalties, but under the operating rules as part of healthcare reform, there are penalties that are going to be levied based on a per-member (and per-day in some situations) basis. So the fines can get pretty steep. I think that's certainly an incentive for health plans especially to make the changes to the transactions and to adopt what's being proposed and what will become regulated.
Now, vendors and providers don't have the same requirements, but my view is they're going to want to participate because of the efficiencies that we talked about earlier.
FHP: Do you think there will be a requirement to go completely electronic regarding transactions and claims processing?
JE: I'd love to see that personally, but the short answer is no. There has been discussion about the next stage in Meaningful Use that will include a requirement for electronic claims submission and for eligibility verification, but the talk in the industry is pretty inconclusive at this point as to whether that will be retained once the next version of Meaningful Use is announced. But that's probably a year away, at the earliest.
FHP: What type of provider collaborations has Aetna engaged in? How did it go about forming such partnerships?
JE: In my group, we've done several things. One thing is we've created something we call the Strategic Initiative Team. This team works specifically with very large hospital systems because we've found that those systems have different needs than your smaller hospital. So we've tailored the approach with them on a one-on-one basis, and that's been very successfully received by all the organizations we work with, and we've mutually seen some great savings and efficiency by adopting much more electronic transaction utilization, and frankly, working together to resolve issues that arise between the two organizations.
We also work extensively across the industry. I mentioned one of the other efforts that's going on is part of the operating goals, but we've also been on the forefront working with organizations such as CAQH, AMA, MGMA, and, most recently, with the HBMA, and their constituents to look at all these issues at varying levels of detail. These are all provider-focused organizations, and I think when we roll up our sleeves and sit down and work together, we can accomplish a lot.
FHP: What advice would you give to insurers looking to embrace provider-based technologies?
JE: It's some of the things that we just mentioned: it's working collaborations with either providers directly or with provider-based organizations and also collaborating within the industry because I think, collectively, we come up with solutions that benefit everybody. A lot of what we're talking about here is not in areas where we compete as health plans. It's where we gain efficiency and help take cost out of the system.