Important initiatives for CIOs in 2015

The focus of healthcare accountability, quality outcomes and cost of care is driving a major shift in the healthcare industry. Whilst CIOs have always had their plate full, this year specifically will be a busier one. Each of the agenda items this year ties back to the transition from "Fee for Volume" to "Fee for Value" model. Strategically this means paying attention to how care is financed, delivered and managed. Here is my list of items that I consider to be important in 2015.

ICD-10

ICDs are the set of diagnosis codes that translate patient’s health condition from words to alpha numeric. For example: ICD-10 code for fatigue is I10 which is written this way universally and ensures everyone is speaking about the same thing.

In the United States we have been using ICD-9 for over thirty years and it is about to be replaced by the newer version ICD-10. The new version provides greater detail on patient condition’s severity, complexity, comorbidities and complications. So far this upgrade is mandated to go into effect October 1st 2015 and will affect providers, payers and clearinghouses.

Failure to comply with ICD-10 codes in a timely manner could adversely affect the revenue cycle. CIOs should be prepared for this upgrade and plan accordingly.

Marketplace

Prominent items under the Healthcare Marketplace will be the Small Business Health Program (a.k.a. SHOP), Marketplace Data (834, 820) and Risk Adjustment scoring system (a.k.a. Edge Server).

SHOP

The Affordable Care Act does not require small employers (companies with fewer than 50 workers) to offer healthcare coverage. It does however, offer insurance to small employers via the SHOP marketplace. The employers, on the other hand, are either offering no coverage or are offering coverage through one of the three famous routes: Employer Subsidy based Private Exchange, Federal Shop Exchange or Standard Employer Coverage. CIOs will need to plan for this and will need to ensure they have some kind of quoting tool to guide and give different options to small employers.

Marketplace Enrollment Data

Although many insurance companies implemented direct enrollment in 2013 and 2014, the marketplace implementation journey is far from over. Because there has been one full year passed since the ACA was first offered to the individual customers, the record integrity check becomes vital. EDI departments will have to ensure the enrollment and termination data coming back from the exchange is correct and in sync with the local records.

Risk Adjustment, Re-Insurance & Enhanced Encounter Programs

Under ACA the Reinsurance and Risk Adjustment programs were established to mitigate possible health insurance adverse selection and to stabilize insurance premiums. The Risk Model for the marketplace is very similar to that of Medicare Advantage Plans and requires similar reporting practices.

This means that CIOs will have to ensure that proper systems are in place to transmit claims, eligibility and pharmacy data to the government and receive risk scores in return. Currently there are several companies, including Amazon Web Services, offering automated solutions to exchange risk data with the marketplace.

Insurance companies will have to ensure that the claims they are receiving from the physicians are properly coded. Aside from proper diagnostic codes, the insurance companies should also prioritize their patient population based on which patients will benefit most from the physician interventions. Providers could use the intervention list to identify and treat patients in question. The majority of the health plans have rolled out Enhanced Encounter Programs to drive improved care, better coding and documentation.

Pharmacy Tiers Cost Application

Insurance companies will do a great favor to their consumers if they roll out some kind of pharmacy app that would calculate the out of pocket cost depending on the drug tier. A recent analysis by Avalere found that more than one-third of the health plans participating on the marketplace have either incomplete or inaccurate pharmacy benefits listed. This is because their formulary data is not fully compatible with the federal format. This mismatch could mean higher rate of error in out-of-pocket calculations by the consumers when getting their prescriptions.

CIOs can help alleviate this issue by rolling out applications that convey the tier cost information easily and quickly.

Population Health

Population Health is a platform which shifts the focus from sick care system to preventative care models with an emphasis on improving the health of the entire population at a lower cost. Essentially it is the implementation of a system that enables the health care providers to see the overall health of their patients across the continuum of care.

Traditional Population Health Management solutions consist of Data and Action processes. Data from EMR, Pharmacy, Claims, HIE and Labs is aggregated, normalized and converted into actionable records. The actionable records are then used to close care gaps, deliver preventative care, assess risk, analyze cost, increase compliancy and manage utilization.

CIOs will have to take a leading role in delivery of the population health models within their organizations. Payers and providers alike will need this system to be successfully implemented as their future revenues will depend on it.

Transparency Tools

Higher co-pays in popular plans and an increase in pharmacy tiers make the transparency tools ever more important. We will see an increase in usage and demand of such tools (there are quite a few companies who have already made this available to their members). A recent article by Washington Post reiterated the importance of knowing the cost when getting care by showing that a knee replacement surgery could cost $17k or $61k in the same city.

I have written a separate post on transparency tools here (private companies working on the transparency). What gives health plan CIOs leverage over other companies in the transparency tool arena is the medical and pharmacy claims gold mine they are sitting on.

Bottom Line

From ICD-10 to transparency tools, everything eventually links back to the Population Health. 2015 will be an important year to improve the quality of care, reduce costs and change old healthcare status quos. These trends are more than just a moving fad and will affect organizations strategically. Time will tell which organizations are able to turn these into financially viable solutions.