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In the complex and tedious world that is health care billing, those who pay the bulk of the bills--insurance carriers and health plans--have always had their hands full managing bill payment to physicians practices and hospitals of all sizes and types.

But with the latest trend--consumer-driven health care--taking center stage in recent years, managing bill payment is growing more, not less, complex--even as simplifying bill payment continues within the industry.

Consumer-directed plans typically mean more choices of health plans and providers, as well as more financial risk, for employees and health care consumers. Simply stated, health care users, typically employees and their dependents, must pay for medical services for a defined amount with dollars in a flexible spending account, a health savings account or a health reimbursement arrangement.

Health savings accounts, for example, can be used by workers to pay for routine medical expenses, which count toward the deductible of accompanying catastrophic health insurance. Ultimately, consumer-driven plans shift more of the responsibility for health-spending choices onto the patient.

The challenge is that when you create a new way for providers to be paid, as you do with consumer-driven health care, you create more complexity. Some carriers/payors are turning to technology to ease the pain that comes with managing bills in a consumer-driven world.

PreferredOne, a regional health benefits management company serving 550,000 members in Minnesota, needed to meet that growing demand from employers for consumer-driven health products--and solve the technology challenges that go with it. A relatively new entrant in Minnesota's payor market traditionally dominated by several well-established organizations ranging in size from 700,000 to 1.5 million members, PreferredOne needed an edge.

In January 2003, PreferredOne introduced Consumer Advantage, a defined-contribution plan that combines a high-deductible medical plan with both a health reimbursement arrangement and flexible spending account. Quickly, Consumer Advantage became PreFerredOne's fastest growing health plan product, but the product posed an administrative challenge.

With one system housing medical claims data and a second system storing health reimbursement arrangement or health savings account records, each claim had to be processed at least twice, causing bill payment issues. Labor-intensive and error-prone, the process threatened to offset the product's inherent cost benefits. PreferredOne quickly developed a strategy to improve product administration, using software technology from TriZetto Group, a Newport Beach, Calif., technology provider for health plans and carriers.

Using TriZetto's Facets Extended Enterprise application suite, all of PreferredOne's critical data--claims, HRAs, FSAs and more--are held in one central data repository. The claims are processed in one step, quickly and accurately, says John Hofflander, PreferredOne senior vice president and CIO. With both traditional and consumer-driven plan claims now on a single administrative system, PreferredOne has eliminated the expense and risks of integrating disparate software.

"The key to efficient bill management is having the data in one version and in one place," says Hofflander.

Hofflander explains that the new system also automatically updates information related to health reimbursement arrangement or flexible savings account balances, deductibles, and copayments.

"One of the biggest challenges of administering health reimbursement arrangements and flexible savings accounts is that schedules and criteria for rolling over unused balances vary tremendously by employer," he says. "The upgraded system handles this entire process automatically across all employer groups, eliminating hours of work for PreferredOne employees."

Consumer-directed plans may provide health plans and carriers with tremendous opportunities, but, as was the ease with PreferredOne, it also may involve some real IT challenges, mainly the strain of increasingly complex administration.

Kim LaFontana, director of Collector Services and Payor Relations at Athenahealth, a Waltham, Mass., technology provider that tries to smooth electronic billing and collections between doctors' offices and insurers and health plans, says that the consumer-driven health care movement is indeed making things more complex for both payors and providers. Mainly, the carriers need to know when the consumer or employee has met the deductible, which is the point when the insurance carrier or health care plan needs to make payments to doctors or hospitals.

"Insurers need to know and track it, so they know when it kicks in," says LaFontana.

To help small medical groups, those with five to 10 physicians, ensure payment, Ahenahealth provides an application services provider delivery model, which means all the doctors need is a high-speed Internet connection and a browser.

# posted by Medical Information : 2:47 AM