August 2009 | | Issue 8
Health Management Technology

"Safety Net" Program Requires Streamlined Administration & Powerful Data Management

With nearly 47 million Americans who lack health insurance, providing access to care has become a national focus.

In California, counties receive government funding to address the growing low-income and indigent population that is uninsured and underinsured. Advanced Medical Management (AMM), a managed services organization in the California managed care market, serves as the "fiscal intermediary" (FI) that administers this public health program for Orange County.

"Many Orange County residents do not qualify for Medicare or Medi-Cal, and yet they do not have healthcare coverage," says Kathryn Hegstrom, president at AMM. "In the past, uninsured and underinsured individuals would go without care until their medical needs were so urgent they went to an emergency room. In response, the county designed a unique 'safety net' program to provide access to ongoing medical care for its indigent population, by contracting and collaborating with community hospitals, clinics and physicians."

The key challenge for AMM was to cost-effectively administer this safety net program for a patient population that had complex medical problems. Due to the fact that the uninsured and underinsured generally do not receive regular, preventive care, one of these patients often requires medical services equivalent to nine commercially insured patients.

AMM needed a technology solution that would streamline administrative functions, such as claims processing, in order to apply more funds to actual medical care and to maximize coverage for additional uninsured and underinsured enrollees. AMM also needed the technological capabilities to manage and analyze a vast amount of information to help the county meet its data-reporting requirements to oversight agencies.

AMM decided to leverage its pre-existing managed care software solution, known EZ-CAP, it had been using for 15 years to manage complex commercial contracts. EZ-CAP handles all administrative and business process needs for managed care organizations. The system offers an online healthcare portal to facilitate timely, cost-effective sharing of clinical and administrative information, as well as next-generation EDI capabilities to retrieve information and perform transactions in real-time. A care-management component enables clients to enhance the wellness of their patient populations, with case-management, disease-management and utilization-management capabilities.

"We realized this safety net program had basic facets that paralleled managed care contracts, the key difference being the county was the payer, not a health plan," says Hegstrom. "EZ-CAP offered a high level of flexibility and could easily be configured to handle the unique aspects of the county's managed care model. In particular, EZ-CAP offered powerful data-analysis capabilities to help the county monitor utilization."

Six Different Coverage Areas
The county's safety net program includes six different coverage areas. The medical services initiative was designed to link patients to "medical homes," which paralleled the concept of a primary care physician in the managed care world. Medical homes were often community clinics or individual physician offices.

The other five areas of coverage included emergency medical services, HIV testing, public health, child health and disability prevention (CHDP), and CHDP-treatment unit.

AMM configured each of these six programs as if they were different health programs united by a common database. In terms of its patient population, AMM received an electronic data feed of patient eligibility information.

AMM also set up a Web site so that hospitals, clinics and physicians could register online, ensuring they would be paid for the services they provided to eligible patients. This provider data is automatically imported into EZ-CAP.

"Since we set up the safety net program similar to a managed care program, it's easier for clinics and physicians to understand and interact with our organization," says Hegstrom. "As the fiscal intermediary, we essentially look like a payer organization to the provider offices, which makes it easier for them to work with us.

"Because this patient population has not had regular, preventive care, they often have a higher level of medical acuity," she adds. "We process more claims in this line of business than any other. As a result, we leveraged EZ-CAP to automate and streamline the claims process as much as possible.

"Rather than manually review every claim, we configured EZ-CAP to run audit reports that scan and identify claims that fall outside the program's coverage areas," Hegstrom continues. "For example, pregnancy-related services are covered by Medi-Cal, and mental health is covered by the county's behavioral health program. This ensures that our program funds are leveraged to the fullest extent to cover appropriate services and patients."

Many hospital and provider claims are submitted electronically. If there is a problem with a diagnosis code or patient eligibility, AMM can clear the issue immediately. When AMM receives a paper-based claim, a third-party vendor performs optical character recognition on the files, so it has line-by-line detail on every field of the claim.

"Since the county has mandated that hospitals send claims electronically, we will eventually receive more claims via electronic means, which will yield even more efficiency gains," says Hegstrom.

End-of-year Reconciliation
"Each month, we pay registered hospitals a prospective interim payment," Hegstrom explains. "On alternate Fridays, we process these hospital claims, and post the explanation of benefit (EOB) to an FTP site. Hospitals can log on and review the EOBs online."

At the end of the fiscal year, AMM handles hospital appeals and enters adjustments on the claims status code within EZ-CAP. Hospitals are then able to view the adjustments online. After modifications are made, AMM reconciles total hospital payments against total claims activity. The reconciliation process uses a point system, which assigns a certain number of points according to each claim's specific revenue codes.

"We compare the total points accumulated to the total payments made. In some cases, the county may owe a hospital additional money," says Hegstrom. "Using EZ-CAP, the reconciliation process is automated. We've created a highly streamlined method in which we compensate hospitals on a fair and equitable basis, while minimizing claims processing costs."

Another contributor to the program's success is that the county has set up ER Connect. Whenever an eligible patient ends up in the emergency room, physicians log onto ER Connect, look up the patient's designated medical home, and provide the patient with information to seek care at this home for less urgent medical needs.

In the past, the County's hospitals claims only offered a single line of medical information - without the specifics of a diagnosis, various health services provided, and the length of stay in various departments. Codes and other details were lost because the previous administrator did not have a sophisticated technology platform.

"In addition, since the county often receives state or federal funds, it's able to justify to oversight agencies the value it provides in exchange for these funds," says Hegstrom. "These agencies want to know extensive details, such as how many medical home visits were provided versus hospital visits, how many diabetic patients, or how many annual exams. In many cases, data reporting requirements change, as agencies want more and different information. Now, we can produce literally hundreds of different types of reports to analyze patient utilization and validate the allocation of resources."

With the use of EZ-CAP, AMM was able to increase the number of claims processed from 180,000 to 250,000 a year - a 39 percent increase in claims volume - while simultaneously reducing average claims adjudication costs by 20 percent.

In addition, AMM was able to help the county increase the number of enrollees in the county's safety net program from 16,000 to 22,000 - a 37.5 percent increase in the number of uninsured and underinsured that now had access to care. With this coverage, uninsured and underinsured are able to benefit from regular visits with a medical home in order to stay healthy, thereby creating a shift from emergency care to preventive medicine, and reducing overall healthcare costs.

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