Redefining Healthcare through Health IT

For an efficient and effective healthcare delivery, the right information should be available at the right place, in the right way at the right time. Health IT has been touted to help the U.S. healthcare system attain this challenge with its characteristics of improving the efficiency, cost-effectiveness, increased access, quality and safety of medical care delivery.

The U.S. Congress enacted the Patient Protection and Affordability Care Act (PPACA), commonly referred to as Healthcare Reform on March 23, 2010. The act consists of provisions, spread across several years, which is expected to lower healthcare costs, guarantee more healthcare choices, and enhance the quality of healthcare. PPACA also has a widespread impact on Health IT.

The PPACA provisions complement the meaningful use of incentives of the HITECH Act. The use of EHR is essential to many of the health reform initiatives, especially those related to quality measurement and enhancement, establishment of new methods and models for medical care delivery.

This article will provide a brief overview of the various PPACA Health IT provisions.

Electronic Enrollment - Expand Coverage with Health IT

Health Reform legislation will extend healthcare coverage to 32 Million people. Health ITs role in providing expanded coverage through Health Insurance Exchanges and accelerated enrollment will be vital. Health IT can help streamline the enrollment process and also in attaining high efficiency.

The Health Reform law mandates HHS to develop interoperable and secure standards and protocols to facilitate electronic enrollment of individuals in federal and state health and human services programs in consultation with the HIT Policy and HIT Standards Committees.

The standards and protocols for electronic enrollment system shall allow;

• electronic matching against existing federal and state data
• simplification and submission of electronic documentation, reuse of stored eligibility information
• capability for individuals to manage their eligibility information online
• ability to expand the enrollment system to integrate new programs, rules, and functionalities
• notification of eligibility, recertification, and other needed communication regarding eligibility
• other functionalities necessary to provide eligible individuals with streamlined enrollment process

Health Insurance Exchanges and Health IT

By Jan 1, 2014, each state will have to establish a Health Benefit Exchange that will facilitate the purchase of qualified health plans and the Small Business Health Options (SHOP) program for small employers. As an internet portal it will be used to direct qualified individuals and employers to qualified health plans. It will assist them in determining whether they are eligible to participate or eligible for a premium tax credit or cost-sharing reduction. It will provide comparative information and quality ratings regarding health plans offered through an exchange to assist consumers in making easy health insurance choices.

States are now involved in establishing Health Information Exchanges as mandated by HITECH. Creation of both these exchanges will go hand in hand. Health IT will play a crucial role in collecting data related to eligibility determination, enrollment details, provider verification and clinical information which will be required by the insurance exchanges.

Administration Simplification – Reduce administrative costs using Health IT

According to National Health Expenditure Reports from CMS, Medicare, Medicaid and private insurance administrative costs from 1999 to 2008 has increased at 14.9%, 9.8% and 8% respectively. Hospitals spend roughly 20% of revenue on administration costs. With Health IT it is possible to enhance the interoperability between providers and payers, improve quality information sharing and patient outcomes.

The bill has new administrative simplification provisions which require the Department of Health and Human Services to develop a unique health plan identifier, electronic funds transfer and claims attachments standards. It also establishes a single set of operating rules - “business rules and guidelines not defined by a standard or implementation specification” - to standardize the HIPAA standards. The operating rules for electronic funds transfers and remittance advice transactions shall allow for automated reconciliation of the electronic payment with the remittance advice. The legislation carries compliance deadlines from 2013 to 2016 for various transactions. Insurers will have to certify compliance with operating rules or else pay a penalty of $1 per covered life until compliance is achieved.

The bill also requires HHS to seek input on whether to standardize the application process for enrollment of healthcare providers by health plans, as well as the healthcare transactions of automobile insurance and worker’s compensation. HHS needs to consider whether there could be greater transparency and consistency of methodologies and processes used to establish claim edits used by health plans, and whether plans should be required to publish their timeliness of payment rules.

The health reform law mandates that insurers maintain a Medical Loss Ratio (premium revenue spent on clinical care) of 85% for the large group market and 80% for the small group market. Hence, health plans will need to standardize, simplify and automate processes for administrative transactions.

Quality Reporting

PPACA includes regulations regarding quality reporting by healthcare providers. Health IT will make quality measurement and reporting appropriate and effective. The legislation mandates group or individual health insurers, long term care hospitals, inpatient rehabilitation hospitals, hospice programs and cancer hospitals to submit data on quality measures to HHS.

CMS will integrate the reporting measures under the electronic Physician Quality Reporting Initiative (PQRI) and EHR meaningful use incentive program of HITECH act. The integration must consist of the selection of measures, the reporting of which would demonstrate both meaningful use of EHR and quality of care furnished to an individual under PQRI.

New Patient Care Models with Health IT

Certain Health Reform provisions aim to provide incentives to healthcare suppliers for quality delivery of healthcare. Usage of Health IT enabled models is a primary criterion for obtaining rewards.

Medicare Shared Savings Program

The program encourages investment in infrastructure and redesigned care processes for high quality and efficient service delivery.  Healthcare providers may work together to manage and coordinate care for Medicare FFS beneficiaries through an Accountable Care Organization (ACO). ACOs that meet quality performance standards are eligible to receive payments for shared savings. ACO shall define processes to promote evidence-based medicine, report on quality and cost measures, and coordinate care through the use of telehealth, remote patient monitoring, and other such enabling technologies.

Independence at Home Medical Practice Demonstration Program

Demonstration programs will be conducted to test a payment incentive and service delivery model that utilizes physician and nurse practitioner directed home-based primary care teams designed to reduce expenditures and improve health outcomes. These teams will use electronic health information systems, remote monitoring, and mobile diagnostic technology.

Center for Medicare and Medicaid Innovation

Center for Medicare and Medicaid Innovation will test innovative payment and service delivery models. In selecting the models to be tested, the Secretary must include models that support care coordination for chronically ill individuals at high risk of hospitalization through a HIT-enabled provider network that includes care coordinators, a chronic disease registry, and home telehealth technology.

Payer IT Enhancements

Most of the PPACA provisions will require payers to make changes to their IT systems. Systems will have to integrate with the Health Insurance Exchanges to provide plan and rate data. New plans created as per health reform’s law will have to be implemented into distribution and administrative systems.
Mandates like elimination of annual and lifetime limits, limited waiting periods, elimination of pre-existing conditions, and dependent children coverage up to age 26, will require new rating arrangements. Laws related to “operating rules” will require changes to the EDI transactions. Health plans will need to standardize, simplify and automate processes for administrative transactions due to Medical Loss Ratio constraints imposed by PPACA.

Payers will need to implement activities to improve patient safety and reduce medical errors through the appropriate use of best clinical practices, evidence-based medicine and HIT. Plans are required to submit annual reports to HHS regarding plan benefits and reimbursement structures.

Starting from 2014, Medicare Advantage Plans will be provided performance bonuses to conduct HIT initiatives, including clinical decision support and other tools to facilitate data collection and patient-centered care.

Finally, a peek into the projected financial estimates of PPACA

According to the Congressional Budget Office (CBO), PPACA will cost $940 billion over the first 10 years. The legislation will reduce the deficit by $143 billion over the first ten years and by $1.2 trillion in the subsequent decade. The estimated long-term deficit reduction is mainly through $400 billion Medicare & Medicaid savings and about $500 billion additional tax revenues.

The IT provisions of PPACA will cost more than $5 billion. States will invest $2 billion to set-up the health insurance exchanges. The Department of Health and Human Services will invest $1.8 billion to implement changes to Medicare, Medicaid and related IT systems. And the Internal Revenue Service will spend up to $2.5 billion to support eligibility determination, documentation and verification processes for premium and cost-sharing subsidies.

Health IT industry is entering an exciting phase redefining U.S. healthcare system with the implementation deadlines for HITECH, HIPAA 5010 and ICD-10 approaching soon along with the Health IT “low-hanging fruits” on health reforms.

About the Author:

Deepak Padmanabhan works as a Lead Business Analyst in the Health IT field. His areas of interests include Health Reforms, ICD-10, HIPAA 5010 and Health Innovations. He is a certified Project Management Professional (PMP) and Fellow, Academy of Healthcare Management (FAHM).