PayerView 2011

Overview

PayerView^®. Bringing transparency and process integrity to the health care system.

With unprecedented change and uncertainty rattling the health care industry — a trend that is sure to continue through 2011 and beyond — the need for more certainty and consistency in day-to-day provider-payer interactions takes on a new level of importance. Describing the complex provider-payer relationship and identifying areas for improvement requires objective data and the kind of visibility into transactions that only PayerView provides.

PayerView is an annual project of athenahealth and Physicians Practice. It is the industry's leading quantitative report, providing unprecedented insight into the provider-payer relationship with objective, data-driven methodologies. PayerView data helps create an industry-wide dialogue on how breakdowns in the medical claims billing process can be addressed. The objectives of PayerView are:

• Discovery. We continuously assess and refine the metrics represented in the data to ensure that the measures reflect the dynamics that create inefficiency and cost across the health care supply chain.
• Transparency. PayerView data provides a framework to inform initiatives aimed at creating transparency between providers and payers.
• Continuous Improvement. We provide our client base and payers at large with a comprehensive tool that explicates the interdependencies in the health care supply chain, helping both the payer and provider to improve.

We track the details of every client transaction for tens of thousands of providers. PayerView is a natural product of the unique data that athenahealth continuously compiles and manages on behalf of its clients. Unlike other medical billing, practice management, EMR, and patient communication solutions, athenahealth uses a combination of centrally-hosted, cloud-based software tools and robust back-office services. Our providers share a single web-based instance of software, enabling pooled data and intelligence through a powerful network effect. Every detail occurring during a medical claims billing transaction — patient eligibility check, claim submission, processing time at the payer, claim denials, receipt of electronic or paper remittance, and more — is captured electronically across our network.

We distill our information into quantitative rankings. Each year, we distill our extensive medical claims billing data and draw on it to create comprehensive and objective rankings of payer performance. athenahealth widely publicizes the PayerView rankings, and uses PayerView claims data to collaborate with payers to improve the overall provider-payer relationship.

Reflecting the complex dynamics occurring across the health care supply chain, PayerView brings reliable evidence to claims, a process long dominated by imperfect data, hearsay, and anecdotes.

Benefits

PayerView improves the way providers and payers work together.

Payers and providers both strive to respond to increasing demands on each other and on the health care industry as a whole — and with implementation of the Affordable Care Act and the new level of complexity introduced by ANSI 5010 and ICD-10, those demands will only increase. Payers and providers essentially have the same goal — a more efficient and less costly process — but without objective health care supply chain information to pinpoint systemic problems, it's been almost impossible to find a mutually agreeable path forward.

PayerView provides this objective information. It gives payers an end-to-end view of the claims process that is not available to them individually, enabling them to see where their processes exceed or fall short of industry standards. It gives providers insight into how they can operate more efficiently and effectively and thereby make it easier for payers to process their claims.

How providers and payers benefit:

Payer improvements realized by all providers. Whether or not you're an athenahealth client, whenever we help one of your payers improve performance on one of the key PayerView metrics — denial rate, clarity of information returned on paper or electronic remittance — the claims process in your practice benefits from these improvements.

Cost reduction across the health care supply chain. Both payers and providers reduce costs by streamlining the claims process. This is the common ground of claims, where payer and provider goals are aligned — and where PayerView has helped created an industry-wide dialogue to address the places where payers and providers become misaligned.

Better control over practice performance. PayerView metrics give providers a set of day-to-day variables to measure and track their claims. Using PayerView to gauge practice performance, providers can increase profitability and focus on quality of patient care.

Here are a few improvements we’ve made as a result of the momentum behind PayerView:

Navigation of industry transitions. PayerView was critical in measuring the impact absorbed by the industry with the implementation of the National Provider Identifier (NPI) in 2008. While athenahealth's data revealed that many payers experienced a decline in performance, it was the performance of CMS/Medicare-B that significantly declined due to its leadership position in the enforcement of the NPI requirement. It is expected that athenahealth's data will reveal equally interesting outcomes with the upgrade to the HIPAA 5010 Transaction Standard, which impacts all standard transactions. athenahealth's ability to characterize the performance of the entire supply chain through its PayerView dataset uniquely positions it to not only measure how well complex industry standards are implemented, but also to help highlight the pitfalls to avoid.

Increased transparency. PayerView provides a unique window on the end-to-end process of healthcare claims reimbursement and processing. Through its PayerView framework, athenahealth has worked with payers to identify business processes or requirements that negatively impact providers' daily activities. PayerView has been instrumental in defining the information that is needed by the provider during the course of the medical billing process to ensure efficient and accurate processing of claims on the initial submission. Some of this information can be relayed through the use of standardized transactions (e.g., eligibility, remittance). Other information is best supported through self-service tools (e.g., payer web portals) made available to the providers. Likewise, the PayerView framework has brought visibility into the impact provider behavior can have on overall performance. For example, while athenahealth assumed a leadership position with its fully integrated real-time claim adjudication capabilities with both Humana and UnitedHealthcare, provider adoption has been slow. PayerView has continuously proven to be a reliable tool for surfacing performance gaps across all components of the health care supply chain.

Trends

2011 PayerView results revealed the following industry trends and payer highlights.

Industry Trends

Trend 1: Payers Paid in a Timely Manner, but Next Responsible Party Payments and Deductibles Increased

On average, payers continued to pay in a timely manner as evidenced by a decrease in days in accounts receivable (DAR). Payers indicated that future DAR improvement would stem from the optimization of ERA/EFT rates as opposed to a decrease in payer payment cycle time. The slight increase in Medicare DAR was due to claims being held while Congress debated fee schedule issues and potential reimbursement cuts.

Improved First Pass Resolve (FPR) rates suggest that transparency initiatives implemented by payers (e.g., online documentation, provider outreach, etc.) are bringing visibility into payer guidelines. Denial Rates improved across most payer groups, though payers signaled that continued year-to-year improvements in denial rate should not be expected, and, in fact, could reverse. The denial rate for State Medicaids increased, largely due to system changes across some states, which adversely impacted the performance of the Medicaid segment overall.

Providers continue to struggle with managing patient/secondary payer liabilities, yet are slow to adopt point-of-service tools to deal with them. The objective of the Provider Collection Burden metric is to characterize the increased burden being imposed on providers to manage collections from the next responsible party. To ensure that athenahealth's Provider Collection Burden metric was reflective of the true burden imposed on providers, athenahealth removed co-pays as well as time-of-service, real-time claim adjudication (RTA) submissions from a payer's Provider Collection Burden rate, since the amount owed is made available to the provider at the time.

The National Commercial Providers led the market with point-of-service tools. In Spring 2009, Cigna launched its Cost of Care Estimator product, which leverages the eligibility transaction to determine the total cost to be charged for medical services based on the individual's specific Cigna health plan. Aetna is currently working on its version of an Estimator product that it hopes to make generally available.

Humana and UnitedHealthcare have taken an industry lead in RTA. athenahealth has had integrated RTA capabilities with both payers since 2008. RTA allows athenahealth providers to determine the exact liability owed at the time of service, thereby reducing the cost associated with sending patient statements and managing patient collections.

To date, provider adoption remains low, with providers entering claims at the time-of-service 5%-7% of the time, and collecting patient liability less than 1.5% of the time. The industry is at an interesting impasse: providers do not want to change their workflow for a handful of payers, and payers do not want to invest in real-time claim adjudication capabilities until they are confident that providers will adopt it.

Major Trends around Provider Collection Burden:

• Medicare outpaced other payers with high transfer rates to secondary payers
• BCBS dominated with deductibles and other transfers to the patient
• National Commercial payers maintained their lead in point-of-service tools

Trend 2: Electronic Remittance Advice (ERA) Transaction Fell Short of Potential

While the industry at large has had a difficult time transitioning to the standard HIPAA code set of the electronic remittance advice (ERA) transaction, athenahealth data indicates that State Medicaids have had the most difficult time adopting the standard. On average, State Medicaids achieved an ERA Transparency rate of 76.7%, in comparison to other payer groups that achieved an average ERA Transparency rate of 90%+. Given the poor quality of the ERA transaction, providers have had to maintain the paper equivalent to obtain clear next steps. While this situation is most egregious among State Medicaids, other payers have struggled as well.

Trend 3: The Eligibility Transaction Proved a Good Predictor of Back-End Eligibility Denials

The eligibility transaction, which proved a good predictor of backend eligibility-related denials (yes/no patient eligible), has significant potential for providing transparency into plan design and coverage. In aggregate, the quality of the eligibility transaction across all payer groups was high, with Eligibility Accuracy rates of 90%+. Relative to 2009's findings, most payer groups experienced a decrease in Eligibility Accuracy performance driven by the inclusion of the "Other Payer" segment to rate a payer's Eligibility performance.

Unlike its top rated performance of 99.1% in 2009, Medicare's Eligibility Accuracy performance declined significantly in 2010, for a rate of 92.5%. Medicare ranked last relative to other payer groups, and even underperformed the Medicaid segment. National Commercial Payers (Aetna, Cigna, Humana, and UnitedHealthcare) had the best Eligibility Accuracy performance at 97.7%, leading other payer groups by a significant margin.

Medicare's performance suffered. Medicare has been the market leader in supplying all information needed to fully leverage the eligibility transaction. This is because Medicare has a more robust process for obtaining this information than other payers. However, athenahealth data suggests that the COB information contained in Medicare's eligibility transaction does not necessarily correlate with Medicare's backend adjudication systems. As a result, given that Medicare always supplies COB information, Medicare has a higher probability of getting penalized with this metric that includes an "Other Payer" segment.

Payer Highlights

Payer Highlight 1: BCBS-RI Continued to Dominate as the Best Performing Payer

BCBS-RI was ranked #1 in the BCBS, Northeast and All Payers segments. Since the initial release of the athenahealth PayerView results in 2006, BCBS-RI has had the best DAR among all payers included in the dataset, indicating that BCBS-RI has made a concerted effort to pay providers in a timely manner. BCBS-RI has also had one of the best denial rates among all payers. athenahealth experience indicates that BCBS-RI has very clear billing guidelines that enable a provider to submit a "clean" claim.

Payer Highlight 2: National Commercial Payers Displaced Top Performing Regional Payers

Unlike in past years, national payers achieved several of the top rankings in the 2011 results. While Humana's overall ranking declined, Aetna achieved a significant improvement in rank, moving from the 12th-ranked payer overall to the 2nd best performing payer among all 132 payers included in this year's results. UnitedHealthcare performance remained stable, with an overall rank of 4. Data suggests that proper use of the full transaction suite has placed national payers on a par with local regional payers, long considered dominant.

UnitedHealthcare maintained its #2 overall ranking in the National Commercial payer segment in a 2-way tie with Humana. It also tied for 3rd place with Humana in the All Payers segments. UnitedHealthcare performed in the Top 5 across all regions: Northeast — 5 of 40; South — 1 of 45; Midwest — 2 of 26; and West — tied for 1st place with Humana of 33 payers. UnitedHealthcare achieved the #1 ranking in FPR and Eligibility Accuracy in the National Commercial payer segment, which is one of the most competitive peer groups.

Payer Highlight 3: Medicaid-NY Moves from One of the Worst Ranked State Medicaids to 6th Overall Among Medicaid Payers

Medicaid-NY had a banner year in 2010, moving from the 11th percentile (13 of 14) in the State Medicaid segment in 2009 to the 71st percentile (6 of 19). Medicaid-NY's most dramatic performance improvement stemmed from its denial rate, which decreased 66% for a rate of 7.9% in 2010. This dramatic performance improvement translated into Medicaid-NY achieving the #1 denial rate ranking among State Medicaids.

Payer Highlight 4: State Medicaid Performance Continues to Lag Industry Standards

On average, State Medicaids take twice as long as other payer groups to reimburse providers for services rendered. While DAR levels for State Medicaids have averaged 60-80 days since release of these results in 2006, data suggests that State Medicaids have been slow to adopt and leverage electronic transactions that would streamline the process. State Medicaids deny claims 2.7 to 4 times more often other major payer groups. Given the inherent complexity of the State Medicaid program at large, it is not surprising that denial rates would be higher. However, given the limited ability of State Medicaids to fully adopt the electronic remittance advice transaction — ERA Transparency results confirm that the remittance standard has actually introduced more ambiguity into the claims denial process for providers.

Metrics

Measurement is the first step to improvement.

To set overall national and regional rankings, we measured payer performance across six metrics. We weighted each metric, placing a priority on fast, complete payment. The weighting reflects our analysis of the impact each measure has on the ability of athenahealth and its providers to receive payment on claims.

The six performance metrics and their respective weighting are as follows:

Financial Performance (60% of total score)

• Days in accounts receivable (DAR) (25% of total score) Average length of time it takes to receive payment as measured from the date of charge entry to the date of remittance post.
• First pass resolve rate (25% of total score) Percent of claims that are successfully resolved on the initial submission (e.g., paid or transferred to patient responsibility).
• Provider collection burden (10% of total score) Percent of charges transferred from the primary insurer to the next responsible party. Includes co-insurance, deductibles, and other transfers (e.g., non-covered services). Co-Pays and Real Time Adjudication (RTA) amounts retrieved at the time of service were not included in the rate as this information is readily known at the time-of-service.

Administrative Performance (20% of total score)

• Denial rate (20% of total score) Percentage of claims (both pended and denied) that required the practice to perform back-end rework.

Transaction Efficacy (20% of total score)

• ERA transparency (10% of the total score) Percent of electronic remittance advice (HIPAA 835) denial messages with actionable explanations and clear next steps. Reflects how well the payer has adopted the HIPAA 835 standard code set by returning clear adjustment reason codes accompanied by remark codes as appropriate. (This is a new metric this year; its inclusion, along with a revised eligibility accuracy metric, brings more visibility to the full HIPAA transaction suite.)
• Eligibility accuracy (10% of total score) Correlation of eligibility response to adjudication outcome. Measures how well the payer's eligibility transaction predicts the outcome of a claim. Eligibility loss categories are: patient eligible — claim denial; patient ineligible — no claim denial; patient not found — no claim denial; payer downtime; other payer info received — no coordination of benefits (COB) denial; no other payer info received — COB denial. (Inclusion of the "Other Payer" segment is new this year. Its inclusion, along with the ERA transparency metric, brings more visibility to the full HIPAA transaction suite.)

It is important to note that PayerView does not measure how much payers pay; it quantifies, rather, the challenges practices face when collecting for their services.

PayerView metrics and methodology