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HealthEdge payer survey shows payers confident of hitting ICD-10 deadline

With the insurance and healthcare landscape in this country changing on almost a monthly basis, payer software vendor HealthEdge has begun conducting regular surveys of insurers as a means to take the pulse of a market at any given time. The surveys, conducted currently at six-month intervals provide a snapshot of the industry.

Ray Desrochers, executive vice president of sales and marketing at HealthEdge recently talked to Healthcare Payer News editor Chris Anderson about some of the findings of the most recent survey.

HPN: What does your survey show about the preparedness of payers for ICD-10?

Desrochers: It looks like from the payer community that we have been surveying, most of them now feel ICD-10 is under control and behind them, or at least will be by the time the date comes. So from last survey to this survey, we have gone from lots of angst and anxiety about ICD-10 to almost none.

HPN: Was the last survey conducted before the ICD-10 extension?

Desrochers: It was done after the extension and now in the latest survey 90 percent say they are sure they will get there; zero percent say we won't get there and 10 percent aren't sure.

What we saw a couple of surveys ago was a general panic across the market: a. because we had the original date and deadline and b. it was clear that most hadn't actually figured out what ICD-10 compliance meant to them. In other words they were thinking it is just one core system. Once they realized it's not just a core system, It is a whole bunch of ancillary systems, all of a sudden they (realized) they had dozens of thing to go remediate and thought: "There is no way I can get this done in time."

Then, in our last survey, people had done the assessments and were swinging into the middle. Now they have completed the assessments and they know it is enormous, but most have a plan in place to get it done.

HPN: What did the survey show about adoption of new payment and healthcare delivery models?

Desrochers: We have the majority of (payers) saying they are going to participate in them. I'm talking about value-based healthcare ACOs, next-gen consumer-based healthcare, exchanges, et cetera. So we have the vast majority saying they want to do this and the majority saying they can't because they don't have the technology to make that real.

It is an interesting situation. I was expecting that more (payers) would catch on, but also that more would say: "We are figuring it out. We have the way. We have the answer." But that is not what is happening right now.

HPN: So are payers starting to make the technology investments they need to serve these new models?

Desrochers: 2013 is going to be the year. Now that they feel they have ICD-10 licked, they are going to take advantage of this opportunity to go figure out how to position themselves, not just for a new standard – ICD-11 or whatever it might be – but also to really start to take advantage of these next-generation healthcare business models.

So my expectation is that by the next survey we are really going to see that number start to move and that hopefully in the next couple of surveys, more and more are getting on board and saying: "Yes we know what we need to do and we know how, now."

HPN: The survey shows that manual claims adjudication is on the rise among payers. Why is that?

Desrochers: There are a couple of things going on. Number one, their world is getting more complex, not less. As they are trying to adopt to new models, they are finding out that their technology can't handle it. But they don't want to say no to the (providers) asking them to support these news models, so they have gone into manual processing mode.

At the same time, manual processing is getting more and more expensive. So ultimately, as these organization are moving into a 15 percent, 20 percent, 30 percent manual processing mode and doing it at 6, 7, 8, 9 bucks a claim, this gets very expensive very fast. And if you want to talk about industry waste and an area that we can all target to drive down these out of control administrative costs, certainly manual processing has to be one that you laser focus on.

HPN: Are these technology and infrastructure upgrades overdue?

Desrochers: Absolutely. Healthcare, for whatever reason, has been the orphan stepchild. We have seen all of these other industries go through these modernizations and technology transformations over the years. We saw manufacturing do it. We saw banking do it and retail, financial do it. For some reason healthcare has been left behind and we all these organizations, as the survey shows, that are still basing their world on 20-, 25-, 30-year-old technology. What other industries are doing that and expecting reliability? It is crazy.

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