Links to Managed Care Technology Sources

Per-Se Technologies

NaviMedix, Inc.

TriZetto Group, Inc.

McKesson Corp.

QCSI, Inc.

Industry Focus: HIPAA and Managed Care Information Technology Strategies
by Paula DiTallo

     In the midst of a series of economic recessions in the United States throughout the 1980’s until the early 1990’s, the expense of providing health care skyrocketed. During that period, the managed care model, originating from the concept of DRGs (Diagnostic Related Groupings), came into common practice. Frustrated employers and equally frustrated politicians welcomed the advent of the new managed-care model as the immediate answer to their common dilemma of providing health care to their beneficiaries at a confinable cost. IT software providers, like GE Medical Systems Information Technologies and Siemens Medical Solutions , began integrating DRG-style, rule-based processes and policies designed to help their customers monitor the sources of the inflating care costs into their software solutions. Data management systems developed during this time also began to include expanded reporting modules to help decision-makers manage the cost of provision spending. With this support, managed-care companies primarily achieved their success in flattening out health care cost by limiting what they would pay to health-care providers.
     Managed-care companies in the beginning of this cycle were making a tidy profit. These same managed-care organizations in 2002, however, have been taken to task by politicians, physicians and consumers alike for such commonplace practices as denying plan members needed treatments, enforcing physician utilization reviews, and refusing to pay for necessary health-care services. In light of the fact that the escalating cost of providing health care has inevitably crept back into the equation, it comes as no surprise to find that managed-care companies adopted such practices. In cases where managed-care providers regularly approve payments for a broad range of services, high premiums from private payers are used to offset the cost.
     With an economic downturn and rising premiums, how will managed-care companies respond? Rather than continue with this highly criticized strategy of bickering with doctors, hospitals and patients over reimbursements, the managed-care industry now views itself as more of a financial clearinghouse. With this paradigm shift, the focus for a managed-care organization is on processing transactions as quickly as possible, rather than on managing costs through punitive action.
     In order for managed-care companies to survive this transition, information technology will play a key role. Fortunately, the need for payer organizations to hasten their transactions online coincided with the government’s mandate to make each electronic transaction uniform through standard code sets. As many managed-care organizations implement state-of-the-art Internet-based information systems to enable real-time transactions, the IT vendors are meeting HIPAA (Health Insurance Portability and Accountability Act) requirements in tandem. HIPAA legislation mandates that government plans, such as Medicaid and Medicare, private health plans, claims clearinghouses and any providers who perform the following transactions electronically must use the standards for: