June 25, 2013

“Testy” Payers, Part II: A Case Study

By John Wollman and Dennis Winkler

EDITOR’S NOTE: This is the second in a two-part series on ICD-10 testing by John Wollman.

Multiple recent ICD-10monitor articles have focused on testing, and in particular scenario-based testing. This concept was described in one prior article titled “Payers Start to Get Testy.” This follow-up article provides a case study of how Blue Cross Blue Shield of Michigan (BCBSM) is testing with its partners, both professional and facility providers.

Note that the testing described herein is not what some would call “end-to-end” testing. End-to-end testing is a form of testing wherein a “transaction” (a claim related to an encounter) is initiated by a provider from within the provider’s systems, then passes from the provider to the payer either directly or via an intermediary (a clearinghouse or some other value-added network). From there the transaction progresses through the payer’s systems, resulting in some form of response back to the provider. In addition to testing the business ramifications of ICD-10, end-to-end testing also tests the “plumbing” and connections between providers, clearinghouses (and other intermediaries) and payers.

At this point in time, BCBSM and the providers it works with are more interested in testing the business ramifications of ICD-10 rather than the plumbing. In fact, BCBSM refers its approach to scenario-based testing (SBT) as “content-based testing,” in that the content (ICD-10 codes and results) is all that needs to pass between trading partners.

The content-based testing approach enables providers and payers to communicate directly with each other regarding claims of interest in an unobtrusive, cost-effective and scalable manner. With providers and payers equally interested in understanding potential challenges to claims adjudication and pricing, this approach makes a lot of sense for testing with both professional and facility providers.

BCBSM’s original intent was to develop scenarios based on historic claims for all healthcare providers. As they began creating the professional scenarios, they realized that building generic, facility-based scenarios was quite work-intensive and couldn’t be completed in the requisite time frame. Therefore, BCBSM created separate approaches for professional and facility providers.

BCBSM intends to support testing with professional providers via a Web application. The application allows providers to view scenarios and narratives fully describing medical encounters and, based on their review and knowledge, provide the best ICD-10 code(s) for each encounter. Upon receipt of the ICD-10 codes from the provider, BCBSM will “catch” the information and append it on pre-formatted test claims, then run those claims through the back-end claim adjudication and pricing systems. The results, along with the original ICD-9 baseline results, will be compared, and differences and/or similarities will be returned to the provider via email. To maximize the value of the scenarios versus the effort expended to develop them, BCBSM concentrated on high-dollar, high-volume, highly complex claim examples.

BCBSM will make this available to all professional Michigan healthcare providers, but could make it available outside its service territory should an interest arise.

Content-based testing for facilities is different. Given the complexity associated with the creation of generic facility scenarios, BCBSM chose an approach in which they will meet with Michigan healthcare facilities face-to-face and, based on agreed-to medical scenarios of interest (high-dollar, high-cost, high complexity), identify claims to be re-coded by the facilities. Again, facilities only will enter the associated ICD-10 codes, and the same process as noted in the professional provider testing section will be followed, with one important exception: the comparison is between ICD-10 DRGs and ICD-9 DRGs. BCBSM will provide feedback in a similar way, via email, to the facility providers.

The results of the content-based testing initiative will allow BCBSM and the providers to visualize the impacts of coding claims with ICD-10 codes. Providers will be able to see potential issues with medical record documentation (whether there is not enough information to code in ICD-10, for example), understand the complexity involved with ICD-10, and get help with their transition. BCBSM will get an advanced look at what may be sent once ICD-10 is implemented, how it will affect claims processing, and perhaps how it can help them identify areas in which to focus their efforts for outreach and communication. All in all, the process yields a greater degree of information than testing “plumbing-based” transactions.

While the content-based testing approach specifically was targeted for the ICD-10 mandate, BCBSM firmly believes that the same approach will have applicability for future mandates that will require similar collaborative testing among trading partners.

Providers of all types should be prepared to participate in scenario-based testing as their payer trading partners (like BCBSM) start to engage them.

Content-based testing is one approach that can be used to provide a useful view of the potential impacts of implementing ICD-10.

About the Authors

John Wollman is the Executive Vice President of Healthcare for HighPoint Solutions, a Management and Information Technology consulting firm focused on Healthcare and Life Sciences.  John is responsible for HighPoint’s Healthcare industry group, catering to Payers and Providers.  John is a recognized expert in several healthcare business domains (Reform, HIPAA 5010, ICD-10, Platform Strategy) and technical domains (Master Data Management, Analytics).  Since graduating from Duke University, John has held executive level positions at consulting and technology companies over his 25 years in business.

Dennis Winkler is the Technical Program Director of Program Management and ICD-10 for Blue Cross Blue Shield of Michigan and Blue Care Network of Michigan. He is responsible for ICD-10 program direction and is the IT business partner for Medicare Advantage. Dennis graduated with distinction from the University of Michigan's Ross School of Business. He spent his first 11 years of his career with Anderson Consulting (now Accenture); specializing in large, complex system development projects. Winkler joined BCBSM in 1998 and since has been responsible for leading major enterprise programs including HIPAA 4010 implementation, Social Security Number elimination and the National Provider Identifier initiative, among others. He has spoken at several national summits and seminars about ICD-10 since BCBSM began its ICD-10implementation.

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Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.