QuickSafe(sm): The Fully Automated Health Plan Administrator
QuickSafe(sm) is a new technology that fully automates virtually every function of a third-party administrator (TPA). Other than a computer operator and customer service representatives, all of the tasks required to operate a health plan are performed by computer and without human intervention: enrolling and removing members from the health plan; enrolling and removing Diagnosticians and other providers from the health plan; validating in real time members' eligibility to receive benefits under the plan; preparing The Doctor Shopper, processing treatment plans and health benefit claims; issuing Explanation of Benefits statements to members; maintaining an electronic health record (EHR) system; reconciling the monetary accounts of the insurer, providers and members; disbursing funds to members, physicians and other providers; billing patients; monitoring healthcare records to detect fraud; and updating databases to reflect the latest medical information.
These functions include online enrollment, during which the enrollee provides information that is organized into several medical reports. A set of these reports is copied to a flash drive provided by the health plan and retained by each plan member. To keep her records up-to-date, the member presents her flash drive on every visit to a provider.
Another function of QuickSafe is to maintain a set of current eligibility records so that a person's eligibility to receive medical benefits can be confirmed at each visit to a provider.
Yet another function is the processing of claims. There is no other system that provides faster claims processing than QuickSafe nor at lower cost. Imagine a single notebook computer that can process all of the medical claims produced daily by the city of Chicago. This unique capability is the result of the patented structure of the RE·MEDI system, which obviates the need to review medical claims manually. Manual review consumes considerable administrative resources, causes payment delays, and often produces conflict among patients, providers and insurers. It is required by other plans in order to prevent overcharging and to avoid reimbursing unnecessary or inappropriate treatments. The RE·MEDI system eliminates these concerns and, therefore, the need to review claims manually.
With regard to overcharging concerns, the insurer's payment obligations under Ca$hback Coverage are determined solely by the Diagnostician's diagnosis and by the procedures he specifies in the treatment plan. Any charges in excess of the benefit amounts are the responsibility of the patient, while charges below the benefit amount are paid to the patient as a cash rebate or as a credit to the patient's Health Savings Account.
Unnecessary or inappropriate procedures are purged from the RE·MEDI system in two ways. Diagnosticians have no incentive to include them in the treatment plans they prepare, and they have every incentive to exclude them. Moreover, even if unnecessary or inappropriate treatments have been included inadvertently, doctors who perform them raise their costs without providing commensurate benefits to their patients. If they raise their prices to cover these costs, they move away from The Cutting Edge, thereby becoming less competitive and likely acting against their self-interest.
QuickSafe combined with our Electronic Health Record (EHR) produces a flow of health care information that is unsurpassed in terms of efficiency. To observe this efficiency, we follow a RE·MEDI patient as she travels through the system. When the patient arrives at a Diagnostician's office, she presents her flash drive to the receptionist and enters her password. The computer first confirms her eligibility and determines the scope of her benefits. Eligibility lists are updated nightly, so eligibility status is always current. The patient's medical records are then copied from the patient's flash drive to the Diagnostician's computer. Because the patient's medical records always accompany her, the duplication of tests and other medical procedures is largely eliminated.
After the Diagnostician reviews this information, he examines the patient. Most patients will require just routine (low-cost) treatment, which the Diagnostician can administer. But should the patient require more extensive treatment, the Diagnostician will prepare a formal, written treatment plan. The Diagnostician may also add prescriptions to the treatment plan for automated processing at a local pharmacy. Finally, the Diagnostician assigns a prognosis rating, which is his prediction of how quickly and completely the patient is likely to recover if treated by a physician of average capabilities. This rating also is used in constructing the Outcomes Index.
Three copies of the electronic treatment plan are created. One copy is saved to the patient's flash drive. A second copy is stored temporarily on the Diagnostician's computer, from where it will be automatically downloaded at the claims processing center that night. This copy is also the Diagnostician's claim for reimbursement. Finally, a third copy is retained for the Diagnostician's electronic records system. The RE·MEDIsystem is unsurpassed in eliminating unnecessary effort and minimizing administrative burdens.
Doctors who can perform the procedures in the treatment plan are identified by the Diagnostician's computer, and a list of the doctors with offices closest to the patient's home or place of work is compiled. Also in the Diagnostician's computerized database are: the most recent prices being charged by these doctors; their performance measures; and their credentials. This personalized information is printed out for the patient in The Doctor Shopper [Side 1; Side 2] and handed to her.
The patient also receives a personalized cover letter and a printed copy of the treatment plan. The letter, which includes information that mostly has been prepared in advance, explains to the patient the Diagnostician's diagnosis, the proposed treatment and the patient's recovery prognosis. It also discusses some features of The Doctor Shopper to help the patient make a wise choice. The Diagnositician may also provide some explanation for the treating doctor whom he is personally recommending to the patient.
Upon arriving at the office of the doctor she has chosen for treatment, the patient again enters her password. Once her eligibility for treatment is confirmed, medical information is released from her flash drive to the doctor's computer. The information that is released is dependent upon the patient's privacy choices made during enrollment, or as subsequently modified. However, the patient may grant special access to selected restricted portions of her medical record. Doctors not electronically connected to the RE·MEDI system call an 800 number to confirm eligibility and work from a photocopy of the patient's treatment plan.
For electronically connected doctors, the RE·MEDI system is a dream. They can easily review the patient's EHR, including the patient's treatment plan, on their computer. To prepare an insurance claim, they simply add the date and charge for each procedure they perform, typically two keystrokes per procedure. This treatment record also becomes their office record. We are aware of no other system that makes it easier for a doctor's office or for a hospital to prepare and submit a claim and to produce an electronic office record. A copy of the treatment record is also written to the patient's flash drive.
Claims processing begins after normal business hours at the claims processing center. First, treatment plans are downloaded from the computers of Diagnosticians and processed; then, treatment records are downloaded from treating doctors and processed. All treatments are, in effect, preauthorized by Diagnosticians, so the claims of treating doctors can be verified electronically within milliseconds of receipt, and overnight reimbursement can be made to them via electronic funds transfer (EFT).
While the treatment plans and treatment records are being collected from the computers of Diagnosticians and providers, electronic information packets are exchanged. The claims processing computer collects updates to patient information (e.g., address changes) and returns updated eligibility files and updates for the databases used by The Doctor Shopper (e.g., prices, credentials, performance measures). After the data exchanges take place, the revisions are processed on the local computers, and the updated databases are ready for use first thing in the morning.
Finally, QuickSafe issues payments: electronic deposits to Diagnosticians and other providers, and Ca$hback Coverage checks are prepared and mailed the next morning to patients. Alternatively, members may choose to have their Health Savings Account credited rather than receive a cash rebate, thereby avoiding any income tax liability. Rewarding patients with Ca$hback payments may be the most important task performed at the claims processing center. Competition under the RE·MEDI system is driven by members making cost-effective choices, and these Ca$hback Coverage payments contribute significantly to cost-effective choices.
Fraud Reduction
QuickSafe is not only quick, but it has been structured to safeguard against fraud. A treatment plan normally cannot be processed unless the patient's flash drive has been inserted into the USB port of the Diagnostician or treating doctor's computer. There are three exceptions. If the patient has forgotten to bring her flash drive, then the office visit may continue, but the patient is responsible for any costs incurred until the transaction can be recorded on her flash drive. Another exception is for the patient who is admitted to a hospital emergency room. The third exception regards the patient who is treated by a provider who is not connected electronically to the RE·MEDI system. In this last case, the patient must sign a hard copy of the treatment record to verify which treatments were administered. This copy is then emailed as an attachment or faxed to the central claims processing center. Treatment records received at the center by email or fax receive extra scrutiny.
If the patient's disk becomes lost or corrupted, an exact replacement can be produced from records at the claims processing center. However, the replacement will be released only with positive identification. The upshot of these security measures is that no treatment plan and no treatment record will be accepted at the claims processing center without the physical involvement of the patient.
Additionally, treatment plans written by a Diagnostician will be accepted at the claims center only if they have been collected electronically from a pre-designated computer in the Diagnostician's office; and treatment records prepared electronically by a treating doctor or hospital will be accepted at the center only if they have been collected from a pre-designated computer in that doctor's office or hospital. Finally, no payment will be made for any procedure not already prescribed in a treatment plan by a Diagnostician—unless the patient has signed electronically a concurrence form agreeing to an alternative treatment plan. However, the total benefit amount of the alternative plan will not exceed the total benefit amount of the original treatment plan. Any additional costs are the sole responsibility of the patient.
Potential perpetrators of fraud should know that there are multiple copies of every treatment plan and treatment record, including the copy on the patient's flash drive, the Diagnostician's copy, the downstream doctor's copy, and the copy at the central claims processing center. These copies are electronically checked and cross-checked against each other whenever a record is processed. Thus, any attempt to defraud the insurer must involve the collusion of three independent parties: the patient, the Diagnostician, and the downstream doctor. As any student of collusive behavior knows, a collusion involving this many independent parties is difficult and dangerous. Even if successful, the collusion would be limited to a dollar amount that would represent a reasonable charge for a single patient. To increase the take, additional patients would have to participate in the crime, greatly increasing the risk of exposure. Moreover, an electronic paper trail of all transactions substantially increases the likelihood of prosecution.
Bogus Claims
There is another type of fraud: knowingly billing for treatments that were not in fact performed: i.e., bogus claims. The RE·MEDI system introduces some new ways to minimize this problem. One way is to use the incentive already in many health insurance policies—the lifetime benefit. This is a ceiling, typically one million dollars, on the aggregate benefits that the insured person can receive over his lifetime. The policies of three-fourths of Americans with health insurance have this provision.People with a lifetime benefit ceiling in their policies naturally want to protect their remaining lifetime benefit amount, or at least they would if they knew about it. The point is that any insurance claim, whether it is for a service actually performed or not, reduces the remaining lifetime benefit amount. Letting a member know every time the remaining lifetime benefit is reduced gives her a direct incentive to ensure that no unwarranted charges are deducted from it. The QuickSafe system provides this notification. Every time a claim is paid to a doctor or other provider on the patient's behalf, an Explanation of Benefits is sent to the member. This document shows who was paid, how much was paid, when the payment was made, and for what service the payment was made. The EofB also shows how much the lifetime benefit amount was reduced and what the remaining balance is. Thus, the member has both the incentive and the information to protect against bogus claims. Frankly, we are surprised that this approach is not currently used by insurers to gain the support of members in policing claims.
An added way to deal with bogus claims is to have a Diagnostician check for physical evidence that all procedures paid for have been performed. These checks would occur during normal, subsequent visits by the patient. For example, if the treatment in question involved a surgical procedure, then the next time the patient requires a physical examination or an X-ray, the Diagnostician could check for evidence of the operation. Of course, not all procedures leave physical evidence, and patients are sometimes unaware that a procedure is being performed: for example, if they are under an anesthetic.
A related issue is the miscoding of services by providers, perhaps to increase reimbursements. Because the RE·MEDI system reimburses for outcomes rather than for services performed, the miscoding of services is no longer a reimbursement concern.
A factor that should further limit bogus claims is that, under the QuickSafe system, changes must be made to the treatment record while the patient's flash drive is in the provider's computer. This requirement precludes doctoring the treatment record after the patient has left the provider's office with her drive. Moreover, because she receives a printed copy of the treatment record at the provider's office before leaving, a charge for an unperformed treatment is at risk of immediate discovery by the patient.
These provisions in the RE·MEDI system should prove far more effective in guarding against bogus claims than current practice. This means that anything more than a routine computer review of claims is unnecessary, since overcharging, inappropriate or unnecessary treatments and the miscoding of treatments no longer are matters of concern. And while paying for bogus claims still would remain a possibility, albeit a reduced one, current claims review is largely ineffective against this problem anyway.
Summary
QuickSafe is a unique electronic system for processing claims with unprecedented levels of speed and safety. The speed is achieved because RE·MEDI's novel structure makes manual claims review unnecessary: Ca$hback Coverage erases any concern of overcharging, and the requirement that Diagnostician's pre-qualify all procedures virtually eliminates the possibility of unnecessary treatments. These are the only reasons for manually reviewing claims. All other review procedures can be satisfied electronically.
Fraud is difficult to perpetrate under the RE·MEDI system because the patient, Diagnostician and downstream doctor all have physical involvement with the treatment plan. Multiple electronic copies of treatment plans and treatment records are compared whenever one of them is affected by a medical transaction, thereby erecting a substantial hurdle that any would-be perpetrators must overcome. Bogus claims are discouraged by patients' incentive to preserve their lifetime benefit amount and by Diagnosticians who seek evidence that procedures that were paid for have indeed been administered.