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9/15/2005
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Highmark Gets Healthy Results From Automation

Insurer teams with hospital system on life- and time-saving verification system for insurance eligibility.

InformationWeek 500 - InsuranceHealth-care supply chains, despite good intentions, have long resisted automation. Different systems reign among providers and payers, and systems can vary widely even within a hospital group, making it difficult to share patient information.

That makes the automation effort between Highmark Inc., a western Pennsylvania health insurer, and the University of Pittsburgh Medical Center all the more important. Highmark and the 19-hospital UPMC have gone beyond just automating claims payments into the uncharted territory of automating hospitals' queries on patient eligibility. They've turned what used to be 2,000 time-consuming checks a day on insurance coverage into a process that takes a few seconds.

Highmark has "reduced friction" with UPMC, Kronenwetter says.

Highmark has "reduced friction" with UPMC, Kronenwetter says.
The real-time system makes use of a private network, even though it was implemented as a Web service. XML messages move from the hospital's McKesson HBOC patient-registration software over the network to Highmark's IBM WebSphereMQ system, where they're decoded and moved to the mainframe's eligibility status system.

With the new service, "we're reducing friction with a trading partner ... and reducing the overall cost of health care," says Michael Kronenwetter, VP of technology at Highmark. The system became operational in the second quarter, and Kronenwetter expects it to save several millions of dollars a year.

Highmark, a nonprofit with 25 million members, has a history of working closely with UPMC, the dominant health-care supplier in western Pennsylvania and West Virginia. UPMC's hospitals all use the same management software, easing the integration hassles, some of which had to be done anyway because of requirements in the Health Insurance Portability and Accountability Act. Highmark also uses the eligibility system with other health-payment-services providers.

"What's startling about Highmark and the University of Pittsburgh Medical Center is the scale," says Robert Booz, a Gartner analyst on health-payer practices. Being able to compress what had been a 10- to 15-minute manual process down to just a few seconds is a huge savings. Previously, UPMC often proceeded with a patient's treatment without knowing whether the procedure was covered. With the real-time system, the hospitals treat people with eligibility assurance in almost 100% of cases.

UPMC entered into the integration project expecting to get back twice its cost of investment over a three-year period. Says Sean O'Rourke, UPMC's CIO of services and products, "from an ROI perspective, we'll achieve better results than our objective."

Illustration By Paul Watson

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