Success of California Blue's claims transparency program drives expansion

The 120 network hospitals and 30-plus physician groups participating in Blue Shield of California's claims transparency program continue to reap reduced claims cycle times and decreased denials, resulting in significant savings.

The Partnership in Operational Excellence and Transparency Program's (POET) success has prompted BSC and the Hospital Association of Southern California to develop a denials management workshop that would offer best practices gleaned from the program.

During a MedeAnalytics summit on Wednesday in San Francisco, Juan Davila, senior vice president of health plan network management for BSC, said HASC member hospital executives will have the opportunity to learn how to develop a denials management workflow, which BSC created through POET.

MedeAnalytics' Web-based analytical dashboard consolidates and presents claims performance data to providers through a portal. Providers can create custom performance metrics on POET's dashboard.

"POET facilities open dialogue and information sharing to understand claims performance realities," Davila said. "It highlights revenue cycle operational improvement opportunities and forces us to work together across internal silos."

Participating providers have reduced their claims cycle time by two days and experienced a 19 percent reduction in claims denials from 2008 to 2009, compared with a 6 percent reduction for non-participating hospitals, he said.

BSC hopes to include all 340 of its network hospitals in POET by 2013, Davila said.

POET has created a rapport between payer and provider, said George Mack, vice president of member relations for the HASC. "The next step is to monetize that shift and expand to other commercial payers," he said.

The HASC is aligned with POET and is looking to bring hospital executives together to develop consensus positions and resolve common issues through the denials management workshop, Mack said.

Mission Hospital's participation in POET has resulted in a 0.2 full-time employee reallocation of its collections personnel, according to Dan Martinez, director of patient services.

The Mission Viejo, Calif.-based hospital saw a 40 percent decrease in denials, or a 50 percent reduction in lost dollars due to denials. Martinez said transparency has enabled Mission Hospital to develop improved and more efficient processes, establish standard work for claims submissions and improve communication between provider and payer.

Catholic Healthcare West, the largest health system in California and eighth largest in the country, saw a decrease in denial rates and reduction in total cycle time rates, according to Debbie Esparza, director of corporate managed care. One of its hospitals, which had a denial rate of 41 percent, compared to the overall rate of 20.2 percent, was able to decrease that percentage to 10, she said.

CHW was being able to identify root causes by facility of claims denials through the data. The health system saved money from both the reduction of denials and arbitration.

Participating in POET has "allowed effective oversight while highlighting accountability," Esparza said.

While sharing best practices has to potential to cut into the competitive advantages BSC gained with POET, Davila said, "It takes millions of dollars out of the system. It's the right thing to do for our healthcare system."