No More Broken Telephone

In the game broken telephone, a simple message is passed around a circle from one person to the next by whispering in the person’s ear. By the time the words get back to the originator, they usually bear little resemblance to the original message. The bigger the group–or the more links in the chain–the more likely somewhere along the line the message will become distorted.

For years, health claims data in Ontario’s auto insurance system suffered a similar fate. After assessing a patient and deciding on a treatment plan, a health care provider might scribble some notes on a pad, which an administrator would then try to interpret in order to complete a claim form or invoice, often by hand. The form would then be mailed or faxed to the insurance company, with any luck to the correct address and, in some cases, with several fields left blank or illegible. The adjuster might have to call the health care provider several times for clarification, or try to make the best decision possible based on incomplete information or information that has been misinterpreted. Another person might then enter the data into the insurance company’s data system for subsequent statistical analysis.

The journey of health claims data from health care providers to auto insurers can follow a complex and varied route. This can complicate the decision-making process for adjusters, frustrate health providers and delay treatment for injured claimants. It also makes data analysis for the purposes of monitoring the performance of the AB system extremely challenging, if not impossible.

Health Claims for Auto Insurance (HCAI) is the new electronic system for submission, review and response to certain key Ontario Claims Forms (OCFs). Developed by Ontario auto insurers in consultation with the Financial Services Commission of Ontario (FSCO) and various med/rehab provider associations, HCAI went live on April 2, 2007 and will be rolled out across the province by February 1, 2008.

By capturing health claims data from the source–health care facilities, where forms can be created and submitted online–HCAI streamlines the links in the communication chain. The system also has a number of features (e.g., code lookups, data validation) that further reduce the incidence of mistakes and omissions.

“HCAI has a number of benefits, for claimants, for health care providers and for insurers,” Michael Smith, General Manager of Health Claims for Auto Insurance Processing, the not-for-profit corporation entrusted with operating the new system, says. “But the primary purpose of the system is to facilitate the exchange of high quality data.”

These goals are not mutually exclusive. An example is the convenient lookups that allow a provider to select injury and treatment codes from standardized lists. This not only puts injury and intervention codes at the health providers’ fingertips, but it also prevents the use of invalid codes.

A set of validation rules, built into the system, will save time for both adjusters and health care providers by ensuring that only completed forms and forms without obvious errors or inconsistencies are submitted to insurers. In a paper world, these forms would be received by the adjuster, possibly days later, and then require the adjuster to go back and forth with the provider for clarification.

Insurers that take maximum advantage of options to integrate HCAI with their own in-house systems can derive even greater benefits from the system, while further reducing opportunities for human error in transcription. One such option is an automated feed of claim and claimant information from the insurer’s system to HCAI. Insurers will be required by regulation to provide this information for the purposes of matching claims to submitted forms, and insurers with no feed will be required to enter claims manually into HCAI.

Companies can also download their company-specific data from HCAI, in the form of extracts, and use it to populate their own systems to facilitate payment, analyze the company’s claims management and trends and other purposes.

“It really is a necessary evolution to move towards more automation and less paper,” Smith says. “Truth be told, the auto insurance system is one of the last bastions where paper transactions for health claims processing are still the norm and this leads to a great deal of inefficiency.”

Insurers and providers are not the only stakeholders who stand to gain from the implementation of HCAI: policyholders have a big stake in how their premium dollars are being spent. Ever since the 1990s, when there was huge growth in first-party med/rehab expenditures, FSCO and the industry have been seeking an effective way to better understand the dynamics of the auto insurance med/rehab system. Traditional methods of data capture and analysis (Automobile Statistical Plan and Ontario Accident Benefits Statistical Plan) are too high level and do not provide real-time insight into:

* cost drivers within the AB med/rehab system;

* the effect of policy changes; and

* how the system changes over time.

By contrast, HCAI data is pulled directly from actual treatment plans, assessment proposals and invoices so it does provide this insight in a timely fashion. Without this kind of information there can be no accountability, no systematic problem identification, no control of costs, no measurement of health outcomes for the people receiving treatment and no effective way for researchers to obtain data that can be analyzed towards improving those outcomes.

In publicly funded health systems, the collection of real-time information on how the system is functioning has long been accepted practice, yet HCAI is the first system of its kind in the auto insurance sector. This may be a contributing factor in why, between 1990 and 2005, direct health care expenditures in Ontario’s auto insurance system increased by 15.2 per cent per year, compared to 6.0 per cent in the public health system.

As of the end of May, four insurance companies and more than 40 health care facilities were using the system. By February 1, 2008, regulations issued by the Ontario government will require that all auto insurers paying for medical rehabilitation services in Ontario and the Ontario health facilities that bill them use the HCAI system.

Smith reminds insurers that although HCAI will be of immense value to the industry, it does represent a change in claims operation from a paper process to a web-based system and it requires an upfront commitment of time and resources to implement.

“Implementing HCAI in your own business requires training for claims staff (both internal and third party adjusters, if applicable), updating of procedures manuals, workflow changes, set-up of your organization in HCAI and, for those insurers choosing to integrate with HCAI, involvement of IT resources,” Smith says.

HCAI has been years in the making, but the time will come when the industry will have its first real-time glimpse of where med/rehab dollars are going. After years of trying to piece together data like a message from a broken telephone game, the industry is going straight to the source.

No more broken telephone. No more incomplete or inaccurate information. Just clean data.

Alberto Maggi is manager, marketing for Insurance Bureau of Canada, and has been communications lead on the HCAI project for the past three years. He will be actively involved in helping Health Claims for Auto Insurance Processing educate both the insurance and health care communities about HCAI and prepare them to use the system by February 2008.