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Risk Insider: Elizabeth Carmichael

Risk Management Is the Natural Owner of Compliance

By: | August 20, 2014 • 2 min read
Elizabeth Carmichael is the director of compliance and risk management for Five Colleges Inc., which includes Amherst, Hampshire, Mount Holyoke, and Smith College. She can be reached at ecarmich@mtholyoke.edu.

With the adoption of Enterprise Risk Management (ERM), many organizations have already begun to include compliance risks as part of their organization’s risk management portfolio. However, even if the organization has not yet climbed aboard the ERM bandwagon, risk managers should be actively supporting, if not directing, their organization’s compliance efforts in several key areas, namely, interdepartmental risks.

After all, the compliance challenges in most organizations will not be those that land neatly in one department. Dining services managers will be on top of sanitation regulations; comptrollers will file their taxes.

No, the greatest compliance challenges are those that cross division and department lines.

Take a look at some of the compliance requirements that prove challenging to institutions of higher education.

Title IX: Which prohibits discrimination on the basis of sex, covers not only equity in sports but also sexual assault and misconduct. Consequently, this impacts nearly every division of the institution.

Americans with Disabilities Act (ADA): Its related laws and regulations impact academics, student life, facilities, IT, human resources, admissions, athletics  and a multitude of other departments.

Export Controls: A mishmash of laws that similarly effects any department involved with academics, research, technology, and travel.

Records Retention Policy: Required under the tax form 990, covers every division and department and has additional privacy and security implications.

“…the compliance challenges in most organizations will not be those that land neatly in one department.”

Institutions traditionally find it difficult to manage compliance requirements such as these because there is no natural “owner” of the requirement. It is here that risk managers are ideally situated to help their institutions by gathering together individuals from the affected departments into a committee or task force.

Together, they can begin to create a shared management process for the institution. In the absence of hierarchical authority, committees and task forces can wield significant influence, especially if appointed by the president or board.

Furthermore, many compliance requirements are a natural fit within a risk management portfolio because they address insured risks. Compliance with anti-discrimination laws (like Title IX and ADA) is a perfect example, as acts of discrimination may be insured through educators’ or employers’ legal liability policies.

Other compliance matters may directly affect the essential identity of the institution. For instance, if an institution violates the regulations on political speech, it could lose its non-profit status and suffer reputational damages.

While it is impractical for a risk manager to be on top of every regulation that an institution is required to be in compliance with (they number in the hundreds) it is important that the risk manager be a leader in compliance matters that, when not addressed, can directly impact insurance and claims.

Offer to help organize a compliance effort. Make sure to (successfully) follow though.

You don’t have to be a subject expert to do this! Your results can showcase risk management services in the institution, reduce risk, and create a template for your next compliance project.

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Risk Insider: Allan Ridings

Do You Know if Your Electronic Communications are HIPAA Secure?

By: | August 19, 2014 • 2 min read
Allan Ridings is a senior risk management & patient safety specialist at the Cooperative of American Physicians, Inc. He has more than 25 years of experience in risk management and health care operations. He can be reached at aridings@capphysicians.com.

As ubiquitous as text messaging is, many wonder why doctors can’t freely text with their patients. But regulators are clear on this. Text messaging is too vulnerable to information theft to be used unguarded in provider-patient communication.

The responsibility to secure medical information is clearly outlined and enforced by the Health Insurance Portability and Accountability Act or HIPAA.

In order to manage the risk of new forms of electronic communication, there are specific rules for health care professionals to follow when using text messaging and email as provided by the Centers for Medicare and Medicaid Services Office for Civil Rights (ORC).

Below are best practices regarding electronic messaging of patient information.

What’s the importance of security and encryption in relation to text messaging in health care?

The Joint Commission states that in addition to its violations of HIPAA, unencrypted text messaging provides no way to verify the identity of the person sending the message or to retain the information sent and validate it as part of the medical record.

What is unencrypted text messaging?

Traditional Short Messaging Service (SMS) messaging is transmitted over non-secure and noncompliant networks. The majority of traditional SMS messages are delivered as mobile phone to mobile phone messages; however SMS messages are also delivered via other electronic technologies, which also fall under HIPAA governance:

• Email to mobile phone number

• Mobile number to an email address

• Phone number to alphanumeric pager

• Email to alphanumeric pager

So how do medical professionals text or email information to and from colleagues and patients in a secured encrypted network?

HIPAA requires that a covered entity be in accordance with §164.306 and implement a mechanism to encrypt and decrypt electronic protected health information. (45 CFR § 164.312(a) (2) (iv)). It is also required to implement the Advanced Encryption Standard (AES) encryption protocol system with either 128-bit or 256-bit encryption.

Your company or office IT and telecommunications department needs to ensure compliance with the above encryption standards.

What are the benefits of these encrypted / secured services?

Once the physician or medical office has implemented an encrypted mechanism, the sending and receiving of instant information, patient health issues, reports, and referrals as well as communicating with peers, will all be transmitted in secure, protected environments.

Are there any limits when using SMS?

Yes, there is a strict limit of 160 on the number of characters allowed to be sent. Only the first 160 characters will be sent from an email message to a mobile phone and from a mobile phone to an email user. To avoid misunderstandings, it is recommended that caregivers use approved abbreviations when communicating peer-to-peer.

Does your IT department need to make changes to your smart phones or devices?

Yes, your IT team must enable remote access capabilities on your smart phone, so that you can erase (scrub) all the data from it if it is lost or stolen; and you must keep a record of this loss or theft of your smart phone for auditing purposes.

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Sponsored: Healthesystems

The Next Wave of Workers’ Comp Medical Cost Savings

Reducing WC claims costs in one area often inflates them in another.
By: | August 4, 2014 • 6 min read

Managing medical costs for workers’ compensation claims is like pushing on a balloon. As you effectively manage expenses in one area, there are bound to be bulges in another.

Over the last decade, great strides have been made in managing many aspects of workers’ compensation medical costs. Case management, bill review and pharmacy benefits management are just a few categories that produce significant returns.

And yet, according to the National Council on Compensation Insurance (NCCI), medical costs remain the largest percentage of workers’ comp expenses. Worse still, medical costs continue to be the fastest growing expense category.

Many medical services are closely managed through provider negotiations, bill review, utilization review, pharmacy benefits management, to name a few. But a large opportunity for medical cost containment remains largely untouched and therefore represents a significant opportunity for cost savings.

Ancillary medical services is a term used to describe specialty or supplemental health care services such as medical supplies, home health care, durable medical equipment, transportation and physical therapy, etc.

According to Clifford James, Vice President of Strategic Development at Healthesystems in Tampa, Fla., modernizing the process for managing ancillary medical services presents compelling opportunities for cost savings and improved patient care.

Source: 2014 Healthesystems Ancillary Medical Services Survey

“The challenge of managing these types of medical products and services is a cumbersome and extremely disconnected process,” James said. “As a result, it represents a missing link in an overall medical cost management strategy, which means it is costing payers money and patients the most optimal care.”

James singled out three key hurdles:

Lack of transparency

As the adage goes, you can only manage what you can measure.

Yet when it comes to the broad range of products and services that comprise ancillary benefits, comprehensive data and benchmarking metrics by which to gauge success are hard to come by.

The problem begins with an antiquated approach to coding medical services that was developed in the 1970s. The coding system falls short in today’s modern health care environment due to its lack of product and service level detail such as consistent units of measure, quantity and descriptors.

As a result, a meaningful percentage of ancillary benefits spending is coded as “miscellaneous,” which means a payer has little to no visibility into what product or service is being delivered — and no way to determine if the correct price is being applied or if the item is even necessary or appropriate.

Source: 2014 Healthesystems Ancillary Medical Services Survey

“It’s a big challenge. Especially when you consider that for many payers, it’s difficult to determine exactly what they are spending, or identify what the major cost drivers are when it comes to ancillary services,” James said. And when frequently over 20 percent of these types of services are billed as miscellaneous, payers have zero visibility to effectively manage these costs.

Measurement and monitoring

Often, performance that is monitored is given the most attention. Therefore, ancillary programs that are closely monitored and measured against objective benchmarks should be the most successful.

However, benchmarks are hard to determine because multiple vendors are frequently involved using disparate data and processes. There isn’t a consistent focus on continuous quality improvement, because each vendor operates off of their own success criteria.

“Leveraging objective competitive comparisons breeds success in any industry. Yet for ancillary services there is very limited data to clearly measure performance across all vendors,” James said. “And for payers, this is a major area of opportunity to promote service and cost containment excellence.”

Source: 2014 Healthesystems Ancillary Medical Services Survey

Inefficiency

If you ask claims executives about their strategies for improving the claims management process, a likely response may be “workload optimization.” The goal for some is to enable claims professionals to handle a maximum case load by minimizing administrative duties so they can leverage their expertise to better manage the outcome of each case.

But the path towards “workload optimization” has many hurdles, especially when you consider what needs to be coordinated and the manual way it frequently is done.

Ancillary benefits are a prime example. For a single case, a claims professional might need to coordinate durable medical equipment, secure translation services, arrange for transportation and confirm the best physical therapy plan. Unfortunately they often don’t have the needed time, or the pertinent information, in order to make quick, yet informed, decisions about the ancillary needs of their claimants.

In addition there is the complexity of managing multiple vendor relationships, juggling various contacts, and accessing multiple platforms and/or making endless phone calls.

SponsoredContent_HES“We’ve been called the ‘industry integrator’ by some people, and that’s accurate. We are delivering a proven platform connecting payers with providers and vendors on the ancillary medical benefit front. It’s never been done before.”
– Clifford James, Vice President of Strategic Development, Healthesystems

Modernizing the process

To the benefit of both payers and vendors, Healthesystems offers Ancillary Benefits Management (ABM).

The breakthrough ABM solution consists of three foundational components — a technological platform, proprietary medical coding system and a comprehensive benefits management methodology.

The technological platform integrates payers and vendors with a standardized architecture and processes. Business rules and edits can be easily managed and applied across all contracted vendors. All processes – from referral to billing and payment – are managed on a single platform, empowering the payer with a centralized tool for managing the quality of all ancillary providers.

But when it comes to ancillary products, the critical and unique challenge Healthesystems had to solve is the antiquated coding system. This was completed by developing a highly granular, product-specific coding system including detailed descriptions and units of measure for all products and services. This coding provides payers with the clearest understanding of all products and services delivered including pricing and all the necessary utilization metrics.

“We bring the highest level of transparency and visibility into all ancillary products and services,” James said, adding that the ABM platform uses an extensive preferred product coding system 15 times more detailed than any other existing system or program.

This combination of sophisticated technology, proprietary coding system and benefit management methodology revolutionizes the ancillary category. Some of the benefits include:

  • Crystal-clear transparency
  • A more detailed and comprehensive view into ancillary products and services
  • An automated process that eliminates billing discrepancies or resubmittals
  • Integrated and consistent processes
  • Strategic program management

Taken together, the system leapfrogs over the existing hurdles while creating entirely new opportunities. It’s a win for vendors and payers, and ultimately for patients, who receive the optimal product or service.

“We’ve been called the ‘industry integrator’ by some people, and that’s accurate,” James said. “We are delivering a proven platform connecting payers with providers and vendors on the ancillary medical benefit front. It’s never been done before.”

To learn more about the Healthesystems Ancillary Benefits Management solution visit: http://www.healthesystems.com/solutions-services/ancillary-benefits

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Healthesystems. The editorial staff of Risk & Insurance had no role in its preparation.


Healthesystems is a leading provider of Pharmacy Benefit Management (PBM) & Ancillary Benefits Management programs for the workers' compensation industry.
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