By JOHN OLIVEIRA, executive vice president at @Global Inc., an IT solutions provider for workers' compensation and casualty claims, care and medical cost management environments
The Centers for Medicare & Medicaid Services (CMS)'s new mandatory insurer reporting (MIR) requirement is quickly becoming a top priority for insurers and other organizations serving the insurance industry. Whether referred to as SCHIP, MMSEA, Section 111 or MIR, the new requirement imposes an important deadline that now looms on the horizon for responsible reporting entities (RREs) and their vendors.
Originally, live production reporting was set to begin during the fourth quarter of 2009. However, in an alert issued by CMS in March, the deadline was pushed back one quarter to the first quarter of 2010. The March alert also extended the testing period until December 31, 2009, though the start date for the testing period remained at July 1, 2009.
The stiff penalty for noncompliance has generated a significant buzz within the insurance industry. RREs that fail to comply with the MIR requirements are subject to a civil money penalty of $1,000 for each day of noncompliance for each individual for which the information should have been submitted.
While many RREs have already charted a clear course toward compliance, many others have yet to fully confront this issue. It is imperative that planning and action begin immediately. The risk of noncompliance increases with each passing day.
BUILD VS. BUY
As is often the case, responding to new business requirements involves developing new systems capabilities and implementing work-flow changes. Enhancing systems typically involves making a "build it" or "buy it" decision. Both options offer advantages and disadvantages that must be carefully considered. What makes sense for one organization may be very inappropriate for another.
In approaching the build versus buy decision, a number of factors must be thoroughly reviewed. The following list includes some of the top issues requiring careful attention:
Assurance of Compliance.
Any viable solution must inspire a high level of confidence based on the industry experience and technology expertise of the solution provider that compliance can be achieved and maintained. Assurance of compliance must be the primary consideration in evaluating all MIR options.
Time to Implement. Being able to implement a solution in accordance with the deadlines imposed by CMS is an absolute must. While January 1, 2010, seems quite far off at this point, the hard reality is that the most productive portion of the work year has already passed.We will soon be entering vacation season, with the holiday season following closely thereafter. Time may be the most scare resource of all.
Implementing an MIR solution requires significant business expertise, in addition to project management and IT resources. An organization's internal capabilities and resources will be taxed with either a build or buy decision. Conventional wisdom would suggest that a "buy it" solution would be less of a burden to an organization's staff members. Conversely, pursuing a "build it" approach could result in a more custom-tailored solution.
The costs of different solutions can vary greatly in terms of amount and structure. For "build it" solutions, most costs will be concentrated up front, with relatively low ongoing costs. The "buy it" solutions currently available in the marketplace typically involve an up-front implementation fee and then some form of ongoing service charge. Depending on the vendor, the ongoing charges can be in the form of recurring monthly fees, or they can be based on the volume of reporting activity.
Though not often mentioned in the industry buzz, the efficiency of an MIR solution should be an important consideration. There is no silver bullet. All MIR solutions will impact an organization's workflow in some way. An efficient solution is one that not only meets the compliance requirement, but also generates little or no unproductive processing overhead. Unfortunately, an inefficient solution could be quite disruptive to an otherwise well-run claims operation.
CHALLENGES NO MATTER WHAT
Whether an organization pursues an internal or external solution, it will nevertheless face a number of challenges in striving to comply with CMS's requirements. For example, many of the required data elements are often items not readily available in an organization's claims system.
Aside from the need to gather the required information, there will also be a need to store it. For many organizations, it will be necessary to add new fields to their respective claims systems, regardless of whether an organization pursues a build or buy approach. Some examples of required data elements that are not typically part of claims systems include: exhaust date for dollar limit for no-fault, ongoing responsibility for medicals termination date, total payment obligation to the claimant date and funding delayed beyond TPOC start date.
Another challenge facing RREs is that additional staff resources will be required to operate the MIR solution and to monitor compliance. This could be a significant effort depending on the size of an organization and the compliance approach it adopts. A large portion of this effort will most likely be related to coordinating information among vendors and internal resources and to ensuring that all required data elements are captured.
It is of critical importance that each RRE invest sufficient time in learning the MIR requirements and keeping up with new developments. Whether a solution is built or bought, an in-depth knowledge of the requirements will be an invaluable asset in successfully implementing a solution and maintaining compliance.
Such knowledge will also allow RREs to evaluate the solutions being proposed by vendors with all due diligence.
Though the implementation deadline has been pushed back by CMS, the time to act is now. There are many good resources available on the web to assist with researching MIR requirements and solutions. The CMS Web site offers a wealth of relevant information about MIR. New items are routinely posted. So frequent visits to the site are highly recommended.
May 4, 2009
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