Driving Efficiencies in Auto Insurance Health Care

It is 2048. Joe Average suffers a minor leg injury in a collision with another vehicle. Joe Average goes to his neighbourhood medical clinic, ‘QuickCare.’ The health care provider assigned to Average’s case examines Joe and goes over a medical treatment plan with him. Joe gives the rehab treatment plan his blessing.

The health care provider’s administrative assistant plugs the information for Joe’s health care insurance claim into the Ontario Health Claims for Auto Insurance (HCAI) online, Web-based system, first established 40 years ago in 2008. The health care provider hops onto the HCAI Web site, provides the appropriate security passwords, and then outlines the treatment plan and how much it will cost on an HCAI page. He then finds the insurer’s name under the drop-down menu, and hits the ‘send’ button.

On the insurer’s end, the claims adjuster sits down at her computer the next morning, opens her HCAI file, and sees the QuickCare submission has been assigned to her. She sees how much time she has to respond and sets about the task of making a decision on the claim. She checks the latest anonymized data supplied by HCAI on the treatment method. She finds both the treatment and its costs are ranked among the list of most effective and inexpensive treatment options.

After making further inquiries and checks, the adjuster is ready to give approval to the plan. But she isn’t sure if the additional therapy session proposed is worth it. She decides to reject that part of the treatment plan, but accept the rest. She sits at her computer, opens the HCAI file, and hits the ‘partial approval’ option. A pop-up box emerges that allows her to explain her reasons for rejecting the additional therapy session proposed in the billing. She hits the ‘send’ button, and Joe Average knows he is insured for at least the bulk of his treatment plan and is well on the way to a quick recovery….

No lost faxes, no sitting by the mailroom for registered documents, no trail of voice mail messages asking whether the treatment process had been approved. “How was this ever done before the age of HCAI?” Joe Average wondered to himself, as he went to his first physio session within days of the accident.

The scene of a futuristic George Lucas movie? Perhaps. But where HCAI is concerned, the future is now, according to the Insurance Bureau of Canada (IBC), health care providers and the Financial Services Commission of Ontario.

As of Feb. 1, 2008, all of Ontario’s 180 insurers licensed to sell auto insurance in Canada will be required to enroll with HCAI, a new electronic system for the collection of high-quality auto insurance health claims data.

HCAI Processing is the new, not-for-profit corporation designated by FSCO to oversee operations of the HCAI system. Membership in HCAI Processing will be optional for all Ontario insurers up until the Feb. 1, 2008 implementation date, at which time HCAI membership will be mandatory.

Insurers have spent up to Cdn$20 million to design the new system, which represents a significant upgrade over the standardized, paper-based, medical-rehab insurance system implemented in 2001.

“New impetus was given to the [HCAI] idea when the Honourable George Adams was commissioned by FSCO to assist in helping to negotiate fee agreements back in 2000,” Mark Yakabuski, IBC vice president, federal affairs and Ontario, said at a press conference. “And one of the things that [Adams] noted in each one of his reports was the absolute absence of reliable data on med-rehab expenditures in the auto insurance system. He frankly termed it a ‘disgrace’ that the government had to address.”

Adams’ report led FSCO to engage the Canadian Institute for Health Information to do a supplementary report in early 2001. The report led to the introduction in November 2001 of the first paper-based, standard invoice system for med-rehab expenditures in the auto insurance system. “IBC’s design all along, when we submitted our final draft of what a standard invoice should look like was that this platform should ultimately become electronic,” Yakabuski said. “That’s where the real efficiencies, the real savings, the real value was to be created…”

IBC estimates Cdn$1 billion is spent each year on medical/rehab goods and services. And the costs within the system, currently unmonitored, are rising faster than those of the public health care system, it adds. Currently, there is no database of information on health costs related to auto collision injuries, and no way to monitor whether or not the patients are getting better, particular treatments are better than others, or how long the patients are being treated. The result is that insurers have no way of assessing how much the medical/rehabilitation aspect of a claim will cost them.

IBC is touting HCAI as an answer to the “archaic and inefficient,” paper-based claims environment.

“I want to say that when we have achieved [the establishment of HCAI], we will have the presence, bar none, of the best automobile insurance medical rehabilitation database in the world right here in Ontario,” Yakabuski said. “It will be a database that will be accessible to government, to regulators, to health care provider associations, to insurers, of course, to researchers and parties that make requests [for information].

“It will allow for the superior management of very significant resources in the auto insurance and health care fields. Not only will it facilitate the collection of reliable data, which has not been present to date, it will provide economies for insurers and health care providers. It will allow for the much more effective, ready approval of auto insurance forms. And this will be of tremendous benefit to customers and claimants in the auto insurance system.”

SO HOW DOES HCAI WORK?

First of all, after meeting with a client who suffers an auto-related injury, health care providers working within the HCAI framework will submit the following forms to insurers via HCAI:

* Treatment Plan (OCF-18);

* Application for Approval of an Assessment of Examination (OCF-22);

* Pre-approved Framework Treatment Confirmation (OCF-23); and

* Standard Invoice (OCF-21).

When the insurer becomes aware that a health care provider is likely going to submit an OCF-18, 21, 22, or 23 in connection with an auto collision, it will be required by law in 2008 to create a new claim in HCAI and provide specific information about the collision and any potential claimants. The information will be used by HCAI to positively match the information on forms submitted by health care providers.

For forms submitted electronically through HCAI by a health care provider, an online approval decision satisfies the claims adjuster’s obligation to respond (the system will automatically generate an electronic OCF-9, if required).

Starting in February 2008, it will be prohibited for insurers to pay health care providers who do not submit an OCF-21 invoice to the insurer via the HCAI system. FSCO’s HCAI Rollout Guidelines list medical/rehabilitation goods and services that should not be billed through HCAI (including prescription eyewear, dentures, or vocational and academic training).

A few months prior to Feb. 1, 2008, the full implementation date for HCAI, paper forms can be submitted to insurers through a Data Entry Centre (DEC), which will transcribe the paper forms into an electronic format. Initially, the cost of this service will be borne entirely by insurers based on a transactional basis. Over two to three years, however, the costs for the DEC service will be transferred over to the health care providers who continue to submit paper forms.

As of Apr. 23, 2007, three insurers were either using or scheduled to be using the HCAI system. The Gore Mutual Insurance Company and State Farm Insurance were signed up as of Apr. 2. At press time, Security National was due to start using the system as of Apr. 23.

F
or insurers, a key feature of the HCAI system is the opportunity it will provide for insurers, health care providers, regulators and government to assess anonymized data about the health care claims being submitted.

“Providers will be able to track their own cost of treatment, the number of treatments that were given on conditions and the number of assessments,” said Barb Sulzenko-Laurie, the director of IBC’s health issues program. “They will be able to compare their own performance against averages for similar types of conditions. There’s a great boon at the individual provider level in terms of trying to improve the quality of care they are providing.

“At the insurer level, insurers will also be able to look at the data in the system and compare their own performances against industry averages, identify problem areas within their own operations, and find solutions for those problem areas. At the system level, the new database will allow for the monitoring of the med-rehab trends and the early identification of problems.”

Particularly for insurers, “the database will help establish what our real costs are,” said Yakabuski. They will also help insurers assess the value of certain prescribed medical treatments in the system “What procedures work?” Yakabuski said. “What procedures don’t?”

The system will also make it easier for insurers to identify fraud patterns within the system, said Sulzenko-Laurie. “For any insurance system, there is always an element of fraud,” she said. “The data that is being collected through the system will allow for the identification of fraudulent types of behaviours within the med-rehab sector – things like inappropriate referrals, excessive treatment, excessive requests for assessment, and so on.”

The system has been designed with privacy protection in mind. “From the outset, we have been very concerned about and have developed the system for the protection of people’s privacy,” Sulzenko-Laurie said. “The system has been designed to ensure absolute protection of the individual’s personal health information. All personal information will be encrypted. Insurers and health care providers will only have access to [data] of their own patients, their own claimants. The analysis database, which will be available to IBC, to insurers, to provider associations and to FSCO, will not have any personal identifiers in this database.”

The HCAI system is Web-based, so as long as a company has access to the Internet, it will be able to link to the system. Insurers will have a choice as to their level of integration into the HCAI system. For example, claim or claimant information can be input manually via a Web interface (the most basic form of integration), or, at an increasing level of complexity, insurers can build a regular feed from their own systems to HCAI. IBC is recommending that an insurance company establish an internal HCAI project management team, which would help determine how integrated with the HCAI system the insurer would need to be.

“Whenever we’re working with insurers, the first thing that we ask of them is to identify someone that we call an HCAI coordinator,” Mike Smith, IBC manager of indsustry initiatives, advised at the press conference. “This is the point person within the organization who is really going to be the internal champion and liaison between the business claims and the IT sides. He or she will be the key contact for us when it comes to helping that organization to prepare for the rollout.” That person needs to be able to make decision or be part of the group that makes decisions for the insurers regarding the HCAI system, Smith said. “This person has tended to be the claims manager, but that’s not in all cases.”

Once that person has been identified, he or she will need to do initial research on what HCAI is, and consider establishing a project team. The HCAI structure they set up will be based on the complexity of their operation. “If, for example, insurers want to fully integrate into HCAI, they should have a project manager, a business analyst from their IT department that understands their infrastructure, someone who understands their claims system, [and] an internal training resource [in addition to] their HCAI coordinator…,” Smith said.

IBC has a guide for the lead-times required to enroll in HCAI. Generally documentation for enrollment in HCAI should be completed about two weeks prior to the month the insurer elects to start using the system. Smith recommended insurers give themselves about eight weeks of lead-time to prepare the enrollment documentation.

“Obviously, larger, more complex organizations doing full integration with HCAI will take longer,” Smith observed. “They will need to make sure they have the internal resources.”