Military systems in the pink

GCN Agency Award | Claims processing system for military health care streamlines payments, encouraging participation

Project at a glance

WHO: Defense Executive Information
Decision Support.

MISSION: Improve claims processing and record keeping for TRICARE's purchased-care system

WHAT WAS: HCSR: slow, cumbersome, manual, and lacking analytical tools

WHAT IS: TRICARE Encounter Data (TED) Project, an online, automated, fast, with extensive analysis tools

USERS: 2,500 users with Executive Information Decision Support (EIDS); 9.2 million TRICARE beneficiaries

IMPACT: Faster claims processing, more health care providers, better health care, simpler oversight, $20 million saved annually in incorrect claims

COST: $15 million annually.

'This automated, prompt processing encourages more health providers to accept and treat TRICARE beneficiaries,' says program manager Lt. Col. Robert Aarhus

Rick Steele

The tricare encounter data project team: From left, Peter O'Neal, Steve Lewkovich, Jeffrey Lopata, Clarence Williams, Lt. Col. Robert Aarhaus and Kevin Donohue

Rick Steele

When you're sick, you go to the doctor. When you get hurt, you visit the emergency room. But when your medical plan is on the gurney? Systems engineers and planners can help.

The TRICARE Encounter Data project'part of the Executive Information Decision Support (EIDS) program office'has been instrumental in getting the once-ailing Military Health System (MHS) back on its feet.

The TED application uses a solid hardware, OS and database foundation and health care industry-standard records to enable quality health care for millions of beneficiaries worldwide.

TRICARE is the $37 billion health plan for the Defense Department, responsible for the medical needs of more than 9 million military personnel, veterans and their families. TRICARE has its own direct-care network, but also relies on a global network of civilian health professionals, hospitals, pharmacies and suppliers (referred to as 'purchased care').

Revolutionary system

Unfortunately, in the 1990s, these purchased-care providers were deserting the system in droves. Claims processing based on the old Healthcare Service Record was a cumbersome, paper-based, manual procedure that could take weeks to validate a claim'and longer to pay it.

TED records processing was congressionally mandated by the National Defense Authorization Act (NDAA), and came online in 2003, revolutionizing the TRICARE system. 'We built TED on an industry-leading platform,' said Lt. Col. Robert Aarhus, EIDS program manager.

The platform includes IBM hardware servers, AIX operating system and DB2 database. The system also uses COTS data connectivity, analysis and reporting software, such as Power Center from Informatica Corp. of Redwood City, Calif., BusinessObject from Business Object Inc. of San Jose, Calif., and Connect Direct from Sterling Commerce of Herndon, Va. Many of these components rank high in analysts' opinions, suggesting that the chosen technology will continue to prove itself for years to come.

A keystone of the system is its compliance with security and privacy mandates. Maintaining strict accountability to DOD, Health Insurance Portability and Accountability Act and other directives is essential for such a large system containing information on so many people. Encryption, data transfer safeguards and controlled access to records are all part of the constraints.

Speedy process

The new TED system handles 90 percent of claims within 24 hours, a rate that far exceeds the health industry average of 69 percent of electronic claims processed within seven days. Providers also can track their claims immediately after submission. The system rapidly posts payments and denials, and systematically follows up on unpaid claims. Most reimbursements are paid within 30 days, which permits shorter billing cycles.

'This automated, prompt processing encourages more health providers to accept and treat TRICARE beneficiaries,' Aarhus said.
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Since more providers are willing to accept TRICARE patients, quality health care is becoming more accessible to MHS' 9.2 million beneficiaries worldwide. That translates into a higher level of health overall for the program. This, in turn, makes it easier to maintain good health.

TED handles more than 1 million records a day. An estimated 177 million TED records will be processed in 2006, managing government spending of more than $13.3 billion. The way the system processes records supports sound financial oversight, Aarhus said.

Accurate data

The project team developed an editing protocol that captures all but the most invalid data, while requiring that the contractor correct any mistakes. TED rejects purchased-care claims only for validity errors.

Reduction in duplicate, fraudulent and erroneous purchased-care claims saves an estimated $20 million per year. Accurate and timely data is available to the TRICARE Management Activity Program Integrity (TMA PI) office, which analyzes the data to detect patterns of fraudulent or abusive billing by commercial health providers.

In fiscal 2005 alone, judgments and other actions related to fraud and abuse activities totaled $6.6 million identified and returned to MHS.

In addition, TED records feed into the Medical Data Repository (MDR). Analysts can extract volumes of data to data marts to sift for patterns of medical care. 'This helps in making decisions about policies,' and can lead to more effective treatment choices for beneficiaries, Aarhus said.

The TED program office includes about 45 people, responsible for managing hundreds of contractors with companies including ABSI, Lockheed Martin and SAIC.

'TED is a win-win collaboration between government and contractors,' Aarhus said. Together, the project teams in Falls Church, Va., and Aurora, Colo., have instituted a number of improvements that benefit providers and beneficiaries. These include the elimination of complex record formatting, reducing the number of data transactions and allowing multiple providers per record.

A next-generation version of TED is expected to become available in November. Based in Oklahoma City, new parallel-processing servers are expected to increase efficiency by some 40 percent.

A recent presidential mandate directs agencies to share information appropriately with open standards. The TED team is responding with plans to share information securely to providers, which will enable providers to improve the quality of their health care and analyze their own internal business processes.

'Sharing data like this should make providers even more interested in participating in TRICARE,' Aarhus said.

TED provides records and claim processing that is attractive to providers, and important for agency oversight and planning. This provides the foundation for a successful program, and healthy beneficiaries, for years to come.

Edmund X. DeJesus (dejesus@compuserve.com) is a freelance technical writer in Norwood, Mass.

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