By next summer, a new system of
billing, patient identification and insurance eligibility could be in place at
the Cayman Islands Hospital.
The Cayman Islands Health Services
Authority and the national insurance company CINICO are inviting vendors to
submit proposals to build an electronic system for a real-time claims
adjudication and eligibility verification system, to be implemented by 1 July,
Chief Executive Officer of the
Health Services Authority Lizzette Yearwood explained the new system.
“It will be like taking a credit
card to buy something. You will swipe that credit card and it will pull up
exactly what the [insurance] plan is all about, what you have left, what the
patient has to pay for that procedure,” she said.
“That will be the answer for the
insurance industry, as well as the health care provider and, more so, for the
patient,” she said at a meeting hosted by neurosurgeons for medical professionals
and insurance companies last week.
“There are cracks in the system,”
said Ms Yearwood. “I think we have to work as a community to address them. It’s
not the ministry [of health’s] problem, it’s not an insurance problem – this is
a collective issue and I think it’s time we look at investing in a system
because we have the technology out there.”
Vendors have until 6 November to
submit proposals for a system that will administer claims processed between the
government and CINICO, which covers civil servants and indigent members of the
population. According to the request for proposals, the government envisions
eventually expanding the scope of the project to include all health providers
and commercial insurance companies that deal with the hospital and CINICO.
According to the document, the new
system, known as Real Time Claims Adjudication and Eligibility Verification System,
or collectively as RTA/EVS, should provide real-time access to members’
eligibility information; 24-hour access to accurate data, including coverage
restrictions; real-time eligibility verification and claims adjudication; collection
of patient data to better track health records; removing the current “onerous”
manual process; and be able to process about 1.5 million claims and 6,000
pre-authorisation requests monthly.
Delays and inefficiencies
The winning contract will be
approved on 15 December, according to the schedule outlined in the request for
proposal, which was issued on 5 October.
Between 26 per cent and 34 per cent
of current health-care administrative overheads are spent on claims processing,
according to the document. “A large portion of this inefficiency is due to
incorrect patient identification and eligibility checking that leads to the
cumbersome and costly process of managing bad debts and the rework associated
with denied claims,” the document stated.
Long delays in payment are due to
the failure of the eligibility checking process and the time required to
adjudicate claims, it stated.
The existing system has left
patients, hospitals, clinics and doctors’ disgruntled.
“In many situations, patients are
surprised with bills that are much higher than expected and they are unprepared
to pay. The patients’ dissatisfaction with the claims and billing processes
taints the entire health-care experience, regardless of the quality of service
provided by the clinical staff,” the document stated.
It added that clinics and hospitals
were dissatisfied because the system “makes the financial management of the
business very difficult; it alienates patients and it has ripple effect on the
morale of physicians, nurses, and other staff, who regardless of the patient
care they provide, become blamed victims of the flawed claims processing
Insurance companies burdened
The system has also left the
insurance companies unhappy because of the “high administrative overhead
burden” it entails. “The current system creates similar inefficiencies in their
organisations and challenges to their internal financial management,” according
to the document.
Employers also do not like the
current system because of the high costs of health care in general and the
financial overheads of the “inefficient claims processing system that they
ultimately pay”, and because employee morale suffers due to problems with
patient identification, eligibility verification and claims processing system.
The Health Services Authority and
CINICO also plan to move from the current fee for service model toward a
bundled pricing system, known as global pricing and diagnosis related grouping
The health authority made its first
profit of $2.3 million in the last financial year, but is trying to recoup
about $40 million in outstanding debts from patients who have not paid for
treatment they received over the past decade.
Among the issues the HSA and CINICO
want the new system to address is medical identity fraud. “There is a growing
need to positively identify patients to reduce the incidents in with patients’
identities are being stolen or willingly shared for the purposes of
fraudulently obtaining health-care treatment at the expense of employers,
government and insurance companies,” the request for proposals document read.
Technology such as biometrics,
magnetic swipe cards and proximity cards will help to identify patients and
their insurance eligibility would be verified when they register at the
hospital or clinic and again upon arrival for service each time. The system
would also identify doctors and facilities with relevant credentials to carry