Utilizing Community Healthcare Information Network (CHIN) Technology at the Allegheny Health, Education and Research Foundation (AHERF)

Gregory Snow
February 4, 1997

I. EXECUTIVE SUMMARY

II. BACKGROUND INFORMATION

VI. APPENDICES

I. Executive Summary

The major billing and collection problem at AHERF is the lack of accurate patient registration information; including the acquisition of demographic information for verification of insurance benefits. This problem has only become worse with increased volumes due to more outpatient visits as a result of the increasing shift to managed care. Currently AHERF has over 100,000 annual inpatient admissions and over 750,000 outpatient visits. These volumes are significant because AHERF does not verify insurance benefits for over 90% of the outpatient visits, and the corresponding rejection rates for these outpatient visits are approximately 20%. The majority of other problems are due to the large number of interfaces required for intersystem information exchange.

The intention of this proposal is to provide an automated solution to upgrade systems. This upgrade would include the implementation of automated verification of insurance benefits; thus, allowing for the following benefits:

• increased revenue (fewer denials, increased cash collections);
• lower administrative costs (less rebilling, reduction in collection effort, less telephone expense, less personnel, etc.); and
• faster reimbursement (claims sent to the correct payor, cleaner claims, less manual intervention, etc.).

In 1995, AHERF spent $2.5 million in fees paid to collection agencies. A study indicated that AHERF could staff end maintain an equal system for $1.9 to $2.2 million. By automating this process, AHERF expects to realize a reduction in billing rejections of approximately 9% per month. This would result in an annualized savings of $458,537.

The estimated return on investment is approximately three and one-half (3 1/2) months. Furthermore, this installation positions AHERF very well for additional services offered by HDX in the future at no additional cost.

Clearly, AHERF will be able to remedy many of the problems experienced within its Registration and Billing processes, reduce costs and decrease bad debt, with the decision to utilize the HDX CHIN.

II. Background Information

AHERF is a 4,100 bed international, medical teaching facility that employs approximately 24,000 employees with $2.4 billion in annual net revenues. AHERF specializes in cardiology related services but also provides all services typical of a tertiary care facility. Recently, AHERF expanded its market presence within Pennsylvania by acquiring free-standing, ambulatory service centers and affiliating/merging with numerous acute care community hospitals. In addition, AHERF facilitates extensive teaching and medical research activities; thus, further complicating an already complex environment.

AHERF made a rapid transition into the managed care market by becoming actively involved in contracting with various managed care companies to provide primary care services to its members within the state. AHERF prides itself on providing leading edge services utilizing state of the art technology (e.g., CHINs),setting the pace for other healthcare providers throughout the region.

In 1990, AHERF installed the SMS Signature (professional billing) System and in 1993, the HBOC Medipac V2.0 (hospital billing) System to process the billing and collection of all hospital and physician charges on an on-line basis. As other hospitals have been acquired, numerous other billing systems existed at these hospitals. Prior to this installation, AHERF billed the patient who then forwarded this bill to their insurance and the patient was then, in turn, responsible for the remittance to AHERF. As can be expected, this proved to be an inefficient method of reimbursement (see Appendix A). In the early 1990's, this entire process changed. AHERF began accepting assignment of payments from Medicare. Secondly, AHERF converted the professional fee billing system to SMS's Signature System with the HBOC System maintaining hospital charges. Although this solution provided significant enhancements to the AHERF billing system, it too had complications. These complications were compounded by the transition to managed care and primary care services as well as increases experienced in outpatient volumes throughout the industry as a whole.

Similarly, as AHERF has continued to grow, so has the need to build the technological infrastructure to support operations. Further, the healthcare industry as a whole is undergoing rapid change in its transition from a fee-for-service to managed care based environment and, as a result, the industry has experienced changing informational needs regarding access and quality of data. AHERF has recognized these needs and has responded by investigating the feasibility and cost of becoming part of a CHIN. This initiative is but one part of an enterprise-wide solution providing commonality between all AHERF partners. AHERF has further responded to the changing information needs by analyzing its current systems capabilities in relation to the ability to track relevant managed care information: specifically, the ability to process significant volumes of information with a high degree of accuracy. As a result of the subsequent review of that analysis, AHERF has decided to upgrade its existing Billing and Registration System and to do so within the context of preparing for potential integration into a CHIN.

A new breed of value-added network, the "Community Health Information Network" (CHIN), has in two fast years become the focus of just about everyone within, and many beyond, the healthcare information and management systems field. Almost unanimously, players and stakeholders in healthcare recognize the need to streamline information flow, allow access to healthcare information by third parties and cut waste. Diverse interests are asserting their needs in the creation of various CHINs, which result in arrangements that serve many different constituents and functions. CHIN development is in synch with a notable evolutionary phase in communications technology. Many conclude that this technology, combined with the current healthcare formula, is an enabler to progress in healthcare.

From another perspective, one finds hurdles to be cleared in the deployment of CHINs that are more than technological difficulties. They involve redefined roles for those who work in healthcare, political consensus and cooperation, technical standardization, as well as areas like confidentiality and financing. Finally, healthcare market participants will have to look at information as a community resource rather than as a proprietary competitive advantage.

Despite these obstacles, the forces driving the creation of CHINs will be difficult withstand. It is only a question of time and opportunity before CHINs will move forward from theory and pilots to widespread practice. The following are some current issues that are driving the move toward CHINs:

• Healthcare administrative costs are as much as 28 percent of all healthcare related costs in the United States This country spends up to $36 billion per year just to process claims;
• Providers and claims processors must complete over 400 different claim forms for more than 2000 payors; and
• It costs between $5 and $8 to process each single hospital or physician claim.

It is hoped that the U.S. healthcare delivery system will be restructured so that these inefficiencies are weeded out by the pressures of competition. This restructuring is a reflection of changes that have occurred and are occurring with the transformation of fee-for-service medicine into other arrangements that include prepayment, contractual relationships and capitation (managed care). These changes have altered provider-purchaser relationships, and the provider organizations themselves. Purchasers, such as HMO's and other insurers, employers, unions and government, want to reduce both direct costs for care and the administrative costs of benefits programs via one-stop shopping. The desired effect is to contract for the entire continuum of care, which includes defined and enforced levels of quality in outpatient, inpatient, home health, extended care, and diagnostic services.

The extension of managed care reimbursement into virtually every area of healthcare has driven the requirements and functionality of CHINs towards managed care transactions: claims processing and verification of eligibility.

Another force is the increasing emphasis on healthcare quality, coupled with a subtle, but pervasive, redefining of what quality means. Historically, Americans have tended to equate high quality with high access. Purchasers of benefits view quality as meaning "low or controlled costs." Thus businesses have begun recasting provider relationships and, in the process, have made quality a healthcare issue.

The industry is also moving from an interventionist and therapeutic clinical model towards a more holistic, wellness model that emphasizes prevention. This works in tandem with goals of managed care (part of which is avoiding duplicate and unnecessary services). The result has been to move CHlNs toward supporting this approach by building networks that are able to collect and store clinical outcomes.

Lastly, and probably the most important factor driving CHIN development, is provider consolidation in the face of market competition. For one thing, market forces favor integrated, full-service provider organizations so many provider corporations are acquiring the service components needed to fill their offerings. Second, as reimbursement pressures cut into operation margins, many of these service components are seeking to be acquired simply to survive. The resulting organizations typically combine a wide mix of service units under a single corporate umbrella, which is linked, in turn, to its market. This industry consolidation has driven the CHIN toward becoming an organizational integration platform.

There are also strategic and financial determinants that make the concept of a CHIN viable for a variety of entities. A CHIN can be utilized in support of diverse applications such as a clinical decision support, patient and provider education, and enhancement and measurement of patient care quality based upon outcomes and other information. This is above and beyond a CHlNs function as a channel for information and administrative support and the potential for CHlNs to save time, effort, and money.

The value of a CHIN to a subscriber or participant is influenced by three factors:

Participants' strategic goal. Urban entities may want to compete more effectively for managed care contracts, while rural healthcare systems may be more interested in telemedicine and distance learning applications that help strengthen bonds with remote physicians and hospitals.

Participant's role. Every stakeholder (provider, payor, patient, supplier, researcher, professional organization, or regulatory agency) has its own role and stake in the healthcare system. CHlNs could alter these roles and their relationships. Not all will benefit from these changes and the internal reorganizations that they trigger. Some effects and benefits will be immediate, near- or long-term, direct or indirect. In the long run, if the entity is sufficiently viable, all participants will find that they somehow benefit and that CHIN applications will allow them to offer new services to clients.

Physical and conceptual location of the CHIN and its subscribers. Geography influences the value of a CHIN in terms of local market conditions as well as its participant's interactions.

Individual CHlNs are organized around different applications and benefits. Healthcare providers on the west coast and in the Midwest are heavily influence by managed care. CHlNs developed in these areas are more likely to emphasize applications that facilitate competing in a managed care environment. CHINs developed in the plains states and mountain area currently face fewer managed care demands but must overcome the problems of distance. These initiatives are more likely to focus on services that reduce the impact of distance on the delivery of care.

Also, the term "participant" may refer to a physical community (such as a city or state), a professional community (pediatric hospitals or a major corporation), a patient community (cancer patients nationwide), or other self-defined groups. Additional differences of value will be perceived within each category. CHIN participants' interest diverge along various lines including:

• Current level of automation
• Effect of CHIN applications on current business procedures
• Impact on the current level of competitive advantage

The extent of each participant's financial commitment and incentive will be driven by these factors and the tangible and intangible benefits expected. indeed, the perceived value is critical factor for any initiative as it determines who gets involved, how they define the project, and, more importantly, how much they are willing to invest and commit.

The forces described thus far have, in effect, bred a variety of models by which CHlNs are financed and owned: public, private, and community-owned. Each reflects the forces driving its origin and who is served.

Publicly owned CHIN. These are two-level systems: 1) at the first level exists a transaction network providing claims, eligibility, and similar managed care transaction support; and, 2) at the second level exists an ability to feed data to a community health information database. Publicly owned and operated CHINs offer a number of advantages. For example, they will reduce community healthcare administration costs by sharing costs across a broad base of constituents and eliminating some vendor middleman profits. Also, they may contribute to improved community health status by fostering a cooperative approach to healthcare. A disadvantage for this type of CHIN will be the potential lack of capital funds to position the CHIN for future development.

Provider-owned CHIN. In this model, a network of affiliated providers, or a single large provider organization, owns the CHIN, which may be operated by the provider organization or by a third party. Participation in the network depends on membership in, or affiliation with, the owner organization.

These implementations have substantial advantages. Since the member/patient population benefits from improved integration or healthcare services and the employer or other payor benefits from reduced premiums, it is clear the benefit extends beyond the owner organization. Nevertheless, these systems are essentially private in concept and operate principally to the advantage of dominant providers. Privately operated CHINs are likely to increase, because the larger, better-integrated provider organizations are more likely to be able to finance, implement, and manage such technology. A potential drawback could be the exclusion of certain entities due to competition between these various entities and the need for standardization.

Vendor-owned CHIN. In this model, a vendor or group of vendors owns the CHIN and provides CHIN services to users for a fee. In this way, the vendor-owned CHIN operates much like a cable TV company, with one key exception: under certain circumstances, the CHIN vendor might sell an equity interest in the CHIN to a leading provider organization. In such a case--the CHIN would operate to the advantage of the share holding provider. In other cases, such as BellSouth's CHIN, Shared Medical System's Health Data Exchange (HDX), and some implementations proposed by Ameritech--the relationship is one of straightforward subscription-for-services with access open to any healthcare provider willing to pay for the use of the system.

This model has a number of advantages:

• the user is relieved of most of the capital financing, development and coordination burden;
• the vendor has a contractual obligation to meet specific service standards; and
• in some agreements, most of the administrative overhead will be assumed by the vendor.

This model combines the best aspects of the publicly sponsored and privately owned models:

• ability, at least in principle, to achieve significant public purposes of administrative costs reductions; and
• services improvement while being workable in a relatively standardized way within a reasonable length of time.

The principle disadvantage of this model is that it is vendor-dependent, thus creating the sorts of risks that are inevitable when relying on market solutions: vendor instability and inability to deliver on commitments, diminished control over costs and design, and "lowest-common-denominator" functionality.

While it is, to say the least, risky to predict the future of an evolving technology supporting a turbulent industry, certain CHIN trends seem fairly clear, at least for the near term.

Persistence of multiple models. Despite the federal government interest and potential increasing involvement in CHIN development, it is likely that we will continue to have a variety of CHIN models as we do with telephone systems and television broadcasts and cable systems.

Network convergence. As more CHINs are implemented, there will be a natural tendency for inter-network links to form, especially as a consequence of a shift to managed competition. Under the currently proposed federal reform formula, large, federally sponsored regional purchasing organizations will be contracting with multiple alliances, potentially creating "information constituencies" that will cross existing provider organization boundaries. Information sharing is likely to be a condition of doing business with these purchasing organizations. Thus, the federal government is likely to indirectly foster growth of regional healthcare information networks.

Link-up with computer-based patient record (CPR). It is inevitable that direct data links will be established between the CPR and the CHIN, since much of the data that the CHIN will carry is also recorded in the patient record. While there is substantial amount of data standardization yet to be achieved, there will eventually be gateways routinely established between the CPR and the CHIN.

Security. Until now, the confidentiality of patient clinical data has been more or less secured by the hospital's physical custody of the patient record. When the data is electronically transmitted outside the hospital, legitimate confidentiality concerns arise. Generally speaking, data security is not a technical issue, since the technology exists to secure the data as much as desired. Rather, it is an administrative political issue that must be resolved on a case-by-case basis, balancing efficient access with confidentiality. The most promising approach at present seems to combine data encryption with biometric access controls.

While most concerns about security are directed at patient record data, there are similar concerns regarding provider and institutional quality data, which are sensitive and subject to legal disclosure proceedings. It will be essential that task groups address the full range of data security issues and the connection between systems transactions and administrative procedures (such as quality review task force meetings).

Involvement of non-health care technology firms. Much of the technology involved in CHIN is not healthcare-specific, such as data communications, relational database management, transaction switching and so on. (The model for CHIN is not healthcare campus network, but regional and national automatic teller machine systems.)

III. Existing Business Processes

As previously stated, the major billing and collection problem at AHERF is the lack of accurate patient registration information and the acquisition of their demographic information, including verification of insurance benefits (see Appendix B related to the current process). This problem has only become worse with increased volumes due to more outpatient visits as a result of the increasing shift to managed care. Currently, AHERF has over 100,000 annual inpatient admissions and over 750,000 outpatient visits. These volumes are significant because AHERF does not verify insurance benefits for over 90% of the outpatient visits and the corresponding rejection rates for these outpatient visits are approximately 20%. The majority of other problems are due to the large number of interfaces required for inter-system information exchange. For example, updating insurance information in the registration system after the initial hospital billing will not automatically result in a rebill that reflects the updated information being submitted to an insurance carrier. Rather, a billable charge will pend in an inactive status until someone manually requests a rebill. In addition to the problem of the flow of information through the interfaces, there is an issue of supporting these interfaces internally. Each time state and federal regulators require additional data for reporting, AHERF has to add that data field to each part of the flow diagram. Within this scenario, AHERF essentially bears the entire cost of adding system capabilities and loses the economies of scale, which is held by a large vendor.

The intention of this proposal is to provide an automated solution to upgrade systems including the functionality of automated verification of insurance benefits, thus allowing for the following benefits:

• increased revenue (fewer denials, increased cash collections);
• lower administrative costs (less rebilling, reduction in collection effort, less telephone expense, less personnel, etc.); and
• faster reimbursement (claims sent to the correct payor, cleaner claims, less manual intervention, etc.).

Additionally, the solution will provide for the following:

• less clerical effort;
• timely verification of insurance benefits;
• more accurate information;
• more complete insurance information;
• reduce risk with managed care companies;
• reduce risk related to expired insurance coverage; and
• more complete insurance coverage information.

Patients will unknowingly benefit from the solution because many patients do not realize that their benefit plans require pre-authorization. Others are unaware that they are required to use a particular provider or a particular network of providers, that their coverage has expired, or they are eligible for coverage under another insurance plan. Uncovering additional insurance coverage for patients can reduce their payments. AHERF will also benefit indirectly from these improvements in service to their patients.

Various options and opportunities exist to resolve issues related to the insurance verification process. Some of these options are as follows:

• Manual process - this would result in adding numerous FTE's (Full Time Equivalents) at a substantial cost and increase the potential for error;
• Individual devices and separate connections with each payor in a centralized environment - less expensive than the manual process, but still labor-intensive and non-integrated;
• Individual devices and separate connections with each payor in a decentralized environment - least desirable and most expensive option;
• Stand-alone non-integrated solution - more economical but relies on manual transfer of data;
• Total integrated solution - "Nirvana" - least expensive, no manual intervention, will result in a reduction of FTE's.

Given these opportunities, there are three systems that AHERF is currently in the process of purchasing or negotiating for purchase. The first is SMS Invision, a replacement of the current hospital billing package. The second system is Patient Management, or PM, which would replace the current Admissions, Discharge and Transfer (ADTR) system. The final product would be a reinstallation of the Physician Billing System, effectively to enhance SMS. Each of these products has other potential add-on modules as well as future programs still in development.

AHERF has entered into a purchase agreement with SMS for Invision. This system greatly expands upon current functionality, not the least of which is the creation of receivables workstations. This system sets up specific files for collection and accounts receivable ("A/R") follow-up. Each file can be arranged according to any number of categories: such as, a primary insurance plan, secondary insurance plan, guarantor, etc. Building on the receivables workstations would enable AHERF to establish an effective in-house collection department. In 1995, AHERF spent $2.5 million in fees paid to collection agencies. A study indicated that AHERF could staff and maintain an equal system for $1.9 to $2.2 million. A problem with outsourcing (the current collections solution) is that it relies heavily on "dunning" notices to indicate to the patient that their insurance is not paying or did not pay the full amount. After a specified length of time, the account automatically ages into a "bad debt" category from which it is placed with a collection agency. What is missing in many cases is an effort to ensure that the balance and billing information are indeed correct. The receivable workstations would enable management to assign specific accounts to staff members to facilitate follow-up both before and after an account is placed in collections.

Furthermore, one-on-one interviews were conducted to get personal opinions and perspectives about the proposed system. Four groups were identified who would be directly affected by the system's design features:

• Admitting and Registration;
• Information Systems;
• Patient Accounting; and
• Patients.

The interviews produced a solid understanding for AHERF's existing business processes and how the system needed to function in order to automate part of this methodology. To further analyze these observations and experience, a set of flow diagrams were developed to capture the current business process of the system at AHERF (see Appendix B). In order to verify the analysis, we reviewed the flow diagrams with the appropriate parties using these diagrams as an interview tool. Corrections were made to the diagram to reflect the additional information provided by these various parties.

After performing a "Comparative Analysis" of various alternatives (see Appendix C) and a "Cost/Benefit Analysis" (see Appendix D) it became apparent that the most important selection criteria was Invision's capability to integrate with the Health Data Exchange or HDX system (see Section IV for more information), a privately-owned CHIN, that would allow for an automated insurance verification solution.

There are also strategic and financial determinants that make the concept of a CHIN viable for a variety of entities. A CHIN can be utilized to support a range of applications, such as clinical decision support, patient and provider education, and measurement of patient care quality based on outcomes and other information. These additional functionalities go above and beyond a CHIN's role as channel for information exchange, administrative support tool, and time/money/effort saver. The value of a CHIN to a subscriber or participant is influenced by three factors:

• Participant's strategic goals. Urban entities may want to compete more effectively for managed care contracts, while rural healthcare systems may be more interested in telemedicine and distance learning applications that help strengthen bonds with remote physicians and hospitals.
• Participant's role. Every stakeholder--provider, payor, patient, supplier, researcher, professional organization or regulatory agency--has its own role and stake in the healthcare system. CHINs could alter these roles and their relationships. Not all will benefit from these changes and the internal reorganizations that they trigger. Some effects and benefits will be immediate, near- or long-term, direct or indirect. In the long run, if the entity is sufficiently viable, all participants will find that they somehow benefit and that CHIN applications will allow them to offer new services to clients.
• Physical and conceptual location of the CHIN and its subscribers. Geography influences the value of a CHIN in terms of local market conditions as well as participant's interactions.

With the above information as background, the "Cost Benefit Analysis" (see Appendix D) clearly demonstrates an annualized savings from this project of $458,537 with a one-time start-up cost of $129,000.

IV. Health Data Exchange

Under the direction of its parent company, Shared Medical Systems Corporation (SMS), HDX was developed as a privately-owned CHIN to provide electronic data interchange services to and between payors, hospital providers, physician group practices, employers, and users of clinical assessment data. Providers may access the HDX database through a Gateway installed on a dedicated PC or a dedicated PC that resides on a shared LAN. Provider inquiries regarding a patient's eligibility for a specific insurance coverage are sent via a Value Added Network (VAN) through multiple routes to HDX's central database located at SMS's headquarters in Malvern, Pennsylvania. That central database selects information, sends it to an electronic mailbox where the requested information, confirming or denying a patient's eligibility for that insurance, is returned to the provider via electronic signal in eleven (11) to twenty (20) seconds. AHERF has constructed an interface facilitating full systems integration. This means that querying of the HDX database occurs in conjunction with patient registration; therefore, patient information is fed directly into AHERF's mainframe system.

In addition to the Eligibility Service outlined above, the following services are available to AHERF as a result of its integration with the HDX CHIN:

• Financial Settlement Service - The Financial Settlement Service includes the transmission among providers and payors of claims, claims status, remittance, explanation of benefits information as well as electronic transfer of funds. As a byproduct of the use of this service, a longitudinal financial record is created. This financial record can support the settlement of a case when more than one payor is involved.
• Enrollment Service - The Enrollment Service is for employers and other benefit plan sponsors to communicate changes in benefit plan coverage to payors, utilization review firms, plan administrators, and other organizations. This service is designed to be linked to the employer's payroll, benefit tracking, and/or human resource systems.
• Coordination of Benefits (COB) Service - The COB Service is for communication to payors and employers of COB information uncovered as a result of eligibility inquiries and other transactions that updated HDX's main patient database. When a provider's eligibility inquiry identifies two or more payors as potentially being at risk financially, the COB Service communicates information from the main patient database to the payors involved.
• Care Support Service - The Care Support Service is for payors to communicate patient-specific information to providers at the time patient care is to be provided. Among the information that can be communicated are details of benefit plan coverage, co-payment requirements, the status of deductibles, managed care rules, and clinical guidelines.
• Care Authorization Service - This Service is for providers to use in obtaining treatment authorizations. As a by-product of the use of this service, the history and status of the authorization for a case are created for reference by the parties who are directly involved (e.g. the physician and the utilization review organization).
• Care Coordination Service - The Care Coordination Service is for the communication among providers of information concerning care - referrals, test orders, results, etc.

Although AHERF currently utilizes only the Eligibility Service, efforts are now underway to develop the necessary connectivity to gain access to these additional services.

Although numerous benefits may be derived from the timely and accurate verification of benefits information, the greatest advantage of verification at the point of registration is the reduction of post billing rejections and its positive impact on cash flow. A sampling of AHERF's Medical Assistance rejections indicates substantial rejections due to eligibility verification as evidenced in the following:

By automating this process, in the manner previously outlined, AHERF expects to realize a reduction in billing rejections of approximately 9% per month. This will result in an annualized savings of $458,537. Further, by integrating the HDX query as a part of the registration process, clarification of eligibility issues may be done while the patient is still readily available to offer additional information.

The following is a matrix of current practices, expected results once HDX is operational, and the potential "best case" results:

To further enhance the viability of this project, the following should be noted:

• as shown in the above "Billing Process" matrix, once HDX is fully operational, AHERF will be able to reduce the cost to bill a "claim" by 49%;
• no structural changes to the current system will be required (see Appendix E); and
• there are no compatibility issues with existing hardware and software versions.

There are potential "drawbacks" to the use of HDX, but they are few. The following are some of the potential "drawbacks" related to this project:

• HDX provides electronic verification of insurance benefits for approximately 25% of the insurance companies at this time. We expect this percentage to increase to approximately 70% within the next twelve (12) months. However, 90% of all payments come from these 25% of the insurance companies.
• Some resistance can be expected from certain areas due to the following:
  - other priorities;
  - shortage of personnel;
  - time constraints; and
  - dilution of resources.
  

However, due to the vast potential gains from this project, these are management issues and are minor in scope, and will be resolved by Senior Management.

V. Summary/Recommendations

It is the recommendation of this study to proceed with the installation of a privately-owned CHIN (HDX) as soon as possible. The conservative annualized savings for this enhancement is $458,537 with one-time start-up costs of $129,000. The estimated return on investment is approximately 3 1/2 months. Furthermore, this installation positions AHERF very well for additional services offered by HDX (Section IV.B) in the future at no additional cost.

Clearly, AHERF will be able to remedy many of the problems experienced within its registration and billing processes, reduce costs and decrease bad debt with the decision to utilize the SMS array of products, specifically its integration with the HDX CHIN.

Appendix C

Appendix D

* One time fees                         Monthly value of MA Number Search*
   Hardware                  $42,000    70,658    Encounters OP/ER
   Third Party Software      $18,000     7,066    10% Self-pay
   Professional Services     $69,000       212    3%  MA find (Cnsrvtv)
                            $129,000   $18,018    at $85 avg claim

Appendix F

Hardware/Software/System Architecture

II. Software (Cost = $18,000)

The purpose and scope is to create an integration subsystem. The software will run on a Multiple Virtual System (MVS) platform that enables Customer Information Control System (CICS) based hospital information systems or practice management systems to generate on-line, integrated, and interactive eligibility and benefits verification inquiries and responses to and from the HDX network. The software design will be modular and this will allow the software to be migrated to other platforms, which would utilize other database structures, user interfaces, operating systems, and interface engines/communication facilities. The software is written in COBOL II, CICS Command Level, and VSAM for the file structures. At a minimum, MVS Version 3 and CICS Version 2 are required to support the software. AHERF is in full compliance with these requirements. The following software components are packaged as a single set of deliverables:

• COBOL Source Code and Load Modules;
• BMS Maps (screens);
• JCL and Procedures for the Batch Jobs;
• CICS System Entries;
• file definitions for the system's VSAM files;
• system and program documentation; and
• User Guide for the Demand Function.

The structure of HDX is modular in design and implementation. The system will be available both as standalone and as an integrated component of AHERF's Healthcare Information Systems (HIS) and will operate with an MVS/CICS system communicating to the HDX Gateway through COVIA's Communication Integrator product (CI). The standalone version shall include specific CICS screens written using Basic Mapping Services (BMS) maps. The integrated version uses the same entry and exit points, but instead of being invoked via the Demand Menu, it is called from the customer's normal workflow process.

The following diagram represents the conceptual framework of utilizing the HDX CHIN. Simply, the entities involved are the patient, AHERF and HDX. The interactions flow like this:

• the patient presents to an AHERF affiliate - represented by the exploded network of AHERF providers;
• through the registration process, AHERF collects the patient's insurance and demographic information;
• verification of that information occurs when AHERF queries the HDX database - the payers sponsored by HDX are represented by the exploded network shown to the right;
• HDX returns the results of the query (the patient's insurance information, if any) to AHERF; and
• Finally, the AHERF affiliates process transactions directly with the HDX network of payers.

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