Presentation of Ingenix Consulting capabilities at Ingenix Essentials Conference

1. Preparing for ICD-10
12/2/2009

2. Facts
• ICD-9 Diagnosis Codes • ICD-10 Diagnosis Codes
> 13,000 diagnosis codes > 68,000 diagnosis codes
> Uses 3- to 5-digit codes > Uses 3- to 7-digit codes
> Chapters 1-17 are numeric > Digit 1 is alpha (A-Z, not
• Supplemental chapters case sensitive)
use an alpha first digit (E > Digits 2 and 3 are numeric
or V)
> Digits 4-7 are alpha or
numeric
© Ingenix, Inc. 2

3. Facts
• ICD-9 Procedure Codes • ICD-10 PCS Codes
> 11,000 procedure codes > 87,000 procedure codes
> Uses 3- to 4-digit codes > Uses 7-digit codes
> All four digits are numeric > Any of the digits can be
alpha or numeric
© Ingenix, Inc. 3

4. ICD-10 Challenges for Hospitals
• Increase in reporting requirements
• Update older technology systems
• Evaluate new value-based purchasing initiatives
• Increase budgets for investment in EHR applications
• Incorporate computer-assisted coding in documentation
process
• Improve clinical documentation to support higher level of
specificity
• Provide incentives for coders to stay and learn new
coding system
• Prepare for loss in productivity due to coding backlogs
• Train clinical and non-clinical staff
• Prepare for reduced cash flow due to provider and payer
processing errors
© Ingenix, Inc. 4

5. ICD-10 Challenges for Hospitals
• Do it yourself or outsource?
> Do you have the:
• Staffing resources to prepare and maintain
productivity?
• Expertise to conduct needs and gap analyses?
• Expertise for implementation and training?
• Budget to cover one-time costs vs. recurring
costs?
• One-time: training, system modifications, etc.
• Recurring: employee salaries
© Ingenix, Inc. 5

6. ICD-10 Challenges for Hospitals
• Evaluate Vendors
> Work with your vendors to determine if system
modifications or upgrades are available
> Ask vendors:
• What is the status of their solutions for becoming
ICD-10 or 5010 compliant?
• Have their systems been tested?
• Will their systems accept the ICD-10 code set in
10/2013?
• Have their systems 5010 transmissions been tested
for compliance?
• What is the availability schedule for compliant
solutions?
• What is the upgrade schedule for solutions that will
not be ready by the implementation data?
© Ingenix, Inc. 6

7. Accelerated Vendor Section
Selecting a vendor, product or tool – what could be easier right? I know my requirements so
let’s just bring in a few vendors for a demonstration – what could go wrong….
We offer a highly customizable and accelerated vendor selection methodology that will help
you select the right solution for your business model and unique needs
© Ingenix, Inc. 7

8. ICD-10 Challenges for Hospitals
• Budgeting
> RAND Corporation and Robert E. Nolan Company
attempted to quantify industry costs resulting from the
adoption of ICD-10
> Figures vary widely:
• $6B - $14B (Robert E. Nolan Company)
• $1.15B (RAND Corporation)
> MGMA estimated the average 10-physician practice
group would spend $285,000 to transition to ICD-10
> Figures not too helpful for organization to use to set
budgets; HHS provides framework that organizations
can use to estimate one-time and on-going costs
© Ingenix, Inc. 8

9. ICD-10 Challenges for Physicians
• Replace or update existing practice management billing
system software
• Train clinical and administrative staff on new code sets
and changes to technology
• Modify current practice work flow
• Review, amend or replace vendor, clearinghouse and
health plan contracts and data requirements
• Update superbills and corresponding mapping strategies
• Improve quality and accuracy of clinical documentation
practices
• Revise or replace billing forms
© Ingenix, Inc. 9

10. Start Preparations Now
• Most far-reaching change in U.S. health care to
date
• Impacts reimbursement, marketing and
research
• Assess strengths, weaknesses and limitations
sooner rather than later
© Ingenix, Inc. 10

11. Hospital and Physician Solutions
12/2/2009

12. Understanding the Industry Forces &
Trends in the Provider Market
We have an extensive understanding of the market forces and trends and the
resulting business challenges and opportunities facing hospitals, health
systems and physician groups.
– Payment models changing through consumerism
and the move to severity adjusted reimbursement
– Patient safety
– Measuring and improving quality
– National attention and competitive pressures to
implement EMR capabilities
– Emerging care models to reduce cost
– Election year and looming policy reform
– Staffing shortages
– Census drivers
– Aging population and more chronic care
– Modernization and interoperability
© Ingenix, Inc. 12

13. Delivering Solutions for These Business Challenges
Our consulting solutions can help you improve patient safety and
health quality outcomes, find operational cost efficiencies, ensure
equitable payment for services and comply with regulatory
guidelines.
– Strategic Planning
– IT Strategy, System Implementation &
Information
Optimization Mgmt.
– Enterprise Information Management & Data Operations
Mgmt.
Clinical
Mgmt.
Our
Warehousing Clients
Revenue Financial
– Clinical & Consumer Engagement Mgmt.
Strategy &
Mgmt.
Program
– Revenue Cycle Optimization Optimization
– Financial Advisory
– Health Care Reform & Government Regulation
Our interdisciplinary consultant teams bring together market-leading
capabilities to help hospitals, health systems and physician practices
achieve their business objectives.
© Ingenix, Inc. 13

14. Strategic Planning Solutions
Set corporate vision and your organization’s strategic agenda by
evaluating the newest research, understanding the emerging
medical technology trends and learning how hospitals and physician
groups across the country and throughout the world are treating
patients like yours and setting their business strategy and service
line mix. Services include:
– business strategy evaluation and development
– organizational governance
© Ingenix, Inc. 14

15. IT Strategy, System Implementation & Optimization
Solutions
Transform your processes, your systems and your business to
achieve safety and efficiency. Services include:
– IT assessments, strategy and governance
– vendor evaluation and system selection
– clinical system implementation
– process reengineering and system optimization
– system integration
– training and curriculum development
– testing and environments management
© Ingenix, Inc. 15

16. Enterprise Information Mgmt. / Data Warehousing
Solutions
Utilize multi-system hospital data along with industry benchmarks
and payer data to measure and improve financial and clinical
performance. Services include:
– payer / hospital claims analytics
– payer connectivity
– enterprise information management and data warehousing
– data integration and decision support
© Ingenix, Inc. 16

17. Data Warehousing and Information Management
Data is everywhere – but how can you make smart business decisions unless the data is
transformed into useful information which is managed, integrated and available? We can help…
© Ingenix, Inc. 17

18. Clinical & Consumer Engagement Solutions
Leverage information and technology to enhance patient safety,
improve physician relations and adherence to evidence-based
medicine guidelines, engage patients, optimize clinical efficiency and
contract with managed care. Services include:
– evidence-based medicine / pay-for-performance analysis
– physician connectivity and engagement
– consumer connectivity and engagement
– quality assessments and never-event audits
© Ingenix, Inc. 18

19. Revenue Cycle Optimization Solutions
Drive operational cost efficiencies by improving revenue cycle
management, reimbursement and business process redesign.
Services include:
– coding and billing compliance
– ICD-10 transition preparedness
– revenue cycle optimization
– operating performance benchmarking and optimization
© Ingenix, Inc. 19

20. Business Advisory and Actuarial Services
Utilize information effectively to set financial strategy, manage
department and service line profitability, manage operational costs,
increase net revenue realization, define growth opportunities and
comply with regulations. Services include:
– financial strategy
– benchmarking and actuarial modeling
– capacity planning
– managed care contracting strategy development
– debt capacity analysis and financial projections
– enterprise-wide strategic plan and service line plan development
– community-based safety net strategy development and financing options
© Ingenix, Inc. 20

21. Health Care Reform & Government Compliance Solutions
Understand the impact of health care reform on providers and
alternative strategies for dealing with the continued challenge of cost
pressures for publicly-financed and uninsured populations. Services
include:
– financial and economic analysis of regulatory proposals
– government program payment adequacy/shortfall analysis
– recovery audit contractors (RAC) education, mock and shadow audits, appeals
support and analytic reports
© Ingenix, Inc. 21

22. Payer Solutions
12/2/2009

23. Operations Assessment and Optimization
What is it?
• In today’s environment, businesses are more challenged than ever to achieve optimal
quality and efficiency in their administrative operations. Case installation turnaround time is
often lengthy and error‐prone and can lead to missed employer commitments. Eligibility and
enrollment solutions are often inefficient. Claim processing quality issues may increase
turnaround times, manual rework, and operational costs, while lowering quality scores in
the public forum.
• Ingenix Consulting’s Operations Assessment service offerings focus on optimizing payer
administrative operations to drive cost savings, more effectively manage staffing, and allow
for scalability and growth.
• Our methodology is designed to comprehensively identify and define current state people,
process and technology challenges, identify root cause drivers, develop short‐ and long‐term
future state models, and implement solutions that improve the quality, efficiency, and
timeliness of a payer’s business operations.
© Ingenix, Inc. 23

24. Operations Assessment and Optimization
Our Experience and Expertise
© Ingenix, Inc. 24

25. Operations Assessment and Optimization
An Integrated Service Offering Cont’d
•The operations assessment & optimization service offering helps clients reduce operating costs,
prepare for future growth, and ensure proactive compliance with current and future regulations
•This powerful offering can be sold as a standalone to clients or embedded as a “phase II” in numerous
other Ingenix Consulting offerings
HCOT IBS HSO GPO FA IOD
Operations Stepwise Claims payment Medical trend Executive
MA strategy
strategy Medpoint IT accuracy issues analysis dashboard
Scalability, cost/ Underwriting Claims operations Operation strategy Service & claims End‐to‐end
headcount & defects ops issues issues for growth ops issues operating issues
Operations Assessment
INVESTIGATE INNOVATE IMPLEMENT IMPROVE OPERATE
• End‐to‐end or targeted • People, process, and • Detailed delivery • Monitor processes and track • Operations and Ongoing
operations assessment technology short and long‐ requirements metrics post deployment Management
• Identification of people, term recommendations • Delivery of people, process, • Iterative improvement
process, and technology • Comprehensive and technology process deployment and
issues workstream workplan requirements and design assessment
development
Cost: $50‐75K Cost: $250‐500K Cost: $250‐500 Cost: $150‐300 Cost: $50‐75K
MEASURE & ITERATE
Powerful Results
Scalability for Cost and headcount Increased operational Additional Ingenix
Defect reduction
growth reduction efficiency products and services
© Ingenix, Inc. 25

26. Operations Assessment and Optimization
Real Example, Real Results
Situation:
Our client was a Medicare/Medicaid payer that had identified three challenges:
They were concerned they would not be prepared for an upcoming Medicare audit
They did not have a handle on whether the staffing levels in their claims operations were
appropriate
They did not have confidence that their TPA was correctly paying their claims
What Ingenix Consulting Did:
Ingenix Consulting combined our operations assessment offering with GPO & HSO capabilities to conduct:
A CMS Part C Mock Compliance Audit to identify compliance gaps
A Claims Operations Assessment to identify process and technology gaps & assess staffing levels
A Medicare Claims Payment Accuracy Review to determine how accurately the TPA was paying
claims
Results:
Within 5‐6 weeks Ingenix Consulting delivered the following:
Identified and corrected compliance gaps that would have led to fines
Identified process changes that will create IRR of 115% and NPV of $300K through headcount
reduction
Identified $1M in claims overpayments against $16M in total payments
IC is now working with the client to structure a Phase II engagement to help execute on the findings of the operations
© Ingenix, Inc. 26
assessment

27. Ingenix Consulting
Real Example, Real Results
“Ingenix Consulting was able to combine the services of it’s Business Advisory and Actuarial
Services practice and the Health Care Operations and Technology services to provide
solutions for our Medicare/Medicaid payer client. The client needed to understand the
impact of changing contracts to reflect state specific Outpatient Prospective Payment
System Methodology.”
• IC was able to evaluate the financial impact of contracting changes on actual plan
specific data.
• IC identified providers which contracting changes would be significant and need
additional communication.
• IC prepared a list of existing data deficiencies in need of attention prior to the transfer
of methodologies.
• IC was able to update 2010 budget estimates to reflect the savings to be achieved with
updated contracting.
© Ingenix, Inc. 27