HIPAA Moves Humana To Revamp Process

For some insurance companies, HIPAA compliance is just another cost of doing business. For other carriers, the HIPAA (Health Insurance Portability & Accountability Act) regulations have opened a once-in-a-lifetime opportunity to not only meet or exceed the compliance requirements, but also to change entire business processes and become more efficient.

One such company is Louisville-based Humana, Inc. ($4.3 billion in assets). "HIPAA is a stepping stone that gave us the opportunity and allowed us to move to a more automated way of doing business," says Brian LeClaire, vice president and chief technology officer, Humana. "Vitria Sunnyvale, CA is essentially the tool that helped us move to a more automated process. Also, we did not want to be stuck in a last-minute rush to become HIPAA compliant."

Real-Time Claim Tracking

Rather than just modifying existing applications to reach HIPAA compliance, Humana decided to change the business processes involved in accepting, routing and eventually paying claims—essentially moving from a batch-oriented business process to a real-time methodology where claims would be accepted and tracked in real time, explains Ric Light, director of IT development, Humana.

"There are things that we were not able to do that we can do now, such as track a claim anywhere in the claims process similar to the way you can track a package with FedEx," according to Light. "We can look at any claim, anywhere in the process. Before, it was all batch. When a claim submission comes in, we can take a claim in real time, apply edits and route it to the proper platforms."

Realizing that the insurance carrier's existing batch-oriented business process would not help the company become HIPAA-compliant or improve customer service, Humana began searching for a vendor solution last summer. "From an IT standpoint, we always look to partner before we buy, and buy before we build," says LeClaire.

According to Light, Humana "evaluated a list of potential vendors and we also looked at some products that we had developed in house. And we consulted with external sources to identify leaders in this area," he says. "Vitria was the prime candidate for us since they had the HIPAA components prefabricated as part of their package." Humana chose Vitria's BusinessWare integration platform, along with the Vitria Collaborative Application for HIPAA.

John Chmielewski, systems manager, IT development, says some of Vitria's components that were included as part of the HIPAA-compliance architecture included EDI and XML functionality. "The EDI and XML components allow us to take the raw data in the Accredited Standards Committee (ASC) X12 format," he says. "Developing the components is very exhaustive work because there aremany variable layouts to X12. Vitria's HIPAA kit had all of that built in."

Leapfrog the Competition

And the ready-to-implement X12 components that Vitria developed enabled Humana to be much farther along than it would be if it developed the functionality internally, says LeClaire. "If we picked a different vendor, or developed the technology ourselves, we would not be where we are today," he says. "Because they had the components prefabricated, we were able to cut out some development time. We also chose Vitria because they demonstrated that they are committed to healthcare. They have a great solution and they are a great partner. We have advanced the business so we have greater capabilities. The solution that we have developed with Vitria is very flexible and allows us to grow and adapt to the changing environment."

Although the final HIPAA requirements have not been issued, LeClaire says that Humana should be compliant. "Our expectation is that we are addressing the regulation requirements," according to LeClaire. "We are able to track and identify claims while they are being processed."

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COMPANY:

Humana, Inc., Louisville, $4.3 billion in assets.

LINES OF BUSINESS:

Health, dental, life and disability insurance.

VENDOR/TECHNOLOGY:

Vitria Technology, Inc.'s (Sunnyvale, CA) BusinessWare and Vitria Collaborative Application for HIPAA.

CHALLENGE:

Become HIPAA compliant and gain efficiency in business processes.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio