Medicare claims data: 3 Analytics solution ideas for Payers and Providers to enhance customer experience

The billing (claims) data of healthcare providers for the United States Medicare Program, which is considered to be one of the most important healthcare programs to be held private for almost 35 years, was made available to the public on April 9, 2014.

The data that will be available to the public includes the identifiable healthcare provider information, specialty, procedure and associated cost information. However, data related to the patients will not be available to the public, as patient privacy will be maintained.

Experts and some groups have opposed the release of this data due to the possibility of privacy intrusion and potential for patients and payers to misinterpret the data among others. The implications of this data release require further extensive analysis.

Several payer groups are very excited about this information. Government and the government agencies are interested to see the cost efficiencies that this program would bring. Insurance firms and private payers would like to leverage this information to benchmark the claims the providers make. Patients and healthcare delivery enablers (employers) would like to wean the ‘quality of care’ information from this data.

This data is really a treasure trove to understanding the various dimensions of government spending, provider billing patterns, fraud and potential cost efficiencies. In my opinion, three product ideas based on this data which can be features of a stand-alone product or used in conjunction with any existing product are:

  • Fraud/Improper payment prevention
  • Doctor ratings
  • Driving cost efficiencies and cost reductions

Fraud/Improper payment prevention
According to a US Government Accountability report, in 2012, the Medicare program covered more than 49 million elderly and disabled beneficiaries. The cost was $555 billion and the estimated improper payments reached $44 billion. This ratio of almost 8% of the payments being improper provides a great opportunity for reduction.

A product which uses advanced prediction/estimation models based on patient behavior, billing cycles, nation-wide provider billing estimates and standard cost estimates to detect improper payments would be of great interest to the government.

Insurance providers would also be very interested in such a product.

Doctor ratings
With the newly available information on the procedures, it will become easy to identify the expertise of the providers. For example, if one wanted to get a cataract operation done, you could find out how many operations your surgeon did last year. Research shows that the quality of procedures are often better if the doctor performs it frequently.

A product or a feature which combines these newly available doctor ratings with the cost information would be a very powerful tool for the selection of the expert. Several insurance companies and healthcare analytics firms already provide features which list doctors by their specialty, ratings gathered from peers, and cost estimates. The new analyzed data would fit right in. A product which compares the healthcare provider claims estimate for the same procedure from a Medicare perspective and insurance provider perspective would be of great interest to both the government agencies (CMS etc.) as well as the insurance providers. This will help the payers to benchmark costs and drive efficiencies.

Driving cost efficiencies and cost reductions
With the data on the cost per procedure now clearly available, researchers can look at the money spent on drugs or procedures in different parts of the country. They can check whether that leads to increased quality in care. From a payer point of view, now there is comparable claims information for the provider to compare the insurance coverage part and the Medicare billing cost for the same procedure.

A product which compares the healthcare provider claims estimate for the same procedure from a Medicare perspective and insurance provider perspective would be of great interest to both the government agencies (CMS etc.) as well as the insurance providers. This will help the payers to benchmark costs and drive efficiencies.

In summary, the released Medicare claims data is a very rich piece of data that will make its presence felt in multiple facets of healthcare and its repercussions will be tremendous to say the least.

The article was originally published on Healthcare Payer News on April 24, 2014 and is re-posted here by permission.