Health Information Technologies and Health Care Transformation James Golden, PhD Director, Division of Health Policy Minnesota Department of Health February 7, 2008

Overview Opportunities in HIT Clinical HIT Administrative HIT Actions Mandates Support Community Effort Opportunities for Savings

Electronic Health Records EHRs Better connect providers Assist providers - Have the right information at the right time Improve patient safety Minnesota’s private sector has invested hundreds of millions of dollars in EHRs and other HIT

EHR Actions Minnesota e-Health Initiative – Formed 2004 Statutory Mandate - that all health care providers must implement an interoperable electronic health record by January 1, 2015 State Appropriated Grants and Interest- Free Loans - $14.6 M to support the purchase, implementation, and connectivity of EHRs in safety net providers

EHR Actions Revised & Recodified MN Health Records Act – to eliminate or reduce privacy barriers to electronically exchanging health information, while maintaining or strengthening patient privacy protections. MN HIE - statewide health information exchange that will initially exchange medication history and formulary information between providers and payers

EHR Implementation Success Adult Primary Care Clinics – June % - have implemented or in the process 46% in % in % considering implementing months. Acute Care Hospitals – Fall % - have fully or partially implemented

Cost Saving Opportunities Key Assumptions EHRs used to full potential Standardized electronic communication among all payers and providers Effective clinical decision support Savings Available 4.3% of projected health care expenditures $2.5 billion per year by 2015

Administrative Transaction Simplification Minnesota Health Care Administrative Simplification Act Purpose - Savings by implementing electronic data interchange using a single set of administrative standards and simplified procedures

ASA Focus Areas Premium Payments Enrollment Eligibility Remittance Advice / EFT Referrals /Authorization First Report of Injury Claim Claims Status Claim Attachments

Administrative Costs Administrative Transactions Costs - % of total spending: Health Plans2% Hospitals1% Clinics3% Projected System-Wide Costs SFY $742 million SFY $970 million

2007 Changes to ASA Uniform Electronic Transaction and Implementation Guide Standards Requires - Three administrative transactions must be exchanged electronically using a single standard for content and format starting in 2009 Eligibility verification Health care claims Payment and remittance advice

Applicability of 62J.536 All Health Care Providers Provide health care services in MN for a fee Eligible for reimbursement under Medical Assistance All Health Care Payers Health Plans/Insurers Third Party Administrators Workers Compensation

Developing the Standards Commissioner of Health uses rulemaking to develop companion guides: Based on Medicare standards Developed in consultation with Minnesota Administrative Uniformity Committee Modifications from Medicare as appropriate Rules developed in 2008, effective in 2009

Opportunities for Savings Single Standard - Content and Format Easier to maintain billing software – fewer staff Less effort to stay current about payer requirements Easier coordination of benefits across payers Electronic Transactions Electronic claims are less expensive than paper Reduced data entry across trading partners Eliminates mailing and telephone costs

Implementation Costs Single Standard - Content and Format Programming changes to existing systems Increase in suspended claims during the transition Increased customer service costs in transition Electronic Transactions Computer equipment/software or clearinghouse Training of staff on new procedures Development of provider portals

Opportunities for Savings Key Assumptions 7% reduction in costs Adoption by all providers and payers Savings Available – w/o implementation costs SFY $7.4 million SFY $23.8 million SFY $67.9 million SFY $215 million

Thank You! - Questions Minnesota Department of Health James I. Golden, PhD Director, Division of Health Policy