For Labs, Blockchain Offers New Opportunities

Aetna, Humana, Multiplan, UnitedHealthcare, Ascension, and Quest are working with blockchain

CEO SUMMARY: Some of blockchain’s proponents view its potential uses in health information technology to combat cybersecurity threats and improve the secure exchange of health information through electronic medical record systems. But for clinical laboratories, blockchain could be the key to improve payment processes and help eliminate errors in payment and allowed amounts. In theory, it could do so by allowing both parties to track claims from origin to payment. 

FOR CLINICAL LABORATORIES looking to solidify their relationships with health plans, blockchain may provide a new opportunity. Surprisingly, labs may be positioned to offer substantial value to health plans, providers, and others developing blockchain for a variety of purposes in healthcare.

Take, for example, when a new medical office opens. Clinical laboratories are among the first to know about such openings because physicians need to contract with at least one lab in order to manage patient care on the first day. As part of that contract, the lab is likely to bring supplies to the physician’s office and set up a way to collect specimens and test requisitions.

Case for Blockchain

A more compelling case might be made for using blockchain to reduce errors and improve the speed and accuracy of payments from public and private health insurers, proponents say.

One of the first problems proponents say blockchain could solve is the one involving out-of-date provider directories. Because labs are among the first to know when a new physician group is opening, the lab can alert the physicians and the health insurers for which it is in-network that both should list the other as a partner.

That way, the health insurer can keep its physician directory up to date, thus helping to solve one of the health insurance industry’s toughest problems. To date, health insurers have been notoriously bad at keeping their provider directories up to date.

Failing to do so causes patients to get surprise medical bills, which is another big problem that health insurers face. By visiting a doctor whom a patient believes is in-network, but who is in fact out of network, the patient may get a large surprise medical bill for healthcare services the patient may have believed should have been covered.

One way to address both of these problems is by having health insurers and clinical labs use blockchain, which is a data structure that can be timed-stamped and signed using a private key to prevent tampering. One of its widespread uses to date has been with the cybercurrency Bitcoin.

Some of blockchain’s proponents view its potential uses in health information technology to combat cybersecurity threats and advance the secure exchange of health information through electronic health record systems. Proponents say that when blockchain is used with EHRs, it can protect sensitive medical records from hackers and can be updated quickly and inexpensively. If so, it could be an effective tool for updating provider directories.

In a recent Dark Daily e-briefing about blockchain, Jason O’Meara, Senior Director of Architecture at Quest Diagnostics, noted how blockchain could be useful for clinical labs.

Although health plans collect the information they need for provider directors many months after a new practice opens, Quest and other labs often know about such new operations weeks in advance because of the need to order lab tests for patients on the first day, O’Meara explained.

“Each of our organizations expend a tremendous amount of energy and effort trying to get this data as good as it can be,” O’Meara said. “The challenge is—when we’re doing this in independent silos—it leads to duplication of efforts.”

New Blockchain Alliance

In December, Quest joined health insurers Aetna, Humana, Multiplan, UnitedHealthcare, UHC’s data division Optum, and the health system Ascension in just such an effort, called the Synaptic Health Alliance (SHA).

“The alliance is exploring how blockchain technology could help ensure that the most current healthcare provider information is available in health plan provider directories, providing consumers looking for care with the most accurate information when they need it,” Quest said when it joined the alliance. “Maintaining up-to-date health plan provider directories is a critical, complex, and challenging issue facing organizations across the healthcare system.”

Under federal and state laws, health insurers are required to maintain directories that are accurate and up to date. To do so, insurers and their vendors spend some $2.1 billion annually acquiring and maintaining provider data, Quest said.

The SHA defines blockchain as “a shared, distributed digital ledger on which transactions are chronologically recorded in a cooperative and tamper-free manner [such as a] spreadsheet that gets duplicated multiple times across a network of computers, which is designed to regularly update the spreadsheet.”

Track Claims in Real Time

In a recent article in Modern Healthcare, reporter Shelby Livingston explained that Change Healthcare is using blockchain to allow providers and insurers to track claims in real time—from the point of filing the claim to when each provider is paid. If blockchain technology can be harnessed in this way, does it have the potential to allow providers and payers to sort out all the issues they have currently over rejected payments and allowed amounts?

Change Healthcare already has a division that works with independent and hospital-owned labs to reduce the costs of medical billing and coding services.

If Quest and other lab companies can successfully demonstrate how blockchain can be used to improve the cumbersome and error-prone payment processes that most insurers and labs use today, they will have made a big step toward solving one of the most challenging problems that clinical labs face when seeking payment.

As Livingston explained, providers and health insurers maintain their own separate payment data. This means the insurer’s idea of the status of a claim could be quite different from the lab’s view. “But blockchain would allow both parties to have a shared understanding of where that claim is in the life cycle and automate the claims adjudication process,” emphasized Livingston.

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