Independent Health Establishes a New Company

Independent Health Establishes a New Company named DxID to Improve Efficiencies and the Affordability of its Medicare Advantage Plans

WILLIAMSVILLE, N.Y. (August 12, 2011) – Independent Health today announced it has established a new company named DxID to improve efficiencies and the affordability of its Medicare Advantage plans. DxID will help ensure Independent Health’s Medicare Advantage members’ diagnoses and diagnostic profiles – especially those of its high-risk Medicare members – are complete, resulting in earlier interventions to improve their health status and appropriate coding of claims submitted to Centers for Medicare & Medicaid Services (CMS). The company was incorporated on August 10, 2011.

Michael W. Cropp, M.D., president and CEO at Independent Health, said this move is another example of the organization’s ongoing efforts to transform health care, and to introduce new, innovative ways to address rising costs and provide quality, affordable, patient-centered care. “Our goal is to help our 66,000 Medicare Advantage members achieve the best possible medical outcomes while ensuring the most efficient use of resources,” said Dr. Cropp.

“Independent Health strives to ensure that our members receive the high-quality care that is necessary to maintain and improve their health,” said Dr. Cropp. “This is especially critical for our senior members with complex, chronic conditions. Collecting all the diagnoses affecting our Medicare Advantage members will enable us to assure they receive the services necessary to maintain their optimum health status while allowing us to receive the appropriate reimbursement from CMS to cover the increased costs of providing this exceptional care.”

“The establishment of this business aligns with Independent Health’s overall continuum of services and processes associated with caring for our Medicare members. It is a good fit with our recognized strengths in customer service and member satisfaction, provider and physician relations, claims review, and data analytics,” said Dr. Cropp.

The new company will initially focus on servicing Independent Health’s Medicare membership with a long-term plan of developing capabilities and infrastructure to serve other Medicare Advantage plans and Programs of All-Inclusive Care for the Elderly (PACE) plans throughout the United States, which receive revenue from CMS.

“DxID provides an opportunity to lower administrative costs while improving the level of ‘back office’ service and operations,” said Michael Faso, senior vice president, finance and new business development, at Independent Health.

“Independent Health utilized its own internal resources and several outside agencies to perform these services prior to establishing this new company,” said Faso. “We considered options to buy or build this function and ultimately decided to develop these competencies and establish this business on our own. Building this business lowers our operating costs and provides the opportunity to generate future revenue.”
Two Rochester area executives with extensive experience in this field – Betsy Gaffney and Gregg Coughlin – will serve as co-CEOs and help develop DxID, while overseeing its day-to-day operation. The new company is expected to employ an initial staff of approximately 20, and will likely be headquartered in the Rochester area because its two tops executives reside there. Independent Health will provide additional administrative support, including finance and human resources, from its Williamsville, N.Y. campus.

CMS reimburse Medicare Advantage plans according to Hierarchical Condition Coding (HCC) requirements which are based on a fixed formula, revised yearly. Medicare Advantage plans assume a certain amount of risk from Medicare as they take in members and are reimbursed a set amount to provide health care coverage for these patients. The rate per member, per month (PMPM) is based on a set of diagnoses with attached factors that become a multiplier to determine the reimbursement rate.

Reimbursement from CMS depends on accurate and complete diagnostic physician coding. If the Medicare Advantage plan relied solely on claims data to determine its PMPM reimbursement, the rates recovered from Medicare would not cover the risk of caring for members.

“As a result, companies such as DxID provide the capability to more completely analyze the data, create member diagnostic profiles, help plans prioritize and arrange for the most appropriate care, verify documentation, and create an audit trail and reports that meet all CMS requirements, while also supporting physicians with their documentation requirements,” said Coughlin.
The new initiative will be transparent to Independent Health’s Medicare Advantage members as the work is done through a provider-based chart review process.

According to Gaffney, in addition to marketing DxID to other Medicare Advantage and PACE plans, there are also growth opportunities to provide services both up stream and down stream to the office chart review process for Independent Health and external customers. These include new member diagnosis prospecting and auditing services, health risk assessment (HRA) content and management processing, customized case and disease management reporting, financial reporting, and submission file testing and delivery. These services are currently performed by several outsourced vendors.

Gaffney and Coughlin said the new company’s value differentiator will lie in its compliant technology platform, superior customer service, a trained nurse field staff, a compliance-ready submission standard, and an audit-tested data submission process.

DxID will operate as a subsidiary of Independent Health Corporation (IHC), which in turn is a wholly owned for-profit subsidiary of Independent Health. IHC also owns and operates Pharmacy Benefit Dimensions, Independent Health’s pharmacy benefit management (PBM) company, and Reliance Rx, a specialty pharmacy company.