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With the expected changes in health care, due to the many initiatives in the evolving landscape we have on the radar — ICD-10, accountable care and payment reform, to name a few — there is probably no more opportune time to redefine the provider-payer relationship.

Historically, from a provider perspective, there has been a bit of a love-hate relationship with the payer community. They are always looking for ways to reduce their costs, but we rely so heavily upon the private payers in particular to remain profitable that we work very hard to convince them of our worth and value to their covered lives.


The working relationship between providers and payers has always been very data-driven. In the contract and contract renewal process, both sides present their version of expected or desired cost structures to treat patients of all types and conditions. Then, once an agreed upon cost structure is reached, the data required to make the relationship successful (submission and payment of claims) is pretty intense. This is true regardless of the payer class — private/commercial or governmental.

All too often, neither side of the relationship has complete trust in the data of the other side. Both have a "black box" view of the other, with no real transparency between them.

In Arkansas, we are embarking upon an early experiment in payment reform. Beginning July 1, a payer consortium consisting of Medicaid and the two largest private payers have identified six conditions, from congestive heart failure to attention deficit hyperactive disorder, that they will pay on a per-episode-of-care basis. They have made it the responsibility of a "primary accountable provider" (PAP) to ride herd on the services provided and the expected clinical outcomes, regardless of the venue in which they are provided.

The plan is to use current payment mechanisms and methodologies to pay the claims, and then perform a quarterly "true-up" process to determine whether any funds need to be re-paid to the payer, or if additional payments should be made to the provider. If the PAP has exceeded the pre-determined limit, they owe money back to the payer. If they are within the proscribed range, everything is good. If they are below the proscribed range, they share in the savings with the payer and receive additional money. If they are below a certain amount, they do not benefit, the assumption being that too little resources expended does not produce the necessary clinical outcomes needed.

This brings us to a real conundrum. Payment reform in particular is going to require a much more open and trusted atmosphere between the providers and the payers, especially regarding the sharing of data. Providers are going to want to participate in seeing the data that is being used to determine the payment ranges. Payers are going to want more robust clinical data beyond just that which is currently provided for the payment of claims. Here in Arkansas, the major players on the payer side have preemptively created the Advanced Health Information Network, primarily sponsored by BCBS of Arkansas. It is usually referred to as the "all-payer claims database" and includes information from Medicaid as well as the larger Arkansas payer organizations, one of which, Qualchoice, has my provider organization, UAMS, as one of its primary shareholders.

How do we create a trusted platform and a more open relationship between the payer and provider communities for the purposes of payment and health reform? In Arkansas, the debate is whether we should use the AHIN for payment reform, but yet use a second mechanism, the state-based Health Information Exchange to help drive health care reform, rather than creating a single entity and database for both payment and health care reform that can be accessed by both provider and payers. The fact that we are even having that discussion shows that there is a lot of work to be done to create better working relationships between the two sides.

I favor a single entity approach (though I need to disclose that I am the current chair of the Arkansas HIE Council) because I think that having both claim information as well as clinical information in a single database, then building analytic capabilities on top of that would result in a powerful tool not only for health care and payment reform, but for robust population management and statewide research cohort discovery as well as better utilizing the limited resources we have. Representing the provider side of the equation, I am willing to contribute as much clinical information as will be required for both payment and health care reform, but would prefer to do it in the most economical manner, i.e., to a single place.

The jury is still out, so stay tuned.

David L. Miller is vice chancellor and chief information officer at the University of Arkansas for Medical Sciences, an academic health sciences center.