Case Study

Impact stats:

• One billion Medicare claims processed per year 

• One consolidated claim gateway will replace seven disparate systems

Summary

When a Medicare enrollee sees a health care provider, the Centers for Medicare & Medicaid Services (CMS) and Medicare Administrative Contractors (MACs) must process the enrollee’s claim for benefits. MACs are private companies that contract with CMS to process Medicare claims, handle provider enrollment and education, and conduct medical review activities for specific geographic regions.

Currently, MACs receive claim submissions from health care providers and submit them to CMS using seven disparate systems that are proprietary to the MACs. In doing so, MACs ensure the claim submission is accurately filled out and convert the claim submission into a file CMS’s system can read. The process of checking if a claim contains the correct information is called an edit. There are over 2,800 edits, or pieces of information to validate. 

Though this process is effective, CMS wants to make it more standardized and streamlined. They’ve tapped Nava to help consolidate these seven systems, which process over one billion Medicare claims annually, into one electronic data interchange (EDI) gateway. The new, consolidated gateway will serve as a unified front-end solution for essential claims processing activity between health care providers, trading partners, and CMS systems.

Approach

CMS is leading this project with an agile approach, meaning they’re breaking work into small chunks rather than working toward one big launch. First, we helped CMS build an EDI gateway prototype to test with one MAC before scaling. This prototype will inform the final, custom-built EDI gateway for CMS, which will accept certain types of Medicare claim submissions and replace the large, distributed system with a consolidated process. To narrow the prototype, CMS selected over 80 edits that are the most common, complex, or unique.

Next, we helped CMS transition into a parallel production environment. This enabled CMS to increase the load of claims passing through the parallel production environment while continuing to perform real-time claims processing. Notably, CMS hit this important milestone for parallel production five months ahead of their original schedule. 

Outcomes

Currently, CMS provides funding to each MAC to develop, maintain, and operate their independent gateway. By consolidating the seven gateways into one, CMS will save millions year-over-year. 

When complete, the consolidated EDI gateway will give groups across CMS better visibility into submitted Medicare claims as they adjudicate, audit, and pay enrollees’ claims. Ultimately, this will give CMS insight into claims that the system rejects, helping to detect common mistakes or fraud. These analyses could inform potential policy changes that address fraud, waste, or abuse. 

Further, the EDI gateway will track all the claim submissions that MACs submit, ensuring every claim submission is processed and routed to the correct CMS adjudication system. Notably, we helped CMS implement the new EDI gateway without disruption to enrollees, providers, and claim submitters. 

All of this improves CMS’s ability to support and scale Medicare operations with greater reliability. By building foundational infrastructure that’s easily maintainable, CMS can better serve Medicare enrollees through streamlined, dependable claims processing. 

Process

Currently, MACs use their unique gateways to process claims. If a claim submission has a mistake or is missing information, the gateway rejects the submission and sends a report detailing the type of error to the provider so they can fix it and resubmit the claim. Meanwhile, accurate claim submissions get submitted to CMS’s main system for processing and adjudication. Because MACs maintain their own gateways, CMS only receives successful claims and is unable to identify trends or common issues among rejected claim submissions. 

CMS tasked our team with helping replace the separate, commercial off-the-shelf gateways MACs use with a consolidated, centralized, custom-built EDI gateway hosted by CMS. Once complete, claims submitted to this consolidated EDI gateway will be routed to the appropriate MAC. CMS’s goal is to replicate current system outcomes, so we helped them use the existing system to inform the prototype. CMS also wanted to limit interruptions to MACs’ operations and workflows and make the edit process more efficient, both of which make it easier to test and implement the new gateway with MACs. 

Because they’re merging multiple gateways, CMS wanted to start small to keep an eye on performance and have the ability to tweak issues as they arise. We began by helping CMS prototype an EDI gateway with one MAC that only handles professional claim submissions, which are non-hospital claims for things like a visit to a primary care doctor. Starting with one type of claim submission enabled CMS to easily identify ways to improve the prototype without too many variables. Working with one MAC allowed CMS to target and fix issues rather than juggling tests across all seven MACs.

The first iteration of the prototype only moved claim submissions from one cloud-based data storage source to another. This enabled CMS to test the new gateway early in the development process. Each new feature CMS added to the gateway thereafter was automatically sent to CMS’s cloud provider for evaluation. 

Incrementally, we helped CMS add more features to the prototype, like the ability to confirm claims data and make edits following a system of automated rules. Lastly, we worked with CMS to ensure the gateway can convert claim submissions into files compatible with CMS’s existing claims adjudication system. 

CMS launched the prototype with one partner MAC and we helped create a communications and testing plan to ensure ongoing collaboration and feedback. When CMS began testing, we only enabled the gateway to ingest accurate professional claim submissions and produce correct files. Then, we helped CMS test each of the 80+ selected edits with the testing MAC, ensuring the gateway sent the proper responses for each edit. After that, we helped configure the partner MAC’s system to send a duplicated stream of real claims to the gateway, checking for system errors and ensuring reliability. Finally, we helped expand testing to include institutional Medicare claim submissions, or claims from hospitals. Throughout this process, we gathered regular feedback from our partner MAC to address in the final product for CMS, which will include all 2,800+ edits. 

Conclusion

The EDI gateway prototype we helped build enabled the partner MAC to ingest, check, and convert Medicare claim submissions into a CMS-readable file before routing the claim submissions to adjudication. Going forward, we’ll help CMS scale this prototype to handle claim submissions from all seven MACs across the country. CMS will maintain the centralized EDI gateway, gaining visibility into submitted professional and institutional claims. This visibility will enable CMS to evaluate data among rejected submissions, ultimately helping the agency identify common issues or fraud to influence policy changes.