Tackling Administrative Simplification at Humana: An Interview with CEO Mike McCallister

I had the opportunity today to meet one on one with Humana’s President and Chief Executive Officer, Mike McCallister, and interview him regarding how Humana is dealing with the myriad of issues surrounding the administrative complexities facing one of the nation’s largest health plans, as they strive to simplify.

I asked Mike to cite some examples of specific successes he felt Humana had achieved during the past couple of years regarding administrative simplification. Three items jumped out in our conversation:

• Provider Contracts – Humana has completed an initiative re-negotiating their provider network agreements to facilitate much greater digitization of their provider claims adjudication process, through increased standardization of their contracting arrangements
• Simplifying their product offerings – Humana has recently accomplished greater standardization of various products offered to groups and individuals, thereby reducing the complexities required in administering those products.
• Supporting the roll-out of Availity – which is a multi-payor electronic eligibility and transaction initiative fully operational in Florida and now being implemented in several other states as well, significantly reducing numerous manual functions and accommodating such conveniences as card-swipe of membership ID cards for data exchange.

With respect to Availity, Mike indicated that is the electronic transaction exchange initiative they are backing as an organization, and they are pushing it as the model for industry-wide adoption. He cites the discipline he and the other sponsoring organizations used in its development to set and stick to standards that could be universally deployed, versus building in a labyrinth of exceptions that would bog down the system.

Mike noted the Humana’s annual capital budget is $225 million, nearly all going to IT, with the vast majority dedicated towards such initiatives to address administrative simplification.

What are the big administrative challenges still facing Humana? Mike points to facilitate systemic loading of data, particularly at the point of sale. Eligibility issues built into the marketplace still remain as well, such as how the industry and state laws allow retroactive eligibility (accommodating employers to add, delete or change employee eligibility after the fact- typically up to thirty days), which makes accurate real-time eligibility and related transactions difficult.

Availity in particular sound extremely interesting. Coming soon will be an interview with their organization to hear more details about that initiative.