Edge Servers can provide business benefits

September 1, 2013

HHS will use aggregated data to analyze health plans’ risk pools and administer reinsurance by tapping into Edge Servers

One of the many challenges facing Qualified Health Plans (QHPs) is to provide information to the Department of Health and Human Services (HHS) through a distributed data collection model. The approach uses a one-directional, secure system that will allow HHS to operate on the “edge” of health plans’ systems to receive de-identified, aggregated risk-score and reinsurance reporting. 

HHS will use the aggregated data to analyze health plans’ risk pools and administer reinsurance for plans with members that incur significant healthcare costs. Its ability to analyze and underwrite the risk equitably is informed by the aggregated data provided through what is known as an Edge Server.

Edge Servers will enable HHS to process the summarized, de-identified member data at the plan-level to run risk adjustment and reinsurance calculations, while minimizing data transfers, avoiding the need for member-level claims information, and ensuring health plans’ proprietary data remain secure.

In addition to ensuring that HHS has the necessary information for calculating risk scores and reinsurance exposure, plans can develop a nimble solution that provides additional business benefits.  For example, plans may develop a more comprehensive solution that offers the ability to perform monthly tracking of risk adjustment scores by subsegment, and produce their own reinsurance calculations. This expanded Edge Server framework would enable health plans to anticipate losses and protect themselves from unpredictable costs in diverse membership pools.

There are four goals QHPs should consider when implementing Edge Servers to ensure regulatory compliance and be prepared to begin monthly reporting to HHS in January 2014:

Create a nimble and configurable server-Edge Servers will enable HHS to process information required for audits through a system housed within the issuer’s data environment, minimizing data transfers and safeguarding individual member privacy. This effort requires health plans to analyze granular, member-level information and provide only aggregated de-identified data to HHS.

Automate data quality through processes that can rapidly incorporate edits-Health plans must ensure that rejected Edge Server data are analyzed and, as part of an agile development process, their associated error filters are applied upstream in the data warehouse so that only clean and accurate information are transferred to the Edge Server.

Test early and often, as delays can impact resources-Phase I of implementation began in March, with Phase II launching this month. Phase II requires rapid deployment and testing to ensure connectivity. In four months’ time, health plans must select their Edge Server approach, conduct training, install hardware, and develop the process to extract data from their proprietary system, transform it into the needed data formats, and load those data onto the Edge Server. And, all of this preparation must be accomplished while HHS requirements continue to evolve.

Leverage available resources such as the CMS Consumer Service and Support Center Operations, especially during testing phase to aid in troubleshooting-The importance of keeping an eye on developments at HHS and the Centers for Medicare and Medicaid Services over the coming months cannot be stressed enough. It is important for health plans to stay informed, as requirements and regulations are still rolling out.

The risk adjustment and reinsurance provisions will protect health plans, and encourage fair competition. What health plans need is a solid foundation consisting of a readily available technical support team and flexible approach to ensure success and to meet the challenging timeline.