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New Medicare-tied unit at Independent Health

Independent Health Association has formed a new subsidiary to centralize the collection of patient information and assemble more complete medical profiles of Medicare Advantage members as a means to improve care and lower costs.

The new subsidiary, formed Wednesday as DxID and likely based in Rochester, will electronically cross-check the insurer's member roster against medical providers' patient records to make sure Independent Health is aware of all care and diagnoses a member has received.

That will allow the company to develop a more complete picture of a member's medical conditions and potential issues, instead of relying on actual claims it has paid. In turn, it is hoped it will enable the insurer and providers to intervene earlier in a patient's medical care -- especially for higher-risk members -- to prevent further health problems and expenses.

"What this enables us to do is move care upstream and identify issues to make sure members receive care proactively, not reactively," said spokesman Frank Sava. "It's kind of moving from health insurance to health assurance."

At the same time, it will ensure that Independent Health properly codes claims it submits to the federal government so that it receives proper reimbursement "to cover the increased costs of providing this exceptional care," said Dr. Michael W. Cropp, the insurer's chief executive officer.

The federal Centers for Medicare and Medicaid Services reimburses at a higher level for someone who is more chronically ill or has different health conditions than for someone with a less severe situation. Applying for payments based only on past claims would deal with illnesses but might result in the insurer being underpaid for the overall risk of the patient.

"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," Cropp said. "Independent Health strives to ensure that our members receive the high-quality care that is necessary to maintain and improve their health. This is especially critical for our senior members with complex, chronic conditions."

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

For now, DxID will work solely for its parent company, with two co-CEOs and about 20 staff members in Rochester, as well as support from Independent Health administration in Williamsville. It's the third such services subsidiary owned by the insurer, along with a pharmacy benefits manager and a specialty pharmacy company.

Officials hope to make the service available to other Medicare Advantage and other health plans for a fee, giving Independent Health a new revenue source that "can mitigate premium increases in the future," Sava said.