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Transcript

Chenny (1:02):

Hello, everyone. Welcome to the next edition of our Products That Count podcast series, focusing on healthcare, especially our care catalyst series. Today, we have a great guest from Simplify Healthcare, Daniel Knies.

He’s a seasoned healthcare IT leader with more than 25 years of experience in the payer segment. He currently serves as Senior Vice President of Claims1™at Simplify Healthcare, where he leads innovation in claims configuration and automation. Daniel has deep expertise in architecting online transaction processing systems and driving efficiency in critical areas such as benefits and provider data management.

His mission is to revolutionize healthcare workflows through technology, delivering scalable solutions that empower payers to streamline operations, reduce complexity, and improve outcomes for members, providers, and organizations in an increasingly complex healthcare ecosystem. Welcome, Daniel.

Dan (2:10):

Thank you. Thank you for having me.

Chenny (2:12):

I appreciate it. Of course. So we discussed before, and I wanted to get a sense of what motivated you to pursue a career in healthcare leadership.

Dan (2:24):

So I’m just trying to determine how far back to go with that question, right? So right out of college, I was fortunate enough to start at a small company that built pharmacy benefit management platforms, PBM systems, and that is really the foundation and where I started getting into both claims adjudication, from an insurance perspective, and online transaction processing, you know, fast turnaround, sub-zero second transaction processing within a platform, and really addressing that space. And so, it was there that I was really motivated and got ingrained in the healthcare industry.

And following along with the PBM platform, I started as a founder of a company in the early 2000s, basically saying, well, if the pharmacy world can be connected in real time and adjudicate claims in real time, then why really couldn’t the rest of the industry? Why are medical claims processing and dental claims processing? Why is that such a slow process within the industry today?

And so that’s what really then continued to drive my passion to really solve that problem and carrying that even into Simplify Healthcare, onboarding and standing up those systems. And yet, we are not real-time across the board with transactions. You can see mandates coming from CMS that are kind of pushing the world into that mode.

So, price transparency, the fire standards that are emerging “right now for communications from the EMR over to payers and from provider to provider. So I think there’s a lot of laws and governance being put in place right now, I think to push the market to real-time, which again, from a Simplify Healthcare perspective, looking at ways to help move the needle on the configuration and the provider data management will only help facilitate and allow real-time claims to be processed in the future.

Chenny (4:37):

Awesome, awesome. So real time, can you explain how it is being done today? It was interesting to hear you say that Fire and Interoperability for our audience who are not from healthcare. Fire stands for F-H-I-R, Fast Healthcare Interoperability Resources.

It’s a standard for the healthcare industry to go into more real-time as in the other industry. So, how do we do today? How do we process the claims today for our audience?

If you can just give us a quick, the need for real-time that comes from how we are doing it today.

Dan (5:20):

When you look at the pharmacy world, for example, and you walk into your standard drug store, they have your insurance information. And through their practice management system or their online point of sale service system, they submit the claim in real time to a back-end payer platform and a PBM platform, which goes through thousands of rules to determine if that claim should be paid, what the co-pay should be calculated, and gives that response back to the pharmacy. And like I said, within, you know, within seconds.

And so, the patient at the counter knows how much they owe before they even walk out the door. Now, if you compare and contrast that to the medical world, you go see your doctor, they may have some idea of what the claim is going to cost, the only thing they will actually collect from you at that point in time would be a co-pay. Then that claim gets submitted, and it may take up to 15, sometimes 30 days for you to realize how much you owe the provider.

So, from a transparency perspective, you know, the provider submits that file, that file gets turned into, typically, what is this? It’s an ANSI transaction called the X12837. That X12837 gets sent to a clearing house. The clearing house batches claims together from different providers to send to a single payer system. And when the payers receive that, they go ahead and adjudicate those claims. It may go through multiple stages. It could be a pre-scrubbing phase that happens in batch with the X12837. It then goes into the adjudication platform, where it will calculate and go through all the various rules for a specific benefit plan. And from there’s typically a payment process that is executed sometimes on a weekly basis, sometimes on a daily basis. It all depends on the payer’s technology stack, which then aggregates all of the claims that it receives since the last time it ran and determines what the total payment amount should be per provider. That is then typically extracted into another batch file called the X12835, which is then sent either go back directly to the provider themselves or sent to a payment aggregator who then will eventually cut the check or cut an EFT payment to those providers. So there are just a lot of stops along the way within the current medical world.

If there are prior authorizations involved, if there are more complex conditions involved, then you typically have to coordinate with the payer for medical management. There are laws being looked at right now regarding prior authorization. I’m not really up to date totally on them. I just know that laws are happening around prior authorization and possibly the ability to start removing those. And so that also is a delay within the whole payment process to get those claims paid.

Chenny (8:22):

Wow. So this is the current process, which is antiquated. When we walk into the pharmacy, by the time we walk out, we know the co-pay, how much is going to be out of pocket, whereas when we go and see the provider, that’s not the case. And now we know why.

“Multiple stops, right?

Dan (8:48):

Multiple stops. And it could definitely be more complex. There are other payment systems out there.

For example, a payer may contract with a company that does pricing. And so they may have to take that file and send it directly out to a repricer who can re-adjudicate and price those claims. If it’s out of network, they were in network. So, I mean, the network arrangements could be fairly complex, where the payer may send that claim to different tiers of individuals to actually price those claims. So, that just adds to the overhead and the complexity of it as well.

Chenny (9:26):

Absolutely. Absolutely. And in all of this, the members will be scratching their heads.

“What’s going on? I didn’t expect this bill. Why does this cost this much?”

So, yeah. Yeah. And then this is where the experience, right?

For those who are in a vulnerable situation, putting them through this expense that they didn’t anticipate. And that puts them in a very difficult spot. So, now, that’s where your organization comes in, Simplify Healthcare, I’m assuming, right?

So, can you provide an overview of your product and services? Because FHIR interoperability will take us forward, but adoption of FHIR interoperability is, in my eyes, the industry has just started doing that, and it’s a way to go, but the problem has to be solved. We gotta simplify the healthcare itself.

“So, what a perfect segue. Can you throw out an overview of the products and services from Simplify Healthcare? 

Dan (10:31):

Absolutely, and thank you for that question. So, I started at Simplify Healthcare at the end of 2023. So, about 18 months into my journey, a little over 18 months into my journey with Simplify Healthcare.

Where prior to that, my whole career was focused on really building the adjudication engines and all those other parts of doing the adjudication, developing and cutting the checks and the payment process, spending my whole career developing that, and then connecting up with Simplify Healthcare. When you look at these claim adjudication engines, they’re fairly complex in nature from a configuration perspective. You have to build benefit plans. It’s typically down at a code level. It’s very detailed work that has to occur within those platforms today. What payers face as a challenge is finding and keeping talent long enough to understand all the nuances of that claim adjudication platform.

Simplify Healthcare looked at the problems around the claim adjudication system, not claim adjudication itself. Those problems were manual data entry into those platforms, which is complex. Then, when you start thinking of benefit plans, the ability to file plans to CMS, the ability to file plans at a state for the exchange business, for the Affordable Care Act, and the ability to be able to build custom plans around self-funded insurance in the ASO world.

And so, all those dynamics allowed Simplify Healthcare to focus on three, four different products. We have a Benefits1™ product, which actually manages and controls the filing to the state, and it’s your full benefit catalog. Like, how do I define a benefit plan? What are the stages for me to define that benefit plan? And how do I file that benefit plan with the government entity who needs to approve that plan? And so that is our Benefits1™ application, and it kind of has everything related to, you know, managing the benefit plan.

We then have the Provider1™ application, which is everything around provider data management. It includes provider data management with standardization and the ability to build standardization around the data that’s being entered, as well as provider contracting and provider credentialing. Those are the two main products. 

I’m on a product called Claims1™, and where Claims1™ sits in the middle is between, again, that complex claim adjudication engine on the right-hand side, and then those very business-centric applications on the left-hand side, namely Benefits1™ and Provider1™. So, from a Benefits1™ perspective, you can say, I have a chiropractic visit that’s a 20-dollar copay. To make that little word and turn it into the configuration with a core adjudication platform, depending on which one it is, it could be fairly complex.

You need to define service categories and put the specific procedure codes in those service categories. There are just multiple layers of configuration that need to occur to build and support that one would align with in that benefit plan that says chiropractic 20-hour copay. What Claims1™ actually does is we built a tool that understands the language on the right-hand side and understands the language on the left-hand side, and can build and do that translation in the middle. So that it shelters the individual from having to know the complexities of that core adjudication platform and allows Claims1™ to really build the plan of what it would actually look like in that native syntax. In the user, then, what they have to do is review the plan and not manually type in the configuration within those platforms. Again, we do that for both provider data and benefits data.

The other product we have is Xperience1™. That’s our AI-driven customer service experience platform, which really sits and kind of focuses on the benefits themselves and how benefits can be interpreted. And so it’s kind of an enabler with native connectivity to both Salesforce and or Microsoft Dynamics.

And then, of course, there is our SimplifyX™, which is our whole AI flagship product for any little other use case throughout the health insurance company, the health payer, you know, we can help automate with our AI company. And we use that AI from SimplifyX™ in all of our products as well, from just different things, of actually comparing quotes or they’re helping compare benefit plans, looking at comparisons within provider data, are all kinds of parts within that SimplifyX™ that kind of feed into all of our products.

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