More Related Content Similar to (Final Presentation) CodeVantage Code Halo System UMD 2015 Similar to (Final Presentation) CodeVantage Code Halo System UMD 2015 (20) (Final Presentation) CodeVantage Code Halo System UMD 20151. © 2014 Cognizant
© 2014 Cognizant
October 2015
CodeVantage – A Code Halo System
Cognizant Case Competition
Final Round Submission
2. © 2014 Cognizant2
Meet our team
Bill Fegan
2nd Year MBA Student
Gabrielle Kuey
1st Year MBA Student
Anna Holland
1st Year MBA Student
2nd Year MPP Student
Fletcher McCraw
2nd Year MBA Student
Focus:
Consulting
Internship:
Coverent Consulting
Previous Employment:
Trade Operations
Specialist, State Street
Corporation
Focus:
Consulting
Internship:
USAID
Previous Employment:
Living Classrooms
Foundation, World
Food Programme,
Peace Corps
Focus:
Healthcare/Consulting
Internship:
Consulting Intern,
Clinovations
Previous Employment:
Consultant, The
Advisory Board
Company
Focus:
Consulting
Internship:
Change the World
NonProfit Consulting:
Today’s Children,
Africa’s Future
Previous Employment:
International Brand
Management and
Digital Strategy, Calvin
Klein and Kate Spade
3. © 2014 Cognizant
Target Market
Code Halo solution targeted to commercial, non-specialty
hospitals and health systems with at-risk contracts
Problem Statement
Hospitals fail to maximize the revenue opportunities associated
with risk-based contracts
Solution
Introduce predictive model for patient appointment
recommendation and performance analytics to capture full
revenue potential
Business Benefit for Cognizant
Positions Cognizant as provider-focused leader in managing
patient risk; a strategic mandate for all hospitals across the
next 30 years
Medicare Advantage (MA) Enrollment is Growing but Billing
Inaccuracies Cost Hospitals Millions Annually
3
$1.5k - $2k
$412M - $630M
Estimated market size
Average revenue lost per
Medicare Advantage patient
per year
$10.3M
Baseline NPV for
CodeVantage launch
5. © 2014 Cognizant
Declining Traditional Revenue Streams Force Healthcare
Industry to Reevaluate
5
1. The Advisory Board Company. Healthcare Industry Trends 2015
2. The Office of the National Coordinator for Health Information Technology. Adoption of electronic health record systems among non-federal acute healthcare hospitals. May 2014
CodeVantage systems offers new revenue opportunities with the digitization of patient medical
data
Industry Problem
Code
Halo
Market Value Risk
($4)
($14)
($21)
($25)
($32)
($42)
($53)
($64)
($75)
($86)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Medicare Fee-for-Service Payment Cuts1
Reductions to Annual Payment Rate Increases (in billions)
Traditional revenue avenues declining:
Reductions in fee-for-service reimbursement
rates creating an incentive for hospitals to
adopt risk-adjusted contracts
HITECH Act digitizing the hospital landscape
1%-5% of a hospital’s Medicare revenue was at
risk relating to use of electronic medical records
71.90%
85.20%
94%
2011 2012 2013
Percentage of Hospitals Adoption Electronic
Medical Record System2
6. © 2014 Cognizant
The rise of Medicare Advantage (MA) and
other risk-adjusted contracts
38% of all Medicare revenue will be MA by
2021, up from 32% in 20151
Capture of Medicare Advantage Market is Mission Critical
6
With risk-adjusted contracts like MA trending to become a greater revenue source, utilizing
CodeVantage to efficiently manage these contracts presents a unique growth opportunity
Industry Problem
Code
Halo
Market Value Risk
42%
58%
19%
15%
33%
25%
6% 2%
2012 2022
Medicare Medicaid Commercial Self-Pay
Average Hospital Inpatient Case Mix by Volume3
8
8.7
9.2
9.9
10.8
11.8
12.8
13.6
2008 2009 2010 2011 2012 2013 2014 2015
MA is expected to be significant portion of
a provider’s revenue by 2020
58% of hospital revenues will come from
Medicare within the next 5 years
Number of Medicare Advantage Enrollees 2008 - 20152
(in millions)
1. Avalere Health. Medicare Advantage 2015 Snapshot. July 2015
2. The Henry J. Kaiser Family Foundation. Medicare Advantage 2015 Spotlight: Enrollment Market Update. June 2015
3. The Advisory Board Company. Healthcare Industry Trends 2015
7. © 2014 Cognizant7
Understanding Medicare Advantage
Insurance Firm
Traditional: Medicare Fee for Service
• Revenue on a per service basis Hospital
Hospital submits bill
for services rendered
Insurance
reimburses on a per-
service basis
Risk-Adjusted Contracts: Medicare Advantage
• Revenue a flat payment per patient
based on sickness
Hospital receives
flat payment per
patient
Payment amount
based on HCC
methodology
Insurance Firm Hospital
Industry Problem
Code
Halo
Market Value Risk
8. © 2014 Cognizant
Hierarchical Condition Categories (HCCs): A New Industry
Standard
8
• Risk-weighting method that determines revenue a hospital receives for each MA patient
• A patient with more documented diagnoses receives a higher HCC score
• A Higher HCC Score results in more revenue per patient
Definition
$800
HCC Score
1
Revenue per patient per month
1.5
$1,200
2
$1,600
0.5
$400$0
0
CodeVantage helps a hospital increase its patients’ HCC scores, bringing in more revenue
• If a hospital fails to document every disease every year for a MA patient, then the HCC score is not
maximized and revenue is lost
Industry Problem
Code
Halo
Market Value Risk
9. © 2014 Cognizant9
MA Revenue Streams Require a Different Approach
Decline in Chronic Diagnosis Coding Across Three
Years for Select Diseases1
Issue: Providers fail to document full diagnoses
for each patient each year
Issue: Hospitals fail to proactively engage
patients to bring them in the door
1 2
$1.5k - $2k
CodeVantage helps identify all diagnoses to document and proactively connects patient to the
necessary physician to capture full HCC score
Industry Problem
Code
Halo
Market Value Risk
1. Blue Cross Blue Shield. Its All about Coding, Caring, and Collaborating.. Feb. 2013
2. AAPC Factor HCC with Two Pronged Approach to Risk Management. Aug. 2012
Amount per patient lost
due to missing HCCs2
100% 100% 100%
17% 16% 12%11% 11% 7%
Coronary artery disease COPD Diabetes
Year 1 Year 2 Year 3
$7.5M - $10M
Potentially lost revenue
for hospital with 5,000
MA patients
10. © 2014 Cognizant10
CodeVantage Data Ecosystem
Hospital Medical
Data
Patient Prescription
Data
Hospital Billing Data
HCC
Predictive
Algorithm
Medical Footprint
Physician Appointment
Availability
SMS
Messaging
Patient Cell
Phone
Disease Prediction Appointment Scheduling
Performance
Tracking
Physician
Scorecards
Industry Problem
Code
Halo
Market Value Risk
CodeVantage Platform
11. © 2014 Cognizant
CodeVantage Impact on Individual Patient Care
11
Industry Problem
Code
Halo
Market Value Risk
Name: Merl
Age: 75
Health Plan: Medicare
Advantage
Medical Footprint:
• Chronic Pancreatitis
• Active Insulin Prescription
• Historical Depression Diag.
• Taking Lipitor
Merl calls to schedule
annual GI appointment
CodeVantage predicts
diseases and identifies
undocumented
diagnoses
System prompts
registrar to inquire about
scheduling PCP
appointment for
undocumented
diagnoses
PCP visit results in
documentation of
diabetes, depression,
obesity, hypertension,
and migraines
12. © 2014 Cognizant
CodeVantage’s Implications for Hospital with Merl’s Visit
12
Without
CodeVantage
With
CodeVantage
Diagnoses Documented: Revenue Received by
Hospital:
• Chronic Pancreatitis
Chronic Pancreatitis
Diabetes Mellitus
Depression
Hypertension
Obesity
Migraines
$600 per month
$1,640 per month
Resulting HCC Score:
2.051
0.747
Industry Problem
Code
Halo
Market Value Risk
Merl’s CodeVantage initiated PCP visit nets the hospital additional payment of $1,040 per month,
$12,480 annualized by documenting previously undiagnosed or undocumented diseases
13. © 2014 Cognizant13
Industry Problem
Code
Halo
Market Value Risk
CodeVantage Target Market Defined
>100 Beds
• Available resources to
purchase CodeVantage System
VA Hospitals
• Federal contracts have a higher
barrier to entry
Non-Specialty Hospitals
• Offer diverse services for risk-
based contracts.
At-Risk Contracts
• Necessary for risk-adjusted
payments
Children’s Hospitals
• No Medicare patients
Specialty Hospitals
• Lack of diversity in treatment
services
Targeted Segments Purposefully Excluded Segments
14. © 2014 Cognizant14
CodeVantage Target Market Size
1. Essentials of US hospital IT market; 5 year forecasted spend for US hospitals. HIMSS Analytics 2010
2. HIMMS 2013 Annual Report of the U.S. Hospital Market
3. “The Advisory Board Company. Healthcare Industry Trends 2015
4. SearchHealthIT.com, Analytics: Moving Health Care Forward, 2015
Industry Problem
Code
Halo
Market Value Risk
1,672 $412M - $630M
Percentage of Hospitals Adoption of Risk Based Contracts2
Likelihood of adoption by year
Estimated number
of hospitals in
target market4
Estimated CodeVantage
market size
CodeVantage is targeted towards a sizable and fast growing market of hospitals adopting risk
based contracts
$30.2B - $46.4B
$6.1B - $9.2B
$610M - $920M
$412M - $630M
Hospital CapEx per Year1
20% of CapEx direct to IT2
10% of IT direct to
Clinical/Quality Solutions2
91% Non-Specialty and
75% risk based3
8%
23%
54%
69%
75%
2013 2014 2015 2016 2017
Determining Market Size
15. © 2014 Cognizant15
Market Ripe for New Entrants
33.32%
38.42%
42.97%
2011 2012 2013
Undifferentiated Competition
Cognizant’s competition lacks activation
technology to capture revenue
Most competitors are focused on health plans
Technology is limited to diagnosis HCC
opportunity
% of Hospitals with Data-Warehouse/Clinical
Data Mining Technology1
Industry Problem
Code
Halo
Market Value Risk
1. HIMMS 2013 Annual Report of the U.S. Hospital Market
Ineffective Substitutes
Medical Scribes
• Pros: Improves in visit coding accuracy
• Cons: Cannot proactively ID care gaps
Chart Audit Services
• Pros: Good coding quality control process
• Cons: Only retrospective, costly, not
comprehensive
CodeVantage is targeted towards a sizable and fast growing market of hospitals adopting risk
based contracts
68% 33%
Unpenetrated clinical data
mining technology market1
Increase in mining
technology market
penetration since 20111
16. © 2014 Cognizant
TriZetto MA HCC Risk Adjustment
Manager leverages a technology
developed by the Johns Hopkins’
Bloomberg School of Public Health for
insurers
• Estimates HCCs for insurance
companies
• Identifies providers and members
who most likely need risk
adjustment
• Compares coding to determine
accuracy of risk-adjusted payments
• Estimates risk scores and evaluates
how additional HCCs might impact
revenue
16
CodeVantage
Physician
Appointment
Availability
Tool
TriZetto MA
HCC Risk
Adjustment
Manager
CodeVantage
SMS
Messaging
TriZetto Owned Technology Provides Easy Market Entry
Industry Problem
Code
Halo
Market Value Risk
HCC Risk Adjustment Manager
17. © 2014 Cognizant17
Consulting-Technology Hybrid Offers Recurring Revenue
Opportunity
*Billable hours and rate assumptions in Appendix K
$80,000
$394,250
$102,000 $102,000 $102,000 $102,000
$30,000
Year 1 Year 2 Year 3 Year 4 Year 5
Other Fees
Service Fee
Consulting Fees
Implementation
Fee
Revenue Recognition for One Engagement
Industry Problem
Code
Halo
Market Value Risk
(for the average hospital)
1. Interview. Keyon Crawley, Deputy Director Center for Health information Systems. UMD 2015
2. Cognizant Technology Solutions 10K
3. Assumes 15% discount rate
$1M $61.5M
Projected 5 Year
Revenue
Initial Investment1
94 20%
Profit margin
assumption2
Number of clients
acquired over first 5
years
$10.3M
NPV3
21 Months
Payback Period
18. © 2014 Cognizant18
Additional Engagement Cross-Sell Opportunities
Patient Responsibility
Patient Eligibility
Registration &
Scheduling Assessment
Engagement Activity
HCC Opportunity
Analysis
Patient Care-Gap
Analysis WellServe: Population
Health Consulting
ICD-10 and Clinical
Documentation
Improvement
Cognizant
Cross-Sell Opportunity
Industry Problem
Code
Halo
Market Value Risk
Consulting services created to identify business development opportunities in complementary
services
19. © 2014 Cognizant19
Strategic Benefits and Promising Returns
Industry Problem
Code
Halo
Market Value Risk
Strategic
Benefits of
CodeVantage
Launch
Leader in population health and risk-based
contracts for providers
Expertise transferrable to Trizetto’s
insurance HCC Risk Adjustment Manager
technology
Synergies with HealthActivate will allow Code
Halos to expand to patient mobile health
20. © 2014 Cognizant20
Assessing Business Risk
Market Risk
Product/TechnologyRisk
Same as
present Adjacent to present
New to Company
Sameascurrent
offerings
Adjacenttocurrent
offerings
NewtoCompany
Market/Product Risk Matrix
High Risk
Low Risk
High Risk
Medium
Risk
High Risk
Medium
Risk
Medium
Risk
Low Risk
Low Risk
Industry Problem
Code
Halo
Market Value Risk
By modifying a current product and introducing it to an adjacent market, the risk profile of
CodeVantage is significantly reduced
21. © 2014 Cognizant21
Risk Mitigation
Industry Problem
Code
Halo
Market Value Risk
Type Risk Statement Mitigation Plan
Product
Privacy Concerns
Access internal expertise on HIPPA compliance from TriZetto’s work and
experience handling patient centric data with its different products
targeted to the health insurance and hospital market.
Potentially long sales-cycle as
a hospital’s unique
opportunity could be unknown
Create a two-step sales process involving a significantly reduced initial
opportunity assessment for a small fee that will translate into a full
engagement sale. Focus marketing efforts on campaigns that encourage
hospital self-selection.
Scalability of technology
across different IT systems
Develop standard extracts for three largest EMR products (EPIC, Cerner,
and Meditech) and prioritize hospitals with these systems.
Market
Patient buy-In to appointment
visit recommendation
technology
Conduct patient surveys to measure; partner with hospital in alpha stage
to test patient reaction to recommendation logic.
Increase in vertical support
from insurers to providers for
HCC capture
Ensure Cognizant is first to market with CodeVantage technology and
builds the capacity of hospitals to increase capture of patients’ HCCs,
while developing relationships with insurers to facilitate implementation.
Decrease in Government
Medicare spending
Develop bare bones model allowing hospitals to purchase less
comprehensive yet effective software.
22. © 2014 Cognizant22
Next Steps
1. Approval to move ahead
2. Understand different hospital IT systems and scalability for interaction
3. Understand the link between hospital and insurers for submitting data
4. Identifying and targeting beta partners
5. Speak with Cognizant software development team about costs to build
solution
6. Identify and train internal team consisting of TriZetto and Cognizant to
be able to deliver consulting service
23. © 2014 Cognizant23
Appendix A: Marketing Sizing
Bed Segment Avg Cap Ex Median Cap Ex # of Hospital
IT Spend as a % of
CapEx
100 – 199 $ 8.06 $ 4.89 1063 16%
200 – 299 $ 15.47 $ 9.66 582 19%
300 – 399 $ 22.39 $ 15.86 348 22%
400 – 499 $ 32.89 $ 19.26 192 27%
500+ $ 54.77 $ 38.39 266 18%
• Implies annual hospital IT spend is $9B -
$5.9B
• % of hospitals that are specialty = 9%
• % of hospitals with at risk contracts – 75%
• Our market size = $6.2B - $4.1B
• 2,451 total hospitals greater than
100 beds
• % specialty – 9%
• % risk based = 75%
• 1,672 hospitals in target market
24. © 2014 Cognizant24
Appendix B: Marketing Size – Major IT Investment
Areas
• Quality/Clinical
• Finance
• HR
• Revenue Cycle
• Surgical
• Nursing
• HIM
• Lab
• Ancillary
• EMR
Cognizant Target IT
Segment
10%
25. © 2014 Cognizant25
Appendix C: Risk Analysis – Intended Market
Intended Market
How familiar is the intended market? Same as Present Market
Partial Overlap with
Present Market
Entirely Different from our
present market
Score
Customer's behavior & decision
making processes
1 2 3 4 5 3
Our Distribution & sales activities 1 2 3 4 5 3
The competition 1 2 3 4 5 3
Highly relevant Somewhat relevant Not at all relevant
Our brand promise is 1 2 3 4 5 2
Our current customer relationships
are
1 2 3 4 5 3
Our knowledge of competitors'
behavior and intentions is
1 2 3 4 5 3
26. © 2014 Cognizant26
Product/Technology
How familiar is the technology? Is fully applicable
Will require
significant
adaptation
Is not applicable Score
Our current development
capability
1 2 3 4 5 2
Our technology competency 1 2 3 4 5 1
Our manufacturing & service
delivery system
1 2 3 4 5 2
Our intellectual property
protection
1 2 3 4 5 1
Identical to those of current
offerings
Overlap
somewhat
Completely differ
The required knowledge &
science bases
1 2 3 4 5 1
The necessary product & service
functions
1 2 3 4 5 3
The expected quality standards 1 2 3 4 5 2
Total (y-
coordinate)
12
Appendix D: Risk Analysis – Product Technology
27. © 2014 Cognizant27
Appendix E: First To Market with CodeVantage
Adapting current Code Halo/HCC
technology to CodeVantage
Developing streamlined
appointment scheduling
technology
Beta Client implementation
Research and development for MA technology
Developing streamlined
appointment scheduling
technology
Beta Client implementation
Cognizant’s CodeVantage Development Timeline
Competitor's MA technology Development Timeline
12 – 14 months 3 – 4 months 6 – 8 months
3 – 4 months 6 – 8 months3 – 4 months
Market Entry at
least
22 Months
Market Entry
Within
15 Months
Leveraging TriZetto’s current MA Insurance Solution technology into CodeVantage MA
technology provides a significant competitive advantage and swift market entry opportunity
28. © 2014 Cognizant28
Appendix F: Proposed Approach to Deliver CodeVantage
Phase 1
• Implementation
• 4 -6 Months
Phase 2
• Client Process Overview
• 1 Month
Phase 3
• Opportunity Analysis
• 1 Month
Phase 4
• Process Change/Training
• 3 Months
Phase 5
• On-Going Service
• 4 Years
Proposed Service Structure Key Deliverables
Build hospital extract file
Interface with registration system
Provide training on platform
Process map scheduling,
registration, and coding processes
Analyze HCC revenue opportunity
Identify largest improvement
opportunities
Full training of schedulers on system
Education for physicians about HCC
importance
Monthly progress reports
29. © 2014 Cognizant29
Appendix G: Four Pillars of the CodeVantage’s Strategy
Patient Code Halos will allow hospitals to increase revenue through comprehensive MA claim
submissions
30. © 2014 Cognizant30
Appendix H: Projected Launch Year New Client Acquisition
Sales Activities
Frequency
(per year)
Exposure per
Event
Sales Meeting
Conversion Rate
White Papers
Published
1 300 2%
Teleconferences Held 3 20 15%
Conference
Presentations
2 100 5%
Web-Site 1 500 0.05%
Count
Sales Conversion
Rate
New Clients
Warm Sales
Meetings
25.25 30% 7.575
Direct Sales
Meetings
96 15% 14.4
Marketing Launch Activities and Sales Meeting Conversion
Marketing Launch New Client Acquisition
31. © 2014 Cognizant31
Appendix I: NPV Sensitivity and Assumptions
P&L Assumptions NPV Discount Rate Sensitivity
10.22% $ 12.9M
13% $ 11.3M
15% $ 10.3M
17% $ 9.4M
19% $ 8.6M
$150k $4.9M
$200k $5.7M
$250k $6.4M
$300k $7.2M
$350k $8.0M
$400k $8.8M
$450k $9.5M
$500k $10.3M
Year 1 Price Point NPV Sensitivity
Realized Revenue Year 1 $500,000
Realized Revenue Year 2 $102,000
Realized Revenue Year 3 $102,000
Realized Revenue Year 4 $102,000
Realized Revenue Year 5 $102,000
Renewal Rate 50%
Liscensing Fee Rate 10%
Sales Growth Rate 3.10%
Margin 20%
Discount Rate 15%
Initial Investment $1,000,000
Negotiation Rate 50%
Negotiation Amount $30,000
Tax Rate 35%
Amoritization Negligible
Change in Working Capital Negligible
32. © 2014 Cognizant32
Appendix J: Profit and Loss Projections
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
# of
Engagements
Sold per year
2 22 23 23 24 25 26 26 27 28
Revenues
$
1,000,000
$
11,191,500
$
13,773,563
$
16,435,669
$
19,180,301
$
21,908,016
$
23,704,727
$
25,659,138
$
27,466,971
$
29,436,010
Price
Concessions
$
200,000
$
329,625
$
339,843
$
350,379
$
361,240
$
372,439
$
383,984
$
395,888
$
408,160
$
420,813
Net Sales
$
800,000
$
10,861,875
$
13,433,719
$
16,085,290
$
18,819,060
$
21,535,577
$
23,320,743
$
25,263,250
$
27,058,811
$
29,015,197
Costs
$
638,400
$
8,667,776
$
10,720,108
$
12,836,062
$
15,017,610
$
17,185,391
$
18,609,953
$
20,160,073
$
21,592,931
$
23,154,127
Income
$
161,600
$
2,194,099
$
2,713,611
$
3,249,229
$
3,801,450
$
4,350,187
$
4,710,790
$
5,103,176
$
5,465,880
$
5,861,070
After Tax
Income
$
105,040
$
1,426,164
$
1,763,847
$
2,111,999
$
2,470,943
$
2,827,621
$
3,062,014
$
3,317,065
$
3,552,822
$
3,809,695
Product
Investment
$
(1,000,000)
$
(300,000)
$
(300,000)
Net Gain
$
(894,960)
$
1,426,164
$
1,463,847
$
2,111,999
$
2,170,943
$
2,827,621
$
3,062,014
$
3,317,065
$
3,552,822
$
3,809,695
NPV
$
10,302,983
33. © 2014 Cognizant33
Appendix K: Initial Cost Assumptions
Source Portion of Year Needed Cost
Developers 10 $120,000.00 0.5 $600,000.00
Cloud Costs 1 $50,000.00 1 $50,000.00
Hospital IT Systems
Expert
1 $150,000.00 0.5 $75,000.00
Project Management
Costs
15% Extra $833,750.00
Project Risk
Contingency
20% Extra $1,000,500.00
34. © 2014 Cognizant
Appendix L: Understanding Risk-Adjust Payments and the HCC
Score
34
HCC risk-adjustment methodology is become widely adopted by CMS for normalization of cost
or quality metrics for the level of patient risk making it imperative for providers to manage this
metric
HCC score calculated using patients demographics,
submitted claims, medical documentation and any
existing conditions (disease burden).
Hospitals submit documentation of disease burden
to insurance firms for reimbursement payments.
Insurance firms pass this on to CMS.
Hospitals receive payment based on HCC score of
patient. The higher the HCC score, the higher the
payment.
Medicare Shares Savings Program adjusts payment
rates on HCC scores making HCC risk-adjustment
methodology critical to revenue generation.
CMS requires annual documentation of disease
burden to disperse payments therefore capture of
comprehensive disease burden is mission critical.
35. © 2014 Cognizant35
Appendix M: Customer Service Benefits
2% $2.2M - $5.4M
Annual Medicare
revenue at risk for a
provider directly tied to
performance on patient
satisfaction surveys
Estimated annual revenue
gains for a provider with
$120M in revenues for being
in top quartile regarding
patient satisfaction1
202
868
1135 1172 1220
1355 1418
1743
2243
2868
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Estimated Number of Retail Clinics in the US2
The rise of consumerism in health care:
Growth of HDHPs1 pushing patients to shop
around for value
Proliferation of retail options increasing
competition for traditional providers
36. © 2014 Cognizant36
Appendix N: Service Fee Structure
Source
Contracted
Hours
Billable Rate Price
Principal 145 hrs $450 $65,250
Manager 280 hrs $325 $91,000
Consultant 600 hrs $250 $1,500,00
Analyst 440 hrs $200 $88,000
Implementation Fee $80,000
Negotiation Buffer $30,000
Estimated Engagement Budgeted Hours and Price
37. © 2014 Cognizant37
Appendix O: Details Service Structure with Deliverables
Service Timeline
Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
Service Implementation Client Process Overview Opportunity Analysis
Process
Change/Trainin
g
On-going service
Duration 4-6 months 1 months 1 month 3 months 4 years
Activities Build extract file
Understand
registration/scheduling
process
Assess HCC
opportunity gap
Educate Dr.’s
about
importance of
HCC capture
Technology
maintenance
Load to Code Halo
Platform
Analyze risk-based
contracts
Identify missed patient
referrals
Train
registration on
new alerts
Monthly progress
reports
Validate
Identify patient care
gaps
Build process
sustainability
infrastructure
Interface with
Registration System
38. © 2014 Cognizant38
Appendix P: Evidence of SMS with Appointments1
Evidence is building that demonstrates applications for the utility of text
messaging for treating, researching and preventing disease across a
range of disease conditions and patient types.
Further, research has demonstrated that text messaging improves
treatment compliance, medication adherence, immunization
literacy and appointment attendance
SMS appears a simple and efficient option that may result in health
benefits for patients. This review provides evidence substantiating my
hypothesis that SMS text messaging will have valuable applications in
health services and provides good evidence for use in driving patient visit
attendance.
1. In Search of a Effective Mobile-Device-Based Communication Strategies for a Healthier World. Kenyon Crowley. Oct. 2014
39. © 2014 Cognizant39
Appendix Q: Discount Rate Calculation
Cognizant Discount Rate
tax rate 35%
Return Debt 3.14%
Return Equity 10.56%
Debt Value $ 1,637,502,000.00
Equity Value $ 39,560,000,000.00
Cognizant Tech Solutions Discount Rate 10.22%
Risk Premium for Project 5%
Baseline Discount Rate 15%
Editor's Notes make it clear what technology Cognizant already has (Trizetto's tech) which reduces cost and risk; we need to have TPs ready to explain why we are saying a specific # of months. Explain execution of the project as well.
Patient Level Data Captured in CodeVantage
The strategy of CodeVantage is to develop patient-centric Code Halos which will collect and track individualized patient data, including: historical health documents, doctors’ notes, claims data, and lab and pharmaceutical data on an annual basis.
Hospitals will use patient data to accurately predict patients’ current and future disease burden and translate them into the appropriate HCC codes.
Accurate patient level data captured in CodeVantage allow hospitals to improve patients’ care
Hospitals will utilize the CodeVantage system (comprised of their patients’ individual Code Halos) to predict ancillary diseases and connect patients to the appropriate caregiver.
When a care-gap is identified, hospitals will be alerted by the CodeVantage system to connect that patient with the appropriate doctor to have their disease diagnosed and cared for.
To ensure efficiency and patient retention, the CodeVantage system will also provide a tool to ensure effective care coordination. CodeVantage will schedule patient appointments with the necessary doctors on the same day as their annual check up or another scheduled appointment.
Hospitals using more accurate diagnostic reports will experience increased reimbursement rates from MA
By ensuring patients are getting comprehensive care by having their diseased diagnosed and treated efficiently, CodeVantage will provide hospitals with a critical tool to capture patients full disease burden resulting in higher of MA payouts by preventing undiagnosed/untreated diseases from being missed.
Understanding Hierarchical Condition Categories (HCC) Scores
The Center for Medicare and Medicaid Services (CMS) reimburses Medicare Advantage insurance providers a flat per-patient, per-month fee regardless of the amount of services the patient utilizes.
The flat rate, however, is adjusted based on the clinically documented disease burden of the patient based on the assumption that sicker patients will be more costly to treat and therefore require higher reimbursement.
The rate received per patient is based on his/her HCC score, a score calculated on (1) a patient’s demographics and (2) submitted claims outlining, with medical documentation, any medical conditions the patient may have (i.e.: a patient’s disease burden).
The higher the HCC score, the greater the revenue-per-patient for the hospital.
How HCC Scores Apply to Hospitals
Hospitals are now forming their own insurance plans and/or accepting capitated contracts (risk-based) from insurance firms. Medicare Advantage, a risk-based contract, has been in existence since 1997.
Hospitals that enter into these contracts negotiate the percentage they receive of the flat payment that CMS pays to the insurance company (typically 85%), therefore hospitals in these contracts have a direct incentive to maximize the revenue-per-patient, or the HCC score.
Medicare Shares Savings Program (MSSP) also adjusts payment rates on the HCC score, making the HCC risk-adjustment methodology critical to revenue generation for hospitals