NEWPORT BEACH, Calif. - May 11, 2009 - A growing number of health plans believe the transition to the ICD-10 diagnostic and procedure coding system presents an opportunity to achieve competitive advantage by using the migration as a catalyst to make strategic organizational improvements.

This is among the findings of a 2009 survey commissioned by The TriZetto Group, Inc., a software and IT services firm that helps payers and other healthcare constituents move toward Integrated Healthcare Management (IHM): the convergence of benefits administration, care management and constituent engagement information and incentives to improve U.S. healthcare. This second in a series of longitudinal surveys tracking payer transitions to ICD-10 was conducted by The Gantry Group, LLC, a strategic consulting and research firm. The first survey, conducted in October 2008, serves as a basis for comparison.

From the first TriZetto survey to the second, the commitment to use ICD-10 migration to drive additional IT system changes and achieve strategic advantage grew especially among health plans on both ends of the membership continuum -- small and large memberships. The commitment rose from 31 percent to 48 percent among plans with fewer than 50,000 members, while it increased from 36 percent to 75 percent among payers with more than 8 million covered lives.

The surveys prove what we've been hearing from customers," said Rob Scavo, senior vice president of core administration solutions. "Many of them plan to leverage ICD-10 to drive broader system and operational changes that improve their connectivity to providers, members and brokers, reduce costs and enhance clinical outcomes. In effect, they are using ICD-10 to power their IHM strategies."

The surveys show payers are not postponing ICD-10 preparation even though the federal government extended compliance deadlines to Jan. 1, 2012, for the ANSI x12 v.5010 HIPAA electronic transaction standards and to Oct. 1, 2013, for the ICD-10 code set. Thirteen percent of health plans have moved from inaction to action on migration, according to the two studies by TriZetto, while ICD-10 project starts have increased by 29 percent. The number of payers developing plans or putting plans into place has risen from 41 percent to 54 percent. Sixty-three percent of health plans reported in the most recent TriZetto survey that the deadline extensions will either not affect their planning or merely slow the pace of adoption.

Intensifying ICD-10 activity reflects a growing understanding by healthcare payers of the considerable scope of work to execute the migration. From the first to second study, payers increasingly said that the effort will be comparable to the HIPAA effort (up from 14 percent in the first study to 24 percent in the second), while 26 percent of health plans continue to believe that ICD-10 will be a larger effort than HIPAA compliance. Health plans that believe ICD-10 will be a larger effort than Y2K readiness rose from 19 percent to 28 percent.

"As payers have begun planning ICD-10 implementations, they've become aware that the scope goes well beyond claims coding," Scavo said. "They're seeing that ICD-10 will impact all areas of health plan operations -- from product development to revenue management, customer service, reimbursement management, finance and administration, care management, network management and risk management -- and therefore their care management, provider network and constituent systems as well as core administration applications."

TriZetto, said Scavo, expects a number of payers will use ICD-10 as an opportunity to replace outdated core administration platforms to more quickly enable compliance and provide a foundation for IHM. He said health plans that already have state-of-the-art systems likely will use ICD-10 migration to drive changes in their care and constituent applications to take better advantage of the intelligence the new coding structure provides.

A 2008 health insurer survey performed by industry research firm Gartner, Inc. revealed that the number of core administrative systems that healthcare insurers maintain has remained high. Seventy percent of respondents indicated that they have more than two core administrative systems, and 32 percent of these have four or more core administrative systems. (Source: Galimi, Joanne and O'Neill, Maureen, "Multiple Core Administrative Systems Continue to Plague Healthcare Insurers," Gartner, Inc., Dec. 9, 2008.) Having this many core administrative systems will challenge ICD-10 migration efforts because each system will have to be updated for ICD-10 or replaced.

TriZetto's Facets® and QNXTTM core administration platforms, as well as its care and constituent applications, will be ICD-10-compliant well before the 2013 deadline, according to Scavo. Timely systems compliance, he said, will allow its healthcare payer customers to focus on updating their products, network and care management technology and processes, and customer service operations "to achieve the full benefits of ICD-10 migration and competitive advantages of IHM."

TriZetto commissioned The Gantry Group to provide a baseline of health plan attitudes and perceptions about ICD-10 and then track changes in these opinions as payers conduct their IT upgrades. Participants in this longitudinal study ranged in plan size from fewer than 50,000 members to more than 8 million. Role groups were broken out by plan size and included C-suite, vice president, director, manager and specialist/analyst employees at 100 healthcare payer organizations.

About ICD-10

When seeing a patient, a doctor collects historical and physical information and recommends steps to improve health and perhaps certain medical procedures. All of this is coded using a diagnostic taxonomy, the World Health Organization's International Statistical Classification of Diseases and Related Health Problems (ICD). The codes are used to track morbidity and mortality data and for health claim reimbursement. In 2013, health plans and providers must move from ICD-9 coding to ICD-10, a more complex scheme of classifying diseases that reflects recent advances in disease detection and treatment and that is used by all other countries in the industrialized world.

About The Gantry Group

The Gantry Group is a strategic consulting firm that guides technology-based solution providers to build offerings that capitalize on urgent market needs and challenges. For the past decade, The Gantry Group's customer satisfaction, primary market research and ROI/TCO measurement services have armed the world's leading technology vendors with targeted market intelligence to support their strategic business decisions and inform their solution roadmaps. Backed by over 25 years of experience, The Gantry Group delivers to business executives the firsthand customer metrics, market insights and predictive measurement capabilities that allow them to accurately quantify the business opportunity and position themselves to seize the greatest market share. Additional information about Gantry Group can be found at www.gantrygroup.com.

About TriZetto

Founded in 1997, TriZetto is a privately held healthcare information technology company in the U.S. With its technology touching half of the U.S. insured population, TriZetto is Powering Integrated Healthcare Management™. TriZetto provides information technology solutions that enable health insurance payers and other constituents in the healthcare supply chain to improve the coordination of benefits and care for healthcare consumers. The company's offerings include enterprise and component software, hosting and business process outsourcing services, and consulting.

CONTACTS:

Government Relations Contact:
Brad Samson
The TriZetto Group
949-719-2220
brad.samson@trizetto.com

Media Contact:
Melissa Bruno
Schwartz Communications
781-684-0770
trizetto@schwartz-pr.com