; Arkansas Blue Cross And Blue Shield Receives Patent
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Press Release

Arkansas Blue Cross And Blue Shield Receives Patent

November 19, 2012

Little Rock, Ark. - Arkansas Blue Cross and Blue Shield recently received a U.S. patent for an information technology system developed by Joe Smith, senior vice president of Private Programs and chief information officer for Arkansas Blue Cross, and a team of employees.

The patent covers an innovative computer system that will save millions of dollars for Arkansas Blue Cross and its members and ease confusion in claims filing in the future for doctors and hospitals.

“The pinnacle of innovation in America is getting a U.S. patent,” Smith said, “And we have a whole team of people who can be proud of being a part of this accomplishment.”


Every doctor’s office, hospital and health care business in the world uses a system of codes to record health care diagnoses. These codes are filed with health insurance companies and are used to determine the payment the medical provider receives for providing the service. The World Health Organization (WHO) developed the International Classification of Diseases (ICD) codes. A new set of codes was released a few years ago. The United States by law must switch to these new codes by October 1, 2014.

The old coding system, called ICD-9, contains about 24,000 numbers for 24,000 different conditions. The new code set, called ICD-10, contains 155,000 codes.

The new codes are designed to better define a person’s diagnosis. For instance, under ICD-9, rheumatoid arthritis (RA) has one code, but under ICD-10 there are 96 codes related to RA because the code includes the body part affected.

This all sounds good, but there is a problem. The computer systems developed to recognize the old codes currently can’t recognize the new ones. Requiring every business involved in the U.S. health care industry to switch to the new coding system will be expensive and confusing — and it will happen right on the heels of health care reform.

For Arkansas Blue Cross, the codes are used by almost all computer systems and business processes in the company. “This is a huge change for anyone in health care,” said Joe Smith, senior vice president of Private Programs and chief information officer for Arkansas Blue Cross.


Joe and his team created a computer system that will accept codes in either 9 or 10, but in the “back room” convert all 10 codes back to 9. By “neutralizing” the codes, Arkansas Blue Cross can process claims for both coding systems, review business rules and medical policies, and make smart decisions of when to switch over completely to ICD-10.

In 2008, Gartner, Inc., the world’s leading information technology research and advisory company, published a case study on the ICD-10 planning by Arkansas Blue Cross, and said, “Arkansas Blue Cross and Blue Shield moved quickly and decisively to address the looming change from ICD-9 to ICD-10 coding, determining that not doing so would expose the company to significant risk of slow or parital compliance. Through leadership at the senior executive level that is determined to act, rather than react, the company developed a plan to manage the uncertainty and high costs of ICD-10 by neutralizing the application conversion process.”

Value to Members

How valuable is the ICD-10 Neutralizer? Just by building it and implementing it in house, Joe said Arkansas Blue Cross likely partially saved and partially deferred somewhere between $45to $65 million*. The Arkansas Blue Cross strategy is so good in fact, that other consultants started marketing their own version of the ICD-10 Neutralizer — even using the name. Joe had trademarked the name and was able to stop them from using it, and now that his patent has been approved, he can also stop them from using the design that he and his team developed.

The full adoption of ICD-10 in the medical community is expected to stretch over several years. Information technology experts predict that during the switch, the clinics, insurers and others will be in a “data fog” since they will not immediately understand the impact on all business rules, which could open the door to fraudulent activity. Because Arkansas Blue Cross will be working with the known ICD-9 codes during this “data fog” period, the chances of fraud related to the codes will not escalate significantly for the company. Arkansas Blue Cross also will be able to process claims from doctors and hospitals regardless of whether they are using the old codes or the new ones.

*America’s Health Insurance Plans’ ICD-10 compliance survey estimates for a Plan the size of Arkansas Blue Cross.

About Arkansas Blue Cross and Blue Shield
Founded in 1948, Arkansas Blue Cross and Blue Shield, an Independent Licensee of the Blue Cross and Blue Shield Association, is the largest health insurer in Arkansas. Arkansas Blue Cross and its affiliates have more than 2,700 employees. If combined, the 38 independent, locally operated Blue Cross and Blue Shield Plans collectively provide health care coverage for 93 million Americans.

The Blue Cross and Blue Shield Association is a national federation of 36 independent, community-based and locally-operated Blue Cross and Blue Shield companies that collectively provide healthcare coverage for nearly 105 million members – one-in-three Americans.  For more information on the Blue Cross and Blue Shield Association and its member companies, please visit bcbs.com. We encourage you to connect with us on Facebook, check out our videos on YouTube, follow us on Twitter and check out The BCBS Blog, for up-to-date information about BCBSA.