Buy or Build an Edge Server: Three Questions to Consider

As the Affordable Care Act takes effect, health plans wishing to participate in the Health Insurance Marketplace must implement proper tools to abide by the government’s requirements for data collection. These requirements include operational edge servers be in place by January of 2014.

What are Edge Servers?

An edge server is any server that resides on the “edge” between two networks. Most issuers of individual and small group health plans will use edge servers to share data with the Department of Health and Human Services (HHS). The primary role of the edge servers is to ensure that data elements containing Protected Health Information (PHI) are limited, yet still allow for the collection of relevant data by HHS. The edge servers will make de-identified claims data available to HHS on a remote basis for the purpose of risk adjustment and reinsurance calculations.

Edge Servers: Build or Buy?

The following are questions that a health insurer should consider when determining whether to build or buy an edge server solution:

1. Is it in your company’s best financial interest to procure the equipment and human capital required to build and maintain an edge server? Or is it more cost effective to use a vendor for an edge server solution?
2. Is your company prepared to bear liability when it comes to issues such as disaster recovery?
3. Does your company have the expertise and bandwidth to ensure compliance with data standards and submit correctly formatted data on a timely basis?

Planning Accordingly

By the end of 2013, issuers need to:

• Procure hardware and the required software
• Develop Extract, Transfer, Load (ETL) protocols
• Educate staff regarding XML structured layouts
• Monitor the release of new CMS guidance and regulations.

Given tight timelines, each of the above-mentioned tasks needs to be addressed and coordinated to ensure health plans are well-positioned to succeed in the Health Insurance Marketplace.

Contact a Verisk Health expert to learn more about edge servers and our Health Insurance Marketplace solutions.