News Release

Arkansas Blue Cross and Blue Shield receives patent


Max Greenwood @ 501-378-2131

Little Rock, Ark. (October 2, 2012) — 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 is the first ever assigned to Arkansas Blue Cross, the first ever given to Smith, and only the third ever in the Blue Cross and Blue Shield System of Plans history.

"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."

While the patent itself is significant, what it protects is even more vital to Arkansas Blue Cross. The patent is for the "Method and System for Health Care Coding Transition and Implementation." Smith and his team call it the "ICD-10 Neutralizer ®".


The International Classification of Diseases (ICD) is a health care classification system developed by the World Health Organization. It provides a standard diagnostic tool to classify diseases and injury. For 32 years, the U.S. health care industry has been using ICD-9, which contains about 24,000 codes of three to five numbers, but on Oct. 1, 2014, health insurers, providers and the U.S. government are mandated to change over to ICD-10, which includes 155,000 codes of seven digits, numbers and letters.

For Arkansas Blue Cross, the codes are used by almost all computer systems and business processes in the company. For example, these codes are used in determining price of inpatient claims. "This is a huge change for anyone in health care," Smith said.


Smith 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 partial 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, Smith said Arkansas Blue Cross likely partially saved and partially deferred somewhere between $45 to $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.

*AHIP’s ICD-10 compliance survey estimates for a Plan the size of Arkansas Blue Cross.

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 39 independent, locally operated Blue Cross and Blue Shield Plans collectively provide health care coverage for 93 million Americans.

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