Transcript Managing Your Third Party Administrator

Images, Ghosts and Picture:
Document Management Solutions
Mon, Sept. 10
3:00 – 4:30 pm
STRIMA 2007 Conference
“Maine: Downeast and Different”
September 9 – 13, 2007
Portland, Maine
Your Guides
 James Wedster
Vice President of Product Development
Valley Oak Systems, Inc.
 Christopher Schaffer, Esquire
Vice President, National Sales
CorVel Corporation
2
Agenda




The Case for the Paperless Claim File
Document Management (DM) in the Claims Process
An Electronic Infrastructure for DM
CIRMA Case Study: Integration for Improved Workflow
 City Case Study: DM Tools and WC Best Practices
 Developing Your Own Paperless Path
 Q & A Session
3
The Case for an Interactive and
Fully Electronic Claim File
Beyond Scanning & Imaging
 Initial focus was on importing documents
into claim file
 Ongoing focus will be on fully automated
claims systems that take advantage of
current technologies and provide a single
platform for communication by all
stakeholders
5
Why Change the Process?
 Operating efficiencies
 Advanced technologies
 Artificial intelligence
 Rules based engines
 Storage
 Security
 Enhanced reporting and information sharing
 Improved results and effectiveness
6
Where to Start?
 Map out your claims process
 Critically analyze each step
 Why do I do this?
 Can I automate?
 What value is added?
 How can each step be effectively and efficiently
coordinated to reduce process time
7
Items to Consider Incorporating
into Electronic Claim File Process




First Notice of Loss
 Diagnostics
Nurse Case Management  EOB/Check Writing
Medical Bill Review
 OSHA Reporting and
Tracking
RX/DME
 Payroll Systems
 Appraisals
 Photographs
 Recorded
Statements/VOIP
 Positive Pay/Check
Cashing
 ISO Indexing
 Reserving Worksheets
8
Project Implementation
 A well-designed electronic claim file and
document management system should
enhance the process - Not add to the
process
 Implementation should be staged to avoid
information overload
9
Recognizing the Paradigm Shift in
Claims Adjusting
 In the past, the effectiveness of your
claims administrator was results driven
 Now, in addition to results, claims
administrator is now responsible for data
integrity, computer measured
benchmarks, OSHA reporting, paying
medicals within XX days, etc.
10
Unfortunate Reaction
 Adjusters have become box-checkers and data input
clerks
 Intense focus on objective automated measurements




Three-point contact
Compensability determined within XX days
Average medical turnaround
Closing ratio
 Substantive, proactive claims adjusting has become
secondary because results aren’t easily measured
11
Implementing for the Future
 Implement in a way that promotes focus
on substantive claims handling while
assisting adjuster in box-checking, data
integrity and file documentation
 Use audit tools
 Rules-based auto routing
 Letter writers
12
Invest in Technology to Support
Process or It Will Not Be Used
 Dual monitors to reduce screen flipping
 Size of monitor – No zooming in
 Effective and common sense document
management
 Ability to insert notes or comments on
correspondence
 Speed of delivery
 Speed of system – Load time/storage capacity
13
Document Management
in the Claims Process
What is Document Management?
 Originally, a system used to track and store images of
discreet paper documents
 Evolved to a systematic approach for storing,
accessing, and tracking information electronically
 Key characteristics of document management (DM):
 Ability to manage information, collaborate when creating
information, distribute information, and allow secure access
by relevant parties
 Supports a wide spectrum of “less paper” to “paperless”
work environments
15
Traditional Claims Challenges
 Inefficient workflow and business processes hamper productivity
 Time-consuming, labor-intensive tasks, e.g. repetitive data entry
 Inability to achieve end-to-end automation, straight-through
processing
 Difficulty in accessing and sharing data across the enterprise
 High operational costs (paper, copies, storage, and personnel)
 Lost documentation, due to physical transfer, storage and retrieval
 Inconsistent application of best practices in paper-based
environment
 Lag time in communication and collaboration among stakeholders
 Slow transactions impact customer service and satisfaction
 Inability to analyze and report on trends that affect costs
16
Paperless Claims:
Realistic or Unattainable?
 30 years ago the term “paperless office” first appeared,
based on belief technology would eliminate paper
 Today, paper consumption at 100-million tons a year
 Associates may be at different stages of paperless
path, need to accommodate their paper processes
 Consumers are tech-savvy, demanding more
paperless, web-based transactions
 For now, total elimination of paper is unrealistic; but
moving closer to a paperless environment has many
attainable benefits and reward
17
Delivering Value to
Paper-based Processes






Claims Management
Policy Administration
Underwriting
Risk Management
Incident Reporting / Event Management
Billing
18
An Electronic Infrastructure
for Document Management
Types of Technology
Software as a
Service (SaaS) /
Browser-based
Technology
Scanning,
Document
Imaging, OCR,
Digital Photos
& Video
EDI, XML,
Web Services
Internet Tools:
Email, Hyperlinks
Workflow
Management
(Business Rules)
20
Yesterday’s Paper-based Processes
Medical Mgmt
Accounting
Claims
Users
Imaging
Bill Review
Policy
21
Today’s Electronic,
Internet-based Infrastructure
•Claims
•Bill Review
•Imaging
•Policy
•Medical Mgmt
•Accounting
•HR
One-System
Internet
Business Rule
Workflow
Central
Repository
Hub
Users
Server
22
Case Study
Connecticut Interlocal Risk Management Agency
An Integrated Environment
for Improved Workflow
CIRMA: Updating IT for
Document Management Success
 One of the largest, most sophisticated public-entity
risk management pools in the nation
 Grew 600% since 2000, business environment
became more complex
 Legacy systems couldn’t keep pace in terms of
functionality and capacity level
 Integrated claims and policy administration system
was key priority to achieve DM efficiency across
enterprise
24
CIRMA Claims Challenges
With Exponential Growth, Increased Claims Capacity
 Went from 12,000 to 22,000 claims a year
 Needed to handle increased capacity without increasing human
resources and without impacting quality and performance
Previous Claims System
 Labor-intensive, paper-based business processes
 No web-based capability (e.g. no online reporting of claims)
Policy Administration
 Two disparate systems, multiple interfaces with claims system
 Difficult to access, retrieve and update policy information
25
New System’s DM Tools
Deliver Process Efficiencies
 Truly web-based, integrated claims and policy system
 Enable integration and document management across core
business units
 Flexibility to meet CIRMA’s unique document management
requirements
 Created an end-to-end electronic platform that integrates all
relevant insurance processes
 Established a centralized data repository, making it easy to
access and share information
 Business rules define and automatically manage workflow:
right people receive the right information at the right time
 Contemporary tools enable automation and paperless
processing
26
Before: Disparate Environment
Two Underwriting Systems
LAP
Underwriting
WC
Underwriting
First Notice of Loss
Managed Care
SIU Support
Finance
(Great Plains)
Claims
CITRIX
External Users
(Members and Staff)
27
After: Integrated Infrastructure
Internal Environment
Managed Care
Services
SIU System
Finance
(Great Plains)
EDI
Claims &
Policy Hub
External Users
(Members and Staff)
First Notice of Loss
28
Enterprise Connectivity
Claims
Adjusters
Admin
Assistant
Business
Analyst
Finance
Document
Management
Nurse
Case
Manager
Risk
Control
Members
UnderWriting
Improved connectivity
and Claims
sharing of information
View-Only
among all stakeholders
29
Benefits & Savings
Admin Costs
Ratio
Claims Reporting
Costs
Reports
Distribution
Industry Average
22 cents / premium $
Via Call Center
$16 / claim
Paper Distribution
Takes 3 people 2 weeks
to run quarterly reports,
which stand 3 feet high
CIRMA Benefit
13.6 cents / premium $
CIRMA Online Process
$3 / claim (anticipate 20% of
22,000 claims a year)
Online Distribution
Automatic scheduling and
distribution – save time,
resources, paper & hassles
30
Case Study
Integrating DM Tools for
WC Best Practices
City Profile
 7th largest City in the US, 11,076 employees
 Self-insured, self-administered WC program
 $23.8 million in workers’ comp claims costs
 Expensive! Effective claims management best strategy to
control costs and losses
 Needed DM tools to enable more efficiency and identify highcost, high-risk areas for loss control
32
“Before” Picture
Legacy System
 Paper and labor intensive
 Lack basic functionality
 Little automation of routine,
low-value tasks
 Inconsistent data collection
and reporting
 Band-aid approach in rapidly
escalating cost environment
Desired DM Best Practices
 Seamless claims reporting
 DM efficiency leads to
manageable caseloads
 Support for more automated
processes
 DM data collection will help
identify high-cost, high-loss
claims areas
Results: Inability to report outcomes =
Inability to influence outcomes =
high claim costs!
33
Leveraging DM Tools
 Document Management Tools:
 Avoid generation of paper in the first place: injuries reported
immediately to call center and interfaced into claims system
 Automated business rules drive best practices
 Auto-populated correspondence with claimants
 Diary-driven claims examiner workflows
 Electronic interfaces maximize efficiency and information flow
 Enable Data Reporting and Effective Management:
 Accurate data collection through required fields
 Identify trends to target with safety and loss-control initiatives
 Monitor key performance measures to track success
34
“After” Picture
 Seamless alignment of technology and DM objectives
 Electronic import of new injury reports
 Reduces injury reporting from 4 weeks to 24 hours
 Automation of bill review and payment
 36,000 automated payments annually
 Bill review savings:$10.8 million in year after DM implementation
 Maintain 1:1 open to close ratio
 Diary driven workflow increases efficiency and productivity
 Immediately closed 700 claims, reducing examiner caseload
 Distribution of quarterly reports help agencies to control costs
 DM data collection helped reduce claims by +6% over four-year period
 Costs reduced by $2.4 million in year after DM implementation
35
Developing Your Own
Paperless Path
Document Management:
Success Strategy Summary
 Online data capture avoids generation of paper in the first place
 Leverage scanning, document-imaging and OCR capabilities
 Utilize digital files where possible (PDF, photo, video), attach them
to electronic claims file
 Embed DM capabilities within workflow management, ensures right
person gets the right information at the right time
 Create an enterprise-wide electronic infrastructure
 Browser-based technology
 Centralized data repository
 Utilize connectivity tools (EDI, Web services, the Internet) to further
streamline business processes and the flow of information
 Leverage data to improve decision-making and program
performance
37
Questions & Answers
Contact Information
 James Wedster
Valley Oak Systems, Inc.
[email protected]
Phone: 925-242-4600
 Christopher Schaffer, Esquire
CorVel Corporation
[email protected]
Phone: 843-937-4900
39