Health Insurance Company Achieves 11 Month ROI
THE BUSINESS DRIVER:
A NEED TO CAPTURE DATA FROM MEDICAL CLAIMS
In the competitive world of health insurance, the efficient processing of medical claims is a critical component of success. The advantage often goes to firms that can limit processing costs while concurrently providing the highest level of customer service.
To achieve both of these potentially conflicting goals, one of the largest health insurers in the U.S. identified data capture and optical character recognition (OCR) technology to improve the processing of more than 22 million paper-based CMS 1500 and UB-04 claim form receipts. The company also sought to greatly improve employee productivity, shorten processing time and increase auto-adjudication rates. Leveraging these efficiency improvements, the company aimed to simultaneously improve service levels for the business clients, subscribers, doctors and hospitals that constitute its customer base.
As an early adopter of high-volume enterprise content management technologies, the company evaluated data capture solutions with clear requirements about how these technologies would integrate within its existing infrastructure and complement its business model. Front-end scanning and OCR technology to replace manual data entry was necessary, but not by itself sufficient, for a total solution. In addition, the company wanted breakthrough improvements that would streamline its overall business processes. The new system had to be capable of fully replacing the current combination of outsourced and internal data entry of 36,000 claims per day and pay for itself in less than two years.
KEY TECHNICAL COMPONENTS:
- High-volume scanning, capture workflow processing and export of the image documents to the back-end image repository.
- Forms processing functionality, including automated form identification, image enhancement, recognition, and the framework for business rules processing.
- A claims processing vertical application, providing pre-configured form definitions, common business rules and edits and industry-standard data exports for the CMS 1500 and UB-04 claim forms.
- Custom rules that utilized the company’s membership and provider information and customer-specific lookup tables.
The solution was complex and ambitious – and came with an extremely aggressive project timetable. The customer mandated that production implementation had to be achieved in six months – and it was.
$1 MILLION ROI IN 11 MONTHS
The resulting solution met or exceeded all of the company’s initial goals, was fully integrated with its core systems and was an unqualified success. The project had the distinction of being awarded the company’s “Project of the Year”.
R2K’s solution has been recognized through numerous other industry awards, including Kinetic Information System’s “Process Innovation” award and Business Solutions magazine’s “Channel Connection” award.
The company knew that a successful front-end data capture system would eliminate its dependence on outsourced data entry providers, enhance profitability in a competitive market and allow it to scale up in volume. The time was right to evaluate a state-of-the-art information capture technology solution.
The company selected and partnered with R2K Inc., after a lengthy evaluation of vendors and potential solutions. R2K was chosen because it is a leading information management technology services firm with expertise in insurance claims processing.
KEY BUSINESS ACHIEVEMENTS:
- The company achieved a complete, $1 million return on investment in only 11 months, almost 50% faster than the initial target.
- Built-in customized business edits decreased suspense rates by more than 15% and increased the overall quality of data for claims within the first pass rate.
- Provider coding to ensure the correct medical provider is paid was automated. Sixty-five percent of all claims were provider-coded with no human intervention at 100% accuracy.
- The claims processing cycle time decreased 40% for CMS 1500s, with an overall 160% increase in productivity.
- Quality improved and claim costs were reduced sufficiently to allow the company to take work back in-house from a vendor who specialized in data capture.
R2K performed an in-depth requirements analysis, developed comprehensive technical specifications, delivered several early prototypes and made timely modifications as requested. Completing the project on time and within budget, R2K delivered a customized solution built on software from a leading software vendor. As a result, R2K’s client benefited from substantial reductions in costs, increased customer satisfaction and an impressive ROI.