BCBSTN Speeds Claim Service

When health insurance claims are not processed promptly, affiliated healthcare providers are likely to be unhappy; and when healthcare providers are unhappy, they're likely to make their patients unhappy as well. That kind of trickle-down misery is what Blue Cross Blue Shield of Tennessee (BCBSTN, Chattanooga, $116 million 2002 revenue) was trying to prevent as it sought to bring a higher level of automation into its claims processing. The carrier covers about 2.4 million members and receives roughly 53,000 paper claims per day, out of a daily total of about 200,000 claims. Managing Medicaid, private, over-65 and federal government employee markets made automating claims processing a challenge.

Complex and Slow

"It used to take us five to seven days to even know we had a claim" says Deanna Quinn, manager, creative business solutions, BCBSTN. And claims were often misrouted, resulting in delays that could run for weeks. "I won't say service was bad, but it wasn't as good as it could have been, and we were spending a tremendous amount of effort to get things where they needed to go," Quinn says.

In search of a cure, BCBSTN conducted a process analysis and set goals for improvement, including a key demand for same-day entry of claims, Quinn recalls. "In the new world, everything we received would be scanned and in the system that night."

That objective was met through the implementation of Dakota Imaging's (Columbia, Md.) Transform and HealthClaim Expert software, coupled with a FileNET (Costa Mesa, Calif.) solution for storage and retrieval, that began in June 2000. The system went live with physician/professional claims by the end of that year, followed by hospital/facility claims in 2001. In 2002, the carrier implemented enrollment transactions and medical records. Currently, BCBSTN is in the process of adding imaging of dental claims.

Now BCBSTN can locate claims and medical record documents in seconds. And with same-day imaging and entry, the carrier has taken processing time down from about 14 days to just 6.5 days. "We basically took off the seven days on the front end when a claim was just sitting in queue," Quinn explains.

One of the major benefits of that change is improved cash flow for providers. "If we can pay that claim in seven days, they've got three weeks to reconcile their bills - and they are less likely to send [an outdated] bill to a member," Quinn notes. In the past, she adds, correspondence often got crossed in the mail, and members bore the brunt of the consequences. "Now our member calls are down by about 50 percent because they're not getting billed by the physician, and in many cases they're receiving their explanation of benefits within three days of their doctor's visit."

Amazing Payback

Savings on call center needs are part of a larger picture of return on BCBSTN's $6 million investment in the solution, according to Quinn. "Our business case was that we would pay the investment back in 18 to 24 months, but at the end of nine months we were $15 million ahead," she says. "So we paid it back in about three months - an amazing pay-back period.

Quinn believes that two vital factors made that payback possible: "First, we redesigned the process on the front end instead of just 'paving the cow path,' and second, it was because Dakota really stepped in to be our partner and helped to make things happen."

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CASE STUDY CLOSEUP

COMPANY NAME: Blue Cross Blue Shield of Tennessee (Chattanooga, $116 million, 2002 revenue)

LINES OF BUSINESS: Health insurance.

VENDOR/TECHNOLOGY: Dakota Imaging's (Columbia, Md.) Transform and HealthClaim Expert software.

THE CHALLENGE: Automate processing to increase volume and accuracy of healthcare claims.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio