Electronic Efficiencies

Eliminating manual processes in claims results in happier customers -- who receive their claim payments quicker -- and significant gains in processing costs.

As a third-party administrator of Medicare Advantage and Medicare Supplement plans, Bellingham, Wash.-based Olympic Health Management Systems (a subsidiary of Chicago-based Aon Corp.; $9.8 billion in revenue) shares many of the processing challenges of health insurers. As a result, the TPA sought the help of AdminiSource, now a part of Metavante Healthcare Payment Solutions, to convert a manual claim fulfillment process into an electronic one. "We were in a completely manual paper environment for communication with our clients, with very little in the way of audit controls -- and those were subject to manual error," recalls Ed Cruz, manager, program administration, Olympic Health Management Systems.

In 2001 AdminiSource helped Olympic develop, test and deploy automated processes to convert claims into HIPAA-compliant transaction codes for payment distribution and remittance advice information. The process includes duplicate file and check detection along with custom audit control reports that enable Olympic to balance the distribution to their internal payment registers. "Payments that used to take us three to five days to generate after adjudication now go out the following day," Cruz says.

The claims fulfillment solution requires annual programming modifications by Metavante Healthcare Payment Solutions, to meet insurance regulations for timely notification to members of all rate changes, for example. In mid-2005 the vendor provided electronic records capabilities to Olympic that customer services reps can use in answering subscribers' questions. Cruz reports that subscribers "are now getting real-time answers to their questions, and if they need additional copies of documents, we can fulfill the request on the spot and deliver them within a day or two."

Cruz adds that the implementation of automated premium rate notification reduced his full-time employee requirement by three to five people. "I'm passing the savings from that on to my clients," he remarks.

Olympic currently is working with Metavante to build electronic funds transfer (EFT) capability, according to Cruz. "I envision that will pay itself off within three months when utilized in conjunction with the HIPAA 835 [electronic remittance advice], representing a potential savings of about half a million dollars annually," he says. Olympic plans to have the capability in place by the third quarter of 2007. --A.O.

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