Regardless of the potential cost savings, customer satisfaction continues to be Progressive's No. 1 priority in the e-payments space, insists the carrier's Nowak. "There are some payment methods that might be more economical for us as a company, but at the end of the day, it's all about the customer," she says.
Since 1999, Progressive has rolled out additional e-payments technology, including online EFT payments and authorizations in 2003, payment by Web-enabled cell phone in 2005, PayPal payment options in 2006 and paperless billing in 2007. "We're constantly evaluating new payment methods and trying to make prudent decisions around what the next big payment methodology is going to be," Nowak relates. "For instance, we're working right now on customer-selected due dates and giving them more flexibility in that arena."
For most of the insurer's e-payment initiatives, Nowak relates, the company developed applications in-house. She declines to identify specific areas where outside vendor solutions were used. "Historically, we've been very heavy on the build side because the types of programs we wanted weren't always readily available in the market," Nowak explains.
Raymond Voelker, Progressive's CIO, echoed Nowak's statements on development -- that much of the technology was developed in-house for lack of options in the market at the time -- in an interview for a past article. He also recognized that many of Progressive's innovative technology plays of the past 10 years are becoming less competitively advantageous as other carriers continue to catch up.
While it's unlikely that most carriers will be able to equal Progressive's leadership position in e-payment capabilities any time soon, Voelker's core sentiment nonetheless rings true. The insurance industry as a whole -- as opposed to just carriers that sell direct-to-consumer products -- is becoming more customer-centric. As a result, insurers of all sizes, lines of business and distribution methods are facing strong customer demand for robust online payment capabilities, and they're taking great strides to meet it.
In part to address an aspect of its 2007 strategic plan to become more customer-focused, Blue Cross Blue Shield of Montana launched an online billing initiative for its group customers in the second quarter of that year, according to Peg Hasner, the Helena, Mont.-based health insurer's director of eligibility. "We wanted to make sure that our customer-focused approach resonated throughout our entire business," she says. "We were trying to find a fresh way to interact with our groups, and we were looking to be more flexible and be more prepared to meet the changing needs of our customer base."
Customer demand helped drive the initiative, Hasner adds. "Those options were already out in the marketplace from a retail standpoint," she explains. "It just made sense that you could pay your health insurance online."
Starting with online bill view and payment, the carrier went live with the eBilling solution from Benefitfocus (Charleston, S.C.) in January 2008, Hasner reports. That July BCBS of Montana (more than 230,000 members) rolled out an online billing adjustment capability. In September the company was able to combine its billing with that of ICMI (Insurance Coordinators of Montana Inc.), a subsidiary offering life, dental, vision, and accidental death and dismemberment insurance products.
Benefitfocus president and CEO Shawn Jenkins describes the eBilling solution as software-as-a-service (SaaS). "It's a hosted solution," he explains. "A lot of the technology we use involves Oracle [Redwood Shores, Calif.] databases and a J2EE framework."
Through October, BCBS of Montana's Hasner estimates, 3,000 groups, representing about 47 percent of the company's group customers, are using the online system. "We had a goal to meet a 30 percent adoption rate in our first year, and we have surpassed that," she relates.
Prior to the implementation, Hasner notes, BCBS of Montana's billing systems were "archaic." "The bill would be created systematically. However, we'd have to manually stuff it and mail it," she admits.
On the payments side, Hasner adds, the company did offer an EFT option, but it was not customer-centric. Once customers chose the EFT option, she explains, they were tied to it for subsequent payments. It was also a manual process to change the bank account tied to an EFT. "We really needed to get something into our customers' hands that was easy to use and that was online," she says.
With the new system in place, Hasner reports, the carrier has accelerated its payments processing. "We were able to get payments in-house quicker, and that allowed us to process claims faster," she says.
Meanwhile, the new system has freed up call center representatives. According to Hasner, payers can now access current and past invoices online. And customers can handle adjustments online as well, eliminating the need for customer service calls and, as Hasner puts it, "paper bills with red lines on them."
While Hasner says it's too early to discuss exact figures, Blue Cross Blue Shield of Montana also expects to realize postage savings and further efficiency gains as groups elect to go paperless under the new system. "We are looking to both those paper and postage savings sometime next year," she projects.