STRIMA 2007 Conference“Maine: Downeast and Different”

September 9 – 13, 2007Portland, Maine

Mon, Sept. 10

3:00 – 4:30 pm

Images, Ghosts and Picture: Document Management Solutions

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Your Guides

James Wedster Vice President of Product Development Valley Oak Systems, Inc.

Christopher Schaffer, EsquireVice President, National Sales CorVel Corporation

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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

The Case for an Interactive

and Fully Electronic Claim

File

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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

Beyond Scanning & Imaging

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Operating efficiencies Advanced technologies

Artificial intelligence Rules based engines

Storage Security Enhanced reporting and information sharing Improved results and effectiveness

Why Change the Process?

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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

Where to Start?

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Items to Consider Incorporating into Electronic

Claim File Process First Notice of Loss Nurse Case Management Medical Bill Review RX/DME Appraisals Recorded

Statements/VOIP ISO Indexing

Diagnostics EOB/Check Writing OSHA Reporting and

Tracking Payroll Systems Photographs Positive Pay/Check

Cashing Reserving Worksheets

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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

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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.

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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

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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

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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

Document Management

in the Claims Process

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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

What is Document Management?

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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

Traditional Claims Challenges

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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

Paperless Claims: Realistic or Unattainable?

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Claims Management Policy Administration Underwriting Risk Management Incident Reporting / Event Management Billing

Delivering Value to Paper-based Processes

An Electronic

Infrastructure for

Document Management

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Types of Technology

Software as a Service (SaaS) / Browser-based

Technology

Software as a Service (SaaS) / Browser-based

Technology

Workflow Management

(Business Rules)

Workflow Management

(Business Rules)

Scanning, Document

Imaging, OCR, Digital Photos

& Video

Scanning, Document

Imaging, OCR, Digital Photos

& Video

EDI, XML, Web ServicesEDI, XML,

Web Services

Internet Tools: Email, Hyperlinks

Internet Tools: Email, Hyperlinks

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Yesterday’s Paper-based Processes

Claims

Bill Review

Policy

Imaging

Medical Mgmt

Accounting

Users

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Today’s Electronic, Internet-based Infrastructure

InternetCentral

Repository

Hub

•Claims•Bill Review•Imaging•Policy•Medical Mgmt•Accounting•HR

One-System

Users

Server

Business RuleWorkflow

Connecticut Interlocal Risk Management Agency

An Integrated Environment for Improved Workflow

Case Study

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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

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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

CIRMA Claims Challenges

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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

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Before: Disparate Environment

LAP Underwriting

WC Underwriting

Finance(Great Plains) Claims

Two Underwriting Systems

First Notice of Loss

Managed Care

SIU Support

External Users(Members and Staff)

CITRIX

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After: Integrated Infrastructure

Finance(Great Plains)

First Notice of Loss

Managed Care Services

SIU System

External Users(Members and Staff)

EDI

Internet

EDI

Claims & Policy Hub

Internal Environment

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Enterprise Connectivity

Claims Adjusters

Admin Assistant

NurseCase

Manager

Risk Control

Under-Writing

Members

Finance

Business Analyst

View-Only ClaimsImproved connectivity and sharing of information among all stakeholders

Document Management

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Benefits & Savings

Claims Reporting Via Call Center CIRMA Online Process

Costs $16 / claim $3 / claim (anticipate 20% of 22,000 claims a year)

Admin Costs Industry Average CIRMA Benefit

Ratio 22 cents / premium $ 13.6 cents / premium $

Reports Paper Distribution Online Distribution

Distribution Takes 3 people 2 weeks to run quarterly reports, which stand 3 feet high

Automatic scheduling and distribution – save time, resources, paper & hassles

Integrating DM Tools for WC Best Practices

Case Study

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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 high-cost, high-risk areas for loss control

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“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!

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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

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“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

Developing Your Own Paperless Path

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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

Questions & Answers

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Contact Information

James WedsterValley Oak Systems, Inc.jwedster@valleyoak.comPhone: 925-242-4600

Christopher Schaffer, EsquireCorVel Corporationchris_schaffer@corvel.comPhone: 843-937-4900