RECORD OF SOCIETY OF ACTUARIES
1986 VOL. 12 NO. 4B
CONSIDERATIONS IN IMPLEMENTING A NEW
MEDICAL CLAIMS PROCESSING SYSTEM
Moderator:
C. NELSON
Panelists:
STEPHEN
DAVID
Recorder:
STROM
R. CARLIN*
A. PEDERSEN**
WILLIAM
ROBERTSON***
ROBERT
J. HOYT****
o
What is state-of-the-art
o
What are the requirements
o
--
Processing
--
Information
--
Customer
Current
Provider
--
Utilization
--
Data
software?
of such systems?
reporting
and future
--
in packaged
health
care developments
reimbursement
review
required
control
for actuarial
MR. C. NELSON
STROM:
Today
in implementing
a new medical
that
must
be addressed:
mechanisms
and evaluation
analysis
our topic
claims
of discussion
processing
system.
will be considerations
To kickoff
our topic,
*
Mr. Carlin, not a member of the Society, is a Marketing
Consultant
at
Resource
Information
Management
Systems, Inc. in Oakbrook,
Illinois.
**
Mr. Pedersen, not a member of the Society, is a Vice President in the
Research
Development
Division at Advanced
System Applications,
Inc. in
Bloomingdale,
Illinois.
***
Mr. Robertson,
not a member of the Society, is Director
Marketing
at ERISCO in New York, New York.
****
Mr. Hoyt, not a member of the Society, is Director of Group Claims
Allstate Life Insurance
Company in Northbrook,
Illinois.
3071
of New
Product
at
PANEL
I would
like to tell you about
medical
claims
viable
force
cient
processing
medical
claims
our experiences
system.
in the group
processing
medical
ment
options,
claims
and
market,
system.
conversions.
group
that
industry,
ago ;tnd since
then many
things
of things on the drawing
fully
The
the system
However,
if one is to be a
and effi-
improve
most of the new cost
the productivity
of our
at the end of the road in the develop-
The only thing
We believe
insurance
our new
we have just put in a new
(1) it can handle
We are almost
of our new system.
feel that
At Allstate,
being:
regarding
you need an up-to-date
(2) it will greatly
examiners.
at Allstate
We at Allstate
insurance
system with its major advantages
containment
DISCUSSION
left is to complete
we have
developed
we finished
Therefore,
of
is the best in the
its development
have changed.
board to enhance
the last couple
about
a year
we have put
our system even before
a couple
it has been
implemented.
dramatic
exciting
changes
taking
in some respects;
frustrations
vendors
of medical
claims
We believe
claims
of their
is not an associate
five
research
we will have
Mr. Stephen
Mr. Carlin,
sultant.
Finally
Prior
development
member
joined
of Actuaries.
R, Carlin
notch
vendor
System
Mr. Pedersen
Although
is their
Robertson
he is from
Information
director
years.
marketing
industry.
He said, walking
seen some
old friends
that
around
the hallways
he has worked
Life, and a few other
places.
Without
started.
3072
further
Douglas.
not a
He just
in the insurance
here at the meeting,
with at U.S. Life,
Systems,
con-
Mr. Robertson,
marketing.
20 plus years
Next
Management
is their
of new product
Bill spent
ASA, he
for ASA for
for eleven
from ERISCO.
Applica-
is the vice
He has worked
of the Society,
who
will be the top
Advanced
data processing
of Resource
them in April of this year.
New England
in the administra-
RIMS, he spent six years with McDonnell
Mr. William
of the Society,
division.
a top
speakers
From
A. Pedersen.
not a member
to joining
we will have
three
can be very
One way to alleviate
from
systems.
years and he's been in insurance
Inc. (RIMS).
system
today's
processing
in the Society
industry
for those of us involved
tions, Inc. (ASA) we have Mr. David
president
insurance
it can be very frustrating.
is to buy your
will keep it up-to-date.
in the group
however,
tive side of the business,
these
place
he has
Mutual
of New
adieu,
let's get
York,
IMPLEMENTING
MR. DAVID
A NEW MEDICAL
A. PEDERSEN:
onc and one on which
with
some common
proccssing
systcm,
your products
bridge
claims
software,
-- the basic editing,
and explanation
Even major
packages
variables
today.
benefits
which
systems
have
systems
within
are rapidly
authorization,
concurrent
groups (DRGs),
Claims
necessity
tion
through
which
The need to offer
a triple
option
are indemnity
insurance
(HMO)
The products
health
care
toward
advanced
arrangements.
completing
systems
plans,
Our
changes
product
research
needs
the least
3073
much
This would
the release
then
These
of CAPS
technology
informaII, a
to increase
in the future.
developing.
maintenance
and development
needs.
related
and
how we will treat
managed
which
processing,
of care and medical
charges.
advanced
and health
HMO system
to meet our clients'
with
with
is rapidly
PPO plans,
move from
an extensive
logic edits.
and pre-
diagnostic
reporting,
affecting
reporting
care delivery
opinion
(PPOs),
flexible
medical
processing
additional
surgical
and the physician's
these
advanced
those of today.
appropriateness
and are dramatically
and provide
plans.
advanced
ASA is addressing
combines
productivity
determining
and
and benefits
in precertification
arrangements,
the
claims
products
and the medical
second
with
routine.
handle
Tomorrow's
than
organizations
for the patient
are here today
tomorrow.
system
provider
pretty
by most vendor
emerging
new features
care processing,
are even
review
well.
verifica-
and payment
and administration
care industry
funding
of eligibility
calculation
characteristics
through
preferred
systems
a claim
changes
the health
moving
alternate
conditions
trigger
different
claims
where
like to bc.
-- are becoming
plan quite
second,
the best way is to
are accommodated
for claims
indemnity
ambulatory
review,
automatic
need to be able to handle
significantly
The demands
more.
systems
of the traditional
administration
functions
of benefits
in plan differences
Today's
you would
the automated
associated
what
although
a new medical
you are today;
and third,
you arc to where
viewpoints,
implementing
where
for the future;
tion and creation
checks,
first,
SYSTEM
the topic is a challenging
you will see some different
you need to review
the gap from where
PROCESSING
mentioned,
When you consider
are targeted
In packaged
AS Nelson
I think
threads.
CLAIMS
The products
organization
to the most managed
division
can interface
is working
to our existing
in
PANEL
Within
the indemnity
process requires
products,
coinsurance
health
This
care
primarily
cost.
between
management
handling
the insurer
insured
of benefit
provisions
is the least
and the group.
or self-funded,
plans.
are utilized
managed
is little
Today's
the
When necesto manage
and the relationship
There
or the insureds.
the PPO arrangements,
are involved
for reduced
costs.
process.
groups
their
direct
PPO is necessary
indemnity
is
involvement
systems
or
are capable
to assure
of
effectively
track,
more from
your claims
had extensive
changes
part of benefit
negotiate
Finally,
made
provide
and payment
ASA is devoting
significantly
level
industry.
involved
to
much
systems
have
as an integral
collected
management
from
and help
better
being
in managing
used
use and controlling
Issues
to develop
selection
of quality
and
of care
of the HMO.
the providers,
and at what
demands
the HMO provider
provider
incentives
and manage
opportunities
In addition
care.
the financial
effort
and changing
the effective
mandate
of managed
of benefits
a significant
growing
The data
the employee,
in managing
may affect
As you can see, new product
care
the group,
all the relationships
and the level
requires
ASA developed
the PPO network
to
information
the PPO requirements
The HMO products
the highest
wellness
to your
Additional
processing.
of the
for the insured
of relationship
systems.
as
for renewal.
care.
to evaluate
this kind
the health
management
applied
or
care
is provided
in comparison
on use.
to incorporate
are all involved
the costs of health
can meet the
and manage
quality
of managing
Financial
services
an impact
the HMO products,
and the insurer
providers.
or disincentives
will serve to support
within
and managed
to these
and administration
PPO contracts
generally
or hospitals
cost effective
calculation
PPO payments
are part
will have
report,
and the PPO physicians
PPO physicians
The incentives
physicians
the group,
and the goal is to provide
and the groups
Selecting
employees
products.
use the PPO
the insurer,
in the product
The insurers
care delivery
health
and other
product
of the providers
networks
insureds,
may be either
a wide variety
this product.
Within
critical
which
administering
sary, deductibles,
DISCUSSION
cost.
It is
the
That's
an HMO processing
why
system
for HMO administrators.
are rapidly
to managing
the health
3074
benefits,
emerging
in the
we will need to bc
care delivery
and utilization
which
IMPLEMENTING
relationships
and their
need to support
the various
ment
A NEW MEDICAL
these
equivalent
a reliable
are happening
selection
together,
it's vital
by age groups
on projected
which
provide
discounts,
to evaluate.
to know
based
of such information
for large
groups.
data
becomes
critical
data,
meet the policyholder
reports
This service,
source
need
within
option
option
anticipated
determine
or whether
structures
actually
which
increase
of categorizing
remap
rely
setting
treatments
history
available
or shifted.
benefits
of medical
has a more direct
selection
the value of and the effect
needs.
coverage
relationship
among
products
in
may shift
It will be important
of cost containment
will be really
In addition,
product
has become
of a changing
system.
3075
to
real time
be a significant
current
loss and coinsuranee
of how the plan is reimbursed.
to services
and
in the future.
as the price
like stop
a
is used
for ever changing
should
relationship.
savings
normative
which
As an online,
center,
levels
to develop
to calculate
claim
The
The timeliness
our clients
is used
Adverse
on varying
use because
with
specific
premium
it will be increased
experience.
rate or expectation
increases
the assumed
and actuarial
when
and its utilization
cost versus
whether
care is more
the overall
for our clients
environment.
risk pools and
increases.
information
for this information
these products.
for underwriting
for reporting.
data
across
as holdbacks,
use versus
are immediately
the health
and statistical
a selected
the new triple
your
and graphics
and
and statistics
which
provides
requirements
called
of claims
Your
history
yet which
of
or for advising
and comparable
why ASA is working
base of claim
comparative
such
it's critieal
norms
the patterns
For pricing
within
services
and their
will
When all of these options
must have the data and the system
results
national
That's
trends.
arrangements
Therefore,
between
develop-
or users of this information
and understand
staff
to measure
the products
need for broad
system
your
systems
can be made
to your product
to make decisions.
the true costs of medical
difficult
common
customer,
SYSTEM
and administration
are critical
and by medical
of financial
PROCESSING
true comparisons
to know
experience,
the ability
With a variety
staffs
The client,
base from which
clients
Claims
so that
System capabilities
and management.
demand
costs.
new products
options.
CLAIMS
more
medical
to
there
may
Your requirement
complex
service
as you must
delivery
PANEL
Tomorrow's
claims
data.
systems
claim
level
claim
and experience
experience
must
provider
levels to evaluate
premium
point
multiple
the actual
holdbacks
financial
allow
or
uniform
must integrate
systems which
handle
or risk
breakdowns
that
your financial
pools.
It's
are matched
cost of services.
is more complicated
encounter
which
The system
costs and financial
to claim match-up
of detailed
processes
and reporting.
reimbursements,
that true experience
proper
feed
to your administrative
of billing,
critical
need to be the entry
data
processing
data back
functions
tional
That
DISCUSSION
The
at the
tradi-
and requires
greater
sophistication.
Not only will
clients
you as actuarial
wilt be demanding
significant
portion
of employee
increaslngly
knowledgeable
fundamental
question
my savings?
And if there
areas?
groups
share
Your
a growing
tively
are savings,
Your
Advanced
Applications,
in providing
beginning.
Our challenge
you meet
the evolutionary
facing.
information
meet
health
your
own experiences
costs.
The
how much
are
which
you require
as you
Your task of matching
by your
produces
systems;
solutions,
and enhance
in today's
is being spent
ability
results,
is
to effec-
and those
results
rapidly
of growth,
not just systems,
changes
health
has been asked
a new claims system.
and our own corporations'
software
to developing
points of view which probably
you are
products
products.
systems'
care
for
The
solutions
to
industry.
to provide
its observations
My fellow
will differ
backgrounds.
3076
us
to help
which
new software
our existing
changing
has placed
and for us it's just the
revolutionary
committed
This panel
in implementing
and I have specific
those
where your money
that we are developing
age is here and we're
on considerations
are becoming
are they in the different
its ten years
insurance
and the near
R. CARLIN:
your
to be a
rates and discounts,
how much
that
but
care.
is to provide
to refine
requirements
MR. STEPHEN
in controlling
through
health
]t is that challenge
and are continuing
corporations
will be measured
the process
quality
this data,
costs continue
to see the same detail
success
and manage
System
care
rates and costs in line.
are cost effective,
as a leader
plans,
use and of determining
challenge.
evaluate
benefit
all the reduced
will want
to detailed
be requiring
As health
and involved
is, with
the task of keeping
products
professionals
it as well.
panel
members
based upon our
That's
how it should
IMPLEMENTING
be.
There
A NEW MEDICAL
is no definitive
solution
ety are the key elements
Specific
questions
of-the-art
which
that we're
in software
They are current
dealing
with
specifically
with
and control,
and data required
are the current
claims?
initiated
Today's
in the
was a major
exclusive
of service
and
capabilities
organizations
forms
of packaged
software
employers.
in the 1980s.
months
of discounted
more acceptance
the simple payment
has shifted
data;
from
The emphasis
which
the growth
of PPOs,
associations
between
providers
than that of the PPOs, have
care which
is cost containment
then on automated
claims
of claims to the acquisition
data
that we can use to evaluate
such
as Resource
to
that were
Cost containment
arrangements
HMOs, an older concept
as a means of managed
systems
as they relate
of concepts
provider
contractual
level.
utilization
ago has spawned
preferred
taken to it's next logical
meaningful
reimbursement,
analysis.
(EPOs),
of such systems?
that must be addressed,
are mere reflections
a few short
to provide.
What is the state-
for actuarial
1970s and implemented
provider
include:
on provider
applications
"hot button"
(PPAs) and other
gained
emphasis
and vari-
are obliged
care developments
review
health
today
SYSTEM
Flexibility
vendors
and what are the requirements
health
looking
Well, what
PROCESSING
for all situations.
we as software
packages?
and future
CLAIMS
that elusive
quality
of
of care
issue.
Software
vendors
problem.
First,
delivery
methodologies
of the tremendous
regard
to hardware
and second,
strides
and software
does that do then to the small
current
develop
The
fourth
claims
with
we must maintain
compact
of hardware
will occur
computer
in reasoning
elements
3077
will
with
ones
What
capabilities?
has allowed
what
be capable
through
a dual
understanding
advances
for just yesterday.
integration,
and software
in certain
care
an up-to-date
technology
scale
have
-- one of the most recent
or personal
of computer
very large
Systems
in health
in technological
development
as well as its failures,
ware specialization
concepts
I saw an advertisement
generation
systems
next generation
its successes,
Management
that are being made
being the new 386 chip, which
The
Information
we have to keep up with the latest
of learning
problems.
of the health
the vendors
we call VLSI.
Soft-
care field.
from
to
PANEL
You will
find
that the industry
will
microteehnology.
As an example
there's
of inserting
capability
diagnosis
from
derived
the episode
from
care, toward
using
knowledge,
hard
become
more
Each
defined,
element
detailed
specifically
of reporting,
capabilities
procedures
which
automated
involved
control
could
through
AI shells.
This
data
evaluate
providers
mended
to maintain
be involved
knowledge
future
methodology
and develop
in accordance
diagnosis
stay and severity
the regional
then are definable,
(SQCs), as well as the potential
then
Those
be compensated
providers
which
be far
have
accordingly.
3078
intelligence
episode
of
The new systems
will
reimbursement
such
because
quality
and review/
or knowledge-based
schedules.
acceptable
will be
of utilization
Through
things
to
recom-
as length
of
they lie outside
norms for that particular
statistical
and
to meet those
as artificial
reflect
and
for simi-
local norms
here today
systems.
reim-
different
follow
and eventually
for the development
yield
Diagnosis
on the current
which
will
Provider
rule-based
contractual
schedules
use.
flexibility
cases may be reviewed
norms or the established
can be established
care (CQC).
will expand
negotiated
and treatment
of illness,
will
to develop
being rendered
with
may
known
these new specialized
the level of services
provider
today.
in the development
engineering
reports,
care.
that those present
of automation
how to
will
for internal
characteristics.
extreme
By
structure
or integrated,
discussed
reimbursement
exists
in the next evolution
(AI); actuaries
illness
will have
The potential
based
health
of evaluat-
approach.
soft knowledge,
reports
in San Francisco
Provider
to migrate
means
reporting
singularly
take on regional
are performed
systems
requirements.
taken
are being
could
in Boston.
with
at employer
of managed
that
will tend
systems
coupled
administrative
whether
in the future
methodologies
lar activities
looking
on the success
bursement
of systems
information
is known,
and
codes.
a new and more objective
and ultimately,
information
System
which
code and having
procedure
has been the primary
a more integrated
that
and mini
type of specialization,
diagnosis
appropriate
data, which
to make a decision,
reports
by mainframe,
the next generation
proceed
management
with
of illness
ing health
be handled
of this particular
a specific
code then matched
Information
DISCUSSION
group,
What
of care norms
of a clinical
quality
of
SQC and CQC quotients
would
IMPLEMENTING
A few questions
today's
come to mind.
systems
an aging
needed
sufficient
population
questions
I think
in mind
to throw
during
she said, "Insurers
must
old actuarial
MR. WILLIAM
with
insurance
care
delivery
First,
and
to provide
employers,
which
does managed
health
it's changing.
The world
Research
suggested
convention
earlier
Second,
what
for more data
They
it to be a reflec-
of new systems and
by technology.
traveling
And finally,
we
an increased
of success will reside
around
the country
about
and what
talking
the alternate
the impact
health
of those
are on
systems.
mean to the insurance
is changing
at the Health
have
for the next level of appro-
and providers
care
this year,
yet
of data.
of claims
what
(HIAA)
and found
guidelines
are emerging
implementation
Opinion
new approaches.
Key components
I've been
means that
so hop on board
shaped
and completeness
companies,
are
had these
as far as we are able, and anticipate
ROBERTSON:
systems
the selection
in software
at the requirements
of care issues.
consistency
and in
questions
Health
develop
in refinements
analysis
These
by
care, and for
systems."
and partially
automation
and necessity
in accuracy,
and programs?
at the state-of-the-art
upon
policy
their
We have looked
captured
health
Are changes
in both
when
them to be dynamic
priateness
used
SYSTEM
being
development,
the next decade?
of products
have looked into the future,
dependency
is currently
of Family
tion of past ideas.
found
that
PROCESSING
that the president
out
We have looked
Is data
methodologies
an administration
to be answered.
CLAIMS
to meet the policy
needs
in the statistical
planning
have
A NEW MEDICAL
industry?
and as the president
Insurance
"The train
Association
has already
Well, it
of
of America
left the station,
fast."
does it mean for employers?
-- for employers,
it truly
cost less if the employees
quality
of care
that
From the provider's
they
specific
The key issue seems to be the demand
data.
What does it truly cost?
are in an HMO?
are getting
in an alternate
How can
delivery
I measure
system?
point of view the same issues are emerging,
getting
into our business
famous
philosopher,
just as you're
Yogi Berra
getting
into their
said, "The future
3079
ain't
business.
what
Does
the
and they're
As the
it used to be."
PANEL
The considerations
DISCUSSION
in implementing
a new medical
the same for you as it is for us, the vendors
That
is, we've got to make some of the right
direction
of the future
out there.
No sooner
past, than
we're
gested
that
there
There
to learn
appears
system
and reimbursement
reimbursement
and mid-sized
that the latest
precertification..As
away
A survey
any simpler
words.
words of the
Someone
sug-
to HMOs and PPOs
carriers,
which
have
from traditional
that
and
were doing
the insurance
provider
However,
of these together
delivery
corpora-
a year old now, showed
employers
observed,
HMO alternative.
fee-for-
we had done of major
is about
the PPO, preferred
to put the three
getting
care to some alternate
were that 50% of major
adopting
was once a competitive
are trying
however,
system.
you probably
been more readily
are
on what the strategic
in addition
for medical
insurance
numbers
system
industry.
(OWAs).
to be a trend
indemnity
processing
to that
some of the three-letter
one up there
Weird Arrangements
clearly
guesses
is, it isn't
some new three-letter
be another
service
tions
One conclusion
have we mastered
having
should
is Other
is.
claims
of services
alternative
there
hospital
industry
has
than
what
are some insurers
in the so-called
triple
that
option
plan.
There
do seem to be economic
insurer,
the employer
services
in a traditional
10 cents by putting
hospital
precertification,
and the like.
many
another
for this.
indemnity
have included
number,
which
is hard
services,
between
used cost containment
opinion,
mandatory
arrangement
15 cents out of that dollar
of those
and
with
those services
outpatient
a PPO, you could
probably
the fact that
programs.
The comparable
you are comparing
delivered
save
methods:
that reflects
the cost utilization
to get because
for the
level of medical
plan, you can probably
commonly
second surgical
In a discount
If it costs a dollar
to buy a certain
fee-for-service
in the traditional,
surgery
squeeze
reasons
and the employee
different
levels of
on an HMO basis seems to be quite
a
bit less.
We've been
between
HMO.
spectrum.
talking
a traditional
What's
really
Each
about
triple
indemnity
happening
one is starting
options
plan,
as if there
a preferred
out there
is a whole
to take on some
3080
were
nice clear
provider
cut choices
arrangement
lot of choices
of the characteristics
and
along
a
of the
an
IMPLEMENTING
other.
A NEW MEDICAL
There may not be too many
out there.
Someone
insurance
in those companies
their
first year
requires
of service
new systems'
who have
about
of the services,
physician
option
plans,
each
and
point
Whether
get paid something
outside
the system
required
determining
There
are multiple
employer's
which
levels
there
This
in
also
for those
of us
We have
now
is with the proa primary
care
may be financially
is the ultimate
reduced
of the triple
in a HMO, get to choose
behave according
to the rules of the system
or they take themselves
benefit
level means keeping
but also whether
or an authorization.
That
or not that
would
track
particular
he a factor
in
payment.
of accounting
ones of whether
money,
companies.
physician,
they are enrolled
they
arrangements,
the level of claim
the traditional
plan,
and get a somewhat
a referral
left
health
an HMO, for example,
over the years.
services,
close to 100% of benefits
not only of the provider
service
systems
plans
arrangement.
although
service.
indemnity
requirements
or not a "gatekeeper"
of service
employees,
medical
into
arrangement
for the medical
in the risk sharing
In the so-called
claims
SYSTEM
of individual
in several
and information
traditional
who is responsible
responsible
force employees
kind of financial
whether
of choice
a resurgence
has happened
requirements
what
PROCESSING
pure freedom
however,
that
which
been providing
got to worry
vider
has predicted,
CLAIMS
arrangements
it is the insurance
but also is it the medical
group's
to worry
about.
Not only
company's
money or the
money,
or the provider's
money?
Finally,
sliced
all the data
a different
tice patterns.
cine
way and looked
For example,
differently
for-service?
we have traditionally
in their
I'm told,
That could
to employers
needs
to be
at from the point of view of provider
are the providers
HMO environment,
In California,
PPOs and one HMO.
provided
in the system
versus
the average
mean having
their
practicing
PPO,
physician
them
versus
prac-
meditheir
is a member
fee-
of two
in the claims system
four
times.
So there
are some
data entry,
new control
remote
new processing
provider
requirements
input,
(managed
requirements
third
party
provider
3081
(referrals,
collection,
rules,
authorizations,
EFT), some
matching
authorizations/
bulk
PANEL
referrals/service
prospective/retrospective
auditing,
of care evaluations)
quality
(capitation
accounting,
capitation
DISCUSSION
review,
payments,
bonus
may be implemented
day one, but some of them
offer
plan today.
a triple
option
How are insurance
multiple
options
the quality
companies
and trying
and employers
to compare
organizations
of these
programs.
Other
options
include
existing
indemnity
claims
system
or making
system.
There
are advantages
disadvantage
Typically,
In making
Administering
separate
insurance
knowledge
are some of you that
items such
as bulk data
represent
for medical
you need
the needs
care,
even
somehow
hooking
data
the questions
that
saving
pricing
with
into
employers
obtained
a capitation
of capitated
with
data,
PC.
today
The
putting
you may find it diffi-
and
records
those
data
issues.
a bi-solution,
our point
are many
payments,
third
services
payors
is that
which
solution
We've got to find some
etc.,
party
The feeling
even on those
inventory.
From
there
capitation
system.
requirements,
and drug
wait for the ultimate
simple
are
of
way to
so we can start to prepare
answers
What would
have cost
on a fee-for-service
arrangement?
system.
that are primarily
delivery
are asking:
of the claims
software,
processing,
We can't
the system
triple
may mean a lot of time
medical
primarily
encounter
up to the doctor's
get encounter
me if they were
that's
utilization
basis.
one
to an
or claims expertise.
of organizations
to have complete
for on a capitation
each
an integrated
option system,
accounting,
in an alternate
to administer
PPO, HMO capabilities
system
may be confronted
entry,
systems
is that it is a real problem
administrative,
scheduling,
and
Most of them are using
are outside
or buying a triple
to
issue of offering
to each one of these approaches.
systems
of view, from a mega bi-solution
paid
with this
for the cost effectiveness
or buying
to the existing
an HMO requires
such as appointment
that
Not all of these
if you are going
adding
the HMO people
while adding
cult to come across
separate
and disadvantages
of having
together
and money.
There
and consequently
provider
requirements
payments).
of care in each one of those alternatives?
option
review,
are necessary
dealing
the data
separate
the data
concurrent
and some new financial
How much
am I really
It may even mean doing
some quasi
services.
3082
basis?
these services
to
IMPLEMENTING
A NEW MEDICAL
CLAIMS
If you look at the history
of the development
that I think
from
we all started
some cost containment
features
outpatient
surgery,
logic
code with diagnosis,
of preferred
whether
medical
and
the ability
providers.
That
now of adding
hospital
precertification
termine
length
Another
claims
thing
emerging
which
health
need to deal
preferred
with
different
some other
and
get a lower
rate.
Finally,
there
are those
things
not
generation
payment
module
which
schedule
would
you to look at normative
data,
to the claim processor
that
offering.
referral
claims
by DRGs.
including
plans, different
we think
level
out there
We need
claims
to be able
against
was obtained
that vary
to enter
it; perhaps
for a specialty
possible
service
whether
on our group
sonal
and generate
groups,
of companies
a set of standard
A lot of us, when we think
side of the shops.
what you have to offer
and
and medical
and provide
physithe data
on a capitation
to define
software
or
-- this would
basis.
a more specific
for as wide a market
in this area.
MR. STROM:
about
hospitals,
to
in a medical
determine
processing
with a small group
in the
to add to the system
paid; look at "gatekeeper"
to pay physicians,
of
who have
arrangements
we need
that
We also
a more sophisticated
providers
in the
Although
deal with encounter
of requirements
de-
and need to do to stay current
the level of benefits
patterns;
We're now working
a
as part
cians'
needed
in
B. We're in
integrate
be used in determining
referral
base
of procedure
that vary by size; that is, put more people
plan and adjudicate
an authorized
system
of appropriateness
We're seeing
with different
hospital
option
find
opinion,
in some areas of the country.
issues
arrangements.
arrangements
a triple
allowing
it's strong
even arrangements
treatment
a software
is to adjudicate
by year,
serve
an indemnity
second surgical
A versus
we have recognized
accepted
provider
you will
processing.
care industry
isn't nationally
systems,
who you went to see made a difference
of stay and have that available
of the ultimate
SYSTEM
to deal with, what I call first
schedule
to that
system,
to it:
in terms
is where
you got paid by payment
the process
of claims
what was essentially
and added
some
PROCESSING
Maybe
of claims
systems,
each one might
as a vendor.
think
comment
Does it also pertain
group?
3O83
of it mainly
a little
bit
to both per-
set
as
PANEL
MR. PEDERSEN:
basically
For a lot of the clients,
the individual
processing,
go against
and treating
individual
side of the system
processes,
but
they use the group
side for
up a policy
master
that
minigroup.
We do not have an
setting
it as a, if you will,
it works
that
basically
MR. CARLIN:
Our solution
specific
and then
policy
DISCUSSION
deals
with
the individual
the same on the group
is basically
assign
they can
health
insurance
side.
the same as ASA's; you set up a
the individual
members
to that
particular
policy.
MR. STROM:
system
Another
from
system,
question
a vendor
we looked
versus
at building
could
get, and obviously
else's
product.
between
maybe
coming
anybody
MR. CARLIN:
must define
address
and getting
That
that.
ranges
18 to 24 months
time has been exercised,
or clients,
that's
could
already
it's been tested,
outside
for a
to see what
we
somebody
of the difference
so to speak,
a claims
versus
system?
Does
can share?
the spectrum.
is and then try to build
between
your claims
we went
out and buying
the wheel
to develop
up and down
it takes
you could look at a system
going
when
approximately,
recreating
your services
Generally,
That
better
estimates,
buying
[ know
and also going
of costs that they
what the element
able system.
vendors
it inside,
to do it yourself,
have a feeling
ask is regarding
it yourself.
the cost worked
What are your
trying
I might
doing
First
18 to 24 months
relate
into
of all, you
the various
modules
to develop
$1.5 to $2 million.
been developed.
Then
All that development
it's been evaluated
and the cost for that is in the hundreds
that
a work-
by several
other
of thousands
of
dollars.
MR. ROBERTSON:
world
Having
to the software
world
true cost was of developing
employers,
things
recently
and having
a claims
I know
The other
would
that
key thing
have changed
our numbers
moved
over
from
had an opportunity
system
I'd guess that it is something
MR. STROM:
inside.
relatively
internally
on an order
came
that you brought
to look at what the
at one of my former
of magnitude
out a lot higher,
of 10 to 1.
trying
to do it
up was by the time you put it up,
so much you might have had to start
3084
the insurance
over.
IMPLEMENTING
MR. DONALD
after
A NEW MEDICAL
M. PETERSON:
you got the system up?
how many claims
claims
did you have to add?
Were there
had a quasi,
collector
and check writer.
size.
examiner
had a calculator
knowing
that,
50% productivity
didn't
additional
mechanized
It didn't
It kept some accumulators
the new system
periphery
thing
gains
and how many
here is the kind
system,
have many
and things
problems?
of system
or what were we doing?
where
adjudication
features
we proposed
improvement.
get the productivity
to management
We put in a learning
in 17 weeks.
It turns
within
So
that we would
curve
of 17 weeks.
out, we're
a year.
a data
our claim
next to her desk and used that quite a bit.
to get this system
Well, we
it was basically
like that, but basically
60% from the people that have been up almost
month
productivity
the new system and how many processors
of the whole
maybe
SYSTEM
in the way in which you measured,
Were we doing it manually
basically
PROCESSING
were your
get out before
get out after
The key point
we were on before.
what
In other words,
did a processor
did that processor
MR. STROM:
Nelson,
CLAIMS
getting
get a
We
nearly
Did it take an extra
or two to get to the curve?
MR. ROBERT
J. HOYT:
get to our expectations.
We looked
at about
It took a little
a 30-week
longer,
learning
curve
to
but the goal was certainly
reasonable.
MR. STROM:
Everybody
approximately
33 bills before,
with
what's
expensive
period
happened.
to do, but
counts
We're still
we will
their
claims
differently.
and now we're
doing
in the throws
more than
of conversion,
get our money
of time.
3085
We were doing
over 50.
back
We're really
happy
and it was very
in a very short