Ensuring competitive advantage: No-risk technology for insurance industry

Saving money, increasing revenue, improving customer service. Lofty, but common goals for corporations. Lofty, but crucial goals for the insurance industry where both competition and customer expectation are particularly intense.

Attaining those goals requires efficient management of every one of the millions of documents within an insurance company’s purview-from regulatory compliance to policy underwriting and issuance to customer correspondence and claims resolution.

To stay competitive, Amalgamated Life Insurance (www.amalgamatedlife .com) realized it had to cut costs, deliver better customer service and use resources better. The best place to improve efficiency, management decided, was speeding up the time to process claims. That also would increase the volume of work the company could handle.

Targeting HCFA-1500 and UB92 claim forms, the company envisioned a streamlined process in which operators would spend less time handling paper-based forms, allowing them to better respond to customer inquiries and reducing operating costs.

Amalgamated Life has chosen a system from Datacap (www.datacap.com), which has cut the time required to process claim forms from the industry standard of about seven days, down to two days, according to Mike Courtelis, assistant VP of MIS at Amalgamated.

Because the HCFA forms are without anchors and printed using drop-out ink, the critical information to be captured was difficult to identify on the page, Courtelis said. The new system has built-in intelligence called Auto Field, which searches the image for expected reference points like date, social security number and total dollar amount of the claim. Then the application draws a rectangle around those coordinates and begins recognition of the data.

Since it implemented the system a year ago, the company has more than doubled the throughput of HCFA claims forms, reducing internal costs and freeing human resources, Courtelis said.

Among the unanticipated challenges, Amalgamated found that many of the HCFA documents were coming into the company printed in ink that was barely legible. Also, the human habit of putting slashes and dashes to separate the day, month and year created more slowdowns in capture and recognition. Inserting some extra logic features into the program to expand its functionality solved those minor issues.

Future plans at Amalgamated include a five-year backfile conversion of previously microfilmed data. Long-range possibilities include implementing an automated customer service tracking system.

Growing pains and pluses

Noridian Mutual Insurance (www.noridian.com) has found there are growing pains with implementing any new technology, but also unexpected benefits, particularly the ability to handle large volumes of work.

The parent company of Blue Cross Blue Shield of North Dakota and several other subsidiaries, Noridian was facing a surge in workload because of the addition of claims from other states. When it first began to seek a new information management system, it was processing 10 million Medicare A and B claim forms for four states. Today that number has grown to 51 million forms from 12 states.

The challenges centered around handling claim forms, according to Kaylin Frappier, assistant VP of Government Programs for Noridian, and grappling with an unwieldy storage system that made it difficult to efficiently retrieve processed claim forms.

A new automated data capture and document processing system from Dakota Imaging (www.dakotaimaging .com) "has dramatically improved our ability to handle the amount of information that comes through our offices," said Frappier. "Each operator can process four to five times more claims in the same amount of time as under our old system, and we are also able to speed the form retrieval process for better customer service."

With the OCR/ICR system, the insurance company can establish special rules and confidence levels to red-flag questionable data for manual checking.

Particularly helpful, said Frappier, is the system’s dynamic edit capabilities. For example, to avoid problems with recognizing a handwritten name and address, one could write a rule ordering the system to access that information by account number rather than scanning the field.

"We can modify and refine these rules at will without depending on programmers or systems integrators," Frappier said.

While the gains in productivity and improved customer service prove the system’s success, there were growing pains, such as refining the system more rapidly than anticipated because of the company’s internal growth, and learning how to manage technology patches, fixes and upgrades to fit in with the workload.

Noridian is in the final stages of developing a program that will allow it to expand its claims processing service to help other health insurers who might be affected by Y2K problems. The company itself expects a 50% to 100% increase in paper claims at the millennium because doctors might not be able to transmit their claims electronically during the Y2K transition. Noridian will offer outsource services to help other insurers who face the same problem and do not have OCR/ICR data capture capabilities.

Web-ready and enabled

MetLife (www.metlife.com) found itself facing many challenges, particularly in such areas as production, data access, efficiency and time-to-market.

The company had one issue system handling 85% of its business needs and five others handling the remaining 15%. If changes were needed to the primary system, the vendor had to make them, and because the vendor was supporting other users, MetLife was limited to quarterly changes and updates. Because the company did not have any programming skills and the vendor lacked insurance/product knowledge, each update required extensive coordination.

There were other problems too. The issue systems were not user friendly, LAN capable or easily upgradable. There was no document management capability.

"The MetLife staff is geographically diverse," said Miriam Krol, VP of the Group Contract and Compliance Division, Institutional Business, at MetLife, "and we needed shared access capability to share filing data, regulatory requirements and product issue capabilities in a secured environment."

MetLife was looking for open systems, PC-based software with easy-to-use tools, and subsequently chose a solution from InSystems (www.insystems.com).

"Overall, the solution enables us to track filings, share information, perform updates and, ultimately, produce contracts faster than in the past," said Krol. "It also enables us to archive documents, including all the relevant information relating to its development, for future reference."

MetLife sees the new vendor as a "business partner" that will help the company modify the software and its capabilities to meet evolving business needs and technological advances.

A key feature of the new system, Krol said, is the Web capability.

"This allows users to perform full searches online, throughout every stage in the assembly process," she said. "Authorized users can also access up-to-the-minute information to improve customer service, and respond much more quickly to inquiries. Most importantly, it allows different areas within the organization, such as claims or contracts, to view other business units from an enterprise perspective."

Another key feature is that the solution allows MetLife to implement a "rules-based" approach to document assembly so that the company can produce consistent, error-free documents in less time, according to Krol.

Although MetLife is still in the process of implementing portions o