HCF opts for digital cover
HCF opts for digital cover
July/August Edition, 2007: In an effort to improve the processing of membership forms, medical service provider invoices and hospital claims, HCF recently introduced Straight Through Processing to its back office operations. But besides driving efficiencies by digitising transactional and membership records, HCF is now better prepared for the next audit by the Health Insurance Commission due in early 2008.
Australia’s fourth largest health insurance provider HCF services over 344,000 memberships which covers almost one million Australians. In order to maintain its position as a leading insurance provider, it sought to improve customer service and the processes that support HCF’s daily churn of 7,000 applications and transactions. The initiative, led by Wayne Miller, Service Delivery Manager and Joseph Elias, Senior IT Projects Manager, is called Straight Through Processing (STP), a process reengineering theory applied to financial services and insurance providers, aimed at boosting the throughput of all its transactions.
The project is a vital step towards preparing HCF for the future and the core technologies it has introduced in aid of this goal is scanning, capture and workflow. While much of the technology will only be seen by employees at its Sydney-based Service Delivery Centre, combined with process reengineering, it will impact relationships with HCF’s customers, medical service providers and hospitals. Equally important, the technology is being used to improve the results of the next audit by the Health Insurance Commission.
The first set of business processes HCF addressed were its membership forms. Prior to the STP initiative, all membership forms - whether these arrive by mail, through branches and the call centre or the Internet - were sent to the service centre for processing. The formerly paper-based practices lead to the service centre storing just under 20,000 documents on site. This impacted storage costs and worker productivity.
Miller’s rationale for targeting membership forms first was pragmatic: it would secure quick wins, make an immediate impact on customer service and help improve the results of the next HIC audit, due in 2008.
The purpose of the HIC audit is to establish the authenticity of an insurer’s memberships, which the Federal Government relies on to issue its “30 per cent” private health insurance rebate. Insurers that fail to produce the correct documentation during the audit run the risk of having to repay monies issued under the scheme to HCF members. The problem for HCF in 2002 audit was that its “not found rate” for membership forms was 4.6 per cent. In the 2005 audit this increased to 7.4%. For HCF this meant a two-fold risk: not only would it have to repay monies to the HIC on not found memberships, but there was the very real possibility HCF would get a mention in parliament because of its performance.
Miller explained that during the audits, HCF was asked to produce documentation to support the existence of a sample of membership numbers as far back as five years. He says the reliance on paper archives made the discovery process during the audit difficult, costly and time-consuming. For the 2008 audit Miller, Elias and HCF wanted to ensure that it did not face the same difficulties as in previous audits and certainly wanted to avoid any associated financial penalties and damage to its reputation that would arise from a mention in parliament.
Implementing Straight Through Processing
HCF’s STP implementation has followed three streams: customer forms, medical service provider invoices and hospital claims.
To manage the two paper-based streams – supplier invoices and membership forms - HCF has introduced 5 Fujitsu 50 page-per-minute production scanners which are located at HCF’s Service Delivery Centre. When scoping technologies to carry it forward, both accepted that paper would be here to stay and have concluded scanning will form part of HCF’s “a long term strategy”.
The Intelligent Character Recognition (ICR) products being used are ReadSoft’s Invoices (for medical supplier invoices) and Forms (for membership forms). All routing and workflow for both scan-captured and Eclipse data pass through the ILOG-based rules engine, while Microsoft SharePoint provides the central repository for captured images, which HCF’s 43 branches now have access to.
A prerequisite for introducing scanning was redesigning the 120 forms HCF uses. The amendments were aimed at ensuring compatibility with the ICR software, including marks to align forms, clear margins and scanner compatible colours.
“This continues to be a business challenge,” says Elias. “All our forms need to be scanner friendly and we’re trying to consolidate the processes. Now all our forms must go through marketing and we’re centralising the creation of forms, which means Office Services must work with Marketing as an integral part of the process.” Elias says this has helped foster better communications between the departments and marketing now understands better how HCF is communicating with members.
Miller and Elias are highly supportive of the Eclipse system, which was introduced as an industry-wide initiative led by Medicare, the AMA, hospitals and insurers. Eclipse links hospital to insurance providers to facilitate faster claims processing. While HCF have been introducing new processes, it has also upgraded its version of Eclipse to 6.4.
Miller says, “We’re the first and only insurer to implement the latest version of Eclipse, Version 6.4 and the first hospital to adopt this system will be the Ramsay Group with around 70 healthcare facilities across Australia. The main benefit of this system is the direct link to the hospitals will enable faster claims processing.”
The road ahead and the next HIC audit: will HCF improve its performance?
HCF is now scanning and processing its entire flow of 2,500 membership pages per day, while on the invoices side HCF has processed over 20,000 invoices in the past six months. Miller expects all its invoices will be processed this way by the end of September 2007, while its hospital claims will be completed by March 2008. Other document-types to be scanned in the future include HCF’s board papers, hospital contract negotiation documents and the introduction of pre-processing to membership applications.
With its membership documents under control, Miller is confident the next HIC audit will result in a not found rate of less than 1 per cent. He also points out the discovery process will be less costly and a much easier task. HCF will be able to take the selection of membership numbers and search the index.
From a day to day perspective, Miller says, “We’ve reduced manual effort and centralised processes with electronic capture. This has helped improve productivity and data quality, which has delivered faster turn around times and better benefits for medical service providers. From a call centre perspective, this has had a great flow on effect by decreasing the number of enquiries about payments from medical service providers.”
Elias says HCF can now process membership documents at a rate of one page per minute, including verification, interpretation. For its invoices, Elias’ tests indicate the time to process claims will reduce from 14 plus days to around 7 days by the September 2007. For hospitals on the Eclipse system, depending on when a claim is lodged, the turn around they can expect is just one day. The new system has also delivered benefits to its branch employees who can access images from the SharePoint repository and resolve the customer’s issue without impacting performance at head office.
Miller says the main challenges throughout the implementation have been change management and customisation. He says, “We decided not to take on any new people but gave our employees the opportunity for retraining, which did introduce some stress. There were also integration issues and we had problems getting the capture products working. In hindsight, we probably added more functionality to the product than necessary.”