Insurance Co. Streamlines Claims Processing with IT

 
 
By Ron Miller  |  Posted 2006-06-19
 
 
 
Barbara Snyder candidly admits she knows little about office equipment or workflow. Still, back in 2004, Snyder, the vice president of human resources at Atlantic American, an insurance holding company in Atlanta, recognized that her mail and claims processing operations were not running as efficiently as she believed they could.

"About two years ago, we found ourselves at a crossroad, where costs were going up and salaries were going up, and we werent obtaining efficiencies that we believed we could," Snyder said.

Atlantic American had a 10-year relationship with Ikon Office Solutions, of Malvern, Pa., in which Ikon was under contract to handle some of Atlantic Americans office services, including mail processing and running a copy center inside the Atlantic American headquarters.

Lacking expertise herself, Snyder turned to a known quantity—her Ikon sales representative—for advice on how to find a solution.

"At that same time, it was time to renew the contract with Ikon," Snyder said. "They are truly in touch with their industry, and they knew how to suggest to us ways of combating production deficiencies."

But the relationship wasnt total bliss, and Snyder would eventually hire an office solutions consultant and bring in several competitors to look at the problem. When all was said and done, the lengthy relationship with Ikon withstood the test, and Ikon implemented a solution that would end up saving Atlantic American $250,000 in the first year alone.

Lou Melancon, Ikon strategic account executive at the companys Atlanta office, said he also recognized there were more efficient ways to process claims than the way Ikon and Atlantic American were doing it. So, in February 2004, with a contract termination date looming, Melancon said he met with Snyder to discuss renewing the contract.

At the same time, Melancon said, he suggested that the best to way to identify bottlenecks and inefficiencies was to conduct an analysis of the claims workflow and look for ways to improve the process using office solution technology that hadnt existed when the two companies began doing business 10 years earlier.

"We followed the life of a claim from where it arrived in the mail to where it eventually ended up," Melancon said. "We also looked at the claim payment process where they were generating payments to the service providers. We documented every step it went through, and we had it documented and flowcharted, and we sat with the client, and they confirmed the sequence."

After successfully getting the contract to revamp the process, Ikon brought in several pieces of office automation equipment to make the claims processing work more efficiently.

The first step, Melancon said, was to reduce the number of people required to open mail from four to one by automating the process with an Opex 51 Extractor, which opens the mail automatically after a single employee feeds the envelopes into the machine. He also brought in a perforated stamper, which replaced a rubber stamp and enabled staff to apply a date and time stamp on up to 20 pages at a time, rather than one page at a time.

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Ikon hired an outside programming company to add a piece of code that applies the bar code to claims automatically as soon as the claims processing department finishes handling them. The claims no longer leave the company for an outside scanning vendor, Melancon said. Instead, the claims are scanned in-house by Kodak 620i and 3590 scanners and stored on a Linux-based Dell server, which gives customer service instant access to the claims.

Ikon also implemented a new check processing system, relieving an overworked IS staff, Melancon said. By using the Troy MICR 9000 check printer with Objectif Lune PlanetPress software, Ikon was able to generate a single check and the appropriate explanation of benefits page for each service provider. Snyder said this means that customers now receive a single check with a page explaining what the check covers, a system she said is a vast improvement for both Atlantic American staff and the customers they serve.

Melancon said that after the system was fully implemented in May 2005, Ikon invited people in for breakfast to introduce the new system and how to use the different components.

Melancon said he also meets with management regularly to see what else Atlantic American needs.

"Every three months we sit down with the Atlantic American management team," Melancon said. The two parties review what has been happening since the last meeting, and Ikon looks for ways to improve its service or add additional services as needed.

"[We ask questions such as] Where are we, and what do we need to do? Here is some excess capacity, and here are your needs. This is ongoing. We are part of the company now. We are linked at the navel."

Snyder said the insurance industry is slow to change and that Atlantic American is still old-fashioned in many ways. She said thats why she is happy to have a long, fruitful relationship with a vendor such as Ikon. They just have to keep working at it.

Ron Miller is a freelance writer based in Amherst, Mass. Contact him at ronsmiller@ronsmiller.com.

Case File

  • Customer Atlantic American
  • Location Atlanta
  • Business need Claims processing workflow was inefficient and did not take advantage of modern office solutions technology
  • Technology partner Ikon Office Solutions, in Malvern, Pa.
  • Recommended solutions Automated the process with an Opex 51 Extractor, which opens mail automatically; purchased a perforated stamper, which replaced a rubber stamp and enabled staff to apply a date and time stamp to 20 pages at a time; hired an outside programming company to add a piece of code to apply the bar code to claims automatically; scanned claims in-house using Kodak 620i and 3590 scanners; implemented a new check processing system, using the Troy MICR 9000 check printer with Objectif Lune PlanetPress software to generate a single check and the appropriate explanation of benefits page for each service provider

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