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KM reaps benefits worldwide for insurers

This article appears in the issue October 2008, [Vol 17, Issue 9]

Knowledge management solutions are being used globally in the insurance industry—in both large companies and small—to simplify research for customer information, to better manage files and to ensure coverage for claims.

Deutsche Verbindungsstelle Krankenversicherung-Ausland (DVKA) in Germany is a clearinghouse for healthcare claims for German citizens who are living in other parts of the European Union (EU). As such, DVKA handles 1.2 million claims per year. And some 10 percent to 15 percent of those claims are disputed, adding to the volume of documents, says Markus Weyres, VP of IT and finance director at DVKA.

To reduce the number of disputes and to settle claims more quickly, DVKA sought a knowledge management solution that could not only record claims, but also track each step of the process to inform all parties of the status of a claim. The software also had to be scaleable and interface with other technologies.

Process optimization
DVKA selected the Process360 business process optimization solution from Global 360. The application, which went live earlier this year, enables DVKA to design and build business processes and process applications for people, data, documents, rules and events without scripting or coding.

Users can see real-time process status and define rules for flexible adaptation to changing business conditions and goal/service level status. That is important, Weyres says, because the EU continues to revise healthcare coverage and payment rules. Process360 also enables authorized users to control resource assignments, workloads and priorities from a Web-based performance management center.

The application enables DVKA to know where all claims, payments and disputes are in the process, as well as to retrieve invoices, generate and print out letters, and handle other business process management functions, making the full process much more efficient, Weyres says."It allows us to integrate with other application systems we are running, streamline our claims processes and ensure we maintain compliance with ever-changing EU legislative and insurance regulations, " he adds.

The SaaS option

In California, Teague Financial Insurance Services, with $1 million in annual sales, has upgraded its processes from paper-based to electronic. That paper-based knowledge includes customer applications, claims, updates and other files that continue to grow in volume and complexity the longer a customer is with the company.

"Nobody liked filing, and of the people who did it, half didn’t do it correctly," said Jean Strouf, president of Teague Financial. If someone needed a file to check coverage, update a policy or for any other reason, it typically took 15 to 20 minutes, sometimes with two people searching for the information.

Converting to a digital format would also help simplify compliance with the Health Insurance Portability and Accountability Act (HIPAA),although the technology to convert paper information to electronic knowledge also had to provide electronic security for the sensitive client information.

Additionally, the sheer size of the paper files was becoming an issue. The more the business expanded, the more room was needed for file storage, and the insurer’s file room was already chock-full, according to Strouf.

While solutions to convert files from paper to electronics have existed for years, the firm saw the cost of scanners, servers, software and annual maintenance as too overwhelming to make conversion cost-effective. Strouf adds, "You had to have a person to scan, a person to code and someone to maintain it. It was going to cost $8,000 to $10,000 just to start, plus annual maintenance costs."

The cost and the need to maintain a secure system were among the issues she discussed with Digitech Systems. Strouf learned that the cost of the equipment had come down, and that Digitech offers its ImageSilo solution as software as a service (SaaS), sharply reducing storage costs.

Time & cost savings

Digitech Systems works with resellers who provide the scanners or other hardware, usually as part of a package deal. Its profit comes from the license fees and storage amount, once the free installation is complete. The total cost was $3,000, one-third of the amount that Strouf had been quoted by others a few years earlier.

Installation of and training on the equipment in 2006 took less than a day, Strouf says. Teague Financial employed some college students to scan old files. Anything that was deemed non-essential was shredded.

Now anytime someone needs confirmation of coverage, authorized Teague Financial employees can pull up and e-mail or fax the necessary documentation, if more than phone confirmation is needed.

Strouf estimates that the SaaS technology saves her firm 319 man-hours and $24,000 annually, while enabling the company to grow 15 percent annually without the need to add more people to handle filing and retrieving.

Security warnin

As knowledge increasingly moves from paper to electronic formats, insurers have to be aware of best practices to protect the digital data, cautions Todd Thomas, broker for Wortham Insurance. The firm sells various commercial policies, among them coverage for data loss (as part of errors and omissions policies).

Insurance companies, especially those with healthcare information due to the Health Insurance Portability and Accountability Act (HIPAA), have sensitive personal data about clients, so they must take particular care to secure customer information.

"What you need to do is to secure the data from the top person in the firm to the lowest employee," Thomas says. That means training all within the company on best practices for security, as well as ensuring all networks, computers, servers and any other devices for storing or transmitting data are secure. If the insurer’s Web site serves as a portal to customer information, access has to be secured.

"You have to take a proactive approach," Thomas says. "You also need to make sure that all information is compliant with the laws of the state that you are in." Most states require that customers be notified if a data breach is suspected, whether or not one actually occurred.

The higher the volume and sensitivity of the information that an insurance company acquires and stores, the stronger the security precautions must be.

Thomas adds, "It used to be that you were concerned with someone taking out [of the office] a few paper files; now someone can take out thousands of files on a thumb drive."


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