Sloans Lake Halves Labor Costs in Claims Processing—A Captiva Success Story
Formed in 1978, Sloans Lake Managed Care (SLMC) is a leading Colorado healthcare organization. Their Personal Injury Protection (PIP) program provides access to healthcare for individuals injured in auto accidents. More than 1.2 million Colorado drivers are covered and more than $65 million is returned annually to state residents through reduced medical care costs and PIP premiums. Additionally, SLMC’s PPO network provides coverage to more than 450,000 residents through a network of 7,500 healthcare providers and 543 acute care hospitals, rehabilitation clinics and facilities. In all, Sloans Lake Managed Care touches the lives of more than 1.5 million people in Colorado with its PIP and PPO business lines.
With new ownership and a renewed commitment to customer service, SLMC sought to regain control over an inefficient claims data entry process in which imaging and keying of claim forms were outsourced. Neither task was being done promptly, and they found it increasingly difficult to manage internal resources due to inconsistencies of the outsourced services.
For a service-oriented healthcare management company, the ability to receive, process and fulfill in a timely fashion the 1.25 million claims it receives annually is paramount. Industry standards for successful claims turnaround time are five days or less. Unfortunately, the outsourced processes created points of failure that intermittently doubled this standard turnaround time. A partial solution had been attempted by enlisting the services of an outside optical character recognition (OCR) vendor. However, this gave rise to additional problems, particularly in quality control, productivity and acceptance of claims for OCR.
For example, claims accepted by the OCR vendor had to be perfectly printed, which resulted in only 40% of total claims being accepted for the OCR process. In addition, the vendor did not allow for control over claims accuracy and permitted only a limited number of fields to be captured. Thus, SLMC incurred costs in performing audits to ensure data accuracy, and found that the OCR “solution” actually decreased the amount of forms that could be automatically processed and forced additional manual intervention. SLMC estimated that 7%-8% of total claims were impacted by quality issues from the OCR vendor, even though only 40% of claims utilized that process.SLMC management concluded that to maximize productivity, increase control and provide better customer service claims processing must be brought in-house. They had three objectives: (1.) obtain complete control over all the steps in claims processing; (2.) reduce costs; and (3.) increase data accuracy.
Flexibility and Processing Power
SLMC realized that to attain their objectives, OCR would remain an integral part of the overall solution. Internet searches yielded 50 OCR vendors, although only a handful offered medical solutions, and they subsequently narrowed their list to four vendors. In lengthy discussions with each, SLMC realized that it had additional requirements such as the ability to customize a vendor’s application to fit SLMC’s current business model.
The need for intensive customization led them to seek an integrator with an understanding of their business and the ability to work with existing SLMC vendors to ensure that the solution met specific business requirements. Additionally, SLMC utilized a return on investment (ROI) model that revealed that the break-even point had to occur within 12 months of the initial investment, so an abbreviated implementation schedule was required as well.
Through Critical Info Systems, a channel partner of Captiva, SLMC chose to implement Captiva’s ClaimPack, a vertical claims processing solution built on Captiva’s FormWare that automates data and image capture from complex paper and electronic HCFA and UB-92 claim forms.
ClaimPack’s OCR engine delivers high levels of accuracy in automated “reading” of medical claims and can recognize all data fields on a form, rather than a required selection—a prime objective for SLMC. Participating in the configuration of the system has given SLMC the capability to make modifications to meet their changing business needs.
SLMC is now processing an average of 5,000 paper claims per day and reading about 450 to 500 characters per form on HCFAs, and about 600 to 700 on UB-92s. This character count is approximately double the industry standard. The system performs key validations assisting automatic processing, using its integrated workflow to quickly process the forms. SLMC is able to process the previously outsourced workload with no increase in full-time employees and has been able to increase their existing staff’s workload by 50%.
Additionally, SLMC has seen turnaround times for claims reduced by 50% to 80%, and inbound information accuracy has increased to 98%. They have reduced labor costs by 50% for the data entry functions, and completely eliminated the outsourced processing of claims, including the previous OCR vendor, external data entry operators and all previously required messenger services that transported the claims paperwork.
SLMC now scans and completes the information entry of claims on the same day they are received, and has the capability to capture 100% of the fields on a claim, which allows them to service all customers by providing complete claim form information.Most importantly, complete ROI—initially estimated at 12 months—was actually achieved in 10 months, and their requirement to automate processing of HCFA medical claims was achieved in only two months.
About Captiva
Captiva Software Corporation (Nasdaq: CPTV) is a leading provider of input management solutions. Since 1989, the company’s award-winning products have been used to manage business critical information from paper, faxed and scanned forms and documents, Internet forms and XML data streams into the enterprise in a more accurate, timely and cost-effective manner.
With a firmly established heritage in both forms processing and document capture, Captiva is the largest and most complete provider of input management systems. Captiva’s solutions are the most flexible and scalable available, conforming to specific business needs and back-end systems—ECM, ERP, CRM, and more—automating business processes, and transforming external information into business-ready, digital content. For more information, visit Captiva