Claims Processing for a Property Casualty TPA
Business Problem:
A national TPA is responsible for paying approximately 2,500 claims per week for approximately 20 million enrollees who have purchased cell phones and insured them against loss. The TPA's responsibility is to adjudicate the claim, find the least cost replacement, cut a processing/shipping order to the nearest phone replacement center, detect fraud patterns, and reconcile payments to suppliers and carriers. The TPA operates a 24 x 7 call center with approximately 75 claims representatives per shift (250 total).
The TPA was experiencing problems with all aspects of the operation. Operational costs were not in line with revenues. The current system had poor response time. Payments were late and inaccurate. Processing time per claim was approximately 11 minutes per call which added to the problem as the TPA was paid on a per claim basis.
The TPA's desire was to build an application that would have the following characteristics:
- Dramatically improve claim processing time (2 minutes per claim) to reduce labor costs
- Move business rules and work flow engine outside the computer application to eliminate reprogramming each time a change was needed
- Efficient management of 4+ million enrollments
- Accurate and timely payments with full auditing capability
- Automate replacement phone order processing and shipping
- Facilitate fraud detection
- Provide on-line claim history
Solution:
RESolutions Consulting designed and developed a fully Object-Oriented business application for the purpose of managing all aspects of claims and payables processing within the organization. System functionality included:
- Claims processing
- Manages all of the necessary information to verify the claimant, type of loss (e.g., physical damage, theft, etc.) and status of the claim within the Claims Management System. In addition, the system tracks the type of equipment that is reported with the claim and recommends the best replacement based on user-defined business rules
- Payables management
- Manages the payment of claims based on claims authorizations obtained via the Claims Management Module. Features include invoice management, check maintenance and cash receipt maintenance
- System and user maintenance
- Provides facilities for managing system access at the screen/function level, information processing based on user-defined business rules, and creation and maintenance of hierarchies at the carrier/market level
- Ad-hoc reporting
- Provides the user with the ability to easily create outside the normal production reporting environment
- Process claims using call center representatives and automatically over the internet
- The ability to dynamically change the business rules and track the history of the changes for future review/audit purposes
- Provide unparalleled security
- The system provides highly flexible and user-specific security features allowing for customized system security controls
- at the application, data, user interface and organizational levels
Return on Investment (ROI):
The following is a partial list of the ROI achieved by the TPA:
- Claim processing using call center representatives was reduced to an average of 2 minutes. This allowed the TPA to reduce head count and process more claims per day
- Claim history was put on-line eliminating the manual process of locating claim information
- Shipping orders to phone suppliers was automated, using automated faxing and e-mail, eliminating the need for manual intervention
- Replacement phone information from suppliers was scanned and put on-line, eliminating the need for paper replacement catalogs
- Problem escalation and tracking was fully automated eliminating mishandling by call center representatives
- Enrollment loading was automated and optimized reducing the daily overhead normally associated with the process
- Cash disbursements were automated with electronic auditing to ensure accuracy of payments
