Claims Rework Reduction
Lean Six Sigma Black Belt Project
Final Report
06 Jun 08
Black Belt Candidates:
Andy Booth
Mary Kay Gilbert
From the charter:
Project Description: To reduce claims rework rate by indentifying and
addressing the root causes which motivate members/providers to contact
us. In addition, to streamline the current Claims & Claim Inquiry process
as well as ensure that the Perfect Service characteristics are incorporated
into the process.
Problem Statement: CompBenefits Dental processed claims produce a
significant number of phone calls (300+K) and claims inquiries (1.9%)
that dramatically increase the cost of processing claims.
CompBenefits Org chart
Operations
PMO
SIPOC
Suppliers
Input
Process
Output
Dental Provider
Submitted Claim
Claim Processed
Approved Claim
Customers
Members
Dental member
Manually Entered Claim
Declined Claim
Providers
Claims Operations
Electronic Claim
EOB/Check Produced Mailed
Question Answered
Groups
Claims Data Entry Vendor
Paper Claim
Open Claim Inquiry
Agents
3rd Party Claims Review Vendor
Phone Call to Cust. Care
Question from a processed claim
Closd Claim Inquiry
Claims Dept
Customer Care
Email to Cust Care
Reprocessed Claim
Customer Care Dept
Claims Inquiry
Reprocessed Claim
Claim Inquiry Opened
Provider Svc's Dept
(if not immediately resolved)
Claim Inquiry processed
Member/Provider notified of disposition
Metrics
Metrics
Time
Time
Accuracy rate
Accuracy rate
Inquiry rate
Cost
Reprocess rate
DENTAL CLAIMS PROCESS MAP- AS IS
Claims
Dental Claims
Presort
2.1 Million
Claims
Claims Processed
Review
Claims
Determination
Claims
System
- 63% claims auto adjudicated decision
- 37% claims manual decision
Processing
Claims
- 45% received electronically
- 45% received via paper and
sent to data entry outsourcer
- 10% received/processed via paper
Claims sent to
outsourced
companies for
review
- 35% claims go to HCI for code edit review
- 4% of claims go to P&R for professional review
Claims sent from
Outsourcers
back to CB
Claims
Approved/Declined
87% of claims approved
13% of claims declined
DENTAL CLAIMS INQUIRY PROCESS MAP AS IS
Claims
Dental Claims
Process
Processed
87% Claims Approved
13% Claims Declined
2.1 Million
Customer
- 87% questions resolved over phone/ e-mail
Customer Contacts
Company regarding
claims status
13% requires claims inquiry
300k calls/ 5k e-mails
Customer
Care
Claims
Customer Care opens
Claim Inquiries for
unresolved issues
38k Claims Inquiries
Claims Resolves
Inquiries
89% of claims inquiries resolved by reprocessing
claims (61%) or returned to customer care (28%)
11% of claim inquiries require re-contact by customer
Cost-volume
Activity
Unit
Cost
Cumulative
Cost
Claim
$2.00
$2.00
Processed
Calls
$3.00
$5.00
(1st, 2nd,
3rd)
First
$3.00
$8.00
Inquiry
Reprocesse
d
$2.00
$10.00
Claims
Second
$3.00
$14.00
Inquiry
Annual
Volume
Total
Cost
2.1M
$4,200,000
300K
$1,500,000
38.5k
$308,000
24.6k
$246,000
4000
$56,000
Voice of the Customer
Strongly
Agree
Agree
Neutral
Disagree
Strongly
Disagree
N/A
Timely Processing
7.0%
40.7%
15.1%
16.1%
18.9%
2.1%
Accurate Processing
7.8%
41.3%
14.9%
19.9%
13.9%
2.1%
Efficient Re-proessing
5.7%
33.3%
20.8%
20.8%
15.4%
3.9%
EOB Info Easy to Use
13.9%
49.3%
15.0%
16.1%
1.8%
4.0%
Online Access Helpful/Easy
8.1%
13.9%
14.9%
9.7%
1.5%
52.5%
Automated Phone Service Helpful
8.9%
38.9%
20.7%
12.6%
7.4%
11.5%
13.3%
29.5%
22.9%
7.8%
12.7%
13.9%
6.6%
10.9%
19.0%
9.3%
3.5%
50.8%
Electronic Claims Processed
Quickly
Direct Deposit Faster than Check
Historical Claims & Error Data
Total Annual Claims Processed
Annual Inquiry Rate
2,250,000
2.50%
2,200,000
2.00%
2,150,000
1.50%
2,100,000
1.00%
2,050,000
2,000,000
0.50%
1,950,000
0.00%
2005 2006 2007
2005
2006
2007
Average: 2.45 days
Standardization & Variation
Reason Code Popularity
CHI
ATL
MIA
JAM
TMP
1
9
47
9
2
36
2
2
36
29
9
31
3
47
25
47
36
9
4
29
2
8
25
10
5
36
9
16
7
47
Reason Code Score
20
18
16
14
12
weighted Score 10
8
6
4
2
0
47 29 36 16 31 25 44
Reason Code #
10
House of Quality
House of Quality
Claims Processing
Correlation
$$
Competitive Evaluation
$$
Strong
Positive
Us
Postive
Major Competitor
Negative
5 is Best
Technical Requirements
Online Claim
Submissions
Customer Requirements
Accuracy
Timeliness
Resubmitted
Direct deposit of Online access to IVR access to
claims processed
claims
Claims
claims
quickly
processed
Processed
processed
1
X
XX
X
X
XX
XX
X
X
X
X
3
O
4
XO
X
5
5
4.2
3.4
4.6
1
1.5
3.2
7.5
13.1
31.2
Improvements
Kaizen Event
Eliminate P&R outsourcing
Standardize training for Customer
Care Reason Codes
Reduce # of codes from 43 to 12
Coerce/reward providers into
automated/online submittal
DENTAL CLAIMS PROCESS MAP- Redesigned
Claims
Dental Claims
Presort
200K
Claims
Claims Processed
Review
Claims
Determination
Claims
System
- 76% claims auto adjudicated decision (from 63%)
- 24% claims manual decision (from 37%)
Processing
Claims
- 65% received electronically (from 45%)
- 35% received via paper and sent to data entry
outsourcer (now single vendor)
- 0% processed paper only!
Claims sent to
outsourced
company for
review
- 23% claims go to HCI for code edit review
(from 35%)
Claims sent from
Outsourcer
back to CB
Claims
Approved/Declined
93% of claims approved (from 87%)
7 % of claims declined (from 13%)
Questions ?