Images Ghosts and Picture Document Management Solutions Mon

Images, Ghosts and Picture: Document Management Solutions Mon, Sept. 10 3: 00 – 4: 30 pm STRIMA 2007 Conference “Maine: Downeast and Different” September 9 – 13, 2007 Portland, Maine

Your Guides § James Wedster Vice President of Product Development Valley Oak Systems, Inc. § Christopher Schaffer, Esquire Vice President, National Sales Cor. Vel Corporation 2

Agenda § § § § The Case for the Paperless Claim File Document Management (DM) in the Claims Process An Electronic Infrastructure for DM CIRMA Case Study: Integration for Improved Workflow City Case Study: DM Tools and WC Best Practices Developing Your Own Paperless Path Q & A Session 3

The Case for an Interactive and Fully Electronic Claim File

Beyond Scanning & Imaging § Initial focus was on importing documents into claim file § Ongoing focus will be on fully automated claims systems that take advantage of current technologies and provide a single platform for communication by all stakeholders 5

Why Change the Process? § Operating efficiencies § Advanced technologies § Artificial intelligence § Rules based engines § § Storage Security Enhanced reporting and information sharing Improved results and effectiveness 6

Where to Start? § Map out your claims process § Critically analyze each step § Why do I do this? § Can I automate? § What value is added? § How can each step be effectively and efficiently coordinated to reduce process time 7

Items to Consider Incorporating into Electronic Claim File Process § § § First Notice of Loss § Diagnostics Nurse Case Management § EOB/Check Writing Medical Bill Review RX/DME Appraisals Recorded Statements/VOIP § ISO Indexing § OSHA Reporting and Tracking § Payroll Systems § Photographs § Positive Pay/Check Cashing § Reserving Worksheets 8

Project Implementation § A well-designed electronic claim file and document management system should enhance the process - Not add to the process § Implementation should be staged to avoid information overload 9

Recognizing the Paradigm Shift in Claims Adjusting § In the past, the effectiveness of your claims administrator was results driven § Now, in addition to results, claims administrator is now responsible for data integrity, computer measured benchmarks, OSHA reporting, paying medicals within XX days, etc. 10

Unfortunate Reaction § Adjusters have become box-checkers and data input clerks § Intense focus on objective automated measurements § § Three-point contact Compensability determined within XX days Average medical turnaround Closing ratio § Substantive, proactive claims adjusting has become secondary because results aren’t easily measured 11

Implementing for the Future § Implement in a way that promotes focus on substantive claims handling while assisting adjuster in box-checking, data integrity and file documentation § Use audit tools § Rules-based auto routing § Letter writers 12

Invest in Technology to Support Process or It Will Not Be Used § Dual monitors to reduce screen flipping § Size of monitor – No zooming in § Effective and common sense document management § Ability to insert notes or comments on correspondence § Speed of delivery § Speed of system – Load time/storage capacity 13

Document Management in the Claims Process

What is Document Management? § Originally, a system used to track and store images of discreet paper documents § Evolved to a systematic approach for storing, accessing, and tracking information electronically § Key characteristics of document management (DM): § Ability to manage information, collaborate when creating information, distribute information, and allow secure access by relevant parties § Supports a wide spectrum of “less paper” to “paperless” work environments 15

Traditional Claims Challenges § Inefficient workflow and business processes hamper productivity § Time-consuming, labor-intensive tasks, e. g. repetitive data entry § Inability to achieve end-to-end automation, straight-through processing § Difficulty in accessing and sharing data across the enterprise § High operational costs (paper, copies, storage, and personnel) § Lost documentation, due to physical transfer, storage and retrieval § Inconsistent application of best practices in paper-based environment § Lag time in communication and collaboration among stakeholders § Slow transactions impact customer service and satisfaction § Inability to analyze and report on trends that affect costs 16

Paperless Claims: Realistic or Unattainable? § 30 years ago the term “paperless office” first appeared, based on belief technology would eliminate paper § Today, paper consumption at 100 -million tons a year § Associates may be at different stages of paperless path, need to accommodate their paper processes § Consumers are tech-savvy, demanding more paperless, web-based transactions § For now, total elimination of paper is unrealistic; but moving closer to a paperless environment has many attainable benefits and reward 17

Delivering Value to Paper-based Processes § § § Claims Management Policy Administration Underwriting Risk Management Incident Reporting / Event Management Billing 18

An Electronic Infrastructure for Document Management

Types of Technology Software as a Service (Saa. S) / Browser-based Technology Scanning, Document Imaging, OCR, Digital Photos & Video EDI, XML, Web Services Internet Tools: Email, Hyperlinks Workflow Management (Business Rules) 20

Yesterday’s Paper-based Processes Medical Mgmt Accounting Claims Users Imaging Bill Review Policy 21

Today’s Electronic, Internet-based Infrastructure • Claims • Bill Review • Imaging • Policy • Medical Mgmt • Accounting • HR Business Rule Workflow One-System Central Repository Hub Internet Users Server 22

Case Study Connecticut Interlocal Risk Management Agency An Integrated Environment for Improved Workflow

CIRMA: Updating IT for Document Management Success § One of the largest, most sophisticated public-entity risk management pools in the nation § Grew 600% since 2000, business environment became more complex § Legacy systems couldn’t keep pace in terms of functionality and capacity level § Integrated claims and policy administration system was key priority to achieve DM efficiency across enterprise 24

CIRMA Claims Challenges With Exponential Growth, Increased Claims Capacity § Went from 12, 000 to 22, 000 claims a year § Needed to handle increased capacity without increasing human resources and without impacting quality and performance Previous Claims System § Labor-intensive, paper-based business processes § No web-based capability (e. g. no online reporting of claims) Policy Administration § Two disparate systems, multiple interfaces with claims system § Difficult to access, retrieve and update policy information 25

New System’s DM Tools Deliver Process Efficiencies § Truly web-based, integrated claims and policy system § Enable integration and document management across core business units § Flexibility to meet CIRMA’s unique document management requirements § Created an end-to-end electronic platform that integrates all relevant insurance processes § Established a centralized data repository, making it easy to access and share information § Business rules define and automatically manage workflow: right people receive the right information at the right time § Contemporary tools enable automation and paperless processing 26

Before: Disparate Environment Two Underwriting Systems LAP Underwriting WC Underwriting First Notice of Loss Managed Care SIU Support Finance (Great Plains) Claims CITRIX External Users (Members and Staff) 27

After: Integrated Infrastructure Internal Environment Managed Care Services EDI Finance (Great Plains) EDI SIU System Claims & Policy Hub Inter n et External Users (Members and Staff) First Notice of Loss 28

Enterprise Connectivity Claims Adjusters Admin Assistant Business Analyst Finance Document Management Nurse Case Manager Risk Control Members Under. Writing Improved connectivity and Claims sharing of information View-Only among all stakeholders 29

Benefits & Savings Admin Costs Ratio Claims Reporting Costs Reports Distribution Industry Average 22 cents / premium $ Via Call Center $16 / claim Paper Distribution Takes 3 people 2 weeks to run quarterly reports, which stand 3 feet high CIRMA Benefit 13. 6 cents / premium $ CIRMA Online Process $3 / claim (anticipate 20% of 22, 000 claims a year) Online Distribution Automatic scheduling and distribution – save time, resources, paper & hassles 30

Case Study Integrating DM Tools for WC Best Practices

City Profile § 7 th largest City in the US, 11, 076 employees § Self-insured, self-administered WC program § $23. 8 million in workers’ comp claims costs § Expensive! Effective claims management best strategy to control costs and losses § Needed DM tools to enable more efficiency and identify highcost, high-risk areas for loss control 32

“Before” Picture Legacy System § Paper and labor intensive § Lack basic functionality § Little automation of routine, low-value tasks § Inconsistent data collection and reporting § Band-aid approach in rapidly escalating cost environment Desired DM Best Practices § Seamless claims reporting § DM efficiency leads to manageable caseloads § Support for more automated processes § DM data collection will help identify high-cost, high-loss claims areas Results: Inability to report outcomes = Inability to influence outcomes = high claim costs! 33

Leveraging DM Tools § Document Management Tools: § Avoid generation of paper in the first place: injuries reported immediately to call center and interfaced into claims system § Automated business rules drive best practices § Auto-populated correspondence with claimants § Diary-driven claims examiner workflows § Electronic interfaces maximize efficiency and information flow § Enable Data Reporting and Effective Management: § Accurate data collection through required fields § Identify trends to target with safety and loss-control initiatives § Monitor key performance measures to track success 34

“After” Picture § Seamless alignment of technology and DM objectives § Electronic import of new injury reports § Reduces injury reporting from 4 weeks to 24 hours § Automation of bill review and payment § 36, 000 automated payments annually § Bill review savings: $10. 8 million in year after DM implementation § Maintain 1: 1 open to close ratio § Diary driven workflow increases efficiency and productivity § Immediately closed 700 claims, reducing examiner caseload § Distribution of quarterly reports help agencies to control costs § DM data collection helped reduce claims by +6% over four-year period § Costs reduced by $2. 4 million in year after DM implementation 35

Developing Your Own Paperless Path

Document Management: Success Strategy Summary § Online data capture avoids generation of paper in the first place § Leverage scanning, document-imaging and OCR capabilities § Utilize digital files where possible (PDF, photo, video), attach them to electronic claims file § Embed DM capabilities within workflow management, ensures right person gets the right information at the right time § Create an enterprise-wide electronic infrastructure § Browser-based technology § Centralized data repository § Utilize connectivity tools (EDI, Web services, the Internet) to further streamline business processes and the flow of information § Leverage data to improve decision-making and program performance 37

Questions & Answers

Contact Information § James Wedster Valley Oak Systems, Inc. jwedster@valleyoak. com Phone: 925 -242 -4600 § Christopher Schaffer, Esquire Cor. Vel Corporation chris_schaffer@corvel. com Phone: 843 -937 -4900 39