CASE STUDY

A forward-looking health plan adapts.

One of the nation’s largest health plans realized it was at a crossroad: The high operating costs due to a myriad of outsourced systems and uncertainty about future health industry and PPACA-related changes were threatening the plan’s ability to grow its Medicare Advantage business profitably. Complex processes due to duplicate data sources and poorly integrated systems for claims processing, billing, and enrollment were resulting in more manual workarounds and higher maintenance costs. Also, the plan’s technologies were designed for commercial lines of business and not Medicare business. The health plan required a technology platform that would help it transform its business at a sustainably low TCO and prepare the plan for a changing environment.

The plan chose a vendor with Medicare Advantage experience: ikaSystems. The plan’s bold vision was to move all Medicare Advantage business operations onto the ikaSystems platform in a phased rollout.

The long-term goal: reduce administrative costs by 30% while lowering medical costs and attain the flexibility needed to adapt to changing market forces.

Enrollment confirmation speeds up, CMS submissions rise

In fall 2009, this health plan deployed ikaMedicareGateway to improve accuracy and speed of membership enrollment and member payment reconciliation processes. Results were almost immediate. Enrollment confirmation within 10 days increased from 94.5% in Q1 2009 to 99.8% in Q1 2010 and 99.9% in 2012, while enrollment submissions to the Centers for Medicare & Medicaid Services (CMS) within seven days increased from 91.4% to 96.5% to 98% in the same time frame.

Overall, the plan was able to achieve a 13% reduction in enrollment and billing PMPM costs with the switch to ikaSystems from its legacy vendor. At the same time, the plan realized a 12% reduction in member servicing costs.

Additional benefits:

  • Immediate response to eligibility queries, saving time and resources
  • An 80% reduction in application processing time, resulting from automated eligibility verification
  • Accretion rates surpassing 99%
  • A 70% reduction in reconciliation time, resulting from automated membership and payment reconciliation processes, which also sped the discovery of discrepancies

Medicare claims pilot lowers costs

The second phase of the health plan’s rollout began in January 2011 with a production pilot involving multiple groups and thousands of members. The plan implemented components of ikaEnterprise for Medicare, a complete Web-based solution for Medicare process automation and intelligence management. The plan has seen remarkable results, including an 88.8% first-pass rate for claims and 99.5% financial accuracy. In all, the pilot has achieved a 44.6% reduction in system and BPO operating costs as a result of the solutions’ flexibility, interoperability, accuracy, and efficiency—exceptionally high auto-adjudication rates virtually eliminated the need for manual intervention, resulting in consistent, accurate claims payments.

This plan continues to go live with ikaSystems solutions, including ikaMember360, an integrated dashboard that drives workflows across ikaSystems solutions to increase member engagement and create a consolidated view of a member’s experience. In January 2013, the plan went live with a full Medicare claims system conversion, taking its entire line onto the ikaSystems platform. Based on the remarkable results from the pilot, the plan expects to see a 45%-60% reduction in operational costs.