VOS Portal Streamlines ClaimsProcess for TPA A Case Study

Gregory B. Bragg & Associates, Inc. Claim Services (GGBAI Claim Services) is a third- party administrator (TPA) that specializes in quality claims handling, investigations and risk management services in the general liability, property and workers' compensation insurance lines. They also handle reporting and financial accounting for their clients. The company has been in business since April 1, 1986.

As Bragg & Associates steadily grew, they realized their current claims system was not fully meeting their business needs. Several critical factors contributed to the TPA looking for a new claims system:

• First, Bragg & Associates wanted to improve their workflow efficiencies to allow for greater claims capacity without additional staff.
• Second, the company needed interfaces with other systems they used, so these secondary systems could be encompassed into a common platform, allowing management to adequately get their arms around their entire claims processing infrastructure.
• Third, they had compliance issues not just with state mandates and insurance regulations, but also with the Public Risk Database Project (PRDP). This is important because 80 percent of Bragg & Associate's clients are self-insured public entities that want to comply with the PRDP guidelines.

As a result, Bragg & Associates undertook a search to find a claims administration system that could meet these critical needs. In August 2001, the TPA signed an agreement with Valley Oak Systems, and went live with VOS Portal in December 2001. The implementation process took four months.

Selecting VOS Portal

Christopher Shaffer, Information Services Manager at Bragg & Associates, had first heard of Valley Oak Systems in 1997 when an associate was installing the company's flagship product, VOS Portal. "In helping with this installation, we had some experience with Valley Oak, and knew the company understood the type of data we would need to pull out of our current claims system," said Shaffer.

At the time of their data conversion and system implementation, Bragg & Associates had about 110,000 claim records in their system, about 100,000 reserve sets and 1.7 million claims payment records.

"When we began looking at new claims systems, there was a short list of vendors we were considering," noted Shaffer. "But to our claims adjusters, there was really just one choice – VOS Portal. I've performed IT system conversions for over 19 years, and if the users don't like the software, the conversion is a bad experience. VOS Portal, however, was really embraced by the end-users even before we signed up. The staff liked the interface; it was intuitive and easy. The features were rich, with every main feature having about five useful sub-features. The diary is a phenomenal tool and the rules are also another great feature."

In August, Bragg & Associates set a completion date for December 2001, and with the help and coordination of Valley Oak Systems, the company backed into that date, looking at key events that needed to occur in data conversion, trial conversion, data validation, and regression testing. With the expertise from both companies, all fields were mapped correctly and the implementation occurred on time – a rare feature in the world of IT.

Increasing Claims Capacity with a Centralized Database

With more public entities self-insuring in response to the hard market and skyrocketing premiums, Bragg & Associates has experienced steady growth. The company's focus on high client service and satisfaction also favored its continued expansion. As they grew, the company slowly began to notice operational bottlenecks that were costing them valuable time and resources.

"The foremost problem was our claims capacity," explained Shaffer. "It was a problem that originated in our database structure and resulted in several inefficiencies. Every individual client and every pool had their own database – so there were 60 unique databases. From an IT viewpoint, that's a nightmare to manage."

To prepare the proper infrastructure for continued growth, Bragg & Associates wanted to merge their databases and have one single point of login.

"We choose VOS Portal for specific improvements that we expected the system would deliver. As soon as it was implemented, we saw a radical change in the way our organization performed," says Shaffer. "Increased claims capacity is one of the main benefits. We were handling about 4500 claims per year, now we're up to 5000 claims per year. Our database has grown to 150,000 total claims, and 2 million claims payment records."

Improved Bill Review Interface

Another area in which Bragg & Associates was experiencing inefficiency was in their interface with various bill review vendors.

"Since our company is very client-driven, we view ourselves as partners in our clients risk management efforts. If our clients had existing relationships with bill review companies, we continued to fulfill those relationships. Over the years, we've forged many partnerships with bill review companies."

At the time of implementation, Bragg & Associates had six separate bill review processes utilizing EDI, but this communication process functioned only one-way. In other words, data was sent from the bill review company to Bragg & Associates, but not the other way around. The inefficiencies that resulted from this one-way communication were multiplied against the many bills and claims processed daily.

With the installation of VOS Portal, Bragg & Associates now has a two-way exchange of data, enabling the bill review companies to automatically run the information against their bill validation process.

"Now when we receive provider payments into our system, we know that they've already been validated against open claims and legitimate entities and policies," explained Shaffer, who also anticipated cost savings in the form of decreased penalties.

"Everything in workers' compensation has a statutory timeline attached to it. If these timelines aren't met, our company or our clients will have to pay penalties. There are about 120 statutory timelines depending on the nature of the claim. With an improved interface, the bill review process is more efficient and there is a greater chance of meeting or exceeding these timelines, allowing us to avoid penalties," said Shaffer.

VOS Portal's automated explanation of benefit (EOB) or explanation of review (EOR) also cut back on operational bottlenecks. "This was an efficiency issue that was half workflow and half bill review. With the past bill review process, the payments came through and we printed out checks, but if there was a reduction in the provider payment, we needed to show how much it was reduced by and why it was reduced. With VOS Portal, the EOB or EOR, was automatically generated and printed on the stub of the check. This automation is a beautiful thing! We knew we would be getting this feature with VOS Portal, but we didn't fully appreciate the positive benefit to our workflow until the system was in place."

Automated Correspondence Module

Another significant benefit of VOS Portal was the automated correspondence piece. At one time, Bragg & Associates had to purchase pre-printed letterhead for each of their clients and pre-printed envelopes, with each correspondence piece needing to be stuffed into the right envelope.

With VOS Portal's correspondence module, Bragg is now able to utilize plain paper with electronic letterhead and blank envelopes with a dual window, saving them and their clients significant stationery expense.

The main benefit of the correspondence piece was the automatic generation of workers' comp forms and standard letters within the system. Bragg had once generated all their correspondence in an external word processing application, and then performed a mail merge. This process was external to the claims system, and the final documents were not trackable or stored with the claims data. Since the correspondence module is an integral part of VOS Portal, much of the information for these documents are automatically populated from the claims system and stored within the claim file, saving additional time and resources.

Additional Benefits and Savings

The maintenance fee for VOS Portal is higher than Bragg & Associates' previous system on a monthly basis, but there are many improved workflow efficiencies that now factor into the return on investment and cost savings.

To review, Bragg gained efficiencies in having a single point database login and an improved bill review interface. The company now has a greater capacity to grow without adding additional employees. Many other unanticipated benefits were also realized from deploying the system. For instance, the check processing time and printing costs were dramatically reduced.

"Before the implementation, we were printing 800 checks a day on a dot matrix printing system, and had one full time employee (FTE) watching over that function. We also had to purchase pre-printed checks with each of our client names. These costs were all passed onto the client, and it's about 50 cents a form," said Shaffer.

"With VOS Portal, we're generating more checks in less time, and printing them on blank check stock. It now takes only 30 minutes. Our corporate philosophy is not to reduce employees. Instead, we redeploy them into more fruitful areas of the company that fully leverage their talents. As a result, today there is still a "check-printing" staff member, but that person is also responsible for a myriad of other tasks. As an employer, we now have much more productive and satisfied employees," said Shaffer.

Bragg & Associates also had compliance issues to consider. Besides the statutory EDI mandates for the first report of injury and subsequent reports, other compliance issues, particularly the Public Risk Database Project (PRDP), also needed to be met. Associations like CAPJA (California Association of Joint Powers Authorities) and PARMA (Public Agency Risk Managers Association) have all agreed to use PRDP as a standard for public entities. "We knew VOS Portal would allow us to become PRDP compliant," said Shaffer.

"Looking at all these benefits, it's difficult to project comprehensive hard dollar savings, and I think it's hard to get around the 'soft' savings," said Shaffer. "We haven't eliminated employees, but we have reassigned them to more productive roles. Although there are no quantitative numbers at this time, redeployment more than makes up for the difference in the maintenance costs. In addition, we can now handle more business without additional staff members."

Moving to the Internet

Bragg & Associates is planning to implement Valley Oak Systems' browser-based system, iVOS™, which will allow Bragg to eliminate the use of middleware software such as Citrix, have access anytime from anywhere via a browser, and improve efficiency with more advanced business rules. Another important factor is that iVOS was developed on the same database architecture as VOS Portal. Thus, it will require no data conversion to move to the new system; the transition will be seamless.

Conclusions

"I've worked with a lot of system conversions in the past, and recognize that the Valley Oak Systems database is one of the most normalized that I've seen. By this, I mean that if you look at a data element in a table, it's not replicated in five different locations. Instead, it's just in one spot with links built off it. It's a true relational database, with an elegant, mature database design," said Shaffer. "In addition, Valley Oak's customer service has been excellent, and the maintenance and upgrades have been entirely trouble-free."

"In the end, we found that Valley Oak Systems, like us, is very client focused. That's one of the intangible traits that we liked about their organization. We have a very similar management philosophy and team approach. These philosophical propensities allowed us to work very well together."

About Valley Oak Systems, Inc
Valley Oak Systems, Inc. is a privately held corporation with headquarters in Alamo, California. Founded in 1994, Valley Oak Systems has relied on the industry experience of its founders to provide high-quality, cost effective solutions for the claims administration industry. Valley Oak Systems is dedicated to providing the highest quality software, services, and support to enable their clients to meet their goals. The company ranks #398 on the 2002 Inc 500 list of fastest-growing private companies.