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BPM Surround – Front Office Innovation with Back Office Automation

BPM Surround – Front Office Innovation with Back Office Automation
Shantanu Baruah - Vice President | December 24, 2014

A large payer in the US is in the process of starting a state-of-the-art case management implementation around claims. I am engaged with them for the past several months consulting and advising them from product evaluation to process implementation. As we were going through various technological elements for a successful claims implementation, the team was challenged because of innumerable limitations imposed by old mainframe based technologies that this payer has today.

In my conversation with the senior vice president of claims at the organization, I soon realized how technology had been an inhibiting factor in the past for them. With their company rapidly expanding its operations, the current program is the only hope he has to rectify the situation.

On my flight back home, I realized that if we go ahead and only implement the single technology at hand, they probably will be headed for another technology disaster. What they perhaps need to fix first, are the back-end systems and processes. Mostly fixing existing systems or processes are discouraged because of exorbitant costs, besides no one wants to touch and wake up the Mainframe beast! It is the classical paradox which, I am sure all of us have gone through in our consulting careers.

In my quest to find a solution, the “aha” moment struck me during that flight. The idea was very simple yet a very powerful one – why cannot we create a surround solution around all the old technology mumbo jumbo – a digitally enabled process surround. I drafted a note to the claims head of this company, and blocked his calendar for a meeting. This blogpost provides the construct of the solution and I would be eager to hear your views and thoughts.

So what exactly is digitally enabled BPM surround?

Claims process background

If you have worked in a payer claims organization you would know that a claim adjudication process goes through several steps – broadly the steps are described in the picture below


For any claim modernization work, the key factors are:

  • Process Flow – how many steps. Define what is manual vs. what is automatic
  • Monitoring – when does monitoring trigger. Proactive vs. reactive monitoring
  • Roles – how many exist. Clear definition of roles and responsibilities
  • System Integration – how many systems need integration to complete the pre and post claims adjudication
  • Failure Points – how many times does a claim needs re-validation because of human / system failures coupled with unavailability and inaccuracy of data

For the claims modernization to be successful each of these points needs to be addressed. Often the advancement in the modernization activity is paralyzed, not because of the new system implementation but because of the existing systems and processes limitation and changing them is not an easy or cheaper solution.

BPM Surround as an answer

BPM Surround works on three principles

The digitally enabled BPM surround moves away from implementing a mere technology solution to a business KPI lead solution. After the KPI’s are defined, all the claims pre-and-post adjudication processes are relooked to identify all manual intervention. It also looks for all wait processes to identify system bottlenecks. All manual intervention and wait because of system limitation is redesigned to reduce the number of steps required to process a claim. For this client, a 17 step pre-adjudication process for a particular state came down to 7 steps.

Once the processes anomalies are identified new case management frameworks are established using tools such as Pega workstation. Often the limitation exists with the integration with existing mainframe system for claims processing which is addressed in the next section.

  1. Relooking the Process Flow – Claims processing is all about meeting the KPI’s. For instance, if the KPI of the new implementation is to increase the claims pre-adjudication process to 95% accuracy, or to file all claims within 30 days to comply with the state regulators with fraudulent claims less than 5%, then claims modernization needs to categorically look at how current process is executed. Process harmonization is critical for the success of a renewed claims system.

    This could be achieved by creating an API layer as an interface point between mainframe and the new case management system. The API layer directly interacts with the mainframe databases such as DB2 to perform the CRUD (Create, Retrieve, Update and Delete) operations. The most important aspect of this concept is to run the API CRUD operations as part of the service oriented architecture (SOA) on a BPM engine. The architecture of the solution can be depicted by the picture below

  1. Redesigning the Integration: As most of the payers run old mainframe systems, real time integration is usually a huge challenge. Often the entry points are restricted or are limited to running sequence of COBOL code between batches. To enhance process flow real time integration is a must. For instance, if the user wants to pre-adjudicate a claim seeking additional information, instead of waiting for a COBOL batch process to run in a nightly batch to fetch the required information, an alternate approach is designed to retrieve the data from the back-end mainframe.

Redesigning the Integration

  1. Emphasizing on UI design: One essential element that often gets ignored while designing a service based claim system is the UI interface. This is one of the most critical aspects for a successful case management implementation. A great design not only helps adoption but also help faster case execution. An example is in the adjudication process, the claims workstation person needs to go through multiple screens for reviewing cases, writing correspondence, checking codes and routing the exception path. With the emphasis on design, a single user screen with intuitive design can reduce both execution steps and time required to complete operations.

In conclusion

In the past payers could survive with old mainframe system for three reasons a) it takes time, but it works b) payers were not restricted by tim,e as the regulations were not stringent c) ACA (Affordable Care Act) was not in place

In the new world, where concepts like outcome based pricing and direct to consumer is taking precedence, payers needs to relook at the way they process claims. Claims inaccuracy may also lead to serious repercussions imposed by regulatory bodies.  For example, all states in the US mandate payers to pay the claims within 30 days of its filing – violation of this is a serious offence, as it may result in the payer losing its state license. For meeting the 30 day SLAs, payers are not able to do FWA (Fraud Waste and Abuse) checks before releasing the payments.

Digitally enabled BPM surround is the best path for the payers to reborn digitally and remain competitive. 

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