Convergence Up Close 2

Process automation eliminates customizedworkflows, reduces errors and saves time and money

Implementing BPM has helped an insurance company automate routine decisions while tapping content to clear up exception transactions. At Newark-based Horizon Casualty, a 65-employee workers compensation subsidiary of New Jersey's Horizon Healthcare Services, claims and related bill payment processes required access to policy data, rules on coverage, claim forms and associated data on each claim. Horizon processes roughly 150,000 medical bills per year for clients including its BlueCross/BlueShield-affiliated parent company, the State of New Jersey and The Hartford insurance company, yet it had "five different ways of doing the same thing," according to John Oliveira, director, marketing and operations.

Processes varied depending on whether bills were related to workers comp claims or auto insurance policies, and all transactions required the assistance of medical payment specialists. These specialists were dedicated to specific types of transactions and were responsible for adjudication-the coding step that determines what is and what isn't covered.

From Oliveira's perspective, the underlying work steps were essentially the same. "You get a bill, you evaluate it and you post it for payment," he explains, "yet we had custom workflows and a lot of variation. We had six people processing bills, and we could get six different results on the same bill."

In 2002, Horizon embarked on a BPM initiative that has put in place a consistent core process with various options tailored to specific clients. Adjudication decisions are now determined by business rules wherever possible, and the human intervention is reserved for exception transactions.

Horizon has fully automated at least 60 percent of the more than 35,000 claims it receives each year via EDI using Rules Power BPM software. Roughly 90,000 paper-based claims are still scanned at Horizon and images transmitted to a service bureau for overnight data entry, but the data returned feeds a streamlined process that has cut 10-day to two-week processing backlogs down to two to three hours. Straight-through processing rates aren't as high as those achieved on EDI-based transactions, but the BPM software gives payment specialists a complete rundown on the missing and out-of-tolerance data so they can access databases, claims images and other sources to plug-in or edit the appropriate information.

The software for the two-year project cost about $100,000, according to Oliveira. The next phase will tackle complex automotive personal injury protection claims, which are replete with rules and analytics aimed at uncovering fraud.

Horizon has far outstripped its original goal of lowering processing costs by 10 percent and automating at least 20 percent of transactions. "We've cut our payment specialist staff in half, yet we're handling the same volume of claims and we're prepared to add several new customers and significant increases in volume in 2005," Oliveira says. —D.H.

Content usually illuminates data, but the opposite canalso apply, with data pointing to better use of documents

The key to efficient content management is reusing chunks of existing information. Minneapolis law firm Zelle, Hofmann, Voelbel, Mason & Gette is pursuing this principle, using a business intelligence (BI) tool to search old casework that might save lawyers time and clients money while possibly changing the outcome of current legal cases.

Like most law firms, Zelle Hofmann deals with thousands of documents every year, and the firm's 180 attorneys and six offices nationwide rely on a document management system to store, access and retrieve more than 800,000 matter-related files. In 2002, the firm upgraded to Hummingbird Enterprise, an enterprise content management (ECM) system, but it also stumbled upon Hummingbird's BI Query tool, which was included as a reporting tool.

"BI wasn't a part of our original plan, but our firm has more than 60 partners, and they're all interested in the financial status of the firm," says Warren Knowles, technology implementation manager. "We've used the software to develop better and more flexible financial reports."

Hummingbird BI lets attorneys review standard reports or select their own criteria and develop custom reports without the aid of IT or accounting staff. The tool also cut costs: More than 200 accounting reports were made available online, with e-mail alerts replacing physical printing and shipment of 20 to 30 reports per day-a time-saving move that has eliminated the equivalent of more than 50 full-time days of labor per year.

Once the IT staff became familiar with Hummingbird BI, they quickly spotted new applications. In one example, a report was developed on the internal use of West KM, a knowledge management tool from Thomson that can scour the firm's own content repository for related documents whenever an attorney conducts a search in the publisher's popular Westlaw legal research database. The BI report revealed that West KM is returning some 1,400 relevant hits per month, a good return on a service that costs the firm more than $8,000 per month, according to Knowles, but the project also led to a bigger idea.

"We realized that if we can use BI to analyze patterns of content usage, we can make better use of our knowledge," says Knowles. "If attorneys are constantly referring back to old [cases], we can point to related documents that can provide a baseline for new cases."

Zelle Hofmann attorneys hold meetings to trade ideas on cases in progress, but people retire, change firms, take leave or are too busy to put much effort into sharing information. The challenge in exploiting BI for KM is devising useful reports. "When is a pattern measurable and useful?" asks Knowles. "Is it when a document has been referenced five times in one month, or is it whenever old content is used?," says Knowles. "The main push is that we want to use our content in a way that is valuable to the client."—D.H.