By Cameron Brown, CEO,Rockford, Ill.– based Midland Management (www.midlandmgt.com). Midland Management is a contract management firm, covering over 90,000 lives. Their client base consists of IPAs and medical groups such as Blue Cross Blue Shield of Illinois, Humana, Unicare and Aetna.

Selected – Not Once, But Twice

Typically, before a vendor is selected, they will have participated in a comprehensive due diligence process, complete with multiple demos, site visits, testing and more. Rarely does a vendor go through this process more than once for the same company. MphasiS Healthcare Solutions (MHS) was the exception.

Midland Management (Midland), a contract management firm that serves over 90,000 covered lives, had selected Eldorado as their claims processing vendor in the early 90s and had been content with the claims processing solution given the limitations of technology. However, as the new millennium approached, they knew that to take their company to the next level in terms of productivity, expansion and customer service, they needed to integrate a truly automated claims processing solution. Given their satisfaction with their original claims processing solution, MHS’s HEALTHpac, they looked to MHS for guidance. However, Midland also took one step further with a complete examination of all major claims processing vendors including OAO, RIMS, and Quadramed.

Evaluation Process

The first step of Midland’s industry-wide review was to establish their overall goals and objectives. In essence, they wanted an automated system that would free up their internal resources, reduce their overhead costs and bring them closer to a paperless system. In addition, Midland envisioned system-wide automation that would merge the clinical and medical department decisions within claims processing, enabling the company to expand their client base and covered lives – without significantly increasingly staff.

The next step for Midland was to form an internal evaluation committee consisting of key management and technical specialists. The committee then researched the latest vendors and compiled a short list of solutions that met the agreed-upon technical functional requirements. In addition, they reviewed other critical elements such as cost, customer service, technical support and overall commitment from the vendor to incorporate customers’ feedback into future product development. The vendor solutions that met those criteria were invited to Midland to demonstrate their software functionality in person. Midland then visited select vendors’ reference sites to further understand the products’ capabilities and the standard interactions between each vendor and their clients.

After fully evaluating their claims processing alternatives, Midland decided to stay with MHS’s HEALTHpac solution and move forward with a conversion to v3.5. Midland trusted the commitment of MHS’s senior executives to supply the latest technology and had personally experienced the dedicated service and support of the individuals within the MHS team. Furthermore, the enhanced provider matching logic, user-defined tables and file management -- all without requiring major customization – was technically superior to the competitors’ solutions.

Training & Implementation

With the decision to continue with MHS finalized, three executive personnel from Midland flew to MHS’s headquarters in Phoenix, Ariz., for a customized two-week boot-camp program, consisting of training on the new version’s auto-adjudication capabilities, as well as instruction on how Midland could internally build the auto-adjudication logic to optimize the claims processing for their clients.

After training was the next big chapter – implementation. The three-person Midland team laid the architectural foundation of the solution and led the company through internal development, quality assurance testing and a pilot rollout. Also critical to the success of the rollout was the end-user training provided to approximately 50 staff members in nursing, claims, customer service, finance and provider relations. This process was repeated when Midland converted to version 4.0 within a six month-time-frame.

Expected Results – And More

The goals that Midland had established were accomplished in spades: high first-pass auto-adjudication, increased productivity in overall claims processing and a transformation into a completely automated claims processing operation.

The bottom-line results were tangible. With a 95% paperless claims processing system, Midland was able to decrease claims-related staffing by 15-18%, saving approximately $150,000 per year. Additionally, the HEALTHpac solution gave Midland the flexibility to take on a new large client, which doubled their number of covered lives while augmenting internal staffing by only 10%. The efficiency of this automation saved Midland approximately $250,000 - $300,000 per year. In further testimony to the effectiveness of HEALTHpac, Midland was able to quickly load the new client’s data, build the needed logic without outside input, establish the referral rules, and complete the client conversion in less than 60 days. With competitive systems, Midland may not have been able to add any clients within a reasonable timeframe.

Furthermore, HEALTHpac enabled Midland to reduce the overall number of customer service calls. Currently, Midland maintains superior customer service for its 90,000 covered lives with only nine customer service representatives and 10 claims representatives. In contrast, the industry standard of one full-time equivalent (FTE) per 1,000 would typically require 90 customer service representatives.

Thanks to the accuracy of HEALTHpac’s provider matching software, Midland also saw a decrease in refunds and voids from providers, allowing the company to maintain one dedicated person for refunds even when their covered lives increased from 15,000 in 1999 to 90,000 in 2005.

Finally, the auto-adjudication for EDI files were everything they had hoped for, achieving rates in the mid to upper 70s -- and even up to the 80s -- for HCFA and UBs. Today, Midland handles approximately 5,000 HCFA claims per day, 1,000 UBs per day and a couple hundred manual super bills from physician offices.

Summary

Midland Management recognized that their company’s continued growth and success depended on selecting a trusted partner that could deliver not only the latest technology in claims processing, but also the commitment to work with them throughout the years to ensure that the product’s development addressed the industry’s – and to Midland’s – evolving needs. Thanks to MphasiS Healthcare Solutions’ HEALTHpac system, Midland achieved their strategic goals with high auto-adjudication rates, significant expansion in business and minimized staff and overhead cost increases.