An East Coast BlueCross and BlueShield Organization

Sustaining Compliance in an Increasingly Regulated Environment

For decades, this BlueCross and BlueShield firm has been serving the health care coverage needs of its members through Individual and Group health care coverage, National Accounts, and Medicare/Medicaid program servicing. Today, with significant market share in its service area, the company’s employees provide sales, claim payment, customer care, and medical management services to millions of members.

Objectives

In mid-2002, senior leadership recognized an opportunity to build upon already achieved improvements in regulatory compliance and cost trends in member appeals and executive inquiry processing results. The creation of a centralized department in the second quarter of the previous year had not achieved the aggressive compliance objectives expected by the leadership team, and department productivity had plateaued at lower than anticipated levels. With the publication of Department of Labor requirements, impending HIPAA privacy mandates, and increasing attention from a host of state regulatory agencies, management reaffirmed its commitment to establishing and sustaining consistently high levels of production, time service, and quality performance. The Robert E. Nolan Company was asked to review member appeal and executive inquiry workflows, design new processes, and create staffing models to allow department management to effectively align resources.

Nolan Approach

A two-month, four-phased project deliverable plan was developed and executed by senior leadership, front-line department management, department employees, and Nolan consultants. Project phases included:

1. Discovery: Department managers, employees, and Nolan consultants

  • Current-state process documentation and baseline measures development
  • Documentation of work composition profiles and historical metric trends
  • Identification of activities and time allocation, by department job role
  • Activity costing and review of regulatory agency processing requirements
  • Documentation of process, technology, job role, and organizational improvement opportunities

2. Collaborative Input: Three department workgroups representing key job roles

  • Validation of identified current processes and work composition profiles
  • Future-state process design, system enhancements, and employee skill sets
  • Guided development of future-state production expectations across a three-level range of work complexity

3. Recommendation Development: Workgroups and Nolan consultants with department management review

  • Future-state processes—manual activities and system integration
  • Required skill sets, by job role
  • Future-state metrics and reporting
  • Appeals correspondence triage function to effectively identify and route work
  • Staffing levels, by job role—based upon work volumes, type of work, and work complexity mix and time service constraints for new and pending work volumes
  • Organizational redesign to support the compliance requirements and employee development needs of future state

4. Implementation Planning: Department management and Nolan consultants

  • Development of implementation/success metrics
  • Required activities for each recommendation
  • Integration of all activities into a single plan
  • Recommended timeframe staging of individual recommendation implementation, recognizing other concurrent initiatives within and outside the department

Results

For less than 15 percent of the anticipated first-year economic benefits of the project, and working closely with department front-line management, Nolan consultants helped deliver solutions that:

  • Have reduced total member appeals case pending levels by 30 percent in two months
  • Have placed appropriately skilled resources at points in the process, ensuring consistent achievement and maintenance of time-service compliance requirements
  • Have achieved and sustained member appeal receipt acknowledgement and resolution compliance ratios greater than 99 percent within six months of project completion
  • Have modified processes and developed staff models which will guide the achievement of $700,000 in net, hard-dollar savings when all recommendations are implemented
  • Provide an organizational structure with effective management spans of control and sufficient flexibility to facilitate further, future organizational combinations
  • Provide the tools to identify and close department member skill-set gaps and apply appropriately skilled resources to future-state department activities
  • Have created automated reporting of work volumes, aging, and time-service results

The accomplishments of the company through this project are a direct result of its senior leadership’s effective management of the five critical project success elements:

  1. Superior senior leadership planning.
  2. Clear communication of goals to the project team and all department employees.
  3. Identification of necessary internal and external resources to execute the project plan.
  4. Meaningful, routine participation by department employees in the development of future-state models.
  5. Consistent follow-through by senior leadership and front-line management. Implementation is nearly complete, annualized savings of more than $600,000 have been realized, and remaining recommendation implementation dates have been scheduled to allow the company to fully achieve identified economic benefits, while maintaining compliance with strict time-service and quality requirements.