Possibilities - Professional Office Systems - Saving Money on Medical Claims

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PROFESSIONAL OFFICE SYSTEMS - SAVING MONEY ON MEDICAL CLAIMS
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*** From February 1991 Possibilities Newsletter ***
*** Copyright 1991 by eSoft, Inc.  All Rights Reserved ***

Professional Office Systems -- Saving Money on Medical Claims
by Alan Bechtold

As the Baby Boom generation reaches middle age, health care is becoming the 
focus of everyone's attention.  The medical insurance industry is under more 
pressure than ever to streamline its operations, while doctors and hospitals 
are under pressure to reduce costs.  Better service at lower cost is the 
desire of all participants in the process, and the demand of the health care
consumer.

One of the areas which affects these costs is the processing of medical 
insurance claims.  There is a tremendous amount of paperwork in a medical 
claim, and any reduction in the error rate and time spent handling forms 
translates directly into cost savings.  It is this area of the problem which 
is addressed by Professional Office Systems -- a subsidiary of the 
Washington D.C. area Blue Cross-Blue Shield Plan.  

Professional Office Systems uses a TBBS system to collect electronic health 
insurance claims from hospitals and doctor's offices, process and edit them, 
then pass them on to Blue Cross-Blue Shield and other major health insurance 
providers.  Claims now arrive at the insurance company computer within 48 
hours vs. 2-4 weeks.  This system saves the doctors time and money by 
allowing them to use their existing office computer billing system to 
directly submit claims.  By cutting down on processing time for each claim 
it also gets doctors their money more quickly.  Reduced processing time 
saves the insurance company money on each claim.

According to Todd Inman -- manager of telecom- munications operations for 
Professional Office Systems -- Blue Cross-Blue Shield saves roughly $1.50 on 
every claim his company handles.  This savings comes from removal of the 
mailing expenses, microfilming, data entry, adjudication and anything else 
that a regular paper claim used to go through to get entered into the claims 
system.

Professional Office Systems' TBBS handles literally thousands of health 
insurance claims every day, and is making it possible for Inman to gradually 
move toward total automation of most of the company's processing tasks.  
Inman runs his TBBS on a node of a LANtastic network so that submitted 
claims can be processed immediately.

"Right now we've got a 16-line setup" Inman said.  "With the network we have 
access to the online system, real-time, 24 hours a day, and we don't have to 
shut down at all.  We can pull health insurance claims off and put reports 
out to the various doctors and hospitals that we work with any time that we 
decide to do so.

Four years ago, all this was done with a multi-tasking version of concurrent 
DOS.  Inman described his company's old system as "a bit of a bear."

"We started out running a multi-tasking operating system with a 
telecommunications package in each of four windows," Inman said.  "The 
operating system did multi-tasking by time-slicing on the PC, but it tripped 
over itself repeatedly, locking the machine up at least once a day.  It 
required a lot of baby-sitting."

The company's first online system was also limited in the number of lines 
that could connect at one time, due to the limited amount of time slicing 
the machine could accommodate.  Inman also pointed out that the old system 
wouldn't let him automate anything.

"We had to literally ride the back of a dinosaur, pulling claims off the 
system whenever we could," Inman said.  "We had to actually take the machine 
down to take incoming claims off and we couldn't even think about networking 
the system to anything."

Professional Office Systems out-grew its old system about two years ago.  
The search was on for a reliable multi-line BBS package to take its place.  
"At the time, there were three or four systems we were seriously 
considering," Inman said, "but it was the customizability of TBBS that 
really attracted us."  This level of flexibility was a necessity for 
Professional Office Systems' plan to automate most of the processing the 
company does on the health insurance claims it deals with every day.

TBBS' customizability allowed Todd to design all of his company's BBS menus 
to fit the health insurance industry.  There are options on the system to 
submit claims and pick up reports and it's all specifically detailed and 
aimed at the industry Professional Office Systems serves.

The company receives 3,000 to 4,000 claims a day, and it compiles each and 
every one of them, doing a substantial amount of up-front editing so they 
get into the mainframe at Blue Cross-Blue Shield, via a dedicated line, in a 
form that is 98% clean.

The whole process takes 3 to 4 hours, but that's no problem now that it's 
all done off-line.  All the processing is now done on a 25 MHz 80386 machine 
that looks into the TBBS system via the network, grabs the files, processes 
them, then sends the polished versions directly to Blue Cross-Blue Shield's 
mainframe.

TDBS, eSoft Inc.'s dBase III Plus compatible TBBS Option Module, also plays 
an important role in Professional Office Systems' online system.

When the company was first looking for a BBS software package, TDBS was 
still in development.  But, according to Inman, the possibilities were 
enticing even then.  The company has since put TDBS to work on many of the 
automation tasks they originally envisioned.

"One of our clients, a Blue Cross-Blue Shield subsidiary called Health 
Management Strategies (HMS), does a lot of what is called managed care 
subcontracting," Inman said.  "If you go into a hospital, this outfit will 
intervene and try to apply some kind of medical necessity guidelines to that 
hospital.  If it's possible for you to stay at home with home health care, 
instead of actually burning up room and board in the hospital, they provide 
both the hospital and the patient that opportunity.  Their end goal is to 
try and keep health insurance costs down.

"The whole process is called preauthorization and, up until we came along, 
it was all done by telephone and fax machine.  They had a staff of roughly a 
dozen people, full-time, sitting by the phone, answering phone calls all 
day, taking these kinds of requests from hospitals, writing them all down on 
pieces of paper, then taking them to a nurse who made the final 
determinations.  We could tell right away that TDBS could be used to 
automate the entire process, and a program is, in fact, just completing beta 
testing."

Professional Office System's TDBS program allows participating hospitals to 
either upload the preauthorization requests with their mainframes or enter 
the requests real-time, directly into a user-friendly data entry screen.  
The program was written with TDBS, to offer clients the same kind of 
telecommunications interface they're already used to from submitting claims.

These preauthorization requests are more time-sensitive than the regular 
health insurance claims.  Hospitals must request and get authorization 
within 48 hours or benefits are cut to the hospital, patient or both.

"Usually, we collect claims all day long and pull them down for processing 
once a day, at noon," Inman said.  "The logistics of our normal operation 
didn't fit preauthorization requests.  For example, a hospital could call 
our system at 1:00 in the afternoon with a request and we wouldn't even pick 
it up until noon the following day.  They could conceivably lose as much as 
an entire day that way.  That's why we decided to make it a real-time TDBS 
process, instead."

Inman explained, "What we needed was a system where the hospitals could send 
in a request any time they felt like it all day long and HMS could call in 
any time THEY felt like it to pick up anything that might be waiting for 
them."

Todd set up a menu that let HMS pick up submitted requests via an online 
TDBS application.  The TDBS program reads TBBS' upload DIR listing into a 
database. It then uses that database as a source file to determine which 
uploaded filenames belong to the caller.  It then automatically creates 
another DIR file to download only those files.  This process avoids the need 
for hundreds of separate directories for each hospital and doctor.

"All of this happens in seconds, online, in the TDBS application," Inman 
said.  "When HMS selects our TBBS menu option to pick up waiting reports -- 
voila! -- the latest files are ready for them to download, listed in their 
private download directory."

It looks easy on the users' end.  Colorful ANSI graphics highlight the 
simple, clean menus and everything takes place so quickly and smoothly it's 
hard to imagine the network behind the scenes that runs all those batch 
files and processing programs.

"Because we might be picking up claims at the same instant that a customer 
is dropping new claims off, we wrote a little PASCAL routine that checks the 
file first," Inman said.  "If a file's size is zero, that tells the routine 
it's in the process of being updated and it isn't made available for us to 
pull off until the update is finished."

When the need arises, SYSOM, eSoft's remote system maintenance TBBS Option 
Module, also comes in handy.  "All of us in the office have a PC and modem 
at home," Inman said.  "We use them regularly to update files and then we 
use SYSOM to work with the system.  Whenever something happens, say a job 
didn't run completely for example, we just dial in and do it."

In spite of the complex tasks routinely carried out by Professional Office 
System's TBBS, Inman says it was remarkably easy to set up.  "We had it up 
and handling routine claim processing within a week," he said.  "Since then, 
we've continually been refining the system, adding functions and automating 
more of our operation all the time."

That process is destined to continue.  For example, more TDBS applications 
are already in the works.

"We should have the entire Blue Cross-Blue Shield portion of our business 
fully automated, thanks to TBBS and TDBS, within this quarter," Inman said.  
"That's roughly 50% of our business.  Much of the rest of our customers jobs 
can also be automated and we're working on many of them as well."

In any business the pay-off is in the bottom line, and Professional Office 
Systems' bottom line is looking pretty good.  Their willingness to 
experiment, to expand the power and flexibility already embodied in TBBS and 
TDBS, brings to the forefront the reliability and capability those products 
bring to the online environment.  Reliability enough to handle tasks which 
in the past could only be performed satisfactorily on mainframe computers.  
And the result is lower health care costs and faster claim settlement.

- END -
PS0291-3
Rev. 2/92

Copyright (C) 1994 eSoft, Inc., All Rights Reserved.  Permission granted
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