ROI from EFT

1
ROI from EFT ERA Adoption

• John Evans, MBA
• BlueCross BlueShield of South Carolina

2
EFT/ERA Introduction

3
Industry Status

• Approximately 95 paper
• EFT with paper remit
• Provider issues with 835 receipt and processing

4
Challenges to Adoption

• Complex by nature money and data in one
  transaction
• Multi-department implementation process
• Low priority (check/EOP work)
• Provider reconciliation / 835 issues
• Need to register and maintain bank accounts via
  multiple websites.

5
(No Transcript)
6
Benefits of Adoption - Payer

• Hard costs (3 page one ounce example)
• Zip-3 rate plus presort .39
• 2 sheets paper, check stock and envelope .06
• Print and insert .15
• Total .60
• EFT/ERA .18
• .42 savings / 70 reduction

7
Benefits of Adoption - Payer

• Soft costs
• Reduced support calls
• Reduced returned mail
• Reduced stop-pay and re-issue
• Simplified reconciliation

8
Benefits of Adoption Provider

• Faster reimbursement
• Predictable cash flow
• Reduced administrative effort
• Less paper
• More secure
• Less fraud

9
Panelists

• John Evans Director of EDI Services, BCBS South
  Carolina
• William Barbato Director, Payer Solutions,
  OptumHealth Financial Solutions
• April Rimpley - 2nd Vice President, Group
  Customer Relations Operations, Ameritas Group

10
Summary

• In April 2006, BlueCross BlueShield of South
  Carolina implemented My Remit Manager to allow
  providers to receive electronic HIPAA 835
  remittance and opt out of receiving paper checks
  and remittances. When providers register for My
  Remit Manager access, they agree to go
  paperless and receive only electronic
  remittances and EFT payments.
• On MyRemitManager providers can access over 16
  months o f electronic 835 remittances and sort
  the information according to member, remit date,
  Electronic Funds Transfer (EFT) tracking number,
  etc. MyRemitManager houses remittance statements,
  reports and payment information in one
  easy-to-use application.

11
State of the State

• BlueCross BlueShield of South Carolina has 9,967
  provider locations that have the potential to
  receive paper remittances three times a week. It
  costs between 35 and 60 cents just for paper,
  printing, and mailing each remittance. This cost
  is compounded by the additional costs associated
  with lost checks, stopped payments, re-issued
  checks, bad addresses, returned mail, etc.

12
Program Results

• Internal performance measures are based on unique
  locations that embraced EFT and turned off paper
  remittance advices. Today 100 of Hospitals and
  1,041 Professional locations are paperless.

13
Internal ROI

• Hospitals represent 32 of our total paper
  remittance volume. By focusing on hospitals, we
  reached ROI within the first few months of the
  program.

14
External ROI

• Measuring ROI was calculated based off savings
  from future value of current payments and the
  savings reaped from auto-posting the 835. For one
  SC hospital, in six months we processed 5,129
  remits electronically, saving the hospital over
  40,000.
• The External EFT savings were based off the
  present value (PV) for receiving a paper check
  and the future value (FV) of money for EFT.

15
Future Value
FV (1r)n n 4 days for paper r 4 annual
interest rate
16
Replication for other plans
17

• EFT Implementation
• April Rimpley M.A.M., FLMI, ACS
• 2nd Vice President, Group Customer Relations
  Operations

18
Ameritas Overview

• Processing more than 3.6 million dental claims
  each year.
• Claims processing turnaround time of 90 in 5-7
  working days.
• Financial accuracy of processed claims exceeds
  99.
• Implementing a high-tech electronic claims system
  specifically designed for processing dental
  claims.

19
Project Drivers

• Reduce Postage Costs
• Green Initiatives

20
Implementation Challenges

• Multi-department project (need detail for each)
• Treasury
• IT
• Accounting
• Claims and Provider Relations
• Project prioritization
• Extensive programming effort
• Tracking EFT payments to provider
• Discrepancy reports
• Service screens with details on transaction types
• Needed EEOP in place

21
In-house vs Outsource

• Phase 1
• Target Tier one Dentists
• In-house to leverage IT capabilities and Network
• Phase 2
• Will partner to register larger numbers of
  Dentists
• Payment Clearinghouse to appeal to larger
  population
• Leverage Phase 1 functionality with partner
  capabilities

22
Provider Registration

• Web based sign-up options
• Opt in push for EFT and EEOB
• Need to manage capability to react to
  transactions that do not go through or go to an
  incorrect account

23
EEOP vs 835

• We did not require paperless or 835 right away
• We now allow paperless even if the provider is
  not submitted e-claims and cannot receive an 835

24
Success to Date

• As of April 29th, we have added 149 records for
  providers
• We estimate 43,600 in savings so far when you
  include bank reconciliation, postage and printing
  savings

25
Questions?
26
Contact Information

• April Rimpley, M.A.M., FLMI, ACS
• 402.309.2050
• ARimpley_at_ameritas.com
• http//www.ameritasgroup.com/