Captiva Software Redefines Paper Pushing For Pacific Life & Annuity Co.

"Speed and accuracy are necessities, not luxuries, in processing medical claims," said Tim Patterson, director of Benefits Support Services – Group Life and Health at Pacific Life & Annuity Co. "Adjudicating these claims means processing approximately 8,000 documents per day, and we're achieving this using Captiva's FormWare," said Patterson. Since implementation, Pacific Life & Annuity Co. (PLAC) has increased productivity processing business-critical documents by 17 percent.

PLAC, based in Fountain Valley, CA, is a subsidiary of Pacific Life, one of the 20 largest insurance companies in the U.S. which manages $290 billion in assets. PLAC markets life and health insurance to labor-management groups and unions and to companies with fewer than 100 employees. The company's Phoenix Benefits Office, in Phoenix, AZ, is responsible for processing and archiving approximately 1.8 million claims and related documents per year for several different groups within Pacific Life, such as the Group Employee Benefits Operations and Multiple Employee Trusts. These 1.8 million documents include complex medical claim forms like the HCFA 1500 Medicare and UB92 forms, dental claims and hand written response letters.

Claims Adjudication
PLAC's Phoenix Benefits Office receives medical claims and related correspondence from physicians, group practices and insured patients by mail, fax and electronic data interchange (EDI). These documents must be sorted by type, indexed, captured and archived before claim adjudication can take place. Once the documents are appropriately processed and routed, adjudicators can access the files and act on them. They issue a check and explanation of benefits (EOB) to the insured or healthcare provider, or request or send additional information. Faster processing improves the level of customer service the company can provide.

In 1998, Patterson recognized that the Phoenix Benefits Office's imaging/archival system worked well for image capture but was not designed to efficiently process forms and documents. He assembled a project team, including business operators and claims operators to evaluate new options. PLAC teamed with Image Process Design (IPD), a leading software-development and systems-integration company specializing in imaging and workflow solutions for the insurance industry, to design a system that would meet the company's growing needs, particularly in the medical claims forms arena.

PLAC needed a flexible system that would satisfy several requirements. First, the system needed to migrate valuable resources currently dedicated to pre-sorting documents in the mailroom to data entry and management. It was also important that the company select industry leading vendors that wouldn't disappear overnight or fail to offer migration paths to other products. Lastly, the company needed true forms-processing capabilities specifically designed to perform automated character recognition on medical claim forms.

"IPD evaluated and recommended established vendors' best-of-breed products to help PLAC manage documents arriving electronically, and via paper and fax," said Mark Brazeau, IPD's VP of marketing. "Our expertise and software solutions, coupled with our partnerships with companies such as Captiva Software Corporation, Kodak and FileNet, helped us develop a customized system to meet Pacific Life's goal of a 17 percent increase in productivity."

Managing Information Into The Enterprise
Once the solution was approved, IPD implemented the system, which was designed to perform as follows: the less than 25 percent of documents originally received by EDI, are now routed directly to the FileNet archival system. The remaining 75 percent received by paper or fax are sorted by document type and placed on the appropriate red- or white-lamp Kodak 923 scanner. The TIF images are collected by Captiva's FormWare information capture software, which identifies the documents as HCFA 1500 or UB92 medical claims, dental claims or penned response letters.

The HCFA 1500 and UB92 medical-claim forms are further processed through FormWare's InScript OCR (optical character recognition) engine, which automatically "reads" the machine print on forms. Characters that the software has not recognized with a high level of confidence are routed to operators for review. The extracted data continues through the FormWare workflow for verification of key information such as social security numbers and numerical totals. The information and files are converted to EDI and sent to the FileNet document management system and to a mainframe that stores the claim information. Once documents are in FileNet and the mainframe, they can be accessed with IPD's user interface, which assists in creating and distributing records to the appropriate Pacific Life queue.

The dental claim forms and penned response letters are also processed using FormWare, after both are exported to the same FileNet and mainframe storage units. The letters flow through FormWare's OCR engine so that key pieces of data, such as social security number and claim numbers, can be indexed and then exported automatically. The dental claims skip the character recognition step, and certain fields are routed to operators' workstations to be input manually – a technique known as "key from image." Once the information is keyed in and verified, the image and data files are exported to FileNet and the mainframe.

"We selected Captiva's information capture software for its accuracy, speed and experience processing medical claim forms, as well as the company's market leadership status," recalled Patterson. "Because of FormWare's efficiency, we have been able to reengineer our resources and get people out of the mailroom and into the data management area of our business. With the benefit office's early buy in on the technology, we have seen rapid user adoption of FormWare, and we've met our productivity goal in six months."