Now and Later A Different Presentation

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Now and Later A Different Presentation
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Original Session Premise

• When Companies choose to replace their legacy
  claims systems, they do so to
• Take advantage of new technology
• Adopt best practices
• Manage claims administration quickly and
  effectively
• Reduce overall costs
• This is happening concurrent with a changing
  regulatory environment that
• Requires compliance during implementation to
  avoid penalties
• Involves possibly both legacy and new systems
• Generates additional costs for exception
  processing in the legacy system

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Session Premise

• This session was originally scheduled to include
  representatives of a carrier and a vendor engaged
  in
• Managing the implementation of a new claims
  system to include these regulatory changes
  (later)
• Concurrently finding a way to effectively build a
  bridge from legacy to the new process (now)

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Whats Different Today

• The carrier that was building the plan to adopt a
  now and later approach to extract data from
  legacy to build that bridge lost key development
  personnel after this session was planned.
• The original plan was scuttled, but the problem
  still remained on how to be ready when the new
  claim system went into production and to use it
  exclusively to feed compliance.
• As a result, this session has become a case study
  of what to do. You are now the panel.

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Background

• Carrier writes between 250 and 300 million
  dollars in WC DWP in NCCI and Independent states
• Has chosen a comprehensive web based claims
  system and is committed to meet a second quarter
  09 implementation date
• Will have the new system, when it is in
  production, completely replace the current legacy
  claims applications.

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Compliance Feeds

• EDI Injury Reporting Including new state IAIABC
  Release 3 requirements
• Fraud Management feeds to ISO ClaimSearch
• The loss side of Unit Statistical and Aggregate
  Financials including extended timelines for
  reporting
• Detailed Claim Information (DCI) including new
  requirements beginning in 2010

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Question 1

• How do you assess the options to determine how
  can you can bridge the compliance gap?

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Question 1

• Could build feed to legacy process but that was
  inconsistent with the implementation of the new
  technology
• Build new systems in house but that might require
  multiple interfaces and cost which could delay
  the planned rollout.
• Use a vendor solution to provide data in a
  transactional model to create the necessary
  output from the new claims system detail.

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Question 2

• What are the implications are making a clean
  break from legacy systems?

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Question 2

• What will the new transaction look like and what
  types of detail will it include that may not have
  been collected previously need to gain a
  compliance perspective about the data at the
  transactional level
• Much of the compliance output involves the
  integration of historical data (SROI, Unit Stat,
  Financials) to make a clean break history must
  be obtained and connected into the final process.

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Question 3

• From a project plan perspective what elements are
  critical to move ahead with this strategy?

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Question 3

• Its not just about claims, getting the
  corresponding policy information into the same
  process.
• Build USR history from internal or external
  source data both summary and historical
  transactions
• Create a snapshot of legacy claim information to
  collect current values
• Utilize legacy data to test for the creation of
  completed USRs in the new process

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Question 3

• Build a transactional feed from the new claims
  system
• Test transaction structure and format
• Test a load of transactions from the system
• Build daily transactions (to meet output
  reporting requirements) and test them
• Produce desired output in test (FROI, SROI, Unit
  Stat, etc)
• Review results and revisit steps where there are
  any production issues

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Question 3

• Create historical FROI/SROI from legacy, load to
  test, review and perform remedial action as
  necessary
• Begin parallel test
• Load current history
• Load legacy claims data to new system
• Get daily transactions from new system
• Perform parallels for all desired service level
• Compare and review results
• Conduct Financial Calls Parallel
• DCO Testing

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Question 3

• Implementation
• Refresh all historical data
• Load historical data to production
• System cutover
• Provide daily transactions as of cutoff date
• Load data into production queue
• Produce compliance output and transmit to DCOs

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Benefits of Conversion

• One interface to create claims related regulatory
  output
• A consistent approach to manage regulatory output
  resulting from detail coming from the new claims
  system
• Sunsetting of existing legacy apps and
  elimination of maintenance and change management
  costs

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Questions 4 5

• Did you learn something new?
• How did I do?
• Thanks for your participation and attention to
  this session. Enjoy the rest of ISOTECH.