HCF is Australia's first insurer to implement claims automation solution

Claims processing times drops 30 percent

Australian fourth largest health fund HCF, has implemented ILOG Rules for .NET as a key component of its automated claims adjudication and payment system, thereby reducing the costs associated with handling, processing and settling claims.

The implementation has allowed HCF to reduce the time required to evaluate and settle claims by about 30 percent, while automating fraud detection.

In addition, it can now implement rule changes within days instead of weeks, and the number of people managing the claims system has been reduced from 10 people to only three, allowing HCF to re-deploy the experienced staff to other parts of the organization.

HCF offers more than 423,000 health memberships covering over 978,000 people and providing more than 341,000 policy-holders with HCF life insurance.

Founded in 1932, HCF provides a means for customers to mitigate the cost of hospital in-patient care. Individual practices hospitals and billing agents submit claims electronically to HCF to check eligibility criteria and determine the proper payment.

With an average of 27,000 claims to process every day, HCF needed a solution to shorten the time it takes to validate, review and settle claims, while also ensuring consistency.

The new business rules-based system enables HCF to eliminate redundant data and quickly respond to changes in business and government regulatory requirements.

The new system also enables HCF to achieve an automation or pass-through-rate of 80 percent.

Using ILOG's BRMS, HCF achieved significant speed to market gains by implementing rule changes within four days instead of three weeks that it used to take previously.

Prior to using ILOG Rules for .NET, maintaining the business rules was difficult because they were less visible to business users. With this solution, claims-related business rules are extracted from the legacy systems and maintained in a centralized rule repository making them easier to manage.

HCF was also able to achieve greater alignment between IT objectives and business strategies by extending rule management to business users.

In addition, HCF can ensure that fraud detection is an integral part of the claims process, enabling the carrier to identify suspicious claims early in the claims' lifecycle.

Carriers can easily add or change attributes and score incoming claims to support their fraud detection guidelines.

It took HCF just eight months to build and deploy the new system, with benefits realized immediately. HCF CIO, Patrick Shearman, said ILOG for .NET fits well into the organization's architecture.

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