Like many insurers, Atlanta-based Atlantic American Corp. (AAC) believed its manual claims-handling process was sufficient - until it experienced rapid growth in the second half of 2002. At that point, the life and health insurer's mail room, which was operated by IKON Office Solutions (Malvern, Pa.), and third-party imaging provider could no longer keep up with the volume of claims, according to Barbara Snyder, AAC's vice president of human resources.
Disputed claims, relates Snyder, could take two to three weeks to handle - "That wasn't acceptable," she says. So, AAC ($470 million in assets) began exploring solutions to reduce the claims processing cycle in spring 2003.
IKON, which was nearing contract renewal, suggested that an expanded relationship could help AAC improve productivity. While the idea sounded promising, Snyder says, AAC wanted to examine other possibilities, so the insurer brought in an outside consultant (which Snyder declines to identify).
"The consultant reminded us that we would need to treat our vendor as a true partner - which we had failed to do in the past," relates Snyder. "We typically made decisions that would impact the vendor, but failed to include them in the decision-making process."
Following the consultant's advice, AAC granted potential vendor partners access to its office for evaluation purposes before submitting final proposals. Based on the consultant's recommendation and the selection team's evaluations, AAC chose IKON at the end of 2003. Snyder declines to name the other vendors.
The entire IKON solution is managed on-site by IKON employees. IKON initiated four months of workflow and technology changes, as well as physical changes to AAC's facility.
The mailroom was expanded to increase capacity and a secure area was established for claims check printing. In addition to mail processing products, imaging technologies were added, including a Canon (Tokyo) scanner, a Kodak (Rochester, N.Y.) scanner, and a Digital One (Mentor, Ohio) Web server and imaging system. Now, IKON scans all claims as they enter the mail room and files are handled electronically from that point forward.
"By April , we were up and running with our new claims management solution, and we saw strong results almost immediately," Snyder says. "We have annualized savings of over $100,000 for on-site claims imaging and an 80 percent reduction in postage costs for claims payment; the two-week claim-scanning process was reduced to a one-day turnaround; and the check printing process has moved to IKON."
IKON's printing of the claims checks saves hours of printer time in AAC's IT department, enabling employees to focus on other projects, according to Snyder. In addition, AAC saves $3,600 per year on the cost of toner cartridges alone.
The next stage of the initiative is the implementation of an automated addressing system for direct mail pieces - a process that previously was handled by a third party - and initial testing of on-site color printing for marketing materials, Snyder relates. "Now, we're providing more actionable and comprehensive marketing information to our agents," she says.
CASE STUDY PROFILE
Atlantic American Corp. (Atlanta; $470 million in assets).
Lines Of Business
Life and health insurance.
IKON Office Solutions (Malvern, Pa.).
Reduce claims handling times and improve efficiency.