STRIMA 2007 Conference “Maine: Downeast and Different” September 9 – 13, 2007 Portland, Maine

1. Images, Ghosts and Picture: Document Management Solutions STRIMA 2007 Conference “Maine: Downeast and Different” September 9 – 13, 2007 Portland, Maine Mon, Sept. 10 3:00 – 4:30 pm

2. Your Guides • James Wedster Vice President of Product Development Valley Oak Systems, Inc. • Christopher Schaffer, EsquireVice President, National Sales CorVel Corporation

3. Agenda • The Case for the Paperless Claim File • Document Management (DM) in the Claims Process • An Electronic Infrastructure for DM • CIRMA Case Study: Integration for Improved Workflow • City Case Study: DM Tools and WC Best Practices • Developing Your Own Paperless Path • Q & A Session

4. The Case for an Interactive and Fully Electronic Claim File

5. Beyond Scanning & Imaging • Initial focus was on importing documents into claim file • Ongoing focus will be on fully automated claims systems that take advantage of current technologies and provide a single platform for communication by all stakeholders

6. Why Change the Process? • Operating efficiencies • Advanced technologies • Artificial intelligence • Rules based engines • Storage • Security • Enhanced reporting and information sharing • Improved results and effectiveness

7. Where to Start? • Map out your claims process • Critically analyze each step • Why do I do this? • Can I automate? • What value is added? • How can each step be effectively and efficiently coordinated to reduce process time

8. First Notice of Loss Nurse Case Management Medical Bill Review RX/DME Appraisals Recorded Statements/VOIP ISO Indexing Diagnostics EOB/Check Writing OSHA Reporting and Tracking Payroll Systems Photographs Positive Pay/Check Cashing Reserving Worksheets Items to Consider Incorporating into Electronic Claim File Process

9. Project Implementation • A well-designed electronic claim file and document management system should enhance the process - Not add to the process • Implementation should be staged to avoid information overload

10. Recognizing the Paradigm Shift in Claims Adjusting • In the past, the effectiveness of your claims administrator was results driven • Now, in addition to results, claims administrator is now responsible for data integrity, computer measured benchmarks, OSHA reporting, paying medicals within XX days, etc.

11. Unfortunate Reaction • Adjusters have become box-checkers and data input clerks • Intense focus on objective automated measurements • Three-point contact • Compensability determined within XX days • Average medical turnaround • Closing ratio • Substantive, proactive claims adjusting has become secondary because results aren’t easily measured

12. Implementing for the Future • Implement in a way that promotes focus on substantive claims handling while assisting adjuster in box-checking, data integrity and file documentation • Use audit tools • Rules-based auto routing • Letter writers

13. Invest in Technology to Support Process or It Will Not Be Used • Dual monitors to reduce screen flipping • Size of monitor – No zooming in • Effective and common sense document management • Ability to insert notes or comments on correspondence • Speed of delivery • Speed of system – Load time/storage capacity

14. Document Management in the Claims Process

15. What is Document Management? • Originally, a system used to track and store images of discreet paper documents • Evolved to a systematic approach for storing, accessing, and tracking information electronically • Key characteristics of document management (DM): • Ability to manage information, collaborate when creating information, distribute information, and allow secure access by relevant parties • Supports a wide spectrum of “less paper” to “paperless” work environments

16. Traditional Claims Challenges • Inefficient workflow and business processes hamper productivity • Time-consuming, labor-intensive tasks, e.g. repetitive data entry • Inability to achieve end-to-end automation, straight-through processing • Difficulty in accessing and sharing data across the enterprise • High operational costs (paper, copies, storage, and personnel) • Lost documentation, due to physical transfer, storage and retrieval • Inconsistent application of best practices in paper-based environment • Lag time in communication and collaboration among stakeholders • Slow transactions impact customer service and satisfaction • Inability to analyze and report on trends that affect costs

17. Paperless Claims: Realistic or Unattainable? • 30 years ago the term “paperless office” first appeared, based on belief technology would eliminate paper • Today, paper consumption at 100-million tons a year • Associates may be at different stages of paperless path, need to accommodate their paper processes • Consumers are tech-savvy, demanding more paperless, web-based transactions • For now, total elimination of paper is unrealistic; but moving closer to a paperless environment has many attainable benefits and reward

18. Delivering Value to Paper-based Processes • Claims Management • Policy Administration • Underwriting • Risk Management • Incident Reporting / Event Management • Billing

19. An Electronic Infrastructure for Document Management

20. Types of Technology Software as a Service (SaaS) / Browser-based Technology Scanning, Document Imaging, OCR, Digital Photos & Video Internet Tools: Email, Hyperlinks EDI, XML, Web Services Workflow Management (Business Rules)

21. Yesterday’s Paper-based Processes Medical Mgmt Accounting Claims Users Imaging Bill Review Policy

22. Today’s Electronic, Internet-based Infrastructure • Claims • Bill Review • Imaging • Policy • Medical Mgmt • Accounting • HR One-System Internet Business Rule Workflow Users Central Repository Hub Server

23. Case Study Connecticut Interlocal Risk Management Agency An Integrated Environment for Improved Workflow

24. CIRMA: Updating IT for Document Management Success • One of the largest, most sophisticated public-entity risk management pools in the nation • Grew 600% since 2000, business environment became more complex • Legacy systems couldn’t keep pace in terms of functionality and capacity level • Integrated claims and policy administration system was key priority to achieve DM efficiency across enterprise

25. CIRMA Claims Challenges With Exponential Growth, Increased Claims Capacity • Went from 12,000 to 22,000 claims a year • Needed to handle increased capacity without increasing human resources and without impacting quality and performance Previous Claims System • Labor-intensive, paper-based business processes • No web-based capability (e.g. no online reporting of claims) Policy Administration • Two disparate systems, multiple interfaces with claims system • Difficult to access, retrieve and update policy information

26. New System’s DM Tools Deliver Process Efficiencies • Truly web-based, integrated claims and policy system • Enable integration and document management across core business units • Flexibility to meet CIRMA’s unique document management requirements • Created an end-to-end electronic platform that integrates all relevant insurance processes • Established a centralized data repository, making it easy to access and share information • Business rules define and automatically manage workflow: right people receive the right information at the right time • Contemporary tools enable automation and paperless processing

27. Before: Disparate Environment Two Underwriting Systems LAP Underwriting WC Underwriting First Notice of Loss Managed Care SIU Support Finance (Great Plains) External Users (Members and Staff) Claims CITRIX

28. After: Integrated Infrastructure Internal Environment Managed Care Services EDI SIU System Claims & Policy Hub Finance (Great Plains) EDI Internet External Users (Members and Staff) First Notice of Loss

29. Enterprise Connectivity Claims Adjusters Admin Assistant Business Analyst Document Management Nurse Case Manager Finance Risk Control Members Under- Writing Improved connectivity and sharing of information among all stakeholders View-Only Claims

30. Benefits & Savings

31. Case Study Integrating DM Tools for WC Best Practices

32. City Profile • 7th largest City in the US, 11,076 employees • Self-insured, self-administered WC program • $23.8 million in workers’ comp claims costs • Expensive! Effective claims management best strategy to control costs and losses • Needed DM tools to enable more efficiency and identify high-cost, high-risk areas for loss control

33. Legacy System Paper and labor intensive Lack basic functionality Little automation of routine, low-value tasks Inconsistent data collection and reporting Band-aid approach in rapidly escalating cost environment Desired DM Best Practices Seamless claims reporting DM efficiency leads to manageable caseloads Support for more automated processes DM data collection will help identify high-cost, high-loss claims areas “Before” Picture Results: Inability to report outcomes = Inability to influence outcomes = high claim costs!

34. Leveraging DM Tools • Document Management Tools: • Avoid generation of paper in the first place: injuries reported immediately to call center and interfaced into claims system • Automated business rules drive best practices • Auto-populated correspondence with claimants • Diary-driven claims examiner workflows • Electronic interfaces maximize efficiency and information flow • Enable Data Reporting and Effective Management: • Accurate data collection through required fields • Identify trends to target with safety and loss-control initiatives • Monitor key performance measures to track success

35. “After” Picture • Seamless alignment of technology and DM objectives • Electronic import of new injury reports • Reduces injury reporting from 4 weeks to 24 hours • Automation of bill review and payment • 36,000 automated payments annually • Bill review savings:$10.8 million in year after DM implementation • Maintain 1:1 open to close ratio • Diary driven workflow increases efficiency and productivity • Immediately closed 700 claims, reducing examiner caseload • Distribution of quarterly reports help agencies to control costs • DM data collection helped reduce claims by +6% over four-year period • Costs reduced by $2.4 million in year after DM implementation

36. Developing Your Own Paperless Path

37. Document Management: Success Strategy Summary • Online data capture avoids generation of paper in the first place • Leverage scanning, document-imaging and OCR capabilities • Utilize digital files where possible (PDF, photo, video), attach them to electronic claims file • Embed DM capabilities within workflow management, ensures right person gets the right information at the right time • Create an enterprise-wide electronic infrastructure • Browser-based technology • Centralized data repository • Utilize connectivity tools (EDI, Web services, the Internet) to further streamline business processes and the flow of information • Leverage data to improve decision-making and program performance

38. Questions & Answers

39. Contact Information • James WedsterValley Oak Systems, Inc.jwedster@valleyoak.comPhone: 925-242-4600 • Christopher Schaffer, EsquireCorVel Corporationchris_schaffer@corvel.comPhone: 843-937-4900