When Florida Combined Life decided to become a primary player in the dental PPO and fee-for-service business in that state, it had two major challenges: an aggressive timeline and an inflexible claims system.The Jacksonville, Fla.-based subsidiary of Blue Cross Blue Shield of Florida had been offering dental coverage as an ancillary product to its health insurance offerings, and it had been paying dental claims through its health claims system. But that system was inflexible, and would not meet the company's future needs, says Charles Brody, dental division vice president at Florida Combined Life.

In addition, the company had only eight months-from February to September 1999-to choose and implement a new system before it began selling its new products. "There was no way we could find a system we were comfortable with in that timeframe, as well as the cost factor to bring it up," Brody says.

After evaluating a few third-party administrators, the company elected to outsource enrollment, fulfillment, billing and claims to Companion Information Resources (CIMR), a subsidiary of Columbia, S.C.-based Blue Cross Blue Shield of South Carolina.

With proven technical expertise and the "Blues" affiliation, CIMR was a logical choice for Florida Combined Life. Blue Cross Blue Shield of South Carolina agreed to meet Florida Combined Life's quality requirements-the percentage of claims paid within 14 days-as well as its system uptime needs. In addition, after a few months, membership grew and CIMR established a dedicated team to serve Florida Combined Life clients.

Working with a TPA makes a lot of sense when a business is starting up and volume is low, Brody says. By paying for services on a per contract per month basis, Florida Combined Life has a fixed cost that makes it easy for the company to determine appropriate rates.

As the company grows, however, it may be forced to revisit the outsourcing decision. Currently at 110,000 members, at some point, the economies of scale could shift. "I'm happy with (CIMR's) service," Brody says. "But from a financial standpoint, any time you're outsourcing . . . every business has to ask themselves, 'Can I do this cheaper myself?' That's an ongoing evaluation you have to have."

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