Claims

Dayton, Ohio - Anthem Blue Cross and Blue Shield launched a pilot e-prescribing program in two Ohio communities in an effort to reduce medication errors and the time physicians spend managing prescriptions.Currently, less than 22% of physicians nationwide use the basic capabilities of e-prescribing, according to the Center for Medicare and Medicaid Services (CMS), Baltimore, Md. CMS estimates that the use of such technology could eliminate as many as two million harmful drug events each year.

Atlanta - LOMA has released a new edition of Life and Health Insurance Underwriting, for the first time in downloadable PDF format, the life research and education association reports. The revised textbook introduces risk assessment principles applied to underwriting individual and group life and health insurance and provides a thorough introduction to underwriting terminology and concepts. The text is assigned reading for LOMA’s underwriting course, UND 386.

Boston - A new report recognizes 39 insurance companies as “Model Carriers” for “doing everything right” in technology initiatives. The companies, which were cited in a report by Boston-based Celent LLC, were invited to a Model Carrier Summit, which began today in New York.

San Francisco - Advances in medical technology are a main factor driving the trend of increasing health-care costs, and industry stakeholders, insurance companies fundamentally among them, agree that improved evaluation methods are needed to better measure the benefits and risks of new technologies and procedures in order to avoid misallocation of health-care dollars. A wide range of health care industry stakeholders--from medical institutions and insurance companies to Medicare and other administrative agencies--agree on the need for a new review system, says Rita Redberg, MD, MSc, director of Women's Cardiovascular Services at UCSF Medical Center and professor of clinical medicine in the UCSF School of Medicine, San Francisco. Redbert examines this subject in the January/February 2007 edition of the health policy journal Health Affairs, which devotes the full issue to cardiovascular medicine.

Newark, Calif. - Risk Management Solutions (RMS) a provider of products and services for the quantification and management of catastrophe risks, scrambled to respond to charges leveled by the Tampa Tribune that its CAT models rely on "faulty science," and that insurance companies are using the models to justify huge rate increases in coastal areas. In a letter to Insurance Networking News, Dr. Robert Muir-Wood, chief research officer of RMS, Newark, Calif., disputed the January 7 article entitled "Insurance Risk Forecast Called Faulty," stating, "We at RMS were stunned by the article's inaccuracies and one-sidedness." Contributing to the dispute is a change made in March 2006 to the RMS model that takes a 'medium-term' (five-year) forward-looking view of risk for estimating potential catastrophe losses. To date, catastrophe model results have typically been based on a long-term historical average baseline. Jim Elsner, a professor of geography at Florida State University and one of four experts on a panel that provided input to the model's development, criticized the results, telling the Tampa Tribune that it contains assumptions that are "actually unscientific." In response, RMS confirmed convening two separate meetings one with Elsner and one in which Elsner, citing an affiliation with an RMS competitor, was absent. In the October 2005 meeting, RMS hosted a meeting of four hurricane climatologists to develop a consensus forecast of the overall level of U.S. hurricane activity expected over the next five years. "The consensus involved weighing the opinions of the four experts, having first provided them with detailed statistics on historical hurricane activity and landfalls. All four scientists, including Professor Elsner, gave their sign-off on the outcome of this process. RMS then took the results of this forecast and implemented them in its hurricane catastrophe model," Muir-Wood told INN. "RMS climatologists took responsibility for determining where the extra hurricanes would be expected to form, while preserving the overall target activity rates established by the expert panel," he said. "A press release and white paper were issued describing this work in detail. Again, all four experts were asked to review and approve both documents, to ensure that their involvement was appropriately represented. The RMS regional landfall rates were not challenged by any of the panelists. While it is now recognized that Professor Elsner has developed his own theories on how hurricane activity translates to regional landfall rates, he did not challenge the RMS landfall rates developed after the 2005 expert elicitation." As reported on March 23, 2006 in Insurance Networking News, RMS justified its updated five-year model, which predicted an increase in modeled annualized insurance losses by 40% on average across the Gulf Coast, Florida and the Southeast. Modeled annualized insurance losses in the Mid-Atlantic and Northeast coastal regions will increase by 25% to 30%, relative to those derived using long-term 1900-2005 historical average hurricane frequencies, INN reported. "This new view of risk is driven by an increase of more than 30% in the modele frequency of major (Saffir-Simpson Category 3-5) hurricanes making landfall in the U.S. to account for current elevated levels of hurricane activity in the Atlantic basin, which are expected to persist for at least the next five years. When compared with a pre-2004 historical baseline, as has been previously employed for quantifying insurance risk, the increases in modeled annualized losses are closer to 50% in the Gulf, Florida, and the Southeast," reported INN. Taking into account that eight storms have hit the area in the last two years, RMS stated that the increased frequency and intensity of hurricane activity in the Atlantic Ocean Basin, as observed since 1995, is driven by higher sea surface temperatures in the tropical North Atlantic and by associated changes in atmospheric circulation. These warmer temperatures are expected to translate into a continuation of high activity in the basin, leading to a greater potential for hurricanes to make landfall at higher intensities over the next five years. "Hurricane activity in the Atlantic basin has been running far above the historical average in 9 of 12 years since 1995," Muir-Wood told INN. "As one metric, the annual number of the most intense storms (Category 3-5) has been more than twice that of the average annual number between 1970 and 1995." In October 2006 RMS organized the second of these annual expert meetings on hurricane activity rates, inviting all four of the scientists involved in the first meeting, reports RMS. "Only Professor Elsner declined, citing that he was under contract with a company affiliated with our main competitor," Muir-Wood told INN. The second meeting involved a total of seven climatologists, and went into greater depth than the first meeting, employing the results of 20 different statistical and climatological forecasting methods, said Muir-Wood. "The activity rate forecast for the next five years that came out of this meeting was almost identical - within 1-2% - of the projection of the first year's meeting," Muir-Wood stated. Despite the charges leveled by Elsner, RMS will continue to run an annual hurricane climatology expert elicitation procedure to ensure that RMS hurricane models reflect the most current view of hurricane risk, said Muir-Wood. "The five year perspective, may in future years, be decreased if this is suggested by the best scientific and statistical evidence available at that time," he added. Since the January 7 Tampa Tribune article appeared, further coverage in the popular press has linked questions about the catastrophe models to the rate increases being employed by insurance companies. Yesterday, two Florida Cabinet officers asked for more information about "a dramatic change in hurricane damage forecasting used by the insurance industry." In the Tampa Tribune's January 9 edition, Gov. Charlie Crist and Chief Financial Officer Alex Sink challenged RMS to provide the background for their model creation. "All of the material produced at these [annual expert] meetings, as well as the details of how activity rates were implemented, have been documented and are in the process of being published in peer-reviewed scientific literature," Muir-Wood told INN. RMS is the official model for the Florida Hurricane Catastrophe Fund, which was created after Hurricane Andrew hit in 1993. The fund provides backup coverage for private insurance companies. "RMS has built its reputation on the principles of providing neutral and unbiased information on risk," concluded Muir-Wood. Sources: Tampa Tribune, The Kansas City Star, Risk Management Solutions, Insurance Networking News archives.

The road seems less bumpy these days for insurance carriers that use state-of-the-art automated compensation to calculate and track agents' commissions. A single streamlined third-party system can replace a hodgepodge of legacy software and manual processes, users say, helping to reduce clerical work, increase accuracy and improve reporting. Moreover, carriers report that the software opens up a whole new world of analysis that pinpoints the true sources of profit and helps identify and retain the best agents.The accuracy rate for commissions at Blue Cross Blue Shield of Florida, for example, has improved from 80% before introducing up-to-date automated compensation to 95% after the implementation, says Linda Lamb, BCBSF vice president of sales business management. The remaining errors arise from data entry miscues or software problems outside the system, she says.

INSURER ENHANCES ONLINE DATAThe Empire Life Insurance Company (Empire Life) enhanced Trilogy, its universal life product that continues to evolve to meet the changing financial and wealth management needs of Canadians. The enhancements represent the largest number of revisions to the product since Trilogy Universal Life was introduced in September 2000. Better delivery of information is achieved through a completely revised client statement and with new online investment information.

RECORDING SOFTWAREWitness Systems Inc., a Roswell, Ga.-based global provider of workforce optimization software and services, enhanced its Impact 360 IP Recording solution, featuring tripled channel capacity, unified recording management and a centralized administration tool. Designed for interactions in enterprise and contact center environments, Impact 360 now features TDM and IP recording under a single management tool. The software operates across IP, TDM and mixed telephony networks, designed to help customers ensure all their calls are recorded, whether for compliance and liability, sales verification or quality assurance purposes. Impact 360 IP Recording allows the recording of SIP-based calls. Also new to Impact 360 IP Recording is tripled channel capacity, which results in fewer servers. The solution introduces centralized administration capabilities, which provide access to all the vital Impact 360 IP Recording configuration settings, enabling customers to centrally manage all of their Impact 360 recorders regardless of location.

GRAIN DEALERS UPGRADE POLICY ADMIN CAPABILITIESGrain Dealers Mutual Insurance Co. upgraded its policy administration capabilities with Policy Decisions from Insurity, a Hartford, Conn.-based ChoicePoint company. Policy Decisions is designed to incorporate complete policy-lifecycle administration services-from application intake to rating and underwriting, from policy issuance to renewal and reinsurance-on a single Web services platform. Grain Dealers looked at competing systems that promised improved access, says David Patterson, assistant vice president and director of Information Services for the Indianapolis-based property-casualty insurer, but Insurity had several advantages that clinched the deal. At first, agents will access it to do their own quoting for commercial policies. The longer-term plan is to provide self-service access to agents for policy maintenance.

Like surfers shooting the curl, insurance companies have learned to ride the industry's wild ebb and flow. No matter what causes the next mini-tsunami-increased competition, government intervention on pricing, new technologies and distribution channels, or evolving customer needs—insurance companies need to improve business practices to stay ahead of the wave.Until now, insurers have relied upon simplified, customer-facing business transactions, such as policy and claims administration and point-of-sale (POS), for direct competitive advantage. The recent concentration on systems upgrades has led to considerable neglect of key business processes, including billing and accounts receivable. Although critical, those functions lack the appeal of hot topics such as Web services, service-oriented architecture (SOA) and regulatory compliance.

Washington - A third conference in the movement to start a standards-based nationwide health information network (NHIN) is expected to include demonstrations of health information exchange prototypes and discussion of business models.

NASHVILLE, Tenn. – The nation may remember 2006 as the year the Democrats won the mid-term elections, Gerald Ford and James Brown died, and data breaches made an indelible mark on American business in general and the insurance industry in particular.

Thousand Oaks, Calif. - To promote health in the Latino community, Blue Cross of California (BCC) has started a Web site called NuestroBien, which is Spanish for ”our well being." The site, located at www.nuestrobien.com, presents articles in English and Spanish on prevention, nutrition and early detection of health problems.

Harrisburg, Pa. - Pennsylvania National Mutual Casualty Insurance Co. enhanced its online quoting and application system for personal lines products, as part of its strategy to jump-start profitable personal lines growth.Some of the technology enhancements include quick-hit automation and workflow improvements, including automatically ordering Insurance Bureau Score reports, automatically assigning plan tiering and simplifying and streamlining the application process by eliminating duplication. In addition, product enhancements include streamlining auto and homeowner underwriting guidelines to make them easier to use and less cumbersome, and revising underwriting guidelines to broaden underwriting appetite for selected risks to be more competitive.

Chicago - Chicago-based insurance broker Aon yesterday became the latest in a series of companies to participate in technology mergers as it announced its intent to acquire Valley Oak Systems (VOS), a San Ramon, Calif., provider of claims management software, services and support for the insurance industry. The acquisition reflects Aon’s desire to supplement its risk management portfolio. Valley Oak, winner of the IASA 2006 Technology Achievement Award, is best known for its iVOS system, which includes medical bill review, policy underwriting, case management, billing and event management capabilities. "Aon's acquisition of Valley Oak Systems continues Celent's predicted roll-up of the insurance software industry,” says Donald Light, senior analyst with Boston-based Celent, LLC. “While most acquisitions of independent insurance software vendors have been by larger software vendors, such as Milwaukee-based Fiserv buying Insureworx, Oakland, Calif., this time it is a major broker doing the deal.” The purchase InsureWorx, a policy and claims administration technology provider, gives Fiserv an end-to-end policy and claims administration offering for workers compensation. Other recent mergers in the insurance technology space include the San Diego-based Websense Inc., acquisition of PortAuthority Technologies, Inc., Palo Alto, Calif., and Ra'anana, Israel, for approximately $90 million in cash. PortAuthority will combine its information leak prevention technology with the "ThreatSeeker" malicious content identification and categorization technology from Websense. The deal will create a single source for companies looking to prevent the unauthorized use or disclosure of confidential data while simultaneously protecting users and data from external malicious threats. The Aon-VOS merger will benefit Aon’s unique position as a large brokerage firm. By integrating and sharing data with RiskConsole, Aon’s RMIX offering, the Aon-VOS deal enables the Chicago broker to create what the companies claim to be the only end-to-end browser-based offering in the marketplace. The acquisition of VOS follows a similar deal cut in 2004 by Aon’s with Risk Laboratories, LLC (RiskLabs), Marietta, Ga. Aon expects to consummate the VOS deal by January 31, 2007. Light believes that, from a marketing and sales perspective, the acquisition makes sense. “Valley Oak's customer base includes a great many risk management units in large employers who self-insure workers' compensation,” he says. “Aon's brokerage business targets that same group of risk managers. Aon's challenge will be to give Valley Oak the resources and freedom to keep its offering fresh and valuable to self-insured employers, as well as other customers such as insurers and third party administrators." Sources: Aon, Celent, INN archives

Dallas – Boston-based Blue Cross Blue Shield of Massachusetts (BCBSMA) has decided to use Premium Payor Services from Zix Corp. (ZixCorp). ZixCorp's Premium Payor Services provide access to future value-added services and deliver enhanced reporting for both payors and providers, aiding in analysis for incentive program initiatives.The Premium Payor Services funding model, which is in addition to the annual subscription fee per prescriber, is typically one dollar per qualified script processed or, as in this case, a flat fee license based on historical usage patterns calibrated to yield a similar amount.

Indianapolis - WellPoint Inc. received three eHealthcare Leadership Awards for two of its branded product Web sites.WellPoint, based in Indianapolis, received a Platinum award in the Best Overall Internet Site category for www.bluecrossca.com, a Silver award in the Best eBusiness Site category for www.anthem.com and a Distinction award in the Best Health/Healthcare Content category for www.anthem.com. The company's Web sites were selected from more than 1,100 award entries.

Washington - America's Health Insurance Plans (AHIP) and the Blue Cross and Blue Shield Association (BCBSA) are working together to grant consumers their wish for portable personal health records (PHRs).

Naperville, Ill. - The thieves who made off with computer tapes containing the names and Social Security numbers of 130,000 Aetna Inc. customers appear unlikely to exploit the information, the Hartford, Conn.-based health insurer says. "There is no indication that data theft was targeted," Aetna says. Aetna announced yesterday that a lockbox containing the computer back-up tapes was stolen in late October from the Naperville, Ill., satellite office of a vendor, Addison, Texas-based Concentra Preferred Systems. Concentra audits medical clams and performs other cost containment services for insurers, and the tapes contained information on customers of "several" other undisclosed carriers, according to published reports. Information on an undetermined number of WellPoint Inc. customers may have been stolen in the burglary, reports say. "We believe the total number is an extremely small percentage of our membership," a spokesman for Indianapolis-based WellPoint says. In a report on the incident, Aetna quotes law enforcement officials who say the burglars also stole cash, pharmaceuticals, DVDs and movie passes, and did not appear to be looking for information to use in fraudulent schemes. The law enforcement agency characterized the perpetrators as "common thieves" looking for cash and other property to pawn. The thieves forced their way into the space occupied by Concentra, as well as the offices of five other businesses in the suburban Chicago building, Aetna says. Property was taken from all the tenants. Concentra officials, who notified Aetna of the loss on Nov. 3, say retrieving the data from the tapes would require a complex combination of commercial equipment and specialized software. The data was stored in unlabeled, difficult-to-understand formats, Concentra says. "These tapes cannot be used on a standard PC," Concetra officials say. Concentra reconstructed the data on the tapes and turned it over to Aetna on Nov. 10. Aetna's IT team worked around the clock to determine what information was stolen. They found the data included member names, hospital codes and either Social Security numbers or Aetna ID numbers for about 130,000 people. The names and Social Security numbers of about 750 medical workers were also on the tapes. Aetna is apologizing and notifying members and providers whose personal information was on the tapes. The insurer also is arranging free credit monitoring to help detect any misuse of the information. Concentra is offering a $10,000 reward in connection with the theft, according to published reports. Source: Aetna Inc.

The National Association of Insurance Commissioners (NAIC) is urging Congress to create a Natural Catastrophe Commission that could establish a disaster fund, strengthen and enforce building codes, and provide community support.