Two government-run insurance compensation providers

Achieving up to 80 percent straight-through processing with IBM WebSphere ILOG JRules BRMS

Published on 13-Oct-2012

"We’ve had an immediate impact with the IBM solution. At the moment, we are actually achieving up to 80 percent straight-through processing." - Manager, Government-Run Workers Compensation Insurance Provider

Customer:
Two government-run insurance compensation providers

Industry:
Government, Insurance

Deployment country:
Australia

Overview

In some countries, government-run insurance plans range from nationwide universal health care coverage, to state and commonwealth organizations responsible for providing workplace and motor accident compensation. In one such state, for instance, a government-run workers’ compensation provider (workers’ compensation agency) is responsible for managing workplace injury compensation. Another such organization provides motor vehicle accident compensation (vehicle accident compensation agency).

Business need:
With multiple business rules manually applied, the workers’ compensation provider required greater visibility of the rationale for the assessment of claims.

Solution:
Both government-run insurance providers implemented a new, flexible rules-based system to reduce the risk of fraud, improve auditability, and minimize the inefficiencies and inaccuracies associated with the manual processing of invoices.

Benefits:
Up to 80 percent straight-through processing; 20 percent faster invoice entry; consistent application of business rules and more accurate payments.

Case Study

In some countries, government-run insurance plans range from nationwide universal health care coverage, to state and commonwealth organizations responsible for providing workplace and motor accident compensation.

In one such state, for instance, a government-run workers’ compensation provider (workers’ compensation agency) is responsible for managing workplace injury compensation. Another such organization provides motor vehicle accident compensation (vehicle accident compensation agency). “These organizations operate in a caring manner and take their responsibility to the public very seriously,” says the general manager of both agencies.

The two organizations pay for treatment and services to injured workers and motor vehicle accidents, including surgery, physical therapy and psychological counseling. Most invoices (claims) come through on paper. The workers’ compensation agency receives close to 98 percent of its invoices on paper, and only two percent come through electronically. The vehicle accident compensation agency receives over 75 percent of invoices on paper with the rest received via electronic data interchange.

Processing 2.24 million paper invoices per year using multiple business rules

Both agencies combined receive 2.24 million invoices per year for 4.1 million services. Approximately 150 employees manually entered those invoices into an IBM mainframe computer. The workers’ compensation agency had several hundred business rules deeply embedded in the mainframe computer code that governed whether a claim should be paid, rejected outright or reviewed by a case manager.

The workers’ compensation agency partners with five private organizations to manage employers’ workers’ compensation insurance policies and injured workers’ compensation claims. Controls were manually applied by the five private organizations. To reduce the margin for error inherent with the manual controls, both agencies chose to implement a new, flexible rules-based system to reduce the risk of fraud and improve audit ability, and reduce the inefficiencies and inaccuracies associated with the manual processing of invoices.

The agencies decided to collaborate in seeking out information technology that could enable the businesses to achieve better outcomes to support the community.

Automating business rules

The solution that the agencies chose was to automate the payment of invoices and integrate the agencies’ systems with health care providers’ systems so that agencies could receive invoices electronically.

For the automation solution, the two government-run insurance agencies turned to the IBM® WebSphere® stack of software products for business process automation using IBM WebSphere Process Server, which is shipped with IBM WebSphere Enterprise Service Bus. For business rules management, the agencies chose IBM WebSphere ILOG® JRules BRMS.

“The IT team determined very early in the program that the IBM ILOG software was the best product out there to implement all of the complex rules that we needed to be able to process invoices,” says the general manager of both agencies.

Accelerated delivery

The two agencies turned to IBM Global Business Services®, which helped them deliver process automation using WebSphere Process Server and assisted them in understanding the business rules and how to build them. Internal staff also learned how to govern and maintain the rules going forward. IBM enabled the agencies to accelerate the program with IBM’s methodology and tools. ”The business rules in ILOG are more visible and easier to change than in the legacy systems,” says the manager of the workers’ compensation agency.

Achieving up to 80 percent straight-through processing

The two government-run insurance agencies developed new work processes that were complimented by ILOG. WebSphere Process Server orchestrates and automates the processes. The business rules were developed in JRules BRMS and connected to WebSphere Process Server through WebSphere Enterprise Service Bus. The solution is then delivered to end users through IBM WebSphere Portal.

When the BRMS solution went into production, the impact was dramatic. “We’ve seen at least a 20 percent decrease in the time taken to enter invoices into the new system,” says the manager of the workers’ compensation agency. “Since the implementation both agencies have consistently achieved up to 80 percent straight-through processing. Prior to ILOG being implemented, vehicle accident compensation agency averaged 65 percent straight through processing. For the workers’ compensation agency, the benefit has come from replacing a manual process with the automated solution.”

“In addition to more efficient processing, the risk to the reputations of both our agencies has been greatly reduced due to tighter controls with the IBM BRMS,” concludes the manager of the workers’ compensation agency.

For more information

To learn more about IBM WebSphere ILOG JRules BRMS, please contact your IBM sales representative or IBM Business Partner or visit the following websites:
ibm.com/brms
ibm.com/websphere

Products and services used

IBM products and services that were used in this case study.

Software:
WebSphere ILOG JRules, WebSphere Process Server, WebSphere Enterprise Service Bus, WebSphere Portal, WebSphere ILOG Rule Team Server

Service:
AIS: Business Process Management, AIS: Portals

Legal Information

© Copyright IBM Corporation 2012 IBM Corporation Software Group Route 100 Somers, New York 10589 U.S.A. Produced in the United States of America October 2012 IBM, the IBM logo, ibm.com, IBM Global Business Services, ILOG, and WebSphere are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The performance data and client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. The client is responsible for ensuring compliance with laws and regulations applicable to it. IBM does not provide legal advice or represent or warrant that its services or products will ensure that the client is in compliance with any law or regulation. WSC14330-USEN-00