Blue Shield of California and Hospital Council of Northern and Central California Announce Initiative to Collaboratively Reduce Claims Operating Costs

Workgroup to develop best practices to improve claim payment accuracy

SAN FRANCISCO and CHICAGO, March 20, 2012 /PRNewswire-USNewswire/ -- Blue Shield of California and the Hospital Council of Northern and Central California today announced a collaboration to develop and implement industry standards and best practices to help hospitals and health plans reduce claims operating costs.  A workgroup jointly developed by Blue Shield and the Hospital Council will focus on identifying inefficiencies in the way plans and hospitals work together on administrative processes such as claim denials and appeals, developing ways to improve claim payment accuracy, and implementing sustainable process improvement initiatives.

This collaboration is modeled after a similar effort between Blue Shield and the Hospital Association of Southern California (HASC), which represents 175 acute care hospitals in Southern California. Blue Shield and HASC have worked together since 2010 to reduce claims operating costs in health care through process analysis and workflow improvements that have helped accelerate cash in the form of timelier contracted claims payments to network hospitals. "HASC's collaboration with Blue Shield is a true partnership that has enhanced both the payer and provider's understanding of the claims adjudication process at the operating level. We continue to probe other elements of the process to gain even more positive results and hopefully serve as a model of best practices for health plans and providers nationally," said George Mack, vice president for payer/provider and member relations at HASC.

Mack will join Kenny Deng, senior director for provider relations and operations at Blue Shield, and Dan Martinez, director for patient financial services at Mission Hospital Medical Center (St. Joseph Health System), to present results from their collaboration today at the Congress of Healthcare Leadership in Chicago (sessions 48A, 10:45 a.m. CT and 48B, 2:15 p.m. CT: Blue Ocean Thinking through Performance Improvement in the Collaborative Process).

Blue Shield's collaborations with the hospital associations stem from the company's innovative Partnership in Operational Excellence and Transparency (POET) program, an initiative to improve relationships with hospitals by proactively sharing claims performance data and using that data to jointly develop process changes, system enhancements and other administrative improvements. More than 180 hospitals in Blue Shield's network participate in the program, which is free and voluntary. Between 2008 and 2011, Blue Shield contracted hospitals have seen their claim denials decrease from 22.8 percent to 17.4 percent, their EDI submission rate increase from 85.2 percent to 90.3 percent, and the claim cycle time decrease from 31.9 days to 28.1 days.

Ron Smith, senior vice president of the Hospital Council, will drive the workgroup's agenda in support of the Council's efforts to help ensure the financial health of hospitals. "The Hospital Council applauds Blue Shield in this collaborative effort to reduce costs to the patient," Smith commented. The Hospital Council represents 185 hospitals in Northern and Central California.

Chris Pass, vice president for revenue cycle at John Muir Health, chairs the workgroup. He sees potential for the new collaboration to standardize and smoothen how health plans and hospitals exchange information about clinical policies and business rules, manage denials and resolve appeals. "We have realized tremendous benefit through our use of POET and I am encouraged by the synergies we create by bringing providers together and sharing our learnings," said Pass.

Shirley Fierstadt, vice president of claims operations at Blue Shield of California, co-leads POET with Kenny Deng.  She credits Blue Shield's cooperative approach with providers to POET's success. "Our mission is to ensure all Californians have access to high-quality health care at an affordable price. By proactively working with providers to better understand their processes, and adjusting our claim adjudication process and messages to suit their needs, POET is gaining traction statewide as a framework for health plans and hospitals to collaborate on industry solutions that increase operational transparency and administrative efficiency."

About the Hospital Council of Northern and Central California

The Hospital Council is a non-profit service organization representing 185 hospitals from Kern County to the Oregon border. Its mission is to work with hospitals to improve the quality of care for residents in Northern and Central California.

About the Hospital Association of Southern California

The Hospital Association of Southern California (HASC), founded in 1923, is a not-for-profit 501(c)(6) regional trade association. The mission of HASC is to serve the political, economic, informational and educational needs of hospitals and to help improve the quality and accessibility of health services.

About Blue Shield of California

Blue Shield of California, an independent member of the Blue Cross Blue Shield Association, is a not-for-profit health plan with 3.3 million members, 4,800 employees, and one of the largest provider networks in California. Founded in 1939 and headquartered in San Francisco, Blue Shield of California offers a wide range of commercial and government products throughout the state. The company was named one of the 2012 World's Most Ethical Companies by the Ethisphere Institute, and has contributed more than $125 million over the past four years to the Blue Shield of California Foundation - which was named one of BusinessWeek's top 20 most generous corporate foundations. Contact your local agent or broker for more information about Blue Shield products and services, or visit the Blue Shield web site at www.blueshieldca.com.

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SOURCE Blue Shield of California