Cost Benefit Analysis

History/Background

MEMO

To: John Smith, Senior Vice President of Human Resources

From: Margaret Chen, Qian Dong, Ashanti Hubbs, Zahara Kanji and Christina Miller

Date: April15, 2010

Re: Cost-Benefit Analysis of Implementing PayRite System software training program

Hello Mr. Smith:

As you are aware, Indemnity Healthcare, Inc. has 1,200 employees in its New Jersey based office. The firm’s customer base includes approximately 2,000 members and 1,000 providers. Our call center has 30 claims representatives that handle all of the incoming calls regarding health benefits and claims payments for the Health Maintenance Organization (HMO), Preferred Provider Organization (PPO) and Point of Service (POS) plans. In 2009, the new PayRite system was implemented because of its distinctive advantages over our previous system. It offers a more reader-friendly Explanation of Benefits (EOB); includes a comprehensive listing of dates of service, products, payments and detailed accounts receivable data. The latter was a major selling point for our organization, because of the high volume of calls received regarding recouping of payments. As we surmised, the system is effective in that it combines all payments from Indemnity Healthcare onto one statement for the providers/physicians; and provides additional information on how a claim was paid, which is beneficial to both the provider and the member.

Although we consider PayRite to be a sound investment that will eventually increase call center productivity, seventy percent of incoming calls are still a result of the customers’ inability to understand the recouping of payments on the EOB from PayRite. Because the EOB statement provides necessary information in regards to claim payment and patient responsibility, it is imperative that the claims representatives understand the logistics of the system in order to best answer customer inquiries.

With the implementation of the new PayRite system, the EOB has...