One of the key decisions organizations face when changing TPAs is how they are going to move their claim data. The time and cost involved in moving claim data can make it difficult and even cost prohibitive for an organization to move to a new TPA.
At the end of the day, the data stored in your TPA’s claim system is your data, and the cost of extracting your claim files and migrating them to a new TPA’s claim system should not be a deterrent for making a change.
The Perfect Migration?
In a prior blog post, Changing TPAs? One Less Thing to Worry About, we identified migrating your claim files from the outgoing TPA as one of the challenges. If you choose to move open claims to the new TPA, odds are your new TPA is using a different claim system. Planning needs to be done for migrating not only open claims but potentially a high number of closed claim files. In the ideal case when claim records are created in a paperless environment, migrating the data typically is not an easy task.
At first glance, just the migration of your claim data alone can make it seem cost prohibitive to change TPAs. But does your migration need to be cost prohibitive or the perfect migration?
The perfect migration is commonly known as a full migration where all your claim data, including open and closed files, are exported from the current claim system; the data is then cleansed and normalized for the new claim system. This needs to be completed in a short amount of time and seems like the logical way to go. The downside of the perfect migration is the cost involved. These full migrations are costly and often make it cost prohibitive.
There are other creative and practical approaches to data migration that are also cost-efficient.
Three Approaches to Moving Your Data
Here are 3 approaches to consider when it’s time to move your data:
#1 Manual Rekeying Open Claims
If you have a smaller volume of claims, and depending on their complexity, it may be practical to simply have your new TPA rekey your open claims into their new claim system. This can be an inexpensive approach, and the cost can be negotiated up front as part of the contract. For this approach to work, both claim systems will have to operate at the same time, which may require overlapping contracts.
The manual rekeying of some of the data in each claim file can be avoided by batching notes or documents into single PDF files. These PDF files can then be easily added to the document management system of the new claim system. Each file would be labeled in bulk by file number and takeover date making it simpler to migrate this data.
For closed claims, an agreement can often be reached with the TPA you are leaving to have online access to those claims on an as-needed basis.
#2 Phased Approach
When there is a larger number of claims involved, the migration of open claims can be divided into multiple phases based on geography, customers or lines of business. This approach would also require both claim systems operating at the same time.
For this approach, the focus could be on migrating essential items like financials, date of loss and claimant name that is structured data that should be easier to migrate than unstructured data such as diary notes. The unstructured data could be grouped into the bulk PDF files as described in the previous section to avoid having to sort out any tricky alignment of different data fields.
Migrating closed claims can also be a phase onto itself, or they can be migrated along with each phase of the migration of open claims. The benefit of migrating closed claim data is simply to have a consistent history of experience for actuarial projections.
#3 Full Migration
As I discussed above, a full migration is the perfect migration approach, but is also the most expensive and risky. Depending on many factors, including the results of the data cleansing and normalization steps, there can be additional cost and time to complete the migration.
Don’t Be a Prisoner to a Legacy Claim System
Many TPAs are still processing claims on legacy claim systems. Many of these legacy claim systems still work well, and a TPA may choose not to invest in a new claims system until it affects their business. You’ve heard the old saying, “if it ain’t broke, don’t fix it.”
However, this is no reason for you to become a prisoner to a legacy claim system. The cost of cloud-based claim solutions has dropped dramatically over the past five years resulting in fewer and fewer legacy claim systems in use.
Moving to a legacy claim system is a step backward and can make it difficult to move your claim data into it. Legacy claim systems have many add-ons, or enhancements on top of enhancements, and may be devoid of some important functionality.
When you go to a new system, think about the day you are going to leave
This move may not be your last. There are plenty of TPAs out there, and you may find one you like even better. During this current transition decision, think about how difficult or easy it will be to move again.
Where are the claims stored (content management system)?
What kind of operating system (is it new technology)?
Is it an industry standard database (versus proprietary)?
How are the diary notes stored?
How much of the data is stored in the database versus document management system?
This cost and time involved in the perfect migration of your claims data can make it difficult and even cost prohibitive to move to a new TPA. We have outlined a few other approaches for consideration including the manual approach of simply rekeying open claims data or taking a phased approach.
By taking a practical approach combined with a little creativity, there are probably more options available.
Part of the decision-making process when moving your claim data to a new TPA is to consider what will be involved if you were to leave that TPA. After all, it’s your claim data, and the migration cost should not keep you from partnering with the TPA that best meets your business needs.
With the decreasing cost of cloud-based solutions, there are fewer and fewer legacy claim systems in use. Moving to a legacy claim system is a step backward that can make it difficult to move your claim data to it.