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State of Arkansas EBD Implements New Online Benefit Administration System |
| By George Platt, State of Arkansas |
The Arkansas Employee Benefits Division (EBD) manages the group health and life insurance programs and
other
select benefit programs for the state's more than 140,000 active and retired state and public school employees.
Effectively managing this self-insured program means creating quality programs that ensure responsive customer
service and promote product education. At the same time Arkansas continually strives to meet the highest standards
for affordability and accessibility. |
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Increasing operating efficiency is a key component in this effort. Arkansas EBD's goal has been to efficiently and
effectively manage the bottom-line for its self-funded programs.In the past the Department used often disjointed and
fragmented paper-based systems that were developed in-house or "borrowed" from other state agencies. These
measures presented several problems. First, they did not allow the Department to receive accurate or timely
information. In addition, the rapidly approaching compliance deadline for the federal Health Insurance Portability and
Accountability Act (HIPAA) was a major concern. It was imperative that the Department find and quickly implement a
new Benefit Administration System, and preferably one that would enhance service by handling many of the requests
online via the Internet.
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Arkansas EBD began actively searching for a new Benefit Administration System in October 2002 with a
comprehensive RFP process. The criteria for an appropriate system included managing eligibility, web enrollment,
premium billing, timely notices, reconciliation of claims, electronic payments, and a data warehouse that allow the
Department to understand future cost trends. The Department's current setup made these requests an even greater
challenge:Arkansas EBD had 23 different data sources (such as agency payroll systems) that had to be interfaced
with the new system. In addition, it was the Department's first experience in acquiring an external system. A limited
budgetand short staff had precluded it from going outside for computer software in the past and in fact, these two
limitationswould continue to influence its decision-making process. |
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For all of these reasons, the Arkansas EBD needed a systems supplier who could demonstrate extensive business
knowledge, system functionality and a willingness to commit to fast-track implementation. It was a tall order. After
careful consideration, Physmark Inc., a Dallas-based company specializing in flexible solutions backed by
comprehensive knowledge of healthcare, was selected to implement the new Benefit Administration System. Physmark
offers an Oracle-based solution called PayerSoft that met 95% of the Department's requirements -- right out of the
box. |
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Selecting the right partner turned out to be a crucial decision. A vendor that understands the Department's business
was critically important. Arkansas EBD began working with Physmark in January 2003 with an intention of
completing the project in mid-2004. As a first step in the project plan, the system's installation and training was
completed by March 2003.
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The next challenge was to load the data from Arkansas's state payroll system into the new system electronically. This
would allow the Department to capture all demographics for the state employees. With Physmark's help much of the
data had to be "cleaned and scrubbed," translated into formats, which both systems could understand. By the end of
May 2003 the Department succeeded in loading data into the new system.
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The next phase, originally set to begin in October 2003, involved handling the open enrollment for state employees.
The Department was well on its way to meet this deadline when quite unexpectedly, in June 2003, the Department
received instructions at the state level to handle the entire school districts' open enrollment using the new system.
This meant that the deadline had to be moved forward to August, giving it less than 30 days to complete this
enormous and challenging task. Working side by side with Physmark, Arkansas EBD was able to complete the open
enrollment right on schedule.
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Arkansas EBD's web-based system is intuitive and captures all of the information accurately. Since going live in
August, the site has received more than 10,000 hits. In October, the Department plans to implement open enrollment
and premium billing for its state employees. The Department also met its HIPAA deadline for being fully transaction
code set compliant. An employer is not obligated to meet this compliance standard; however, the Department's
insurance carriers mandated by it transmit data using the HIPAA ANSI formats.
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Arkansas EBD is well ahead of its implementation schedule, but the good news does not stop there. With eligibility
data in one central repository, the Department has reduced paperwork, lowered administrative costs and greatly
improved efficiency. Employee benefits officials also believe that using Physmark's PayerSoft system will enable the
Department to create a claims repository to understand where the healthcare dollar is going and help Arkansas
become a wise purchaser of healthcare services.
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