Blue Cross and Blue Shield of Vermont, the largest health insurer in the stare, has saved nearly a half-million dollars by employing compensation management technology.
BCBSVT employed VUE Compensation Management, a Microsoft .NET framework-based application developed by Computer Solutions & Software International (CSSI).
Health plan executives say the new software has enabled BCBSVT to decouple broker commissions from insurance premiums, reduce manual interventions by 97 percent and go paperless with broker commission statements.
"Since the start of the implementation in March 2007, VUE Compensation Management has enabled us to examine every broker compensation arrangement in place, identifying out-of-date incentive programs and recognizing cases where broker commissions were not leveraging the desired business result," said Ellen Yakubik, marketing director for BCBSVT. "As a result of this data cleanup and improved processing controls, BCBSVT has saved nearly half a million dollars."
The compensation management system integrates with Microsoft SQL Server 2005, a database that enables the health plan to store and access large volumes of data. BCBSVT employs SQL Server Reporting Services to provide the reporting and the intelligence it needs.
Yakubik said over the next few years the insurer expected to further refine broker payment processes.
Before implementing the technology, BCBSVT paid brokers a percentage of insurance premiums. As premiums rose, commission payouts increased from $3 million to more than $10 million. Today, the insurer structures commissions on the basis of subscriber contracts or pay-for-performance agreements, rather than having commissions tied to premiums alone.
The new system also has created a single place for data storage for all broker information and has helped BCBSVT disburse 85 percent of broker payments electronically. Health plan executives expect to process 50 percent of the commission statements electronically by the next quarter.
The executives said the time spent processing commissions has gone from 65 hours per month to six - and as the organization continues to go paperless, they expect further savings.
"Processing broker commissions in a favorable way is one of the biggest challenges plaguing the payer industry today," said Dennis Schmuland, U.S. health plan industry solutions director at Microsoft.