Tillman, Smith, Ruiz, Weber

Operations Management Abstract

28 April 2015

Background The original project purpose was Reduce the Number of Claims Denied by
Insurance Companies at SAMMC. There was significant variation in the UBO process, work
was not standardized, and work in progress was substantial. After attempts to record the process
and to quantify errors/defects, our project scope and goal changed after the define tollgate. We
were asked to determine how many of the defects were entering the UBO process.
Problem Statement SAMMC cannot collect on much of the third party claims it fills because
the UBO receives only 25.18% of the required information on the DD2569s (Third Party
Collection Program/ Services Account/ Other Health Insurance). The missing data must be
collected before the claims can be processed resulting in untimely, and therefore denied, claims.
Goal Statement Reduce the number of defects on the DD2569 from 74.82% to 0%.
Methods - We observed the first step in the UBO process, precertification, and collected 92
sample DD2569 forms (Third Party Collection Program/Medical Services Account/Other Health
Insurance). This form and patient records should provide the necessary data to process claims
and authorize collection. The current process is comprised of three stages including preparatory
work, insurance verification, and signature collection. Only insurance verification would be
required if defects did not enter the process. This data was used to determine total errors based
on opportunities for errors and the upstream processes responsible for those errors.
Measurement / Findings - The samples revealed most of the required information was missing
from the DD2569 (defects present 74.82% of the time). As a result, the process in the
precertification area is almost exclusively fixing those defects.
The samples of DD2569s then were used to determine the source of the defective
DD2569s. 100% of the defective forms originated in emergency department (ED). With this
information, our blackbelt candidate began to conduct root cause analysis in the ED that is
ongoing.
Value - Our measurement of this process concluded that the UBO process is not in control. The
defects that are entering the process are substantial. Those defects come mostly from one
department. Our analysis will enable the SAMMC team to reduce defects, bring the UBO
process under control, and then improve the UBOs internal process.
Conclusion - We have determined that most of the defects are entering the UBO process from
upstream. Root cause analysis is ongoing for this project under direction from the Southern
Region Medical Command Master Black Belt. Working backwards in the third party collection
process allowed us to show that while there is room for increased efficiency in the UBO, without
a controlled process, UBO system improvements would not be quantifiable and therefore would
not likely be sustainable.