Rocky Mountain Health Plans: CSC Helps Manage Application Vendors

Rocky Mountain Health Plans (RMHP), a not-for-profit health benefits provider in Colorado with 114,000 members, uses an integrated claims transaction system that manages member, provider and product information for core business functions. The system needs ancillary applications to support core system functionality, and has been implementing many of these applications to provide greater functionality to its providers and members and to improve its internal operations. Ancillary functionality is critical for managing business functions, but selection, implementation and ongoing vendor management fragments scarce internal resources at this medium-sized health plan.

The solution? Use a partner so that internal talent can focus on business-critical activities.

Managing Ancillary Vendors

One challenge faced by small- to medium-sized health plans in using ancillary applications is managing the many vendor relationships without distracting internal resources from their core business activities. Unlike vendors that sell claims transaction systems, the smaller and specialized ancillary application vendors may not provide formal services for implementation and operations — meaning more work for RMHP in taking on these activities.

RMHP, with numerous ancillary applications from multiple vendors, found that its internal business and IT resource skills and experience were scarce and often deployed to other projects, potentially delaying new application initiatives.

When Theresa Kupecz-Louden identifies a new functionality need for RMHP, she is tasked with vetting software vendors, negotiating vendor contracts and managing vendor relationships. These are extra tasks that distract availability for core activities of her job as Director of Claims. For a typical vendor implementation, Kupecz-Louden would spend six to ten hours per week on project management over the course of 16 to 20 weeks on average.

A New Approach

In September 2008 Kupecz-Louden identified the need for a subrogation solution, and engaged systems integration and outsourcing company CSC to manage the vendor contracting, implementation and operation. CSC had served as RMHP’s IT department, and RMHP was impressed by the company understanding of issues that regional health plans face in resource allocation and vendor relations.

RMHP was also drawn to CSC’s FirstPortfolio offering, a set of hosted ancillary applications that health plans can add à la carte with pricing based on utilization. “We were able to do this with one vendor — a test drive to see if it really was going to play out in our benefit over the long term, and whether it would be something we would want to try again or expand,” says Kupecz-Louden.

RMHP established its business requirements and identified a subrogation vendor they wanted to learn more about, and left most of the vetting about the vendor’s technical implementation requirement to CSC.

Kupecz-Louden recalls, “That took a big load off my plate in having to work with another vendor to negotiate a contract and educate them about the types of service level agreements, performance measures, guarantees and benchmarks we would expect to see. I counted on CSC to do that for me.” CSC also performed project management for implementation and major releases, using onshore resources to become an expert about RMHP’s business needs and to conduct weekly meetings to communicate issues that required their attention. For the design, build, integrate and test phases of the project, CSC leveraged its cost-effective shared service centers. The team had technical knowledge about the core system at RMHP, database administration experience with the system being employed and knowledge about the technical environment of the specific subrogation solution.

Promising Results

RMHP realized many benefits from outsourcing the vendor relationship to a partner with the right experience and expertise. When CSC took over the resource intensive tasks of securing the software vendor and managing the relationship, RMHP’s resource requirements decreased substantially.

Kupecz-Louden’s time on project management decreased from six to ten hours per week to two to four hours per week, and project team time decreased from two staff at 15 hours per week each to two staff at eight hours per week each. Kupecz-Louden’s role shifted from project manager to executive sponsor, freeing her to focus the core business, and freeing RMHP’s internal developers and database administrators to be deployed on other high-priority projects.

The combination of CSC’s technical knowledge about RMHP’s core system as well as the specific subrogation application made the integration work go smoothly and quickly. With CSC deploying dedicated resources, implementation — which for RMHP’s fully employed personnel would have typically taken 16 to 20 weeks — took only 12 weeks.

CSC’s regular meetings with RMHP ensured management was up to speed about developments with the application, and CSC negotiated appropriate changes with the vendor when proposed enhancements might impede business value for RMHP. “If [a particular] enhancement would have been rolled out then we would have had to remediate some of our programs,” says Kupecz-Louden.

The success of the subrogation system selection, implementation and ongoing operation has RMHP exploring this approach to manage multiple vendor relationships in the future. RMHP is looking to leverage CSC’s FirstPortfolio offering to proactively identify best-in-class ancillary applications that meet their business needs and can be managed using this model.

Related Information

Read more about CSC’s work in Health Services.

Learn more about CSC’s Health Plans solutions.