1. Lean Six Sigma for Service Dirk Barth, NC State CSSMBB, ASQ SSBB #927

2. Medical-Expert Review Process 2 What is Six Sigma? Business Strategy Customer SatisfactionFinancial AlignmentTop Down Focus USLLSLTarget How EFFECTIVE are we at satisfying our customers?

3. Medical-Expert Review Process 3 What is Lean? Poke-Yoke Value Stream Mapping How EFFIECIENT are we with our key metrics?

4. Medical-Expert Review Process 4 Efficiency vs. Effectiveness Efficiency Processing Time Average Speed to Answer (call center) Throughput Work Items / Day # of cases completed Effectiveness Customer Surveys First Call Resolution Call Quality Audit Pass Rate +

5. Service or Transactional Strategic Problem Solving Model Problem System? Follow the system within which people work. Psychology? Follow the people working within the system. A). Define and Characterize the KPOV. B). How is the product or process supposed to work? C). How is it working compared to the way it is supposed to work? Unknown? - Determine Not working how it is supposed to work? - Gaps Working how it is supposed to work? – Capability or Design Develop Solution Known? - Proceed The Critical Order 1.Predictability, y = f (x) 2.Sensitivity, local slopes of y = f (x). 3.Factors and Factor Variance.

6. Medical-Expert Review Process 6 Project Example Medical Bill Review Process General Discussion of Six Sigma in Service Companies

7. Medical Expert Review Process March 2012 ASQ and APICS meeting

8. Medical-Expert Review Process 8 Introduction How does an automobile insurance company detect fraudulent medical bills?

9. Medical-Expert Review Process 9 Problem Statement Medical-Expert Review Process — What is the overall benefit associated with the process? — What is the capability of the internal bill handling process? If a positive cost/benefit is determined, how does Company X optimize the process?

10. Medical-Expert Review Process 10 Project Summary Two separate teams, within Company X, handle the Medical-Expert Review Process Reviews are conducted on bills for treatment including: — MRIs — Nerve and Psych testing over $800 — Orthotics over $500 — Acupuncture bills in excess of $2000 — Multiple visits per day Company X uses two vendors, Companies Y and Z for their medical-expert reviews — Fees for review process average $225

11. Medical-Expert Review Process 11

12. Medical-Expert Review Process 12 Internal Bill Handling Process

13. Medical-Expert Review Process 13 Cause and Effect Matrix

14. Medical-Expert Review Process 14

15. Medical-Expert Review Process 15 Data Collection Strategy

16. Medical-Expert Review Process 16 MSA

17. Medical-Expert Review Process 17 Detailed Process Map: Paper Bills

18. Medical-Expert Review Process 18 Detailed Process Map: Imaged Bills

19. Medical-Expert Review Process 19

20. Medical-Expert Review Process 20 Best Fitting Distribution

21. Medical-Expert Review Process 21 CBA What is the overall benefit associated with the process? 95.0% Normal CI Cost Avoidance Probability Lower Upper 0 0.127774 0.106255 0.152906 87% chance that the medical expert review process returns a positive cost avoidance The review process is overwhelmingly profitable

22. Medical-Expert Review Process 22 Current Capability: Too Late to Review

23. Medical-Expert Review Process 23

24. Medical-Expert Review Process 24 New Process Design

25. Medical-Expert Review Process 25 System Enhancements Automatic Routing of Bills into the Medical-Expert Review Process Dates and statuses of the bills updated in the claims system — automatic diary service Designed in the Third Party Software due to costs

26. Medical-Expert Review Process 26 Pilot Results January 2007 473 February 2007 161

27. Medical-Expert Review Process 27

28. Medical-Expert Review Process 28 Results Reduction of 400 Bills Per Month $690 Per Bill $276,000 Per Month $3,312,000 Per Year

29. Medical-Expert Review Process 29 Post Rollout - Too Late to Reviews 77% of the bills too late to review were paper bills, further giving evidence for faster rollout of corporate bill imaging system. — Further CBA needed to be completed for corporate decision to rollout the new system. — Would add an additional $1.2 million per year 23% of the late reviews were from imaged system. — The team recommends further data collection to determine root cause — Would add an additional $400,000 per year

30. Medical-Expert Review Process 30 Control Plan MeasureSpecification Reporting Frequency Reporting Owner Recommended Actions If Out of Spec. Who/When/How Bills Too Late to Review USL = 183 C = 147 LSL = 111 MonthlyOperations Management Collect data on type of bill, claim handler, and root cause of why it was late. Operations Management / As Needed Paper Bills Too Late to Review 77% of too late to reviews MonthlyOperations Management Collect data claim handler and root cause of why it was late. Operations Management / As Needed Imaged Bills Too Late to Review 23% of too late to reviews MonthlyOperations Management Collect data on claim handler and root cause of why it was late. Operations Management / As Needed Cost Avoidance $690 Per Bill YearlyOperations Management Analyze cost avoidance by Vendor, Type of Treatment, Decisions, Dispute, Timely or Late Operations Management / Year End / Using Data Collection Strategy Used in Project