HealthChoice Claims Administrators – Past and Present

HealthChoice would like to provide some clarification to some of the incorrect and misleading statements that have been made as a result of recent news stories regarding our claims administrators.

Fiserv Health Harrington (name change to Health Harrington effective January 1, 2009) was the claims administrator for HealthChoice from 1994 through 2008. During that time, several name changes occurred as a result of corporate mergers and acquisitions. The names the claims administrator has been known by are:

• Plan Services, Inc. (1994)
• HPSI, Health Plan Services (1995 – 2000)
• Harrington Benefit Services (2001 – 2005)
• Fiserv Health Harrington (FHH) (2006 – 2008)

EDS Administrative Services, LLC (EDS) is a Hewlett Packard company that became the claims administrator for HealthChoice on January 1, 2009. EDS is responsible for processing the HealthChoice plans’ health, dental, and life claims. EDS processes claims and answers phone calls in its Oklahoma City offices. In addition, EDS also uses one of its California call centers on a temporary basis to help handle the higher than normal level of phone calls being received as a result of the change in claims administrators.

HealthChoice hopes this information helps clarify any misunderstandings regarding the past and present claims administrators. If you have any questions, please contact HealthChoice Member Services at 1-405-717-8780 or toll-free 1-800-752-9475. TDD users call 1-405-949-2281 or toll-free 1-866-447-0436.

Processing the Claims Backlog

Previous updates on the status of claims processing at EDS indicated that the oldest claims would be processed first. Please be aware that while processing the oldest claims continues, there are circumstances that can cause more recent claims to be processed before an older claim. Following are a few reasons that may cause this to occur:

• There are a small number of services that EDS is still in the process of programming and testing. While this programming continues, EDS continues to process claims for other services.
• Claims received electronically flow into the system immediately whereas paper claims must be converted and loaded into the system. Claims on outdated or non-standard forms must be completely hand-entered, which further slows down processing.
• There are services that the system will process automatically, and these therefore process quicker than those requiring some type of intervention. For instance, claims involving a series of services in 2008 may require intensive manual processing, whereas an electronic claim for a series of services beginning in 2009 may automatically process immediately.

HealthChoice in Solid Financial Condition

HealthChoice has received a number of calls from members and providers concerned about whether the Plan has the financial resources to pay claims. The delays in payments are caused by one factor alone, which was the delay in the programming of the computer system of the new claims processor, EDS. EDS has taken full responsibility for this delay. EDS has been processing claims since the end of January, and so far has paid more than 626,000 claims and made more than $103 million in payments.

A previous news story mentioned rumors that the lack of payments were due to the poor financial condition of the plan and that part of this was due to large losses in the stock market. Both are incorrect. HealthChoice's financial condition is more than adequate to meet all claims obligations, and its investments are in a diversified and conservative portfolio of bonds and stocks. Although the value of the stocks has decreased (as has the stock market in total), this represents less than 3% of the Plan’s claim payments.

A report on the Plan’s solvency was given during the February 27, 2009, meeting of the Oklahoma State and Education Employees Group Insurance Board by Tim Nimmer with AON Consulting. AON is the Board’s actuary and was voted best insurance intermediary, best reinsurance intermediary, and best employee benefits consulting firm in 2007 and 2008 by the readers of Business Insurance.

Mr. Nimmer reported that OSEEGIB uses the Risk Based Capital (RBC) method for determining plan solvency which is also the method used by the NAIC. This method has the highest level of solvency of any method used for solvency projections.

According to the RBC method, with $112 million in reserves, OSEEGIB’s reserves are healthy and a re very large resulting in a very high degree of solvency.

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