August 10, 2006
To: Compensation Managers; Heads of Human Resources; Participating Separate Employers
Subject: Delays in Claims Turnaround Time
Notice concerning delays in PSHCP claims for reimbursement of medical
expenses
A number of PSHCP members have expressed concerns over longer than usual
delays in receiving reimbursement for their eligible medical expenses.
During the months of April, May and June, our plan administrator, Sun Life,
experienced some delays in adjudicating some claims. The PSHCP Trust is
working very closely with Sun Life to resolve this situation. Concrete measures have been implemented and the situation will be corrected
shortly.
Why are there delays?
A number of factors have contributed to longer than usual turnaround times:
- There has been a significantly
higher number of telephone calls from members who want information on the new
benefits, especially the introduction of coordination of benefits between
members of the PSHCP. The Sun Life call center received 74,779 calls in
May 2006 compared to 47,518 calls in May 2005, an increase of 57%. This has
created more pressure on service levels for both call center response time and
claims turnaround time.
- A significant number of members
requested changes to their coverage levels, to take advantage of the new
coordination of benefits provision and improved hospital benefits. These
changes are processed through the personnel or pension offices.
Due to the volume of these requests, it is taking time for the notice of
changes to reach Sun Life (two to three months). Claims received for
members requesting changes to coverage are automatically pended while Sun Life
verifies the eligibility of members with the respective personnel or pension
office, thereby, delaying payment.
- The PSHCP is the largest private
health care plan in Canada. The plan processes more that 12 million
different medical services and products annually. It is essential that our
claims adjudication process be effective and efficient to not only reimburse our
members in a reasonable time period but also to ensure that only covered
services and products are reimbursed. As a result of recent requests made
by the Trustees of the PSHCP, Sun Life is required to apply more stringent
protocols in adjudicating claims. These protocols deal with issues
such as fraudulent claims, incomplete claim forms, and assignment of benefits,
to name a few.
- The claims adjudication process
is not automated for all claims. Approximately 25% to 30% of claims, need to be
adjudicated manually for reasons such as incomplete forms, out-of-province
expenses, situations where specific information is required, expenses for which
the plan administrator must verify the licence or registration numbers of the
providers, and multiple types of expenses.
Would a prescription drug card help reduce turnaround times?
Reimbursement of expenses for prescription drugs are not, by themselves,
responsible for the longer than usual delays. Most drug claims are adjudicated
within 3 to 5 days when they are submitted alone.
However, a prescription drug card will eliminate even these short delays for
reimbursement of claims because our members will no longer need to pay the
pharmacist up-front. That is why the Parties to the Trust Agreement,( the
Government of Canada, the Unions represented at the National Joint Council, and
the Federal Superannuates National Association), recently negotiated the
implementation of a pay direct drug card, as announced in the March issue of the
PSHCP bulletin.
What are the adjudication turnaround times?
Sun Life is meeting the negotiated service standards and these are monitored
very closely. Our contract with Sun Life requires an average turnaround
time of 9 days, from the day the claim is received to the day it is released,
i.e. the day a cheque is mailed to you or deposited directly into your bank
account.
- During the first five months of
2006, the average turnaround time was 7.7 days. The monthly turnaround times for
the months of January through May were 9.0, 7.3, 7.1, 6.9, and 8.0 days
respectively, all within the service requirements of 9 days.
The majority of our claims are adjudicated within 5 days. This is a recorded
and monitored statistic. On average throughout the year, 65% to 70% of all
claims are adjudicated within 5 days. In May 2006, 74% of all claims were
adjudicated within 5 days. Approximately, 25% to 30% of claims submitted
are subject to longer than usual delays at this time.
- For the 25% to 30% of claims
that are not adjudicated within 5 days, there is currently a turnaround time of
20 to 30 calendar days.
What is being done to address these delays?
Sun Life has implemented a recovery plan to rectify this situation:
- Additional resources have been
hired and training processes accelerated to ensure the performance levels and
quality standards are met.
- An aggressive plan has been
implemented to leverage the support of other resources to eliminate the higher
than usual backlog of claims in the manual adjudication cycle.
- Plans have been made to include
significant incentives to increase the production of the claims adjudication
team.
- Finally, supplemental claims
adjudication capacity has been created through other Sun Life claims
adjudication sites.
We are confident that necessary changes and improvements are being introduced
to ensure the reimbursement of eligible PSHCP expenses are within acceptable and
negotiated service standards.
Phil Charko
Assistant Secretary
Pensions and Benefits Sector
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