Information Notice - Delays in Claims Turnaround Time

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

Date Modified: 2006-08-11