Captovation: Federated Insurance Case Study

Captovation Capture Overview

Our Customers

“What we like most about the eCapture products is that they were able to adapt to our current environment, instead of us having to adapt to their architecture. This fact helped us reduce the amount of time it took to get the system into production, which means our business processes were able to function normally."

Randy Bennett
Senior Programmer/Analyst
Federated Insurance

eCapture = Improved Business Processes at Federated Insurance

The Federated Companies are comprised of four distinct companies, which include Federated Mutual Insurance Company, Federated Service Insurance Company, Federated Life Insurance Company, and Primary Source Insurance Agency, Inc. Federated specializes in business insurance for selected industries including auto dealers, petroleum marketers, convenience store operators, and building contractors. Federated is among the top insurers in premium size, and only one of a few mutual property and casualty insurance companies to exceed $1 billion in premium. Their home office is in Owatonna, Minnesota with regional processing offices located in Atlanta and Phoenix. Federated has 11 claims service offices located across the country.

One common trait amongst insurance companies is that they are paper-intensive, processing a large number of documents on a daily basis. Insurance companies realize that to retain customers they have to handle and process claims quickly and efficiently. Typically, the claims process starts when a customer files a claim with their local insurance agent. The insurance agent then sends the claim to the appropriate claims processing office, and from there they may have to be sent to headquarters for final approval. The underlying problem with this procedure is the time latency involved with mailing the claims, which at a minimum could be 24 hours. This might not seem like a long time, but insurance claims are usually time-sensitive and require immediate follow up – especially to maintain good customer service.

Federated Insurance, decided that they needed to find a better way to process their Health Claims documents. Their old process was labor intensive, and took too much time from start to finish. They were looking for a way to decrease their labor requirements, as well as decrease the amount of time it took for the corporate office to receive the claim once it was sent from one of their regional offices.

“In evaluating our current procedure, we came to the conclusion that we needed a much more efficient process to transfer the documents,” said Randy Bennett, Senior Programmer/Analyst at Federated Insurance. “We were going to be replacing the scanners at our remote offices, so we started to think about alternative methods of sending the documents to corporate.”

The old method of processing their health claims application involved the following steps: Scanning operators would scan the documents to capture the images. The images would then be saved to the local hard drive using the "indexes" as part of the file naming convention. Those images would then be burned to CDs and mailed to the home office. Once the CDs arrived at the home office, the images would be pulled off the CDs for use in processing the health claims.

“Our old process of sending the documents to corporate took a few days,” said Bennett. “The claims process was taking too long to fully satisfy our external customers, and it was also frustrating for our internal system users because the images could not be accessed quickly.”

Federated Insurance decided to call upon their system integrator, AMI Imaging Systems, Inc. of Minneapolis, MN to see if they could offer a solution. AMI had already implemented a document imaging system from Optika, a leading provider of Enterprise Content Management software, at Federated headquarters, so the next step was to advise them on an enabling technology that would help them solve this particular problem.

AMI proposed an eCapture™ component developed by Captovation called ecNet. ecNet is a true, Internet-distributed document capture solution that runs entirely within a web browser. “We thought a browser-based, distributed capture program like ecNet would be an excellent fit for this type of application at Federated,” said Lee Meyerdirk, Senior Account Manager at AMI.

After reviewing ecNet, Federated decided to implement the ecNet Client at two Health Claims processing sites in Owatonna, Minnesota, and one each in Des Moines, Iowa, Indianapolis, Indiana and Tampa, Florida. The ecNet Client gives remote users the ability to scan or scan and index documents remotely, and then send those document images over their corporate Internet back to the ecNet Server. The ecNet Server is installed at the corporate site in Owatonna.

Using a web browser, an administrator defines scanning profiles at the corporate site using the ecNet administration program. Scanning profiles define a set of scanning options available to the remote users. For example, a profile determines whether batches scanned by a user should be indexed as well. When a remote user connects to the ecNet Server, those privileged scanning profiles are automatically downloaded.

“We wanted to get the remote sites up and running quickly,” Meyerdirk added. “ecNet made this easy because all the remote user had to do was plug in their TWAIN-compliant scanner, connect to the ecNet Server, download the ecNet Client ActiveX, and they were ready to begin capturing documents. Now, document images can be sent across Federated’s corporate Internet as quickly as their bandwidth connections allow.”

The other problem facing Federated was that once the home office received the health claims, the claims had to be manually indexed. This process required too many labor hours and time overall. To remedy this problem, AMI suggested another eCapture component called ecAutoFile Server. This software-based program automatically processes batches of images and performs digital bar code recognition. ecAutoFile Server then assigns the bar code values to document index fields, and archives the documents into a document management system.

The remote sites are now using Canon DR-5020 scanners to scan documents. Using the ecNet client, a cover page is scanned with each document. On the cover page is a bar code, which includes all of the indexing information. Prior to sending a batch, the ecNet Client bundles an xml (extensible markup language) file containing all associated batch data, and the respective batch images into a single file known as a PAK file. The PAK file is transmitted over their corporate Internet using HTTP application protocol. After transmission, the ecNet Client checks that the PAK file was successfully transmitted by verifying file byte counts. Federated uses a VPN (virtual private network) to connect their remote sites with the home office. Their connection speeds range from 128 to 256 kilobits per second. “In terms of getting the documents from our claims processing centers to our corporate headquarters, what use to take a few days, now only takes a few minutes,” Bennett stated.

Once the PAK file is received by the ecNet Server in Owatonna, it processes the file and inputs the batch into the main eCapture system. The batches are then processed by ecAutoFile Server, which performs bar code recognition, applies the bar code information to indexes, and archives the completed documents. If any of the documents do not contain bar code header sheets, indexing operators then use eCapture’s ecIndex program to manually index the documents at the home office in Owatonna.

After the index values have been applied, the documents are archived into DocuManage by DocuCorp. Captovation developed a VBA (Visual Basic for Applications) commit macro that facilitates the commit process. The commit macro provides the interface between eCapture and DocuManage for direct document archiving. eCapture is also being used at Federated to capture and archive documents into Optika Acorde. “Using the Captovation developed commit macro, the integration between the eCapture products and our document management products was very seamless,” said Bennett. “There are times that we must remind our internal users that the eCapture products are not part of the DocuManage or Acorde suites.”

Currently, Federated Insurance is scanning and transferring 10,000 to 12,000 images per day from all locations. ecNet has been implemented at every office that processes Health Insurance Claims. Federated Insurance was so satisfied with the outcome that they foresee the current distributed capture process being used for their Property and Casualty application as well.

In addition, they are reviewing and testing another eCapture component called ecImport Server. ecImport Server enables image import from faxes, microfiche conversions, and multi-function scanning devices. Federated was looking for a better way to get faxes and emails containing attached TIFF (tagged image file format) images into their Acorde System. The native images were Group III TIFF format, but needed to be converted into Group IV TIFFs so that they could be viewed. ecImport Server imports the images into eCapture and converts them from Group III into Group IV. The images are then indexed and archived into Acorde.

“By using eCapture, we are able to leverage one capture system for our all of our document capture needs,” said Bennett. “This means that we do not have to purchase multiple capture systems for distributed scanning, centralized scanning, bar code processing, and email importing. It is also a lot easier to support one capture system, and makes training our users easier as well.”

The biggest benefit Federated Insurance has realized with eCapture is that it has helped them save time. Combining ecNet and ecAutoFile Server with their document management system, and an internally created utility for accessing health claims online, have collectively helped them save thousands of hours of claims processing time. For the first quarter of 2002, Federated processed and accessed 45,287documents. Access time for the documents was approximately 3 seconds per. The company estimates that prior to having their current system in place, it took a processor/clerk approximately 5 minutes to manually look up necessary claims information. If you apply this time to the number of documents processed and accessed, after the ecNet/ecAutofile project was put in place the total access time was 38 hours. Prior to the project, the total access time was 3,774 hours. This amounts to an overall savings of 3746 hours.

ecNet and ecAutoFile Server have also helped Federated Insurance decrease direct costs. The costs of CDs and associated shipping charges have been eliminated. They have also been able to reduce the amount of labor hours required to manually process documents. The mailroom clerks in each of their Health Claims offices are now available to do additional tasks. In fact, each Claims office has saved approximately 1/4 of a person per office (5 offices total), which results in about 1 full time employee (clerk level).