Prepayments Planned by Backlogged Oklahoma Insurer

A state workers’ health insurance plan in Oklahoma recently came under renewed criticism when state lawmakers and plan administrators said it may take months to get rid of a backlog of more than 200,000 unpaid health care claims filed by state workers, teachers and retirees.

Bill Crain, administrator of the Oklahoma State and Education Employees Group Insurance Board, said his staff is working with their claims payment vendor, EDS, to make prepayments to hospitals, doctors and dentists who are waiting to be paid for services provided under the HealthChoice insurance plan.

“Making a prepayment for something that’s already due isn’t necessarily the best choice,” said Rep. Lewis Moore, R-Arcadia. Moore said he has received telephone calls from constituents who are concerned about getting their health care claims paid.

Crain said the health insurer owes between $80 million and $100 million in back claims and that prepayments to health care providers would improve cash flow and get money to small providers who desperately need it. The health plan has reserves of about $100 million.

The backlog built up when a new claims payment system run by EDS that was supposed to be up and running by Jan. 1 did not begin until the end of January. Crain has said the claims backlog has been as high as 270,000 and stood at 211,895 claims last week.

The insurance plan receives about 10,000 claims a day for health care services provided to about 200,000 state workers, educators and retirees who use the plan.

“We’ve heard from several members whose claims aren’t getting paid,” said Sterling Zearley, executive director of the Oklahoma Public Employees Association. “You just can’t get your claims paid.”

If EDS is unable to do the job, Zearley said the state should cancel the contract and give the work to state employees.

“There is little doubt that EDS’s poor customer service is creating a massive hardship for doctors, hospitals and state employees,” Zearley said.

Tens of thousands of electronic and paper claims have been received by the HealthChoice insurance plan since its former payment vendor, Health Harrington, completed its last payment cycle in December.

OSEEGIB sought competitive bids for a new processing and payment vendor more than a year ago for its health, life and dental claims. Health Harrington had been the vendor for 15 years, but EDS won the contract. The company had wanted 18 to 24 months to make the transition, but the company was given just one year.

An EDS official, Bill Ritz, blamed the backlog on difficulties in transferring data from the previous vendor.

“That’s what created the bulk of the backlog,” Ritz said. “We have had some challenges. We are making progress.”

Meanwhile, Rep. Doug Cox, R-Grove, an emergency room physician, said HealthChoice has created a trickle-down financial hardship for patients and providers across Oklahoma.

“In today’s computerized world there is no excuse for an insurance company not paying an electronic claim within 30 days or a paper claim within 45 days,” Cox said.

A gastroenterology group owed $726,132 by HealthChoice told Cox it is constantly getting disconnected while trying to obtain claim status by telephone and is given inconsistent responses online regarding claims status.

“They are operating like a company in financial trouble. I hope for our state employees’ sake that is not the case,” Cox said.