How Humana's "Cloud-First" strategy refined claims processing from four days to four hours

Matthew Swendsen
Principal Solution Marketer, Oracle Financial Services

Srini Venkat, group VP of insurance product development at Oracle spoke with Mike Wheatley, AVP of IT at Humana on January 25th at the HLTH webcast. They discussed taking full advantage of a corporate cloud-first initiative and moving their claims system into the future to enable real-time claims adjudication. Here is an excerpt from the webcast:

Adopting the cloud for real-time claims

Srini Venkat (SV): The adoption of cloud technologies has grown dramatically in the past several years, and it was incredible to see this transformation. So, moving non-core administration systems was easy, but core systems to cloud require a much deeper level of internal buy-in from stakeholders. Could you describe your apps, the cloud, and what special needs healthcare payers must consider as they think about moving core systems to the cloud?

Mike Wheatley (MW): Humana has some very old systems to process our claims, which is not unusual in the industry for mainframe-based systems to turn out hundreds of millions of claims a year in processing. Moving to the cloud is certainly not a trivial matter for us, and we're in year four of a ten-year journey to get there. Humana had a tendency, as many companies do to target the easy stuff first to prove it, but we're actually targeting the more challenging stuff first for Medicare HMO, which is the bulk of our business. With CAS NextGen, we're using a component of the Oracle Health Insurance (OHI) claims module, as what we call the claims calculator. So, unlike many systems out there that are fully integrated with membership, provider, and product, we're reaching out to the organization's systems of truth, in real-time, as the claim comes in the door. So, the speed offers us options and a lot more accuracy because we're not relying on batch file fees, etc. and I think it's an exciting and certainly challenging program that we've undertaken.

Humana started several years back with Bruce Broussard, our CEO, really making a companywide initiative we call "Cloud First." So, no matter what we were doing, we would look at the cloud as our first option. And then we also have in the journey where Sam Deshpande is both our chief risk officer and chief technology officer to ensure we have privacy and IT working hand in glove. We've had to clear hurdles with all of them to go to the cloud and get a SaaS solution item cleared for any Fast Healthcare Interoperability Resource (FHIR) situation cleared. So, everything seems to have a hurdle along the way, and we're the first to take a core platform to the cloud. What we continually get told is everyone will follow in your shoes, which is good. But it also means that you're going a little slower than we would like because we have to be very safe with the personal health information and make sure it's well protected.

Improving performance and scalability on the cloud

SV: Humana is undoubtedly paving the road for everyone else to get there. In working with your counterparts on the risk and infrastructure side, Oracle endeavours to provide a core system on the cloud, with a much deeper level of discussions with the risk officers. One of your risk officers' key requirements was that we get to SOC2 compliance on the application level. Now, having developed core systems on the cloud, one of the challenges that often come up today, if you are coming from mainframe systems are service levels that you have to achieve on the cloud are much higher for core systems for large payer organizations. One of the requirements is a 99.99 Service Level Agreement (SLA) to meet the demands for core systems. Security is always the key as you move to cloud; you need a similar but secure way to access data. Oracle has developed methods of getting to the data, with a whole new integration approach and gateway to get the system's core data securely. Oracle had to automate ways by which we could do those things on the cloud, and I'm excited to see us paving the way for two cloud deployments for core systems.

Mike, how important is performance and scalability for your transformation projects and any pitfalls you've found? And any steps you're taking for when you move to cloud and modernize core systems that you're achieving and exceeding for your mainframe benchmarks? 

MW: Well, what we had before was inside the Humana data center. We had our disaster recovery (DR) site, located at least 50 miles away. When we went with Oracle, you came up with the concept of active-active, where both of them are online at any given time, so that if one thing were to happen, it doesn't interfere with our ability to operate. That was huge. And because of your infrastructure background, if the East Coast were to be wiped out for some reason, you can transfer over to the middle of the country to keep Humana up and running within a short time. Those are capabilities we didn't have with our mainframe for recovery and real uptime capabilities that Oracle provided that we couldn't get on our own.

Today, it sometimes takes several days to process an inbound claim.

"The vast majority of Humana's claims are taking anywhere from four to five days after we get them before they show up on humana.com. The expectation with Oracle is that 80% of our claims are finalized within four hours of receipt, many within minutes of receipt."

So that will shake up a little bit of our actuarial world and our reserving world that have models based upon these built-in latencies. We're working with them now on how we can run parallel processing, so they can start to understand how they're going to shift those models in the future to accommodate for more real-time claims.

The above was an extract from our live webinar. To watch the entire HLTH webinar – "Defying Gravity with the Cloud: Driving Claims Processing" with Humana, please visit: https://www.youtube.com/watch?v=iX3OUfua4uo

To learn more, feel free to message me to have a conversation.

For more information, please visit:
Oracle Insurance: oracle.com/insurance
Oracle Financial Services: oracle.com/financial-services

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