Account Withdrawal Accuracy Project Example

Health insurance administrator DMAIC project improves billing process

$24.95

Description

Before this Six Sigma project, the billing process for ASO accounts entailed multiple reconciliation checkpoints across the organization and included many manual workflows. This continuously resulted in incorrect administrative fee withdrawals from customer bank accounts, or fees withdrawn late.

In about 60 percent of the cases when an error occurred, the amount withdrawn was less than it should have been. In the remaining 40 percent of errors, customers were overcharged. These inaccuracies created internal and external accounting rework and, of even greater concern, could potentially push customers to seek healthcare coverage with our competitors.

Although late withdrawals were also an area of concern, accuracy was the larger problem. From a customer survey, we learned that 25 percent of customers had experienced having an incorrect amount in administrative fees withdrawn from their account at least once in the previous 12 months. This compared to the 8 percent of customers whose fee was withdrawn late.

The primary objective of this Six Sigma project was to go beyond 6 sigma and produce a 100 percent-accurate withdrawal process. Achieving this objective would increase internal productivity and customer satisfaction,and could prevent the loss of customers and subsequent erosion of profit margins.

In the eight months since the improvements were implemented and the new system was put in place, zero defects have been reported. Additionally, the cycle time for changes improved from a mean of two weeks to a mean of three days. For too long, the company had hobbled along with forms and processes that the finance department understood to be inadequate but with no definitive understanding of why or what to do about it. This project uncovered the source of the problem and within a relatively short period reduced the time it took to register billing changes to a customer’s profile, and completely eliminated inaccurate withdrawals. The financial benefit for these improvements was calculated to be $304,688 for a five-year projection resulting from revenue (interest) increases and staffing decreases.

Additional information

Format

PDF

Pages

7

Publishing Date

July 2006

Publisher

iSixSigma Magazine

Author(s)

Michael Stober

File Size (MB)

0.45

Minimum Software & Version

Adobe Acrobat Reader

License

Personal use only

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