Gateway Health Plan Triples Membership with Business
Process Outsourcing

Focus on Quality Healthcare for Medicaid Members Increases with DST Health Solutions Supporting Gateway's Core Administrative Processes

Founded in 1993, Gateway Health Plan began providing Medicaid HMO services to members in Allegheny County, Pennsylvania. When the company wanted to expand, it decided to outsource a wide range of functions, including claims administration, data center, and software applications.

Gateway's Margaret Worek

Gateway Business Challenges
From the very beginning, Gateway knew that it did not have sufficient capital to invest in the sophisticated information systems required to support Medicaid processing or to hire the claims and IT personnel needed to support its growth plan. "One of the reasons we chose DST Health Solutions was because we wanted one responsible vendor for
outsourcing and software, since the success of one depends upon the other," said Worek. "We didn't want two different vendors pointing fingers at each other if there was a problem."

Processing Medicaid business brings significant challenges. Gateway could be penalized for failing to comply with state standards for claims processing and timely encounter submissions. In addition, recent cuts in Medicaid reimbursement bring plan rates well below actual medical costs. To offset this, Gateway knew it needed an administrative services provider with a great deal of experience and technology resources that could help them drive down operating costs through automation.

Meeting the Challenges
DST Health Solutions implemented its managed healthcare administration software for Gateway in 1997, hosting the system at DST's data center. DST's software handles Gateway's entire managed care network, enhancing performance and operational efficiency. Over the years, as Gateway experienced dramatic spikes in membership growth, outsourcing has allowed them to grow without incurring significant up-front costs for hardware, people and training."If we're going to add 65,000 members, I don't get hit up with costs for another server," Worek said. "My costs are very predictable."

Prior to working with DST Health Solutions, Gateway had an extremely labor-intensive member enrollment process requiring 26 enrollment clerks. DST worked with Gateway to redesign this process and today only eight clerks are needed. In addition, a modification to the system by DST helped reduce the error rate to less than 1 percent.

Gateway needed more flexibility in the area of referral rules so that it could influence claims auto-adjudication rates and goodwill with providers. DST put flexibility into the system to allow Gateway to specify the need for authorizations by certain providers, in certain places of service or for certain procedure code ranges.

Gateway's medical and social services employees needed a care management system to help them manage workload and capture information to support authorizations, outreach, case management and disease management protocols. DST and Gateway jointly developed software modules that allow for immediate eligibility and benefit determination at the time of case entry, preventing medical management staff from authorizing care "in a vacuum."

Gateway provider services staff needed to reduce the amount of time and paperwork involved in responding to inquiries from physicians. DST implemented interactive voice response (IVR) and Web-based technology that lets network physicians verify eligibility, check on claims status, referrals and other issues using the Internet or a touch-tone phone and automated faxback confirmation. These advanced technologies allowed Gateway to support its growing provider network without adding call center staff.

Service Levels, Loyalty Govern Relationship
DST Health Solutions' BPO team must meet established service level standards to support Gateway's business. A multidisciplinary DST-Gateway account team meets weekly to monitor progress and address operational issues. "The training and performance standards are very high," said Mike Blackwood, CEO for Gateway Health Plan. "Lines of authority are clear and DST knows how to gear up when the heat is on. DST's claims unit works very well with our crew here in Pittsburgh.

Results: Accuracy, Responsiveness, Quality, Low Costs
Gateway's ability to focus more attention on care management enabled them to become the first Medicaid HMO to receive an "Excellent" NCQA accreditation, placing them within the highest tier of health insurers in America. According to Worek, Gateway has the highest HEDIS scores in the nation for Medicaid-in excess of 98 percent.

With DST business applications supporting UM, case management, and providing information for outreach and provider and member education, Gateway has been able to reduce NICU admissions for pre-maturity by 5 percent, asthma admissions by 53 percent and CHF admissions by 45 percent, while increasing cervical cancer screenings by 8 percent, childhood immunizations by 5 percent and adolescent immunizations by 49 percent.

DST is processing more than 99.5 percent of all Gateway claims within 45 days of receipt. Paper claims have an average turnaround of 12 to 14 days, and EDI claims have a nine-day average turnaround. Since 2000, claims auto-adjudication rates have increased by 21 percent.
Gateway has never faced a significant penalty from the state for claims processing or late encounters.

DST's implementation of optical character recognition (OCR) technology significantly reduced encounter data rejections from the state due to data entry errors. And from a customer satisfaction perspective, the outsourcing relationship is working—only one-third of one percent of Gateway's members choose to leave the plan. Overall, Gateway has managed to maintain an administrative cost ratio that is consistently below 7.5 percent.

Gateway's Mike Blackwood

The Key to Outsourcing Success
"One of the biggest misconceptions about outsourcing is around the control issue," Worek said. "Some people think outsourcing means you pay a fee to be able to say, 'Okay, now I don't need to worry about this aspect of my business anymore.' I don't believe those relationships work as well. With DST Health Solutions, we manage the relationship. If we are looking at doing something a little bit differently, we don't hesitate to pick up the phone and call DST."

"Our close working relationship with DST has enabled us to achieve rapid growth while maintaining a high level of service to both our members and our providers," said Mike Blackwood. "I have gained at least two hours in every day because of DST, I'm not worried about claims getting processed, I'm not worried about member cards going out the door, I'm not worried about whether the system is up or down, because I know DST is getting the job done."

In Fall 2004, Gateway signed an agreement to extend their outsourcing partnership with DST Health Solutions for another five years.

Contact Us
For more information on on how we can help you, call DST Health Solutions, Inc. at 800.272.4799 or visit us at www.dsthealthsolutions.com.

For more about DST Health Solutions, contact us at inforequests@dsthealthsolutions.com.