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Patrick Springer, Published June 15 2012

WSI catching up with long backlog of pay claims

FARGO – Glitches in implementing a new computer system for the North Dakota workers’ comp program have produced a backlog of payments to medical providers that once topped $15.5 million.

The bill payment backlog at Workforce Safety and Insurance once stretched to almost four months at its peak, but is declining as the agency catches up.

“It’s definitely been a challenge,” Clare Carlson, WSI’s deputy director, said Friday. “We think we’re rounding the corner.”

WSI has been struggling with a computer upgrade that has been in the works since 2007 and originally was slated to launch at the end of 2009.

The latest target date for launching the part of the system that pays medical bills is Sept. 30, a delay from an earlier goal of Aug. 31.

“We’re cautiously optimistic is a fair way of saying” the latest extended deadline will be met, Carlson said.

So far, $16 million has been spent under an upgrade project authorized at $17.8 million, but Carlson said the agency will be able to complete the project without exceeding its budget.

The software vendor, Aon eSolutions, so far has paid the state penalties totaling $405,000 for its failure, and WSI has negotiated $912,000 in free maintenance and support, a sum that should cover one to two years, Carlson said.

He said WSI has also withheld another $499,000 in payments for installations of software features it considers subpar.

Stephen Rhee, Aon’s chief operating officer, said his firm’s share of the total cost is about 44 percent, and has remained on budget for its share of the project.

“Responsibilities for the delays in completing the program lie with multiple parties, including Aon eSolutions, WSI and other third-party vendors,” he said in a written statement.”

Rhee added that WSI requested additional work that resulted in an additional 35,000 hours of work by Aon. “It is inaccurate for anyone to say that Aon eSolutions alone bears that responsibility,” he said.

WSI formed a troubleshooting “strike force,” added temporary staff and is paying overtime to work through the backlog of unpaid medical bills.

The problems arose when the new payment system was automatically reviewing and paying bills.

Glitches caused numerous errors, so the agency resorted to manual bill reviews. Automation is gradually coming back, Carlson said.

As of January, the unpaid medical bills totaled $6.2 million, but mushroomed to more than $15.5 million by the end of May, Carlson said. That figure now is steadily declining, he said.

“They’ve gotten out in front of it,” Carlson said. During the first two weeks of June, WSI paid about 7,500 medical bills per week, compared to an average of 3,900 bills processed weekly in May.

Those figures, he said, compare to a long-term average of about 3,500 bills a week.

Medical providers have been “diligent” in checking on their payment status while WSI works through the backlog, Carlson said.

“Our normal history is pretty good as far as getting them paid,” he said, with a 30-day turnaround the norm.

An executive steering committee, which includes staff from the Office of Management and Budget and Information Technology Department, is working with WSI to solve the computer system problems.

Lisa Feldman, the state’s chief information officer, said WSI is making progress in implementing the system.

“The backlog is decreasing,” she said. “It goes back to Aon and their not delivering on their product.”

The claims payment system is three-quarters complete and is expected to go live by the end of September, Rhee said.

“Despite the delay, Aon eSolutions actually is making significant progress on completing the program,” he said, adding that WSI and Aon agreed to postpone a fall 2011 deadline to July 2012.

Before implementing the part of the Aon system that pays injured workers’ claims, WSI will thoroughly test its functions to ensure it works properly, Carlson said.

“We feel like we can get a claim system implemented that we can pay claimants,” he said. “We take that very seriously.”

Until claims-handling reliability is assured, WSI will continue using the old computer system that dates back to 1999.

“We can still function on the old system,” Feldman said.

WSI expects to handle 24,522 filed claims this year. Volume is increasing with the increased number of workers and activity associated with the oil boom and other economic expansion, Carlson said.

Instead of using Aon to handle employers’ premiums, as originally planned, WSI will seek proposals for another computer system, he said.

No target date for implementing the policyholder computer system has been set, he said.


Readers can reach Forum reporter Patrick Springer at (701) 241-5522


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