Healthaxis Announces Technology Changes to Production Operations

Healthaxis, an innovative provider of technology-enhanced, integrated business process solutions and services, including claims and benefit administration software and solutions, web-enabled software solutions and outsourced claims related services for health benefit administrators and health insurance claims processors, announced today it has completed phase one of a two phase productivity project in its Smart Front-End™ operations. The project, utilizing an innovative combination of state-of-the-art hardware and software will make Healthaxis one of the most efficient front-end service providers in the country.

A key feature of Healthaxis’ Smart Front-End service is reducing or eliminating the amount of paper handling for medical claims processing. The Smart Front-End, in addition to handling electronic claims, moves the handling of paper claims from the customer to Healthaxis. Healthcare providers send the paper medical claims directly to Healthaxis where digital images of the paper claims are created. The Company said that it has been performing these services for over fifteen years, continually making incremental productivity improvements. These Smart Front-End enhancements have resulted in an order of magnitude improvement in productivity.

“Paper-handling processes are typically labor intensive and can include as many as fifteen touches of a claim from receipt of the mail to the creation of an image,” said John Carradine, Healthaxis CEO and President. “We wanted to find a way to reduce the number of touches, without sacrificing quality, thereby improving the process and increasing productivity. Earlier this year, we initiated a Six Sigma project to accomplish this goal. We created a two-step process change. The first step was integrating an absolutely new technology from the recognized leader in mail automation and imaging solutions, OPEX Corporation. We are now able to combine into a single operation the opening of the mail, extraction of claims, preparation for scanning, and scanning tasks into a single uninterrupted process. Doing so reduced the number of touches from fifteen to five.”

The Company said that the next step in the project will be the implementation of a software solution that will automatically identify and distinguish medical claims by type at the time of image creation. This project is scheduled for implementation in late 2006.

Implementing phase one has doubled the Company’s effective operational capacity and has shortened turnaround times. Phase two will have a further positive effect on direct costs of operations and capacity. Healthaxis is one of the first companies to use both technologies for healthcare claims.

Mr. Carradine continued, “The goal of this project was a 100% improvement in productivity. This goal was achieved within the first few weeks of the OPEX implementation. Furthermore, not only did we not sacrifice quality, we improved it. With the elimination of paper touches, the opportunity for human error was reduced, and our error rates, although very small to begin with, have become even smaller. Additional improvements are expected once the software implementation is completed.”

About Healthaxis

Healthaxis, founded in 1965, is a leading provider of healthcare payer solutions, including benefits administration and claims management software and related healthcare transaction processing services. Healthaxis' highly scalable technology is offered on a software-as-a-service (SaaS) basis, enabling third party administrators and insurance companies to offer highly flexible and configurable benefits programs while maintaining the highest levels of auto-adjudication and quality. The results are lower medical costs for employers and members, and reduced administrative costs for payers. Healthaxis' solutions cover all areas of healthcare payer administration, including front-end mailroom services, OCR and data capture, EDI administration, benefits enrollment systems, claims adjudication and admin software solutions, self-service healthcare portals for members, employers, administrators and providers, provider database administration, and a variety of data integration and management services for healthcare administration. For information on Healthaxis, visit www.healthaxis.com.