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CHAPEL HILL – Blue Cross and Blue Shield of North Carolina, the state’s largest health insurer, is spinning off some of its billing, enrollment and claims processing operations into a new operation run jointly with a Missouri health insurance company.
The Chapel Hill-based insurer is partnering with the Missouri insurance company Blue Cross and Blue Shield of Kansas City to create a new company, Topaz Shared Services LLC, which is expected to be operational by Jan. 1, 2014.
The new company will handle the billing, enrollment and other administrative work for customers who have small group plans with the Chapel Hill-based insurer, as well as for some of its individual customers.
Michelle Douglas, a spokeswoman for Chapel Hill-based Blue Cross and Blue Shield of North Carolina, said this will mean that Topaz will now handle the administrative work for more than 650,000 of its customers under age 65 with individual plans, and those who have small group plans.
Blue Cross and Blue Shield of North Carolina has, in total, more than 3.7 million members. The administrative work for the insurer’s large group businesses will still be handled by the Chapel Hill-based insurer, Douglas said.
In addition, the insurers are contracting the health care information technology company TriZetto Group Inc. to provide software, and consulting services to support Topaz, according to a news release.
The contract with Colorado-based TriZetto will mean increased automation of claims processing, billing and administrative tasks, said Loren Finkelstein, a spokesman for TriZetto.
Previously, TriZetto only provided Blue Cross and Blue Shield of North Carolina with technology solutions for only its Medicare plans, Finkelstein said.
“It used to be a heavily manual process – a lot of touches, a lot of faxing, a lot of phone calls,” Finkelstein said, speaking of the administrative work required to manage health claims. “Now those kinds of cases are supported by software that automates much that has been done manually – that’s all involved in this deal.”
With the creation of the new company, there are no immediate plans for layoffs, Douglas said. Topaz will be staffed by current employees from the Chapel Hill insurer, as well as with employees from Blue Cross and Blue Shield of Kansas City, a not-for-profit insurance company with fewer than a million members in the Kansas City area.
The Chapel Hill-based insurer will initially transition 20 of its employees to Topaz, Douglas said. That number is expected to grow to about 40 in several months.
Employees working at Topaz will be based out of Chapel Hill, as well as out of Kansas City, she said. Future locations of the company will be “dictated by the needs of the business as it evolves,” Douglas said.
“As Topaz increases its scope, the number of Blue Cross and Blue Shield of North Carolina employees doing work for Topaz will increase accordingly,” she said in an email.
The move is part of an effort to reduce costs and increase operational efficiencies. Previously, the Chapel Hill-based insurer announced a goal of cutting its administrative costs by 20 percent by 2014.
According to previous reports in The Herald-Sun, the insurer vacated some of its previously occupied office space, it adjusted its travel and training spending, and outsourced some functions.
The insurer announced last month a plan to sell its information technology business to Fujitsu America Inc., and to have the company provide those services in a five-year deal valued at $250 million.
The company planned to retain about 25 of the employees working in that sector, while a number were also slated to be offered work at Fujitsu. The transition of employees and services was expected to be complete in February.
According to the release, company officials also believe that other health insurers also will be interested in employing Topaz’s services.
“Topaz is evidence of how serious we are about continuing to compete and win in North Carolina’s rapidly evolving health insurance marketplace,” said Brad Wilson, Blue Cross and Blue Shield of North Carolina’s president and CEO, in a prepared statement. “Topaz will accelerate our transformation as a company, bring new capabilities to our customers and fuel our efforts to be a more efficient company.”
