Horizon Improves the Health of Claims Processes with Business Process Management

Client Background

Horizon Healthcare Services is a not-for-profit organization offering quality healthcare products and services to nearly 3.6 million members. In fact, Horizon is the largest health insurer in the state of New Jersey and one of the oldest in the nation. Horizon provides customers with a wide variety of medical (including Medicare and Medicaid), dental, prescription drug, and health and wellness insurance products and services.

Business Problem

Organizations within the healthcare industry today are faced with constant pressures of a changing regulatory landscape, higher costs and greater customer demand. Despite growing complexity in the industry, many organizations find it crucial to increase efficiency and streamline internal processes. As discussions around healthcare reform continue to gain momentum, greater agility allows an organization to respond quickly to changing regulations. Horizon sought to maintain this competitive advantage, which requires the ability to adapt their processes quickly in order to optimize performance.

Founded in 1932, Horizon has spent the past 80 years growing into the organization it is today. Along the way, a considerable number of legacy systems have been developed to support the evolving business. Consumed with custom coding, Horizon felt much of their time was spent developing and testing software, in addition to carrying out manual internal processes within these legacy systems. For example, new customers are taken through a number of manual internal processes ranging from registration and distributing ID cards to processing claims.

Horizon processes about 60 million claims each year, some of which run into a Coordination of Benefits conflict. In certain instances, a member may be covered by another insurance provider through a spouse or family member. Since these claims were being processed manually, an employee had to analyze the claim and decide if a member is qualified for coverage and whether Horizon is responsible for payment or not. The consequences were costly on either side. If a Horizon did not pay a claim, and was in fact the primary payer, they were subject to penalties. On the other hand, it was not uncommon for both providers to pay, leading to wasting millions of dollars of overpay each year. Adding to their business challenges, Horizon employees were spending up to thirty minutes on each claim due to the manual processes involved, and many claims were stuck in inventory for days or weeks waiting to be processed.

For such a process-centric organization, the lack of automation was taking a serious toll on business processes. Horizon needed a reliable system that would accurately process these claims, while reducing cost, time and effort at the same time.


In recent years, Horizon has increased its focus on business process automation, going after key processes in the organization from enrollment to claims processing. Most importantly, Prolifics implemented a Business Process Management Center of Excellence (BPM CoE) to provide Horizon with methodologies, best practices and design patterns for the full lifecycle of any project. The Health Plan utilizes the CoE to ensure project success with information sharing, rules definition, prioritization of initiatives and sharing of services definitions, among other features. By defining the scope of a project and establishing initiation guidelines, Horizon is able to improve the efficiency and success of any project.

Leveraging the CoE, Prolifics and IBM set out to satisfy Horizon’s need for process improvement with industry-leading IBM BPM tools, providing greater visibility and management of their abundant business processes. Prolifics implemented IBM ILOG to facilitate straight-through processing of Horizon’s claims, a crucial competitive advantage in the industry, as it drastically reduces the need for human involvement. ILOG defines the many business rules involved in determining the fate of each claim. This enables automated claims approval to be defined, deployed, monitored and maintained, despite their tendency to be complex, variable and evolving.

Horizon is also using IBM Business Process Manager (BPM) 7.5, which combines WebSphere Lombardi Edition and WebSphere Process Server to define the workflow for all incoming claims and orchestrate the steps necessary to properly process them in a quick and automated fashion. The solution also includes WebSphere Enterprise Service Bus (ESB) for backend integration. Claims that fall under straight-through processing, also known as first-pass, are processed automatically and no longer require human involvement, allowing Horizon to drastically reduce the time spent processing claims. As a result, Horizon has seen a tremendous increase in efficiency and rate of straight-through processing. Compared to the thirty minutes previously spent processing a claim manually, nearly 10,000 claims per month are now processed in one minute.

By automating core processes, the solution allows Horizon to reallocate resources to focus on more complicated claims that need further attention. Lombardi and ILOG identify these issues and decide where to send the claim so that they are handled appropriately by a Horizon employee. Typically, these claims are now processed for payment the same day, a feature Horizon has never before been able to achieve. How does this all translate to ROI? For every dollar invested, Horizon sees an outstanding $3 return.

Prolifics’ expert services, combined with leading IBM products, have enabled automation of approximately four million claims that had traditionally been processed manually. With claims moving through Horizon’s system in less time, customers and providers receive payments much more quickly, increasing satisfaction significantly for both groups. Horizon is also able to save costs by reducing instances where they overpay a claim or are fined for lack of payment. In addition, all functionalities are built into IBM products, allowing more time to be spent solving business problems as opposed to creating new technology. By starting with small pilot projects, Horizon was able to achieve quicker time to market and, as they gained greater visibility and realized the multitude of benefits, the solution continued to grow organically. In no time, employees from all corners of the organization were insisting on implementing the same solution.

With an innovative BPM solution in place, Horizon is changing the way they think. By gaining greater visibility into processes and performance, they are making way for an increased focus on metrics and new efficiencies that have never before been possible. The solution allows Horizon to remain competitive in the market, keeping costs down and making it feasible to go after work they had never pursued in the past.

What’s on the horizon for Horizon? The company is determined to continue to innovate. Future plans anticipate leveraging the BPM tools to provide brokers, lenders and providers with greater self-service opportunities.