6 Sigma WCBF 03-04-05
Leading Your Org to Reap the Benefits of 6 Sigma
WCBF Conference
4 March 2005
6σ
Who is VMS? What do we do?
Why 6σ?
6σ deployment
Successes
Lessons Learned
Next Steps
6σ
Highmark, Inc., d.b.a. Veritus Medicare Services {VMS}
Medicare Part A Fiscal Intermediary Processed over 7.6 million claims/yr Distributed over $6 billion to providers Service 1,500 providers
6σ
SettlementFinance
ReimbursementBene/Provider Srvc
QAClaims
MSPInfo Sys
MRAudit
Client SrvcAppeals
VMS
6σ
VMS QA
ISO 9001:2000 certified Internal Controls {FMEA} Compliance Quality improvement Quality control
6σ
Who is VMS? What do we do?Who is VMS? What do we do?
Why 6σ?
66σ deploymentσ deployment
SuccessesSuccesses
Lessons LearnedLessons Learned
Next StepsNext Steps
6σ
Highmark Values
United in Our Mission Dedicated to Excellence Committed to Integrity Focused on our Customers, Employees and
Communities
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ISO QM Underlying Principles
Customer focus Leadership Involvement of people Process approach System approach to mgmt
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ISO QM Underlying Principles {Con’t}
Continual improvement Factual approach to decision making Mutually beneficial supplier relationships
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6 Sigma Values
Improve business performance Improve quality & customer satisfaction Measure output Measure inputs Reduce defects Improve processes
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Developing & Reinforcing Values
Values define attitudes Attitudes influence behavior Behavior creates culture Culture reinforces values
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Rationale ISO § 5 Management responsibility
§5.1.c Top mgmt shall provide evidence of its commitment to the development and implementation of the QMS and continually improving its effectiveness by ensuring that quality objectives are established.
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Rationale ISO §8 Measurement, analysis and improvement
§8.1 General §8.2 Monitoring and measurement §8.3 Control of nonconforming product/service §8.4 Analysis of data §8.5 Improvement
VMS QMS
Quality Objectives {Top Down}
Process Orientation
Results Orientation
Continuous Improvement Activities{Quality Objectives Bottom-up}
Establish measures of the QMSperformance {6 Sigma}
Quality Policy
We believe quality is striving to continuously exceed the performance requirements of our customers. To accomplish this we will:
Strive to continuously understand the dynamic expectations of our customersChallenge management and staff to proactively use facts and data to achieve a VMS environment of continual improvementSafeguard program fundsAdminister our Medicare contract in a responsible and cost effective mannerImprove efficiency while maximizing performance
6σ
What do you measure now? What numbers get the most attention in your area? What measurements do you have?
Do they have a customer focus? Do they have a quality focus? Do they have an input/output focus?
How do you use these measures? What improvement goals are established?
The Role of Leadership on Metrics
•New Questions
•New Measures•New Values
•New Behaviors
Same Questions Same Answers
Why 6σ & Why Now?
To deal with a world of declining budgets
To compete successfully with the best companies
To accelerate the rate of improvement in quality and productivity faster than our competitors
To establish standard business language and approaches across functions
To generate budget to support other strategic initiatives
To increase predictability thereby reducing risk
6σ
Who is VMS? What do we do?Who is VMS? What do we do?
Why 6Why 6σ?σ?
6σ deployment
SuccessesSuccesses
Lessons LearnedLessons Learned
Next StepsNext Steps
6σ
Sr Mgmt Ownership is Key Link 6 Sigma to the business strategy Create the vision for the organization Set stretch goals & metrics to focus effort on 6
Sigma quality Select the Best People with the right structure Ask questions that generate new thinking on
quality and productivity
6σ
How does 6 Sigma Work?Systematic method of breakthrough improvements across all business
functions:
Sr Mgmt established vision, challenge and objectives Champions/process leaders provide focus, leadership and commitment 6 Sigma Champion selects key improvement projects, tracks and quantifies
results Resources lead and perform improvement efforts Projects focus on customer satisfaction and real business problems Project Teams deploy 6 Sigma in their functional organizations Focus on solutions to real business problems
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6 Sigma Deployment Plan
Vision & Business Plan Metrics, Goals & Objectives Roles, Responsibilities & Structure Reward & Recognition Process Data Collection & Analysis System Project Selection & Review Process Project Back-log List 6 Sigma Reporting Process Communication Process
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What is Common Among Successful Interventions Top mgmt with a clear vision Imaginative local line leaders
“We have rarely seen any successful change initiatives that did not involve imaginative committed local line leaders.”
Peter Senge, The Dance of Change
Internal transformation “We know of no company that has generated significant
momentum in profound change efforts without involving active, internal networks of practitioners, people sharing progress and helping one another.”
Ibid
6σ
Successful Interventions: Address real work goals and processes Improve performance Involve people who have the power to take action Balance action and reflection, connect inquiry and
experimentation Provide an opportunity to reflect and think Increase participant’s individual and collective capacity Focus on experiential learning
6σ
Who is VMS? What do we do?Who is VMS? What do we do?
Why 6Why 6σ?σ?
66σ deploymentσ deployment
Successes
Lessons LearnedLessons Learned
Next StepsNext Steps
6σ
Successes
Quality Reviews Sigma Level Credit Balance
Voice of the customer Process improvement
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Provider Enrollment
SettlementBene/Provider Srvc
MSPClaims
MRAudit
VMS Quality Reviews
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Settlement
Reimbursement
MR
VMS 6σ levels
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Reimbursement Interim Rate Setting SNFs
80
85
90
95
100
105
110
10/1/01 to9/30/02
10/1/02 to9/30/03
10/1/03 to09/30/04
10/1/04 to12/31/04
Percentile
104% Upper Threshold
86% Lower Threshold
Reimbursement Yield – 97.54% 3.4σ
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Reimbursement Interim Rate Setting Hospitals
90
95
100
105
10/1/01 to9/30/02
10/1/02 to9/30/03
10/1/03 to09/30/04
10/1/04 to12/31/04
Percentile
102% Upper Threshold
96% Lower Threshold
Reimbursement Yield – 99.99% - 5.2σ
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Credit Balance
All providers participating in the Medicare program are to complete a Medicare Credit Balance Report {CMS-838} to help insure that monies owed to Medicare are repaid in a timely manner.
6σ
Credit Balance
A credit balance is an improper or excess payment made to a provider as the result of patient billing or claims processing errors
6σ
Credit Balance Examples of Medicare credit balances include instances
where a provider is: Paid twice for the same service either by Medicare or by
Medicare and another insurer; Paid for services planned but not performed or for non-covered
services; Overpaid because of errors made in calculating beneficiary
deductible and/or coinsurance amounts; or A hospital that bills and is paid for outpatient services included
in a beneficiary’s inpatient claim
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Credit Balance Voice of the customer
Verify that a check should be submitted. No adjustment or cancel was submitted prior to
ID MSP by #2 in the 838 Report Submit cancel or adjust. Should be an appeal. We
have to override Reiterate what is included on a credit balance
6σ
Credit Balance Process improvements
If adjustments are not on line, claims were returned Review of HICNO’s downstream in the process Install controls upstream in the process
6σ
Who is VMS? What do we do?Who is VMS? What do we do?
Why 6Why 6σ?σ?
66σ deploymentσ deployment
SuccessesSuccesses
Lessons Learned
Next StepsNext Steps
6σ
Lessons Learned
Communicate, Communicate, Communicate Data acquisition is never easy ID of the hidden factory is key 6σ = Excitement
6σ
Who is VMS? What do we do?Who is VMS? What do we do?
Why 6Why 6σ?σ?
66σ deploymentσ deployment
SuccessesSuccesses
Lessons LearnedLessons Learned
Next Steps
6σ
Next Steps
Continue to count defects Attain ASQ 6σ CSSBB designation Continue to facilitate Determine 6σ level for Org Communicate, Communicate, Communicate
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Next Steps {Con’t}
3 Sigma 4 Sigma 5 Sigma 6 Sigma
Design WallBasic Tool Wall
Seven Basic Quality ToolsISO/TR 10017
Statistical ToolsToImprove Processes
Green Belts Black Belts
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Questions?
6σ
Thank You!