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Regence Outsources Claims Processing, Membership to India

The state’s largest health insurer is laying off 23 employees in Oregon after signing a contract with Cognizant Technology Solutions while reaction is mixed with people posting on Facebook
May 27, 2013


May 28, 2013 -- Regence BlueCross BlueShield is shifting its claims processing and individual membership responsibilities to a Fortune 500 company that outsources such work to India. In so doing, the insurer is laying off 23 employees in Oregon and another 33 employees are affected in the four state-region that includes Idaho, Utah and Washington where its non-profit parent company, Cambia Health Solutions, also runs health insurance plans.

Of those 56 employees, 30 people will remain with Regence and transition from individual membership to group membership responsibilities, according to Regena Friedan, Cambia’s director of public relations.

After signing a contract with Cognizant Technology Solutions, Regence notified its employees about the layoffs in mid-May.

Those affected by this transition haven’t been silent about sharing their concerns. 

Jeff Sulitzer who’s in charge of healthcare and developing business strategies for Cognizant, is not involved with this new contract, Friedan said. Earlier, from 2006-2009, he worked at Regence as director of health services and was responsible for helping the insurer expand its focus and competencies on healthcare services and medical management. Sulitzer did not respond to questions from The Lund Report.

Meanwhile, another former employee who had worked in finance for Regence BlueCross BlueShield for three years had this advice for senior management. “Morale is low. Listen to your employees. Implement suggestions from satisfaction surveys and exit interviews.”

That person, who did not disclose their identify, also said, “New mandates and regulations will come from Washington DC for years to come, so stop burying your head in the sand even if you don't agree with it politically. Company-wide emails from the CEO to employees often contain strong political undertones. Find a more positive way of working with these changes.”

Friedan told The Lund Report that Regence had decided to work with Cognizant because “Our focus is on our core competencies of providing our members quality health outcomes and superior customer service at an economically sustainable cost. We continually examine ways to improve internal efficiency, quality, and lower costs in order to be a competitive force in the marketplace. Sometimes this involves partnering with vendors for access to special expertise or systems (like Availity and IBM). The costs savings will benefit our members in the long run as this allows us to lower our administrative costs. 

“Regence is committed to providing our members superior service and world-class quality at a competitive cost,” she added. “To this end, we have engaged Cognizant Technology Solutions to perform specific transactional, non-member-facing job functions in the areas of claims and membership. This decision allows Regence to improve quality, efficiency and service and pass along millions of dollars in savings to our members.”

When asked how those “millions of dollars in savings” would benefit Regence members, and whether the insurer would seek to lower its premiums for the BridgeSpan, which it plans to offer individuals in Cover Oregon, the state’s health insurance exchange, Friedan did not share specifics.

Earlier, Scott Powers, vice president of insurance operations for Regence, sent an email to employees in claims processing, and explained that the changes were a result of the Affordable Health Care Act.

"As reform draws near, we continue to explore ways to reduce costs and improve quality and efficiency to create an economically sustainable healthcare system for our members — this means investing in some areas and reducing investments in others," he wrote, "We understand how difficult change can be, especially on the heels of many changes over the past few years and particularly when it affects our own Regence team members.”

Cognizant, which is headquartered in Teaneck, N.J., has 150,000 employees globally, of which over 100,000 are in India across 10 locations with a major chunk in Chennai. The other centers of the company are in Bangalore, Coimbatore, Gurgaon, Hyderabad, Kochi, Kolkata,[38] Mangalore (CoreLogic), Mumbai and Pune. The company also has local, regional and global delivery centers in the UK, Hungary, China, The Philippines, Canada, Argentina, and Mexico.

In 2009, an investigation by the US Department of Labor (DoL) found Cognizant in violation of the H-1B provisions of the Immigration and Nationality Administrative Act. DoL found that 67 of its workers hired under the H-1B program were underpaid. According to Cognizant, this was due to unintentional administrative errors; the DoL investigation revealed that Cognizant had achieved 99.7 percent compliance in its management of H-1B visa-related issues. The company paid $509,607 in back wages to the 67 employees. No fines or visa restrictions were imposed since DoL did not discover any willful violations, according to Wikipedia.

Diane Lund-Muzikant can be reached at [email protected].


Submitted by Andrea Armstrong on Wed, 05/29/2013 - 12:48 Permalink

I find it interesting that their official number of layoffs is 56. I worked for Regence for a decade and when I spoke with 2 current employees lately they told me that almost all of the claims analyst positions are being outsourced, but that the layoffs will be staggered in order to avoid being seen as a red flag by the media.