How to Reduce Claims Processing Costs - Part Four
This is my fourth and final article in a series that focuses on how insurers can improve their claims processing activities while reducing costs and helping to drive continuous process improvement. My previous columns discussed topics that span assessing your current claims processing costs; streamlining your claims processing activities and exploring the offshore option for processing your claims. In this article I will highlight spotlight how automation is a key element in containing costs.
To truly be a best-in-class claims processing organization, effectively leveraging the right technology is a must. Many carriers already have robust systems in place onsite with their IT departments. A significant portion of these legacy systems are based on mainframes or midrange boxes and can be a challenge to manage, change and enhance in a fast moving, customer-focused and dynamic claims department. New systems and applications are continually being developed to assist in processing claims, many of which are already being cloud enabled.
Four Key Areas to Enhance Processing
When you or your outsourcing provider are considering technology to further enhance your claims process, I recommend you consider the following four key areas:
1. Intake - Intelligent Capture
Technology to digitally capture the incoming volume of paper involved with the claims process has been available for many years. Often carriers use imaging service bureaus/centers to manage this intake process as it is often better leaving the conversion to experts to ensure clean, good quality document images. When deciding on a technology or outsourcing partner for this part of your process you should consider providers that offer automated classification and data extraction capabilities. Also, determine if the proposed solution can support the ingestion of electronic sources such as email since digital adoption is only going to continue to grow.
2. Document Management – Case Management
Many types of documents including claims forms, photographs, proof-of-purchase, police reports, audits and quotes are collected during the claims process. Ensuring that a system exists to effectively and dynamically share this variety of document formats with the right individuals is imperative.
3. Decision Making - Business Rules Engine
Many decisions made during the claims process are based on the policy holder’s coverage. Hence, these decisions require lookups to existing systems. Well established rules implemented effectively in a robust rules engine can further automate activities, thus saving claims examiners valuable time.
4. Payment – Digitally Enabled
Once a decision has been made to settle a claim, a check is generally cut that generates more paper work. In today’s society many individuals, especially younger clients, prefer to perform banking transactions electronically. This eliminates the necessity of visiting a bank to deposit a claims check. Electronic payment systems are a virtual requirement going forward not only for streamlining the claims process, but more importantly for meeting the expectations of the insured.
Other exciting technology advancements are prevalent in the insurance market with many new InsurTech startups partnering with major carriers to develop the next breakthrough in the industry. One area that is starting to grow in adoption is robotic process automation (RPA) and cognitive process automation. RPA is a logical step in reducing costs in your claims operation by eliminating the need for manual data entry tasks. Cognitive process automation helps clarify the context of what is being processed. Together these technologies are set to create a major shift for carriers and outsourcing companies alike to leverage what can be called the “digital worker” or “intelligent agent.”
By utilizing an operations maturity model you can secure a roadmap enabling your claims department to benchmark and continually improve efficiency and cost savings. Quick wins can be gained by offshoring. This provides the flexibility and financial structure to be competitive and responsive to customers while also reducing costs. Technology enablement is an imperative to gain efficiency and accuracy. By implementing these and other approaches, claims processing professionals can be well positioned for success in the days ahead.
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By James Allen, Director, BPO, Canon Business Process Services
Insurance Industry Insights
February 13, 2017