Achieving Claims Excellence: Technology's Role as Part of a Total Solution
Insurers need consistency, quality and speed--not whiz-bang application features they don't use. They need efficiency: eliminating wasted time, effort and tasks. To help prevent a million-dollar mistake from happening, they need to uncover inconsistencies and other "red flags."
Buying a vendor's latest software does not necessarily change the system. Technology is part of the solution, but "systems" also include the processes and people in the claim-management chain. Because systems need to help us perform tasks better, claims excellence results from combining systems with appropriate processes.
The road to operational improvement begins with observing your outstanding employees and identifying why they are effective. Take those characteristics and apply them to your systems; look inside your organization for the best practices that work in your culture for your customers. These are the practices that need to be spread throughout your organization to become part of your operational standard. Another company's best practices may not be yours. Once you've identified your internal best practices, take them and enforce them with the help of technology.
FROM UNSTRUCTURED DATA TO STRUCTURED INFORMATION
To develop systemic best practices, you need to start with information about how you are targeting your mission, and continuously measure your progress toward that goal. In claims, the mission is fast, efficient, accurate claim payment. By paying claims quickly and accurately, you can provide superior customer service and reduce costs. Prompt handling can often prevent a routine claim from ballooning into a big one. The challenge is coordinating many moving parts: first- and third-party claimants, healthcare providers, attorneys, contractors and other vendors.
Frequently, information is unstructured and often exists in both hard-copy files and electronic form. Scanned documents and electronic notepads and diaries are a step up from paper claims files, but still have shortcomings.
Dispersed information is difficult to find, easy to lose and doesn't travel well. Hard-copy files fit this description to a tee, but even imaged documents are problematic because the images are often too large to be sent by e-mail or they are maintained in yet another application separate from the claims administration application.
When information is undefined or unstructured, it is difficult to assess if it is complete and accurate; it's also difficult to extract data and send it to another party. You cannot apply rules to unstructured data. As a result, insurers still need to continuously rekey information from third parties and even from sources within their own operations.
From the outset, get control over information by putting it in one place, with universal access, both in the office and the field, for all who need it. An enterprise-caliber claims application should provide a single solution that encompasses the entire spectrum of the organization's claims needs.
Such an application should be Internet-deployed to support easy third-party access and use by company staff in the field--the adjuster or appraiser who's inspecting a damaged car or taking a statement from a workers' comp claimant. To permit seamless exchange of information from many systems and sources, the enterprise application must incorporate a service-oriented architecture built on Web services technology like Sun's Java Enterprise Edition (known as J2EE) or Microsoft's .NET framework.
Structuring information is the key. Structure transforms an amorphous glob of data into usable, accessible information. Structured information provides for precise definition of data elements and enumerates values and measures.
A key step in gaining structure is to use smart scripting tools, templates and e-forms that include required data and structure. Relevant electronic templates can be defined for first notice of loss, injury assessment or reserve valuations. Taking this step to enforce the completeness and accuracy of information helps ensure that the answer to a query is almost always available and retrievable.
Integration with electronic forms permits transfer of information between e-forms and the database. This lets you target distribution of specific information to the right individuals. Third parties, such as vendors and claimants, can submit information via e-forms, thus avoiding the need (and expense) to rekey information.
Structured information can trigger automatic diaries, which are essentially a workflow engine. The diary application assesses the information in the claim, which triggers assignments to workflow queues and automatically generates forms, reports and letters. This processing can also provide alerts on regulatory compliance and identify large exposures.
Automated workflow queues route each task to the right person at the appropriate level of experience and expertise for the task. The system should also control task assignments, monitoring the number and age of open tasks, thus relieving management of an administrative burden and freeing their time for consultation with staff.
Process monitoring measures the value of triggers and alerts, valuable "currency" to be preserved. Having too many alerts wastes valuable staff time; eventually, many are ignored completely. Continuously monitoring alerts will enable organizations to preserve those that are critical to success and eliminate those that are simply background noise or legacies of "the way we've always done things."
KEYS TO ACHIEVING TANGIBLE SUCCESS
Reduce workload and remove "administrivia."Simple "one and done" claims should be diverted to technical support units, specializing in, say, small medical-only, auto-glass or minor general liability claims. Save your claims experts for high-value, high-dollar events.
Use automated reserve worksheets to calculate benefits. Automating reserve and benefit calculations creates consistency across the organization and improves quality.
Data gathering is an excellent training tool for new or less-skilled employees. They can obtain statements, get authorizations and follow up on vendors, thereby freeing adjusters to do the critical job of working with customers and vendors. Automating repetitive payments eliminates the adjusters' "payment babysitter" role so that they can focus on negotiations, relationship management and team communication.
Use your systems to automate status reporting of routine tasks. Your adjusters can then review by exception, based on custom reports. It simply does not make sense to force a manager to review 100 cases to find the five that require his or her assistance.
Identify the critical factors the manager uses to call these cases out and replicate those criteria in your system. Even if the system chooses a few extra, overall the operation is more efficient.
Involve the policyholder. The claims system should let claimants self-report the first notice of loss or injury by the Internet. Self-reporting offers a variety of options that reduce barriers to compliance while increasing data quality and speed. Better yet, it's accomplished on someone else's time.
Letting claimants, including internal ones, report claims promptly through the Web provides many benefits. Insurers should consider offering incentives for fast reporting, such as reduced deductibles, employee perks and faster payments. Remember, faster reporting means faster intervention; it provides the opportunity to identify fraud early and to establish and maintain good relationships with honest claimants.
Customers should be able to review the status of their claim via Web-based reports. Allowing the client or claimant to find information on his or her schedule eliminates the "statusing" workload on adjusters and improves the linkage between the customer and the claims team.
Create expert teams. Taking a cue from lean management techniques, the claims team should include experts like nurse case managers, loss-control professionals, rehabilitation specialists and fraud investigators. To coordinate the team's efforts effectively, the claims application should create auto-diaries that alert everyone about the actions taken by other team members.
This helps members initiate appropriate follow-up actions and ensures all team members are up to date about the status of a claim. The system also should incorporate "deskcodes" for automating team assignments across disciplines and allow any individual with the appropriate skill-set to act on an item.
The expert-team approach has many benefits, including improved ability to work effectively despite the absence of a team member. Furthermore, team members don't need to search for an activity that might affect their efforts to mitigate the claim; the activity is documented in their view of the system's data. Identifying issues early provides a tool for management review without disrupting work.
PRACTICE BEST PRACTICE
Identifying best practices in claims administration is necessary but not difficult. It is more difficult for carriers to meld best practices with the right mix of technology, people, service orientation, operational proficiency and leadership for their organization and goals. Here, practice does make perfect. Continuous evaluation of methods and procedures, along with identification of high-performers and their methods, will lead to new best practices. When implemented in your system, those best practices will continue to raise the performance of the entire organization. That's the path to true claims excellence.
is chief tactical officer with Insurity, a ChoicePoint company, in Hartford, Conn. Insurity is a leading provider of policy administration, claims management and underwriting software and services for the property/casualty industry.
March 1, 2008
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