Data and Claims: Unearthing the root cause for errors and delays

Errors, delays, omissions, denials – words that signify the challenges that Claims processing entails for insurers, impacting customer experience and brand reputation. Many factors come into play in the ability to settle claims accurately and in a timely manner: the complexity of the claim, the clarity and completeness of the information provided, and the customer’s understanding of the policy. In some cases, the process may be relatively straightforward to navigate, while others may be more challenging and require additional effort and documentation. 

So why do claims get delayed?

Customer errors

The claims process is usually triggered in a moment of emergency. This results in the customer, front-office claims executives, and agents experiencing stress and anxiety. Surprisingly enough, this moment of truth can be handled effectively. While we will arrive at that conversation in the later part of this blog, we should agree that claim submission is typically an arduous process for the customer with form-filling, document collection, and understanding a lot of policy nuances and riders. Some common customer errors include: 

• Mistakes in filling out claim forms
• Providing incorrect or incomplete information
• Failing to follow the correct procedures
• Misunderstanding the terms and conditions of the policy

Voluminous transactions

Voluminous transactions in insurance claims refer to a large number of claims that are filed simultaneously. This can happen in situations where a natural disaster, pandemic, or other event causes a large number of people to file insurance claims at the same time. In such situations, insurance companies may have difficulty processing all of the claims on time, which can lead to delays and other problems. Insurance companies may need to hire additional staff, implement new technology or processes, or seek the assistance of external organizations to ensure that claims are processed efficiently. 

Processing timely claims is a crucial aspect of the insurance process and plays an important role in establishing the insurance company’s brand image.

Additional data asks and investigations

A major cause of delays in claims processing is that the adjudicator requires additional inputs or clarifications on the claim. This can take the form of asking for additional data from the customer or triggering an investigation. In each case, this can add days or weeks to the claim processing time.

A significant issue impacting customer experience in claims is, getting repeated requests for data. Customers can get frustrated if they get two separate data asks sequentially when these could have been identified and sent together in one shot. Also, in some cases, the data being requested could be already present in previously submitted documents or could have been imputed from these.

Manual entries and data ratification

Manual entries and data ratification refers to the process of entering and verifying data related to insurance claims manually, rather than using automated systems. This can be necessary for situations where the data is complex, sensitive, or difficult to process automatically. 

In the insurance claims process, manual entries and data ratification may be used to verify the accuracy and completeness of the information provided by policyholders, to ensure that the claims are processed according to the terms of the policy, and to prevent fraud or other errors. 

This process can be time-consuming and labor-intensive, but it is essential for ensuring the integrity of the claims process and protecting the interests of both policyholders and insurance companies.

Claims processing delays and their impact on the insurance industry

Delays in processing insurance claims can result in a variety of losses for both policyholders and insurance companies. 

For policyholders, delays can result in financial hardship, as they may be unable to receive the benefits they are entitled to on time. This can lead to difficulty in paying bills, covering expenses or accessing necessary medical care. 

For insurance companies, delays can result in increased administrative costs, reduced customer satisfaction, and reputational damage. Also, delays can lead to disputes and potential legal action, further increasing costs and reducing profitability. 

To minimize the losses incurred due to delays in insurance claims, it is important for both policyholders and insurance companies to carefully manage the claims process and take steps to ensure that claims are processed efficiently and effectively.

It is time for insurers to step up to best practices in claims management

Insurance companies that have still not, in whole or in part, embraced digitization seek manual routes to tackle claims processing delays. Here, we examine a few such measures:

• Hiring additional staff to handle the increased workload and ensure that claims are processed efficiently.
• Implementing new technology or processes to automate or streamline the claims process, without much introspection, causing unnecessary short-term investments not yielding proper ROI.
• Providing training and support to staff to help them handle claims more efficiently and effectively.
• Developing policies and procedures to clearly define the roles and responsibilities of all parties involved in the claims process.
• Establishing clear communication channels between policyholders, insurance companies, and other stakeholders to facilitate the flow of information and reduce delays.
• Seeking the assistance of external organizations, such as claims adjusters or third-party administrators, to help manage the claims process.

It may seem a humongous task at this point, but handling insurance claims properly to avoid delays, not only improves the customer experience but also establishes the company as a preferred choice for its customer.

Manual processing, claims data, and the complexities they bring

The process of handling and verifying claims data can be time-consuming and labor-intensive. 

This process typically involves collecting and organizing information from a variety of sources, such as policy documents, medical records, and witness statements. The data must then be carefully reviewed and verified to ensure that it is complete, accurate, and consistent with the terms of the policy. This can require significant effort and attention to detail and may involve multiple rounds of review and verification. 

Additionally, the process may be further complicated by challenges such as incomplete or unclear information, disputes over coverage or benefits, or potential fraud. 

When you add manual processing to this mix, the complexity soars through the roof. Human error, even with maximum scrutiny, often finds its place and weighs down on time and costs. Not to forget the unending introspection into erroneous data which may go unnoticed until the final settlement leading to losses for the Insurer as well.

Overall, the actual process of claims data handling and verification can be lengthy and complex and requires careful management and coordination to ensure that it is completed efficiently and effectively.

Managing relationships, evading consumer malpractices

As much as we would want to avoid this discussion, the fact remains that unethical practices from insurance customers to procure funds via claims can create several challenges for insurance companies, leading to delays, increased costs, and potential disputes. Such behavior can also irrevocably damage the relationship between the insurance company and the policyholder. 

While insurance companies can implement a variety of measures to address this issue, the key concern here is not so much about how the policy is purchased or managed during settlement but how insurance companies can identify patterns in fraud to mitigate such risks before they occur. Accurate data management can play a significant role in backing up insurer decision-making towards claims settlement. Technology is an enabler towards this end. 

Transforming the industry using technology, the evolution of automation and the future

The innovation so far

The insurance claims industry has undergone significant changes in recent years due to the evolution of technology and the increasing use of automation. Many insurance companies are now using advanced software and systems to automate and streamline the claims process. This can help reduce errors, improve efficiency, and provide a better experience for policyholders. 

For example, some companies are using Artificial Intelligence (AI) and Machine Learning (ML) to analyze claims data and identify potential fraud, automate routine tasks, and make more accurate and timely decisions. Additionally, mobile technology and online platforms have made it easier for policyholders to file claims, track their status, and receive benefits. Overall, the evolution of technology has had a profound impact on the insurance claims industry and is likely to continue to shape its development in the coming years.

The future of Insurance Technology and extensive use of AI 

To address these issues, companies can use artificial intelligence (AI) to automate data entry processes and reduce the likelihood of errors. AI can be trained to read and extract information from handwritten records, which can help to reduce the amount of manual data entry required. Additionally, AI can be used to validate the accuracy of data and flag any missing or incorrect information, helping to ensure that claims are processed quickly and accurately.

Another way to improve the efficiency of claims processing is to implement a digital records system. This can help to reduce the need for paper records and make it easier to access and share information between providers. Digital records can also be integrated with AI systems to further automate and streamline the claims processing process.

Overall, the use of AI and digital records can help to improve the efficiency and accuracy of claims processing, leading to better experiences for patients and providers.

Takeaway

Proper claims case assignment and the use of automated systems can help increase the claims process’s efficiency in several ways. Some of the key benefits of these approaches include the following:

Improved accuracy and consistency

By assigning claims to the appropriate specialist or subject matter expert (SME), insurance companies can ensure that the claims are handled by individuals with the necessary expertise and experience. This can help improve the accuracy and consistency of the claims process and reduce the risk of errors or disputes.

Reduced processing time

Automated systems can help accelerate the claims process by automating routine tasks and allowing claims to be processed more quickly and efficiently. This can help reduce the time required to process claims and improve settlement turnaround time.

Improved customer satisfaction

Proper claims case assignment and automation can help provide a better experience for policyholders, by ensuring that their claims are handled by knowledgeable and experienced individuals. This can help improve customer satisfaction and trust and can reduce the risk of disputes or complaints.

Errors in claims processing may arise due to manual work and the repetitive nature of the process. Insurers who are future-ready have already made investments in AI and automation and have begun gaining an advantage over their peers. Clearly, leveraging technology can be a game changer in getting to the rock bottom of errors and delays in claims management.