Episode 027: Better Claims Processing for Insurance

Thanks for joining us today. My name is Kevin Ledgister and I am your host, and this podcast, Better Claims Processing for Insurance, is part one of a two part series where we take the best practices of going paperless to the world of insurance claims. So let’s go ahead and listen in.

For an insurance company, claims are one of the most challenging areas to manage and automate with technology. It often involves gathering information from various sources such as receipts, photos, medical information, video, legal certificates and forms. And because you have to interact with multiple parties with various approvals and communicate up with those customers, the process is often not entirely linear.

This is the reason why many insurance systems are efficient at storing claims related data, but lots of tools that digitally transform the claims process to make it more efficient. So with me today is Jeff Hiegert, who is a senior customer adviser of insurance at Hyland Software. And in the interest of full disclosure, Hyland Software is a partner of ImageSoft, and he will help us to understand, to take a holistic view of the claims process from start to finish and what technology is available to augment those core insurance systems. So Jeff, thank you for joining us today.

So if you could just kind of slow things down for us and kind of break this up into digestible chunks that we can process this. How can insurers really approach the claim, and what’s your overall approach? Where do you guys start from?

And that’s why I like to use a process that, or a function or a methodology kind of, we loosely call it the business process foundation when we work with our customers to help them identify and solve challenges within a business process like claims. And the foundation kind of came to light as I was working with some of my colleagues from other industries, government and healthcare and higher education. And the more we sort of talked through and deconstructed our core industry processes, the more similarities we’ve found. So in short, we sort of realized that virtually all business processes are built upon a simple five step foundation. And that first step is sort of, we label that as the initiate step, which means that every process has some sort of trigger that that starts the process, whether that’s a call from a customer, an internal associate, starting a process. Maybe there’s a trigger in a business system that kicks off the process, or there’s some sort of an event that happens to initiate the claim.

In claims, that’s called the first notice of loss. And that can occur in many different ways. And after a claim is initiated, it kind of goes into this collect step where necessary information that’s collected from the claimant, from examiners, from service providers, a variety of different sources, and all that information and data and forms and documents are kind of collected to make up the claim file. And once that information is collected or as it’s collected, there’s an evaluate phase that takes place where the claims examiner really kind of takes a look at the information that’s collected, compares that to the policy record, what are the policy stipulations, is this a covered event, is the person submitting the claim, are they eligible to submit the claim?

There’s a lot of decisions that kind of go on as that information is being collected. And then sort of either during the evaluate phase or after the evaluate phase, there’s an interact step, and that’s really where communication takes place to the internal and external stakeholders of the process, whether that’s the claimant, the agent, an internal resource, another department, right? There’s always communication that has to be required as the process is being performed. And then lastly, it kind of gets into an execution phase where the transaction that supports that process is actually executed in a core system, a core claims management system.

So while certainly every carrier is going to be different, and there’s a lot of layers across that foundation, when we look at a process like claims or any process for example, we try to simplify it by saying, “Okay, how does that process initiate? What information do you have to collect, and how do you make an evaluation or determination on what is it you’re going to do? And who do you have to interact with, and how do you interact with them? And then when you’re done, how do you execute that transaction? Where do you execute that transaction?”

And really kind of starting with that simple five step structure of a process and then sort of building upon that foundation of the what it is that you’re trying to accomplish, then you can sort of reconstruct or look at the how you execute those different phases and steps. So that’s a way for you to take a complex process like claims and break it down into a simple five step structure and then kind of reconstruct the feature functionality on top of that so you can make sure that you’re doing each of those five steps in the most efficient way.

So having just gone through having to make a recent claim myself, and fortunately this was in the property and casualty world where one of my vehicles was in an accident that eventually totaled the vehicle. There was a bunch of steps that we had to go through in terms of filing this actual claim. There’s forms to fill out. They were looking for different information. We got in contact with our agent as well. So there was a lot of things that happened to just to kind of initiate this whole step, and the police were there as well too. And so there’s all kinds of stuff going on. So when it comes to this idea of first notice of loss, this initial initiation of the process, what are some things that you guys talk about that can really help them streamline and maybe make it a little bit easier for the people that have to deal with it?

So, when Hyland works with our customer base, really we first want to understand the various ways that that someone can initiate a claim, right? Whether that’s through a phone call or downloading a form or whatever the case may be. And we really start to kind of peel that back and try to make it as easy and as simple for the consumer, the claimant, to initiate that claim, right? So if the process is, here’s the form, here’s the two or three forms that we have to have filled out. Are there things that we can do to make that easier for the claimant? We found that in many cases, most of the data, the data points or the fields or the information that the forms are asking the claimant to provide his information that in many cases the carrier already knows, right?

It’s part of the policy file or it’s been stored in another system somewhere. So asking a claimant to provide all of that information in a form may seem non-intrusive on the surface, but it can be really frustrating for someone who feels like they have to provide the same information over and over again. So we look at ways to take digital forms or paper-based forms and digitize them and make them more dynamic, right? So we can pre-populate data from other systems so the claimant really is just validating information rather than having to provide it in a blank form. So that kind of leveraging some of our forms products to do that. We’ve looked at a lot of technology partners as well. We just recently partnered with another technology vendor to launch a product called OnBase OnSite, which is a mobile field inspection and evidence collection solution.

And it just, again, it’s looking for ways to where, how can we put more feature and functionality in the hands of the claimant or the claims examiner who’s trying to initiate … Or the claims investigator, I’m sorry, who’s trying to initiate that claim and get more information at the beginning so that you don’t have to kind of ask for it all the way through the process. And so those are some ways that we have worked with our customers, and it really is about trying to reduce the amount of data and information that the claimant has to provide in order to initiate that claim. Because as I said, most of the information that is needed, we already know because of the policy record or other systems. And so just kind of help guide the claimant through that process, through a dynamic form, makes it much easier and simpler for them to get it started.

And a lot of times you just don’t have that. And I think being able to dynamically alter of those forms, or at least based on different responses, how you can narrow that down and reduce the amount of confusion that exists and get more accurate information up front is, I think that’s really key. So I think there’s a great part of the process. So we talked about this first notice of loss, right, this first, I need to make a claim. You just talked about different ways of automating that process. But now there’s usually this whole period that you go through where the insurance company, the adjusters, whoever it is, they need to take a look at, okay, we need some additional documentation to support your claim, right?

And you mentioned a couple of different things, such as there’s this person to have the … Are they the right person to file a claim? Is there a valid claim, and then how do we verify that? So that usually means that there’s a whole bunch of collection of documents, and that’s not always the easiest thing. Some years ago it was, you’d have to mail it in or you could fax it in, right? And now we’re in the days of e-mail and cell phones and everything’s electronic. How can we help with this collection phase of this business process framework? How do we make it easier for both for the person that’s going through loss, and also for the insurance carrier that has to process and gather these documents and put them all together?

At the same time, we can build business logic into those forms so that it’s dynamic, and as the claimant is checking boxes or answering questions and indicating particular situations or conditions of their claim, we can expose additional forms or hide information on the documents that we know aren’t going to be pertinent to that type of claim, right? Whereas maybe they’ve checked a box that said, if there was any injuries involved, and they indicated that yes, there were some injuries involved. At that point, we can go ahead and expose and present to them, here are the additional forms that you might need to fill out for any kind of medical claim or medical losses or injury reports and things like that, rather than waiting to get that form into the claim examiner’s hands and having them look at that and then have to turn around and go back to the claimant and say, “Oh, you checked this box. I need to now ask you for these additional forms.”

So a lot of the challenges that happen around the collect phase can be eliminated by really streamlining some of the technology advancements in the initiate phase. But ultimately there are going to be times where even with that in place, there’s going to be situations where as the claims examiner is reviewing data and information and content, they may come up with a need for something additional. And sometimes e-mail can work. Sometimes U.S. mail can work. But both of those, you’re at the mercy of the days and times that people are going to access those technologies, right?

And so that’s where we look at a solution like ShareBase, which is more of a … It’s an enterprise file sync and share where you can basically create a cloud-based online claim folder and send a link out to the claimant and say, “Hey, here’s … Click on this link. Inside there you’ll find the additional form that’s necessary.” They can fill it out and then put it back into that folder and when they’re done, it can automatically be ingested in OnBase and made part of that claim file. So you basically eliminate the printing it, putting it in a envelope and mailing it, and waiting three days for it to the get to the claimant. Then they have to fill it out and put it back in an envelope and wait for it to get here.

So you eliminate a lot of that kind of frustration by digitizing that collection process. And not only that, it’s a much more secure way to do that type of communication than it is an e-mail, especially if there’s life insurance or medical situations or things like that where you’re needing to share personal information or private information or HIPAA compliant information. You want to be able to communicate that out to your claimant in a secure manner. And oftentimes, e-mail and paper mail just don’t cut it in that regard.

So there’s a lot you can do in forms of technology. A lot of it’s going to depend on a carriers threshold for acceptance. They may not be comfortable letting any claim get paid without somebody taking look at it. And that’s fine. But if we can automate most of the steps from initiate to collect, and maybe even make some decisions in the evaluate phase and only present to the examiner, “Hey, here’s what we know and think about this claim,” and allow them to basically validate some of the decisions and some of the thresholds and, I mean it, it can greatly reduce the overall amount of time it takes from first notice of loss to settlement.

Thanks again for joining us on this podcast, and if you haven’t already done so, be sure to subscribe to Paperless Productivity where we tackle some of the biggest paper-based pain points facing organizations today. We’ll see you next time.