The Elephant in Your Claims Department
"The elephant in the Room” is a popular phrase that we often use to describe an obvious problem or difficult situation that people do not want to talk about. This phrase is particularly applicable in today’s insurance claim department, operating in a trans-formative digital age, yet clutching to best practices that are not only inefficient, but costly.
Here is what we know about your claims department:
1. Aging workforce and talent gap. Today, 38% of the workforce is 55 years of age or older, many of those individuals are claim leaders or executives in the insurance market and those handling actual claims have less experience and less training than their seasoned peers. Claim experts are retiring and taking their knowledge with them and meanwhile today’s desk level adjusters operate a heavily litigated claims environment, struggling with constantly changing regulatory requirements and deadlines. They are also expected to make claims liability determinations, identify compensable body parts and conditions, claim -related medications and medical costs, in the absence of adequate training or tools. It takes 5-7 years for a claims adjuster to get a “feel” for claims management, but in today’s changing, fluid workforce, the use of applications and tools to streamline and automate routine processes is an urgent operational need.
2. Inadequate medical reserve-setting. It is no secret that medical reserve setting is a pillar for insurance solvency and sustainability. According to the American Academy of Actuaries, in the past four decades, 100 - or 1/3rd - of all Property and Casualty carriers were insolvent and 58% of insolvencies were due to under-reserving. Historically, adjusters have used home grown spreadsheets, minimalist market tools, “stair stepping” practices, projected settlement value, or loss run information to establish medical reserves and none of these methods offer any reasonable degree of accuracy in forecasting a medical reserve. The average life span of a claim is four years and most lifetime claim reserves are set at 60-90 days post-date of injury without a re-evaluation until settlement. As part of our research and development, we ran a comparison of medical forecasting by profession and what we learned is that in general, claim adjusters under-reserve 30%. An analysis of claims data across the industry reveals that most claim systems do not reflect the proper, compensable diagnosis at the onset of a claim or throughout the claim life cycle, meaning the compensable diagnosis is little understood. As part of a proof of concept to offer a SaaS platform to adjusters to forecast medical care we learned that with the rare exception, claim adjusters simply are not aware of what injuries or diagnosis are compensable to a claim and therefore what prescribed medications and treatments are actually related to the injury.
3. Who is responsible for Medicare Secondary Payer Compliance? In 2015 we conducted a random survey of non-group health plans’ Medicare Secondary Payer Compliance programs and the significant systems and process concerns driving non-compliance we identified still rings true for most payers, five years later. Senior claims leadership and managers place the responsibility for Medicare Secondary Payer Compliance and MMSEA Section 111 CMS Report squarely on the adjusters’ desk yet have no confidence in adjusters’ skills to identify or manage this regulatory compliance component of a claim settlement. Further, there are no systems in place for compliance measuring and monitoring.
4. Managing remote claims adjusters. The result of COVID-19 in scattering workers to remote, home environments, has created both an opportunity and a challenge. The opportunity to demonstrate productivity at a lower overhead cost that increases employee satisfaction is an argument for maintaining remote work beyond the pandemic into the future. However, peer to peer hands-on learning and the measuring and monitoring of employee productivity and performance just got harder, creating an urgent need for platforms to streamline, organize and quantify productivity, quality, and customer satisfaction. Solving this dilemma requires companies to adopt technologies suitable for managing both operations workflow and claims outcomes. Today's workers want their companies to commit to using technology that make their workloads easier.
"Nothing turns off millennials more quickly than coming to work on day one and facing a legacy system dating back to the mid-1980s, with less sophistication than many of the personal devices they use." -Michael Costonis, Accenture
5. The technology revolution. Innovative technology is more accessible than ever before. Cloud computing has ushered in an era of experimentation and innovation that typically has only been accessible to the deepest pockets. This has created an enormous opportunity for organizations who have typically operated under a risk averse culture to think about the art of the possible and to re-imagine legacy processes through the eyes of innovative technology. The potential upside is massive. According to Accenture, Insurers who embrace digital transformation report a 65% cost reduction and a 90% reduction in turnaround time on key processes. Younger workers expect technology and tools which augment or can assist in operational-izing their workflow and performance. Customers expect claim decisions and results in real time at a lower cost, they want a friction-less “Amazon” experience. The “Amazon” experience is synonymous with what customers expect from their insurance experience going forwards. For a long time, the claims experience has been bogged down with friction, a painful and lengthy journey littered with fragmented and costly touch points along the way. At Care Bridge International, we employ a three-pronged approach that draws together the very best of people, process and technology to deliver a claims experience that places people and data-driven insight at the heart of what we do.
Coming Soon …. CARE Forward Live!
Tuesday, September 8 - September 16
Care Bridge International calculates medical exposure for bodily injury claim reserves, medical damages for litigation, and Medicare Set Asides, simply and rapidly, using machine learning t