Today, various high-tech systems, such as GPS and online map services, help people navigate the physical world, taking the guesswork out of the task of getting from point A to point B.People can now go online, type in some address criteria and a map is generated instantly, detailing critical intersections, which way to go and when to turn. What the claims world needs is an analogous system-one that helps the claims adjuster navigate the complex terrain of business and regulatory requirements.
Claims adjusters spend a significant amount of their time researching and applying regulatory and compliance rules. To add to this, most of the rules and regulations governing the processing of a claim may be in disparate formats (print and electronic) or even in multiple locations (state or county Web sites). Once an adjuster finds the information, it is often written in a way that only a seasoned attorney can understand. Assuming the correct information is located, the claims professional then needs to apply the rules and regulations, identify exceptions and then process the claim.
Additionally, today's claims systems may not adequately address constantly changing regulatory issues. Each day, laws and regulations change in various states, making it difficult to keep claims systems up to date.
Adjusters need a system that is continually updated and kept current. The result is not just the increased time and associated expense, but also the lower quality of claims processing, the focus on compliance rather than care for the insured, the inability to train new adjusters rapidly and, overall, a much bigger process improvement issue for the entire claims department.
Using our analogy of a system that guides a person from point A to point B on a highway, the claims industry needs a similar system that can help a person navigate a claim quickly and efficiently. The moment a first notice of loss is filed, the claims decision system should provide and/or implement, on behalf of the adjuster, the requisite regulatory processes. For example, in the case of worker's compensation, the system may identify that a first report of injury (FROI) must be filed with the state instead of the county. All the necessary fields to file the first report, be it electronically or manually, may not be available, and the state may not be able to receive the FROIs.
The ideal world
In an ideal world, the moment a claim is entered, the system would trigger a best-practices guide indicating how the claim should be handled. It would guide the user through the process as to what documents should be filed, when the documents should they be filed, which forms are mandatory and who should receive the forms.
The system could also alert the adjuster that there is only one more day to file a certain form. Once a form is ready to be filed, the system would also be able to structure the data so it can be submitted via EDI or e-mailed as a PDF to the appropriate recipients.
If an accident report needs to be ordered, the system would do it automatically and create a diary when the report arrives. Should litigation result, the system would track it, and when the case is settled, the system would keep back-end financials in concert and close the claim.
Currently, there are several companies that specialize in creating and maintaining repositories of regulatory and compliance information. However, a majority of this information is not integrated into the business processes of the insurer. Conversely, there are companies that specialize in rules-based systems that can interpret an insurer's business processes but do not have compliance databases integrated into them.
What is lacking is a creative partnership that leverages the best of what both of these entities have to offer. This would allow new adjusters to efficiently navigate their way through a claim just as a seasoned adjuster would handle it.
Company-specific deviations, such as special procedures, fraud processes, etc., could be added to the system to make it even more valuable.
Ultimately, technology has delivered much efficiency in claims processing. However, the industry needs two players-technology services and compliance knowledgebase providers-to come together and deliver a unified solution.
Badri Narasimhan is vice president of claims strategy & business development at Insurity Inc. Hartford, Conn. He can be reached at Badri.Narasimhan@insurity.com.
