Every year, the property and casualty industry pay out over $75 billion to medical providers. And with each claim, insurers are exposed to everything from innocent errors and internal mismanagement—to intentional fraud.
Claims programs play a crucial role in protecting insurers and ensuring profitability.
Consider these stats:
- After a fraudulent claim is paid, there’s only a 1% chance of recovery
- Two-thirds of large dollar claims—those costing over $1 million—start off as “fairly routine”
- 33% of insurance company failures are due to inadequate reserves
But despite the crucial role claims plays in keeping insurers protected and profitable, every year these programs are being asked to do more with less.
Balancing automation with payment integrity
In 2022, the number of possible diagnoses for casualty medical claims is set to more than triple, from 14,400 to 55,000. As claims become more complex, automation will be crucial to insurers’ longevity. Over 90% of claims are projected to settle via straight-through processing by 2030.
While automation will expedite claims processing, it also means fewer opportunities for manual intervention.
How can insurers manage the demand to automate, without sacrificing the customer experience—or payment integrity to providers?
The evolution of resolution options
Many claims’ programs rely on bill-level validation and claim-level aggregation to drive analytic efforts. These approaches often disregard the time and sequence of events leading up to the claim. Identifying when care is provided over the life of the claim is crucial for identifying providers who abuse the system, while also reducing false positives for fraud and abuse.
Claim pathways are the new frontier in casualty claims analysis, going beyond bill-level and claim-level approaches to deliver more powerful insights. The future of claims handling automation—and more accurate financial projections—will depend on insurers’ ability to build and analyze these pathways.
A claim pathway “starts” when an accident or injury occurs. Events over the life of a claim are recorded and sequenced for analysis. And while each pathway is unique, understanding the similarities and differences among diagnoses and procedures over time provides insurers with a new level of claims segmentation—and insights.
Connecting all claims analytics efforts—across fraud, core operations, and actuarial—then ensures every stakeholder has access to the most granular data possible. Because data is only processed once, it also saves time and streamlines operations.
Three big benefits of claims pathways
Claims pathways build stronger, more effective claims programs. And the results can grow your bottom line—and your organization’s customer base.
Benefit #1: Reduce expenses
The ability to orchestrate data once—for a variety of claims use cases—means less effort is required to curate model-ready data sets. This also means a more efficient use of high-skilled resources like data scientists and actuaries.
Benefit #2: Increase profitability
Claims pathways make it easier to detect and prevent fraud and abuse, so costly—and unnecessary—payouts are avoided. Better access to data also makes it easier to catch high-risk claims early on—and deploy clinical intervention before they can turn into more complicated scenarios.
Benefit #3: Improve claimant’s quality of life
The benefits of claims pathways go beyond dollars and cents, especially with medical claims. Improving the claims process means improving individuals’ quality of life, whether it’s helping claimants return to work sooner after a workplace injury or recover faster from a car accident.
How to get started with claim pathways
Managing the complexity of medical claims starts with access to data—all
the data. Sources may include everything from core transactional and third-party data to unstructured data such as physician notes or phone log transcriptions.
That’s why an analytics approach that makes all data accessible—without having to move it across your organization’s ecosystem—is crucial. The best casualty claims solutions bring analytics to the data—not the other way around.
Once dynamic data pipelines are established, and the right analytics are put in place, claim-level medical pathways need to be built. These enable insurers to engineer crucial time and sequence-based variables into their analytics efforts and deliver more meaningful insights to stakeholders.
But meaningful insights are only useful if the insights are trusted, believed—and most importantly—acted upon. A solution that delivers robust data lineages and explainable results in a business-friendly user interface, while enabling data scientists to utilize their tools of choice, will help ensure end-user adoption.
Find out how to build a future-ready claims program. Sign up for our “Navigating Casualty Claims in a Perplexing Medical System
Tim is an Insurance Industry Consultant at Teradata. He works across all major aspects of the insurance business value chain to derive business value with data and analytics. Having started his career as a reserving actuary in the Big 4, Tim is constantly straddling the lines between high-level strategy and the minutiae of data. Tim engages clients to improve core operations such as marketing, underwriting, claims, actuarial, and finance.
Tim started with Teradata in late 2018 and over the course of his tenure has worn both the hat of Industry Consultant and Business Consultant. While his focus is on insurance clients, the lines often blur, and he frequently finds himself working with broader FSI clients, Healthcare, and Government industries.
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