The objective of this paper is to talk about the current state of the claims process and how an efficient and ideal claims system should be. This document is most relevant for the Indian insurance industry.
Claims Management - Edge through Efficiency<br />Objective<br />The objective of this paper is to talk about the current state of the claims process and how an efficient and ideal claims system should be. This document is most relevant for the Indian insurance industry.<br />Introduction<br />As Insurance companies are becoming more mature in age and volumes, the number of claims arising is also increasing. Claims management is one of the key business processes which have a direct impact on Customer Satisfaction and overall relationship with the carrier. Claims management accounts for approximately 40% of an insurer's administrative overhead. Based on various survey results, average customer satisfaction is ‘Poor’ after going through the claims process. This kind of resource-intensive function will result in such poor customer satisfaction.<br />Requirements for a Claims Management System<br />In claims processing, the main goal of an organization is to decrease claim processing cost. The same can be achieved by reduction in the claims processing TAT (turnaround time) and improvement in their closure rate. This, in turn, will not only help the carriers reduce the operational claims expenses but also result in better customer satisfaction. However, this process is often dampened by several inefficiencies – <br /><ul><li>Error prone human intervention
Time-sensitive dependencies on member signatures</li></ul>An efficient Claims Management System should be able to resolve the above issues and improve the performance of the insurance companies by providing the following functionality:<br /><ul><li>FNOL or Claim Registration
Standardization</li></ul> Claim Management Modules<br />PHealth Claims SolutionProvider ManagementPre Authorization,Case Management and Claim ManagementCOB and ReinsuranceInvestigation and OpinionsPayout ComputationRequirement ManagementFEWS<br />Trends in Health Insurance<br />The Health Insurance sector is an area of focus for most insurance companies in India now. Health insurance is now being projected as the fastest growing segment in the insurance industry, with an average growth of close to 40% in the last three years. It is also expected that if the current trend continues for the next few years, health insurance will turn out to be the second biggest business segment after motor insurance. The current size of Health insurance premiums is Rs 5125 crores and is expected to reach to Rs 30,000 crores by 2015. Hence it is very important to concentrate and lay strong foundations to ensure better claim processing and hence better customer service. Most of the companies in the Health LOB will most probably go with a TPA. This approach poses its own risks like:<br />Customer experience getting affected due to increased touch points <br />Exposing the entire customer and policy information to the TPA<br />TPAs having their own claim philosophy <br />TPAs also serving other carriers <br />Another trend that seems to be set is processing the Health Claims in house by the carriers. This is the right time for these service providers to wake up and take stock of what is going wrong. As insurance companies have a service based business model, they need to make sure that they are able to provide better service quality with lesser costs as compared to any other competition, including their own clients. Processing the claims in house will not only help an Insurance company get better control of the operations of claims expenses, but will also help in:<br />Achieving better customer satisfaction<br />Protecting the personal, policy and health information of the insured<br />Reducing frauds caused by TPA’s<br />In order to get more control and service their customers better, the carrier needs to form a complete repository of various service providers, the various services (surgeries, inpatient and outpatient services), procedures performed in the respective facilities (like lab works, X-rays etc.), the tariffs against each of these services, the list of doctors along with their registration numbers (this will ensure that all the doctors get registered). Each service provider should be rated based on the customer feedback. This will help the insurance company to decide if the provider needs to be blacklisted or de-empanelled, in order to constantly be able to service the customer better.<br />Some benefits and benchmarks published by the carriers processing claims in-house in India are:<br /><ul><li>97.3% beneficiaries were ‘Satisfied’ or ‘Very Satisfied’
Call center average speed of answer has fallen to two minutes
The application has been instrumental in detecting frauds and non-disclosures
Benchmarking of tariffs of the hospitals in the network has been achieved by the application
Reduction in fraudulent claims achieved due to built in fraud rules that help in quickly identifying blacklisted customer and hospitals
Achieved standardization</li></ul>From a futuristic point of view, the regulatory board needs to think of the following key points:<br /><ul><li>Coordination of Benefits
Inclusion of dental and vision LOB by the carriers
Inclusion of Pharmaceutical expense in the insurance
Standardization in the format the claim data is exchanged between the TPA, providers and carriers
Mandatory compliance of ICD-10 diagnosis codes
Protection of customers’ Personal Health Records and Medical Health Records
Paperless claim processing</li></ul>Selecting a Claims Management System<br />The lack of basic quality measures and standards for India’s insurance industry will delay significant real improvement in customer service.<br />Although there are many claim processing systems in India, insurance companies can identify the one that meets their requirements by asking questions like: <br /><ul><li>Is the system based on a standard?
Can additional LOB’s be added?</li></ul>Conclusion<br />Better use of technology, such as better claim solutions, telemedicine, etc. can efficiently provide better customer services, assuming the local infrastructure is in place to take advantage of it.<br />