So, you are considering a new claims software system. Your organization wants something great. You imagine a system that enables users to reduce costs and cycle time and increase throughput dramatically.
You also want to improve the vendor process and workflow efficiencies. You expect your new system to be in place for the next 20 to 30 years. With that in mind, it should be adaptable for growth as well as the inevitable changes.
Here’s the question. Are you thinking about extending access to your service providers using a shared claims software system? If not, why not?
What is a Shared Claims Software System?
A Shared Claims Software system allows an organization to extend direct access to external stakeholders. That’s right. In addition to optimizing the efficiency of internal staff and management, a shared system makes your service providers better. It does this by simply allowing users that are external to the organization to have login credentials and a set of defined permissions to view, add, edit or extract information.
In a shared system, specific workspaces that you populate and view are shared directly with others. Because risk and insurance involves a large number of vertically aligned service providers in the chain, a shared solution is a highly effective way of bringing many specialists together to a common location for information exchange. To create such a solution, the system designers must possess in-depth knowledge of each user’s contribution within the big picture workflow.
The key advantage of a shared solution for a claims department is that a common workspace eliminates the need for internal staff to request reports, receive and process reports and then re-type summary information. For many claim professionals, those tasks take up 80% or more of their entire workday. Worse yet, much of the effort is not ‘value-added’ because it is heavily administrative and only partly analytical.
There is a better way. In having direct access to the system, service providers such as defense counsel, damage appraisers, and assigned experts can deliver their work-product in the exact format and order preferred by you “their customer.” Direct access eliminates the need for processing, interpretation, and transcription from an externally provided document. It’s a direct pour into the claim mold.
The key disadvantage is that external service providers have access to your system. But never fear, this is where smartly designed software offers one of its most valuable tools. That is the two-pronged security feature of data isolation and user permissions. In data isolation, claim records not assigned to a vendor are not accessible.
Further, a “Rights and Permissions module” defines what pages and functions can be seen and operated by users based on that user’s assigned role. Limitations can be set such that external users may only view and edit certain areas of the system such as the litigation or subrogation screens. A rogue external user can be prevented from modifying data in places that should not be modified. And, a single question on the user-setup page tells the system who is “internal” and who is “external.”
External users can be “walled off” from viewing claim records that are not within their responsibility. With these security features, access is a highly manageable risk.
The Use Case for Litigated Claims
A perfect example of the benefits of sharing is seen in the litigation handling context. Litigated claim files rightfully garner a lot of attention. These are files that result in an exponentially higher cost in terms of time, energy and money. They often involve several outside service providers to assist with coverage issues, fact investigation, witness statements, legal research, and valuation.
Companies spend massive dollars on discovery and settlement efforts for litigated files. These matters typically have the longest cycle time and largest negative financial impact on results. So, how can a shared system minimize the blood-letting on a litigated file?
First, it is important to understand that a shared system does not change the respective roles and responsibilities of the parties involved. There is still a claim professional responsible for the overall handling of the claim file to resolution. That claim professional assigns and manages all service providers working the case.
Service providers perform a variety of functions from investigation and legal research to appraising damage and theorizing causes. Service providers conclude their work with reports that include findings, opinions, and recommendations.
The Problem – Excessive costs of information exchange between claims professionals and service providers. These costs are evidenced by rising headcounts, increasing pending claim volume, and increasingly poor quality of claims handling amid a level inflow of claims.
Current Process – The industry is predominantly using litigation report templates and emails to communicate. The defense firm (service provider) typically has dozens of clients, and each client has its own version of the “proper” litigation report template.
Claims professionals send email notifications to defense counsel to request overdue reports and grant extensions of time. Few claims professionals can keep up with their litigation caseload. Their requests for information and subsequent review of that information is often severely delayed. Defense attorneys are often unable to keep up with reporting deadlines and either fail to submit reports or submit them untimely for various reasons.
Additionally, defense firms are unable to keep up with the template differentiation across clients and subsequent changes in those templates as dictated by each insurance company from time to time. In this kind of slow traffic, claims start to turn sour for everyone involved.
Shared Software as A Solution – With a shared system, the claims professional directs the system administrator to add the service provider as a “vendor” on the claim record. Once complete, that service provider defense attorney can directly access the litigation management screen and other select features within a cloud-based system. Fields and content can be populated by the defense attorney with key information summarizing investigations, legal research, and valuation of the claim along with procedural developments in the case. Demands by plaintiffs can be tracked, and recommendations can be entered directly into the claim system.
This direct access eliminates the need for the defense attorney to locate the most up-to-date litigation template, and then complete and send for review. In turn, the claims professional must receive the report and translate or interpret key data into respective claim system fields. The shared solution brings the voice and the eyes of everyone involved in the same location where collaborative claim analysis can be accomplished.
Who Will Drive the Demand for This Feature?
The most likely scenario is that TPAs, startups, captive insurers or risk retention groups will push this innovation toward shared software. These organizations can quickly adapt their current systems or transfer to new systems with this capability. Vendors that charge hourly fees are not likely to push this efficiency although it would forge better relationships. Larger commercial carriers may have an incentive but lack the ability to pull this off in most cases.
Many insurers have struggled with implementing changes. Granting access to a vast number of service providers requires centralized controls and addressing security issues across an extensive network. This can be a roadblock in large bureaucracies that have built armies around the old methods.
Relatively smaller organizations like captives and risk retention groups are also more likely to outsource experts and create a broader group of external system users. That kind of structure would find tremendous value in a shared system that brings outsourced expertise inside the ‘production environment’ with an immediate impact.
Direct delivery of the work product of professional services in the desired location and format translates to significant value and a huge leap forward in claims handling and resolution. The concept has been tried before with incredible success. Many years ago, underwriters and software designers imagined an agent portal to serve customers better and eliminate redundancies. In that way, application information could be entered by agencies seeking to quote new business.
Direct entry into the system eliminates long wait times and enforces the validity of required information.
Conclusion
While futurists are working on artificial intelligence and blockchain, a number of easy solutions to claim handling inefficiencies remain unaddressed. The waste of exchanging information by use of emails, attachments, and disparate vendor templates that are all inconsistent with the destination client system along with all of the noisy administrative coordination to request, receive, review and translate work product is seriously harming quality and results.
There is an opportunity that brings real advancement to this process, and it lies in offering vendors direct access via a shared claims software system. In real practice, the failure to have sharing software creates far more risk and cost to the claims organization than providing managed access.
