Simplifying the Claims Systems Selection Process

By James DeRosa | September 24, 2013

Evaluating and selecting a new claims management system can be overwhelming and can even prove to be an exasperating experience. There are a lot of choices and many vendors seem prepared to offer claim managers the sun, the moon and even throw-in the stars to win the business. I remember one extreme instance when I was attending an international trade show in Las Vegas where a software vendor had a really great power point show demonstrating what the program could do to improve my claims management tasks. When I asked to see actual functioning page templates, I discovered the demo was smoke and mirrors and the “new and improved” program was nothing more than the developer’s wish list. It hadn’t actually been fully created or tested, let alone proven in a real world claims environment.

There are several key factors to study when selecting claims management software to meet the most basic objectives of increasing your productivity, reducing item by item processing time, lowering overall costs and providing your claims staff with improved tools to analyze patterns to prevent future accidents.

Must Be Easy to Learn and Intuitive to Use

Claims staffers spend the majority of their day reviewing a high volume of claim files, adding observation notations, writing letters and approving claim payments. So, any new system needs to be instinctive to use and easy to traverse if it is to improve processing speed, overall efficiency and lower costs.

The performance speed of the claim module is critical. The average transaction should take only a few seconds to complete with no one transaction taking more than ten seconds.

Must be Functional

After reviewing the daily activities of a claim examiner, a logical list of the basic modules that any new claims systems should include are: letter generation, diaries, notepads, claim/claimant maintenance, vendor management, payments and reserves, reporting and check printing. Each of these modules will need to be tested for speed and ease of use in a real claims environment.

In addition, the system should allow you to enter payments in bulk and approve claim payments and reserves in batches. It also should have a document management module or at very least the ability to interface with a document management system.

Must Be Secure

Claims information should always be kept secure and safe with the use of multi-level access passwords and encrypted data. In addition, user access privileges, authority levels, and hierarchal associations with claims management for over the limit approvals are system necessities.

If you select a vendor hosted option, make sure the system is available and supported on a continuous and uninterrupted basis.

Must Be an Experienced Vendor

First, eliminate any vendor who has not “been there – done that” before at least a half dozen times. You do not want to be the beta test site for an inexperienced vendor.

Ask every vendor what specific system conversions they have completed including the original system sources, the conversion process, the amount of downtime involved and the methodology they used to balance reports. The conversion team experience level is critical to accomplishing a smooth transition.

Establish early on whether the vendor is willing to share enough information about the technology and software structure that will allow you to develop new reports, change business rules and expand the current capabilities as you expand into new products and markets in the future.

Must Be Properly Priced

Almost every vendor has their own pricing structure and the biggest challenge in side by side comparisons may be to identify the common denominators. Generally the software can be grouped into three primary pricing options: 1) transactional charges; 2) outright purchase with an annual maintenance fee; or 3) a lease option that allows you to minimize upfront costs and make small monthly payments. If the price structure of the system you are considering is not straight forward and simple to understand, move on to the next proposed software option. Be sure to negotiate volume discounts and a pre-established hourly rate for requested enhancements.

It is important to note that vendor demos do not accurately show system response times. When evaluating new system performance, a claims manager should always try to see the system in a claims production environment with real claims data and user load. In short, don’t buy vendor promises that can’t be demonstrated in your claims environment.

Many claims management software offerings now include newer capabilities, such as the ability to consolidate multiple lines of business to gain efficiencies and further enhance customer service.

Your end goal for a new claims management system should be to significantly reduce your operational costs, increase revenue by automating manually-intensive tasks, and reduce the potential for fraud and penalties. Improved customer satisfaction for clients, and claimants will be sure to follow.

image of James DeRosa

About James DeRosa

James DeRosa the founder/CEO of JDi Data Corporation, has successfully developed innovative technology software solutions for company growth and client satisfaction in the insurance industry for carriers, risk managers, third party administrators and public entities. Learn more at www.jdidata.com. More from James DeRosa
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Latest Comments

  • October 18, 2013 at 5:39 am
    Ashley Ross says:
    The author’s provided some very helpful tips for choosing insurance claims software. Like he mentioned, the market is flooded with products that offered by numerous vendors.... read more

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