The insurance industry continues to evolve each year, forcing carriers to adjust processes and policies in order to keep up with changing demands. One area that has continued to change is the increasing cost of third party bodily injury claims. According to Mitchell estimates, about half of all third party claims have attorney representation, and as a result, adjusters are getting more and more demand packages. The problem is that these packages are often disorganized, incomplete and inconsistent, making it challenging for adjusters to easily get an accurate picture of the claim. For the adjuster faced with reviewing these document packages, it can feel like an impossible challenge to organize, digitize and understand every detail. On the other hand, trying to process a claim with disorganized documentation makes it difficult to reach the most accurate settlement. Complex demand packages often result in lost opportunities, inaccurate injury assessments and inconsistent settlements if the right tools and processes are not in place.
In order to efficiently manage third party bodily injury claims and streamline the process, adjusters should leverage innovative technology and strategic process optimization designed specifically for demand management. This article will examine three key ways to improve demand management by leveraging a third party demand management service, using a team of professionals for document organization, medical coding and specialty review and providing adjusters with an expert claim workspace.
Leverage a demand organizing service
Organizing and digitizing claim documents is a huge, time-consuming task, but it is a crucial first step to successful settlement of third party claims. Insurance companies receive demand packages of various sizes with bills in a variety of formats – from an official, fully coded bill to one written on a napkin. Often adjusters or administrators are forced to sort through claim documents manually, sometimes using sticky notes as dividers and page markers for clarity. This process can take hours and referencing documents during a negotiation with an attorney or claimant is very inefficient and frustrating to all parties.
When adjusters are preparing for negotiations, they might be using only their past experience or judgment on which treatments to consider and the amount to offer as fair settlement instead of making fact-based decisions. Without solid evidence and strong negotiation points, the negotiation can be a tough process and lead to the insurance company settling at a higher amount than is reasonable or fair.
By using a demand organizing service optimized with leading edge technology and a deep understanding of the challenges insurers face, the process becomes much simpler as the claim is organized and digitized with a level of accuracy and quality that surpasses what an adjuster could compile on their own. In addition, service partners typically provide a summary and table of contents along with the organized documents, making it easier and quicker for the adjuster to get a high-level view of the claim at a glance and dig deeper into the details when necessary. This frees up the adjuster’s time to focus on the facts and how to analyze, negotiate and settle the claim using easily identifiable details as opposed to spending precious time trying to sort through mounds of paper. When it comes time to negotiate the claim, the adjuster is better prepared, has a fuller understanding of the injuries claimed and can more easily access the detailed documents if any questions arise. Overall, this process saves time, increases efficiency and improves the overall outcome.
Utilize professionals to analyze the demand
In addition to ensuring claim documents are properly organized, another key step in third party claim management is using a team of professionals to properly code and classify the medical bills and records. In the absence of coding professionals, adjusters may not capture many key details about the treatments conducted and injury diagnosis. In addition, many insurance carriers do not want to assume the significant cost to maintain internal resources to accurately capture all the bill details required to achieve a complete review of the medical condition of the claimant. Without proper medical bill coding, an adjuster could be accepting injuries not related to the claim or considering treatments and associated costs not relevant to the claim.
Using trained and certified coders with a background on how to manage third party medical claims helps fill-in the gaps on bills with missing or incorrect information, catch improper provider billing practices and further supply the correct information so that when it comes time to negotiate, adjusters have a more complete and accurate picture of injuries claimed, treatment provided and reasonableness based on industry standards.
Additionally, using a review service that integrates nurse review is extremely valuable, especially as bodily injury severity continues to increase and treatments become more complex. For example, from 2011 to 2015, the frequency of claimants with nerve or disk injuries has increased by 18 percent, according to analysis reported in a white paper Mitchell released on the state of third party auto claims. Nurse reviewers not only provide recommendations that are easy-to-understand, but also help combat higher prices and overutilization of certain medical services. Nurse review is most valuable when the service employs registered nurses or doctors who are familiar with trauma care and can do a complete deep-dive review of the claimant’s current medical records. When the nurses conduct their reviews in this manner, they can extract the most important information from the medical records and claim file, then point out inconsistencies in the type or course of treatment. When these discrepancies are noted, detailed negotiation points can assist adjusters with settling the claim.
When a nurse review is executed correctly, it can also help insurance companies achieve significant cost containment, as a recent case example illustrates. After a minor fender-bender, a claimant had symptoms of chest pain that led to open heart surgery and hospital bills of almost $200,000. While the plaintiff’s attorney argued that the claimant’s heart issues were a result of the accident, the nurse review found details that demonstrated the heart conditions were pre-existing thus supporting the auto insurance carrier’s denial of payment for the unrelated treatments.
Provide adjusters with an expert claim workspace
Once a demand package is organized and properly coded, adjusters need to be able to easily work with the data in a way that increases efficiency and response time. This is especially important given time is of the essence when reviewing a demand package. An expert adjuster workspace complements the claim system and allows adjusters and administrators to surface key findings easily and escalate any claim or bill that might signify abnormal treatment, fraud or overly costly bills.
In addition, using an adjuster workspace helps create a visual treatment timeline for the claim, outlining any gaps, delays or unusual courses of treatment so the adjuster can more clearly identify any actions that need to be taken. An integrated workspace also allows adjusters to build out their negotiation strategy within one tool, where they can visualize and access all the parts of the demand package. This better equips adjusters with the right information in order to improve overall settlement outcomes.
The future of demand management
While getting adjusters to change behavior and adopt new tools and processes can be challenging, the insurance industry is evolving and technological innovation is driving this change. Technology and services that organize and code a demand and provide a place for adjusters to get a full picture of that claim through a web browser, can ultimately improve the demand management process. While every third party bodily injury claim presents its own set of challenges, by strategically using technology, leveraging the process expertise of outside sources and taking these three steps, adjusters are better equipped to handle third party claims and negotiate successfully to reach a fair settlement.
By Norman Tyrrell, senior director of Product Management, Casualty Solutions Group, Mitchell International and Monica Zylstra, vice president, Service Operations, Casualty Solutions Group, Mitchell International
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