Paying the Price: The Financial Toll of Inefficient Claims Processing

Customers have a simple expectation for every question they ask: ‘Yes, it’s possible.’ Whether they desire zero interaction with an agent when settling claims or need a sympathetic ear to ease their minds, it should all be seamlessly achievable. And one thing they absolutely dislike is having to repeat themselves over and over, especially during stressful times. This makes claims processing one of the most aggravating experiences they encounter. In fact, 87% of customers say that their experience with claims processing is what decides whether they stick with their insurer or look elsewhere.

On the other side of this equation, for the claims processors, the challenge is just as daunting. They are buried under a mountain of data, tasked with verifying it against claims submissions and coordinating with agents and beneficiaries—all within a tight timeframe. It’s a difficult job but what makes it so?

Incomplete Automation Coverage of Corner Cases

Most claims are straightforward and can be smoothly automated, but exceptional scenarios crop up, making the procedure notably more complex and manual. It’s these corner cases that increase costs and create bottlenecks, and insurers are finding it hard to push past with straight-through processing. Interestingly, these few troublesome claims are responsible for most of the costs. This includes revenue losses from claims-related penalties and similar financial setbacks. Claims usually make up 70% or more of an insurer’s expenses, so finding efficiencies here directly boosts profitability.

Pockets of Innovation Create Data Silos

While there has been real progress in automating parts of the claims process—from the first steps of authorization right through to settlement—there are still gaps, particularly in integration. Claims processors don’t have a clear, unified view, which makes it tough to keep everything running smoothly and quickly pinpoint where things get stuck, especially with the exceptions. This lack of clarity drags out the processing time and affects how fast claims can be closed out. The team must manually gather more information—consult external systems, and refer to procedural documents to ensure compliance and accuracy. And processors find themselves switching between multiple systems to find the root causes. What would really help is a ‘single pane of glass’ approach, providing all the necessary information in one, easily accessible place

The Target State: Efficient and Automated Claims Systems

Let’s walk through a typical Healthcare insurance claim scenario after a complex medical procedure involving multiple specialists. A claimant submits their form via a mobile app. And because the medical procedure is complex and involves multiple specialists and therapies, the claims processors need additional documentation and must do thorough manual reviews. The real challenge begins when we realize that the claim information is scattered across different systems—doctor’s notes are stored in one electronic health record system, lab results come through a separate portal, and prescription data is managed in yet another system.

What could streamline this for the claims processor? An AI-powered platform that can seamlessly orchestrate the entire claims processing journey. Multiple capabilities of such a platform would work together to enable true straight-through processing. For instance, Document AI that can effortlessly pull and make sense of data from various sources and formats, pre-populate certain fields, and provide summaries for the rest. AI-powered claims prioritization that helps in sidestepping SLA breaches, while natural language copilots offer real-time guidance to processors, auto-detecting anomalies like duplicates.

Such an approach could help manifest everything the customers need for the straight-through processing of their claims. The benefits are quite attractive: improved customer satisfaction, lower claim costs, and an increased capacity to handle more claims efficiently.