A classic candidate for claims auto-adjudication:
A truck driver gets into an accident, resulting in a significant crack to the windshield. A claim is filed, and the driver waits to hear back. A few days later, an adjuster comes out to assess the damage and approves the windshield repair. The windshield gets fixed several days later. Ten days after it was filed, the $200 claim is finally closed – costing the company an additional $100 in processing fees from its TPA.
What if you could eliminate the processing fee, close the claim the same day it was filed – while improving service?
In certain situations, you can – by automatically adjudicating the claim.
Claims auto-adjudication takes the adjuster out of the equation by applying Artificial Intelligence (AI) techniques to the claims process. The idea is to create a fully automated, AI-assisted workflow that speeds up the transaction, improves responsiveness, and decreases human error. The result is a win for insurers and claimants alike.
Advantages of Claims Auto-Adjudication
Claims auto-adjudication is riding the wave of digitization transforming business everywhere. The world has grown more comfortable over the past year with a whole host of digital tools. And organizations are increasingly relying on technology to automate routine processes and boost efficiency across the business. It’s only natural to apply that concept to claims.
Research shows that by the year 2030, more than half of claims activities will have been replaced by automation. Much of that – including automatically routing claims to the appropriate adjuster and processing payments – is already happening. Automating the entire process is the next step.
By auto-adjudicating claims, you can:
- Get claims closed faster. Automatically adjudicating claims can reduce the claim lifecycle from weeks or months to mere minutes. And the faster a claim closes, the less expensive it tends to be.
- Reduce handling costs. TPAs charge to handle your claims. After all, they do have adjusters to pay. Eliminating the human interaction eliminates these fees – while adding consistency and transparency across the board.
- Reallocate resources. Adjusters are busy people, responsible for clearing dozens of claims each month. Removing small, routine claims from their to-do lists frees up adjusters’ time to focus on more complex claims where their experience can provide the most value.
- Improve service. Customer expectations have changed in today’s era of one-day delivery of almost anything – and demands for fast service for claims processing will likely continue to increase. Claimants appreciate the responsiveness and speedy turnaround time possible with claims auto-adjudication – which, in turn, leads to greater satisfaction. Indeed, speed of settlement is ranked as the top contributor to customer satisfaction with the claims experience.
Where Claims Auto-Adjudication Works Best
Auto-adjudication isn’t right for every claim, of course. Claims best suited for auto-adjudication are those that are low-cost and straightforward, involving property, general liability, or auto claims where no investigation is needed.
The windshield repair example referenced above, for instance, is a straightforward claim that would cost the same whether or not a human adjuster was involved. It’s simply not worth an adjuster’s time to get involved with settling these types of cut-and-dried claims. Technology can do the work more efficiently.
Workers’ compensation and many medical claims, on the other hand, are not good candidates for claims auto-adjudication. These claims are often high cost, involve multiple parties, and require extensive investigation to resolve. Workers’ comp also is subject to complex jurisdictional requirements that would be difficult to fulfill without human expertise – at least with current capabilities.
An added benefit of auto-adjudicating simple claims, however, is that it gives adjusters more time to devote to investigating and resolving complicated claims, where their expertise can truly make a difference in the outcome.
How to Be Successful with Claims Auto-Adjudication
Fraud is perhaps the biggest challenge when auto-adjudicating claims. Today’s claims auto-adjudication technology can build in specific rules to help prevent fraud. These rules can be customized to suit your own business needs. For instance:
- Impose a cost limit. Specify a maximum monetary value of the claim – say $250 – that can be auto-adjudicated. Over that limit and the claim gets routed to an adjuster.
- Require documentation. Ask claimants to upload police reports, photos, and/or other documentation as proof of the damage.
- Audit claims. Spot check auto-adjudicated claims on a regular basis to make sure they are being properly resolved according to your rules.
- Utilize reports. Run reports to identify “frequent flyers” and other anomalies to flag for further investigation.
The best way to keep costs down – and customer satisfaction up – has always been to resolve claims quickly and efficiently. While claims auto-adjudication is still in its infancy, rapid improvements in technology are certain to expand its application to ever-more complex claims. When it works, the efficiencies and value gained by claims auto-adjudication are hard to beat.
For more on adding efficiency to your claims management process, download our e-book, Claim Success: How to Achieve Excellence in Claims Management, or learn more about Riskonnect’s Claims Administration software.