In a 2020 report, McKinsey predicted that more than 50% of claims processing will be automated by 2030.
The report added that automation can not only reduce claims journey costs by 30%, but also improve accuracy by 4% and increase customer satisfaction by 15%.
The world produces 300 million tons of paper every year and annually an average American uses 700 pounds in paper and related tree-made products. This includes a huge amount of usage in the medical, hotel, travel, education and insurance billing processes during claims by employees.
With the mass adoption of automation and digital technologies, there’s hope that the global adult population—almost half of which are set to be millennials and Gen Z by 2030—is heading toward paperless future.
Where’s the challenge?
Claims are integral to any workplace, but they are not foolproof and fraudulent claims often result in significant losses to organizations.
Modernizing monolithic billing and claims processing is not an easy task as it includes complex areas like analysis, accounting, settlement of dues, tax and regulatory compliance, credit risk assessment and administrative tasks while determining and finalizing claims settlements.
But cognitive technologies are now enabling claim adjusters to access, identify, crosscheck and extract relevant data from the submitted paperwork. This is reducing fraud, providing accuracy and real-time insights, while bringing down costs and saving time.
Technologies critical to support improving the claims process
- Robotic Process Automation (RPA): Claim adjusters require RPA bots for automating the entire claims process, including first notice of loss, transactional processes, map claim distributions, adjustments and settlements.
- Artificial intelligence and machine learning: AI-ML is the best tool to identify fraud. It also studies behavioral patterns of potential customers, presenting insights to claim adjusters on possible trends.
- Big data: AI-ML works on big data to help claim adjusters with alerts where a probe is required. It works on these large amounts of data, segregating the actual and fake inputs, and ensuring accurate claims settlements.
- Blockchain: Secure to the core with no fraudulent activity allowed, blockchain’s smart contract brings in transparency for both sides, speeds up the process for claimants’ payments and leaves no room for duplication.
- Cloud: Cloud-based solutions ensure improved customer experience and allow insurance companies to innovate by leveraging AI-ML, big data and blockchain. Customers even get self-service options on cloud platforms.
Digital claim processing in action
Bringing the power of RPA, AI-ML and big data analytics, computer vision and natural language processing on one platform, HCLTech EXACTO™ successfully uses three key steps: process, interpret and extract.
Enabled with domain ontology that gets better with every new transaction and unsupervised learning, it results in a better processing speed and provides real-time claims processing with accuracy.
For example, a global financial/insurance organization approached HCLTech to help it devise a solution to take its slip/bill processing system digital. It needed a solution that could collate paperwork, most of which had handwritten elements, and deploy them to a digital database.
With EXACTO™, HCLTech was able to help revolutionize the processing system, providing 95% accuracy, a consistent rise in speed while scanning the slips and the ability to extract relevant data. Powered with an active learning module, the client was able to access business intelligence at a scale to achieve actionable outcomes.
HCLTech Claims Transformation integrates best-of-breed products, proprietary insights, tools, methodologies and service competencies. The solutions and analytics span all phases in the claims value chain: FNOL, allocation, assessment, settlement and recovery.
HCLTech solutions iSPARC (HCLTech proprietary claims benchmarking framework), iSPOC (a repository of industry-leading claims business processes built on ARIS), iPAS (a proprietary tool for process capability assessment) and partnerships with claims transformation leaders streamline claims management.
HCLTech Adjuster app has successfully brought down the cycle time by 20 minutes per claim in auto insurance and by 10 minutes per claim in disbursement, while increasing the ratio of straight-through processing (STP) to non-STP claims and reduced the average temporary total disability duration by 30%.
In another example, a US technology company with 100,000 customers faced increasing requirements for its recurring revenue model dealing in pure-play unified communication and contact center software. It wanted to enhance this model along with modernizing order-to-cash to enable a cloud model and adopt new best practices, while achieving scalability.
HCLTech’s overall program objective was to modernize the order-to-cash solution to enable a cloud model and adopt subscription economy best practices. It designed the model to include the company’s storefronts, ecommerce and subscription billing and real-time integrations.
Globally, this solution brought in 100% billing accuracy with alignment to the subscription model and zero billing loss, 60% uptick in subscriptions from SMBs, 100% increase in CSAT and 98% success rate in provisioning orders within two hours among other benefits.
Healthcare: The tough area
Healthcare billing and claims administration constitute nearly 3-4% of the revenues for payers and providers. The billing and insurance-related costs are estimated to be over $150 billion in the US annually. Transitioning to real-time claims processing is estimated to save at least $40 billion annually.
The current claims systems pose significant challenges making them ineffective to meet new business models, as well as compliance and regulatory needs. That’s why, real-time claims submission from EMR, clinical records using AI-ML-driven auto coding, offers the potential to significantly reduce the costs, while improving the overall payment cycle turnaround time for providers to enhance the claims and settlement experience on both sides.
HCLTech cloud and healthcare experts are now building a healthcare platform aimed to leverage healthcare claims where the processing time will be reduced from five days to 10 seconds.
Among the top features of this platform are healthcare data interface engine, AI/ML coding engine, native fast healthcare interoperability resources repository, business rules engine, API-based digital claims submission, analytics dashboard, cloud infrastructure and healthcare data protection toolkit.