AI is making a significant difference in the everyday life of humans in all spheres of activity. Being able to do so more efficiently, faster and at a lower cost, AI and robotics has the potential to transform one of the bugbears of the healthcare industry — insurance claim management.
Why claims management needs to be improved
The healthcare industry is constantly evolving. For private payers today, effective claims management goes beyond merely processing and paying claims — it also encompasses strategies to better manage medical costs and improve customer interactions.
Here are the leading causes for the surge in digital innovation in claims management:
- Increase in costs of healthcare
The increase in the number of elderly coupled with the corresponding prevalence in chronic and lifestyle diseases is one of the main causes for the rise in healthcare costs. Insurance cover has also increased from covering severe, acute illnesses or traumatic injuries to covering almost all medical conditions. This as well as advances in the quality and cost of care have also contributed significantly to the rise in healthcare costs.
2. Increase in consumer demands
After experiencing the benefits and convenience of digitisation in other industries, consumers today demand digital and user-friendly pathways that let them easily manage all aspects of their insurance policies.
3. Strict Government norms
Governmental mandates and policies leave very little space for insurers to earmark for anything other than services to their customers. In the United States, for example, 85 percent of all premiums paid for Individual market plans must be spent on medical services for members, leaving companies with only 15 percent to pay for administrative and overhead costs.
4. Increase in job expectations of insurance company employees
Insurance company employees — like those in other companies today, expect meaningful purpose and work flexibility. As a result, insurers are working towards greater flexibility and agility and new ways to work collaboratively. The frequency of training, cross-training and multi-skilling of employees is a norm today. These are not insignificant costs — therefore the imperative to reduce the cost of claims is even greater.
5. Large data volumes are both opportunities and challenges
The sheer quantity of health data ranging from claims records to wearable devices is expected to be 15 times greater in 2020 than in 2013. Managing the sheer volume of data is impossible on a manual level. In order to unlock the inherent value in the data generated — from savings to personalised offerings and care, digitisation is unavoidable.
Using AI to transform claims processing
The heavily paper-based and employee dependent execution frustrates not only customers, but is quite daunting for the insurance employees as well. Sea changes have already been brought into play by a few forward looking insurers who have leveraged Artificial Intelligence to improve the claims process. Here are some of the changes:
- Adoption of Touchless Claims: From passing through multiple hands in a manual claim process, the use of AI in claims processing sees claims being sorted into those that can be processed completely automatically and those that need manual intervention due to concerns with the claims.
- Chatbots: Bringing in automated and effective interaction, the much desired feature of customised communication is easily achieved via chatbots. Customers have questions answered, claims resolved, products bought and policies renewed.
- Personalised Sales Technology: AI has the potential to collate and analyse customer data to personalise sales tactics and address a customers’ specific preferences and needs with relevant insurance products. This allows insurers to reduce the time spent on tedious underwriting processes, to receive alerts with regard to high risk customers and to offer their customers the benefits of a neatly personalised insurance plan.
Benefits for health insurers — greater efficiency, valid decisions
Embedding artificial intelligence in the process of hospital claims management offers multiple benefits at once, not just for insurers but also for patients:
- Potential for saving: Currently, reductions in claim amounts due to audit and rejection of false claims are in the range of 3 percent of the amount originally claimed. With the application of AI in insurance claim processing, an increase of one percentage point alone would afford health insurers of a mid-size German insurer additional savings of around EUR 500 million each.
- Focus on unusual claims: The AI driven cognitive system can very accurately identify unusual claims and sort them out according to the amount of reduction in claim amounts that can be achieved. With its hit rate being so high, the system precisely filters out almost all claims where the claim amount could be reduced.
- Validation for decisions made: Fraudulent claims detection can be automated and patterns can be identified by smart algorithms which also provide the reasons for which claims can be repudiated or certain portions of the claim denied.
- Improved process efficiency: The number of clerical errors that dogged manual claims processing is significantly reduced in AI based claims management.
- Faster turnaround time: The introduction of smart algorithms ensures that claims are quickly and accurately sorted automatically or referred for human intervention. This ensures that claims are cleared within the shortest possible time from filing of the claim.
Artificial Intelligence use cases:
- A Healthcare company has incorporated an AI driven solution into their process. Their reach covers more than 500 million service lines making up over 205 million unique claims that touch $268 billion in charges. The service leverages the company’s Intelligent Healthcare Network data from more than 2,200 payers, 5,500 hospitals/health systems, and across 900,000 physicians. Solutions and services across this Healthcare company’s portfolio are using artificial intelligence (AI) to help customers with improving payment accuracy, reducing denials, enhancing payment forecasting, and reducing administrative overhead. Their strategy is to bring AI capabilities to the entire healthcare financial and administrative ecosystem, and according to their chief AI Officer, claims lifecycle management is the logical place to start. By applying an AI solution to their data, they are delivering new health IT solutions that help customers address the financial pressures from healthcare costs in ways not previously possible.
- Another company “X” claims they can process claims faster and provide customers with fast payouts using AI, including a chatbot. Users can tap a button on the company’s mobile phone app in order to begin the claims process. The application uses AI to match the claim description to similar descriptions stored in its database, searching for any identical claims in order to determine if the claim is fraudulent. If the system determines the claim to be legitimate, the company says it will automatically approve the claim if it isn’t too complex. If the claim is deemed to be too complex, the chatbot will inform the user that a customer support representative (a human) will contact them as soon as possible.
Neutrinos is in the forefront of assisting companies with their digital transformation journeys. Using a digital-first approach Neutrinos can help insurers easily achieve their long-term vision of full digitalization, and help them leverage the potential in emerging technologies to meet their growth objectives. Reach out to our experts today.