By Shahin Hatamian, SVP Product Management and Marketing, Mitchell
We all know that technology advancement and adoption are vital to the future of the workers’ compensation industry and the insurance industry as a whole. In the past five or 10 years, and especially since the start of the COVID-19 pandemic, we’ve seen the industry put a much bigger emphasis on technology and automation. Today, the industry is on the precipice of a true tech transformation that will transform the way we help restore the lives of injured workers.
There is a lot of talk in the insurance industry at large about “touchless” claims, meaning claims that are fully automated from start to finish without human intervention. While this type of automation is possible for simpler claims, it’s not a practical application for workers’ compensation claims. In a Mitchell webinar held in April 2021, we surveyed an audience of workers’ compensation professionals and found that most of them had similar concerns. More than half of attendees said their most significant barrier to increasing claims automation stemmed from the need to keep human touch in claims processing as well as the complexity of workers’ compensation claims.
Workers’ compensation claim automation doesn’t have to be all or nothing—and it shouldn’t be. It’s absolutely vital that we keep the human connection and element of care in the claims process. The industry today should shift its mindset to think about how automation can supplement the great work their employees’ do to manage these complex claims, rather than replace it. Think of it as “touch-less” instead of “touchless.” When you automate touchpoints that require administrative work, it allows more time and opportunity for claims handlers to focus on more strategic or higher value tasks that ultimately help injured employees get back to their normal lives.
Practical, Low-Risk Applications of Automation in the Claims Process
Automating the workers’ compensation claims process doesn’t have to be complicated or incredibly high-tech. Taking smaller steps like implementing simple business rule automation helps mitigate the burden of repetitive tasks from adjusters’ workloads, and can go a long way in boosting not only efficiency, but consistency and overall claim outcomes as well. Below, we’ve outlined quick, low-risk steps claims organizations can follow to help enhance automation in a few of the most crucial parts of the claim lifecycle.
First Report of Injury (FROI)
The First Report of Injury process has a lot of potential for complex automation, but as mentioned above, claims organizations don’t need to implement the most complicated automation to see results. Simple business rules, or even basic predictive analytics capabilities, can evaluate FROI data and route each claim quickly to the appropriate claim handler or medical staff. Routine claims and simple customer interactions that are predictable—which could be about upwards of 60% of the volume in Mitchell’s experience—can be triaged by an automated system, helping to streamline the process.
Additionally, automation can help with FROI and Second Report of Injury (SROI) Electronic Data Interchange (EDI) reporting, which may be a tedious process for organizations processing claims from any of the 40 or so states that mandate it. Software solutions exist today that can fully automate the EDI process by utilizing claim data to identify and create EDI transactions, which are then sent to the states when they are due, in the appropriate IAIABC EDI format. At Mitchell, we have seen our clients increase automation by up to 75% when moving from a manual process to an automated process, while also improving compliance.
Utilization Review (UR)
Automation can play a role in several touchpoints in the UR process, starting with the request for authorization intake process. UR Request for Authorization (RFA) forms are not standardized across the country, leading to a very manual process for data entry into a utilization review system. This can be addressed by using UR software platforms that utilize better intake mechanisms such as portals and electronic RFAs. These systems can also help with paper requests by using optical character recognition tools to capture and input the data. The faster and more effectively RFA forms can be submitted and authorized, the sooner claimants can receive appropriate care.
There is also large potential for automation in this stage of the claim lifecycle by integrating the UR pre-authorization with the system a claim organization uses to review medical bills. If the bill review system can import UR determinations and apply them when the bills come in, it can significantly reduce the manual processing that is required in many programs today, which would increase efficiency, consistency and quality, and help prevent medical spend leakage.
Similar to the FROI stage, claims organizations also have an opportunity to use automation to triage claims for appropriate medical intervention, such as case management, through predictive modeling. These predictive models draw on millions of historical data points from other closed claims to evaluate the importance and impact of key factors at specific points in time, for example, if and when opioid use was involved. These models then generate automatic alerts to claims professionals or automated referrals to nurse case managers when needed.
Automation can also help free up nurse case managers from administrative tasks, giving them more time to focus on making personal connections, providing consultations and being empathetic—these are the things that drive different behaviors and actions, and can truly help improve outcomes and restore injured people’s lives.
Provider Billing and Payment
Automating the provider billing and payment process is one the lowest risk items on this list and has the potential to be the quickest win for claims organizations in terms of automation. Electronic billing has existed for a long time and more recently, ePayments have entered the industry, allowing claims organizations to use either ACH bank transactions or virtual credit card payments to pay providers for medical services.
Despite broad adoption of such notions in other industries, including group health, the workers’ compensation system has been slow to adopt these. Paper payments cost $8 on average for a single payment when you sum up the direct and indirect costs for a paper check, according to Mitchell data; implementing a hybrid program of ACH, virtual payments and paper checks can reduce this cost by up to 60%.
Bill review automation has been around for more than a decade, but some insurance payors still require people touch every single bill, despite the fact that many can be processed straight through without issue. Bill review is a nuanced process and requires a lot of expertise, but increasing straight-through processing using the right criteria for your organization reduces the amount of manual labor required to process medical and non-medical bills. It can help solve some of the challenges surfaced by the talent crisis the industry is facing as its most experienced claims professionals retire and a new generation enters the workforce. By automatically processing a subset of the bills that are straight-forward, you can also free up more time for staff to focus on complex billing situations and injured employees who need that human contact.
A capable rules engine, combined with easy access to bill review data and analytics, can help automate anywhere between 50%, and in some cases up to 90%, of the medical and non-medical bills an organization processes. In a recent Mitchell survey about the use of technology in the workers’ compensation claims process, close to a quarter of our respondents said they are getting more than 50% auto throughput. In contrast, there were a large number of survey respondents who said they were still not taking advantage of this opportunity that has been around for some time.
The Future of Automation in the Claims Process
As we look to the future, it’s absolutely critical that the industry embraces automation and doesn’t shy away from it. Automation is the future of claims processing, but it’s all about doing it in the right way: boosting efficiency, accuracy and accuracy to enable greater human interaction without taking away the level of care needed to help restore the lives of injured workers.
About Shahin Hatamian
Shahin Hatamian is senior vice president of product management and marketing for Mitchell International. He is responsible for product direction, marketing and strategic initiatives for Mitchell’s auto casualty and workers’ compensation software and service solutions. With 25 years of high-tech industry experience, Shahin has an extensive and proven knowledge of product development, marketing, organizational leadership, business strategy, partnerships and global business. Shahin holds a BSEE, an MSEE and an MBA.
About Mitchell International
Headquartered in San Diego, Calif., Mitchell International, Inc. delivers smart technology solutions and services to the auto insurance, collision repair, disability and workers’ compensation markets. Through deep industry expertise, connections throughout the insurance ecosystem and advanced technology such as artificial intelligence, extended reality and cloud-based solutions, Mitchell enables its customers and clients to succeed in today’s ever-changing environment. Each month, Mitchell processes tens of millions of transactions for more than 300 insurance providers, 20,000 collision repair facilities and 70,000 pharmacies. Its comprehensive solution and service portfolio empowers clients to restore lives after a challenging event.
Mitchell, Genex and Coventry have recently aligned their joint industry expertise and advanced technology solutions into a combined organization of more than 6,000 associates committed to simplifying and optimizing property, casualty and disability claims processes and services.
Mitchell is a WorkCompWire ad partner.
This is NOT a paid placement.