Processing claims takes a lot of time. Sometimes, it can take up to 30 days to evaluate each case based on the amount of required documents. But what if you have tens or hundreds of cases per day?
Manually processing your claims is risky because human error often goes unnoticed, leading to long turnaround times and decreased customer satisfaction. It’s also tough to spot a fraudulent document, or one that was already submitted, exposing you to regulatory compliance disasters.
Fortunately, there is a solution, and that is automation. With modern technologies like intelligent document processing (IDP), you can breeze through all your document tasks by automating data extraction to save time and money.
In this blog, we’ll explore everything you need to know about claims processing automation as well as picking the right solution for your company.
Let’s get started!
What is Claims Processing Automation?
Claims processing automation refers to using technology to automate document processing for insurance claims. Automation helps claims examiners, clerks, and adjusters extract data from documents and automatically verify it for faster decision-making.
Claims processing involves various documents to confirm the claimant’s eligibility for compensation. Here are some of the most common documents in claims processing:
- Invoices, receipts, or bills
- Insurance claim forms
- Proof of ownership or residency
- Identity documents
- Insurance cards
- Medical prescriptions
Now that we know which documents are involved in claims processing, let’s have a look at what a typical claim process looks like.
What Steps are in Claims Processing?
A typical claims process usually takes six steps from the moment of the report until the final decision. Each step may require documentation to ensure accuracy, compliance, and efficiency. Here are the most important steps in claims processing:
- Claim Reporting: After having an incident, the insured registers a claim by filling out an insurance claim form. For example, with health insurance claims automation, you can extract key details like the date, time, location, and reason for compensation, so you can open the case in no time.
- Claim Investigation: Your team conducts a thorough investigation to check the claim’s authenticity. Then, you also request any relevant documentation or evidence necessary to assess the claim’s validity, and you can do it even faster with automation.
- Claim Assessment: After collecting the information from the insured as outlined in the insurance policy, you evaluate the damage and settling costs. Here you also consider any deductibles that apply, followed by a settlement offer. With automation, you can do this in no time.
- Settlement Offer: Based on your assessment, you offer a settlement to the policyholder. This offer describes the compensation or assistance you can provide to address the damage sustained, and the insured can choose to accept it or negotiate other options.
- Negotiation (if necessary): If the insured disagrees with your offer or feels that their needs are not adequately covered, they can engage in negotiations. After concluding any negotiations, the last step is to finalize the claim.
- Resolution and Closure: Upon reaching an agreement, you finish the claim process and provide the agreed-upon compensation or assistance. Should there be any remaining disputes, you make any further negotiations until a resolution is reached. Once resolved, the claim file is closed, marking the conclusion of the process.
Now that you know the steps involved in claims processing, let’s look at the technologies that make automating claims processing possible.
How Does Claims Processing Automation Work?
Intelligent document processing (IDP) is the leading technology behind claims process automation. This technology integrates various components, such as Optical Character Recognition (OCR), that work together to automate your entire document workflow.
Let’s look at some of these technologies, how they work, and how they can help you with claims processing automation.
Artificial Intelligence
Artificial intelligence (AI) is a technology that imitates the human mind by learning from information and making decisions by itself. Combined with OCR, it can extract meaning from documents or handwritten texts, which saves you time while reducing errors.
Thanks to IDP and AI, automated claims processing has become more efficient, accurate, and scalable. Therefore, you can reduce manual errors, speed up claim decisions, and enhance customer satisfaction by providing faster responses throughout the claims process.
Natural Language Processing
Natural Language Processing (NLP) is a branch of AI that enables computers to understand the meaning of natural language as humans do. It enables IDP solutions to analyze unstructured text data, such as claim descriptions and customer notes, for easier document categorization.
IDP and NLP simplify data extraction within your claims by capturing and processing data from multiple sources. This helps you handle a large volume of claims more effectively while reducing manual intervention, minimizing errors, and reducing fraud.
Machine Learning
Machine learning (ML) works together with IDP to help algorithms recognize patterns and extract relevant information from documents based on past examples. It improves data accuracy over time, enabling your team to make better-informed decisions.
Additionally, machine learning algorithms can help you identify and investigate suspicious activities more efficiently by detecting patterns indicative of fraudulent claims.
Robotic Process Automation (RPA)
Robotic process automation (RPA) is the use of digital workers who perform repetitive tasks of human workers by mimicking human actions. RPA makes insurance claims automation possible by deploying software robots to handle tasks such as the following:
- Extract data from documents
- Fill out claim forms
- Validate information against predefined rules
- Communicate with other systems to retrieve relevant data
- Perform calculations for claims adjustments
- Detect fraud
RPA streamlines your entire claims process, reducing errors, improving efficiency, and freeing up human resources for more important tasks.
You now know how these technologies work and how they can help you with automating insurance claims processing. Let’s now focus on the benefits of implementing these technologies into your workflow.
Benefits of Claims Processing Automation
Here are five main benefits of automated insurance claims processing:
- Higher efficiency and accuracy: Manually inputting data is prone to errors and can unnecessarily lengthen the claims processing time. With an automated OCR claims processing solution, you can reduce errors while ensuring consistency in processing your claims.
- Cost savings: In claims processing, labor costs can sometimes increase without prior notice, ultimately decreasing profits. Automation helps you reduce labor costs associated with manual claims processing, allowing you to easily automate any resource-intensive processes and save costs.
- Reduced fraud: Some IDP solutions are trained to spot any document fraud, minimizing the risk of making unjustified payments for ineligible claims. Saving time spent on document verification improves your decision-making while increasing productivity.
- Easier compliance: As humans, making mistakes is inevitable, which sometimes leads to noncompliance with relevant regulations. Whether it is fatigue, negligence, or deceit, processing claims can become unnecessarily complicated. With automation, you can easily comply with regulations and reduce the risk of fines and penalties.
- Reduced errors: After a certain amount of time, we usually lose focus and become distracted from our work. With an automated document processing solution, you can provide accurate and timely claims processing by eliminating manual data entry errors.
How to Pick the Right Claims Automation Solution
When considering a claims processing automation solution, you’ll want to research your options rigorously. Choosing your automation solution should reflect your business goals and that it has all the features you need.
Let’s look at some of the most essential aspects automated claims processing solutions should offer.
- Accurate Data Extraction: When selecting your automated solution, be sure it can extract data with over 99% accuracy, such as Klippa’s OCR software, from various claims documents.
- Built-in Fraud Detection: Catching fraudulent documents early on prevents any fraudsters from attempting to bypass your system, such as impersonating someone. So, look for a solution that can detect data anomalies in submitted documents.
- Integration with Existing Systems: In choosing your claims automation solution, look for seamless integration features with business systems, practice management software, and databases.
- Security and Compliance: Strong security and compliance measures protect you from data breaches and unauthorized access. Measures such as data masking can ensure you remain compliant with regulations like GDPR and HIPAA.
- Scalability and Flexibility: As you start automating your claims processing, you can decide how much automation you need. So, look for solutions that give you the flexibility to scale your automation solution according to your goals.
- User-Friendly Interface: Choose a solution with an intuitive interface that enhances your productivity and gives you control over your workflows. Klippa’s DocHorizon platform is easy to use and has a customizable drag-and-drop flow builder that can cater to your specific needs.
Automate Your Claims Processing with Klippa
Automating claims processing is becoming more prevalent in the insurance sector, with more companies adopting an IDP solution to streamline their claims processing. The manual approach to data entry and document cross-checking is becoming a thing of the past.
With Klippa DocHorizon, you can automate all your insurance claims processing workflows from receiving a claim to its resolution. You can also easily add a human-in-the-loop to achieve 100% data accuracy, ensuring you only process valid documents.
Here’s an overview of DocHorizon’s features to help you automate your claims-processing documents:
- Data extraction: Instantly obtain structured data from any part of your claims documents
- Data anonymization: Comply with regulations such as GDPR by masking sensitive data before sending it to databases
- Format conversion: Turn any image or PDF into searchable text and convert it into structured formats like JSON, XML, CSV, or XLSX
- Classification: Categorize claims documents based on your criteria for easier retrieval
- Application integration: Bring together your business software into Klippa for seamless claims processing
- Fraud detection: Catch and prevent fraudulent claims documents with duplicate detection and EXIF analysis
Are you ready to minimize financial risks while complying with regulatory requirements using automated claims processing? Then book a free demo below, or contact our specialists for more information.