At the 2016 Advisen Casualty Insights Conference, a panel discussed the changing role of Third Party Administrators (TPAs) due to new tools and methods of doing business. The panel was:
- Debbie Rogers – Senior Vice President, Global Risk Management – Aramark (moderator)
- Matt Merna – President – Chubb Global Casualty
- Dave North – President and CEO, Sedgwick
Question: How have technology changes impacted the claims handling process?
- People with claims expect back and forth communication with the TPA in their preferred format. This may be email, but it may be via a text. The claim handling model needs to adjust to meet these communication needs.
- Carriers and employers expect a constant flow of information from the TPA.
- The ability to do data mining in adjuster notes allows a significant opportunity for analytics that did not exist previously.
- We need to embrace data analytics as a new reality in claims handling. Anyone who is not actively using these are well behind the curve.
- Analytics can be used to automate some of the claims handling process. On smaller claims, it may not be necessary for a claims handler to actually touch the claims.
We need to keep in mind that predictive modeling doesn’t change anything. It is an analysis of the past. What you do with that analysis of the past is what provides the value. Building the analytics model is the first step, but unless you have a corresponding model that changes how you handle claims then it has no value.
Question: How are analytics producing cost savings?
- Since these models have been in place for several years we are now starting to see their impact. We are seeing quicker closer rates on claims. As time passes, you will be better able to demonstrate the impact of the models.
- Outcomes are measured in a variety of different ways. Cost is just one of those ways. States care about compliance issues. Injured workers care about how the claim impacts their lives.
- The carrier, regulator, employer, injured worker, and the vendors you work with are all your “clients” now and you must consider them when evaluating outcomes.
Brokers, carriers and TPAs all want to show they are adding value to their respective clients. These entities may all be running competing analytic models which may not produce consistent results. It is important that all these entities work together in the best interest of their common clients rather than trying to advance their own interests.
Question: How do you ensure the data you are using is relevant to the particular employer?
- It is important that you filter the data used in analytics to match as closely as possible to the client you are evaluating. Jurisdiction is a very important filter as is industry type.
- You must have sufficient data for the analysis to be valid. If you do not have enough data in a particular state or a particular industry type the results can be skewed.
- In some states, jurisdiction is overwhelmingly the most important data element because the laws are a significant factor in claim costs. (Illinois and California for example)
Question: How do you overcome skepticism around the analytics, especially from claims adjusters?
- It is important to educate the adjusters on the analytics and why they are important. You cannot assume they will just adopt what the analytics show.
- This is part of changing your claims culture. Once adjusters fully understand how the analytics can assist in their job they become more receptive to them.
- Analytics cannot replace claims handling. It is part of the decision making process.
Question: How do you see medical bill repricing evolving?
- Medical bill processing exists to satisfy statutory requirements. Providers bill higher than the fee schedule so that they have data to later argue the fee schedule needs to be increased.
- Some see little value in bill repricing, but it is a necessary part of the industry because the providers do not bill at the fee schedule amount.