The insurers interviewed have significant targets for optimizing the processing of medical records, with 43 percent of the survey group having targets above $500 million. The research was designed to identify key issues related to the processing, adjustment, and analysis of medical-related claims.

As we discovered, most insurers (79 percent) believe that their medical records processing is not fully optimized and requires further improvement.

Within those general confines, there are specific problems. For instance, one out of three of the executives interviewed mentioned the difficulty in accessing medical information and a lack of skill among adjusters, while about half of the insurers said that the lack of key performance indicators is the most important challenge they face. There are many other challenges that are perhaps less pressing but no less frustrating. These include the deficit of standard, consistent rules to evaluate claims, along with the difficulty of identifying complex and/or high-severity injury claims.

Survey respondents indicate that medical information is coming at them in all shapes, sizes, and formats. Simply sorting it out and figuring what it says is a major challenge, with the biggest problem that adjusters face being illegible handwriting. In fact, 47 percent of respondents cited illegible handwriting as an “important” or “very important” concern. Other frequently cited obstacles include:

• The absence of medical context.
• Missing documentation.
• Difficulty in accessing the medical information.
• Use of technical jargon and/or symbols.
• The adjuster's own lack of medical expertise.

Realign Technology Investments

Perhaps not surprisingly, given the information received, about one in five of the insurers surveyed do not meet their targets in terms of the medical records received and reviewed. Accenture believes that this also points to a need for re-alignment and re-direction of technology investment in this area.

While the majority of insurers have started implementing technologies to improve medical processing efficiency and accuracy—such as document imaging and management, streamlining workflow, bill review, and valuation—they still do not appear to be making great strides in taking advantage of the extensive information found in medical records. Accenture believes that, while these investments provide solid returns for carriers, they fall short of a need to re-think how medical information is acquired and handled. Adopting a more holistic view of medical history and available treatment data is in order, starting with assembling the data they already possess into a structured format via the claim process.

The structured format—with data presented consistently in a manner that allows for automated review of provider and treatment information—is an essential building block, not just for improving productivity and reducing cycle time, but also for accessing the wealth of information buried within medical claims.

Carriers can begin to separate themselves from the competition by then tapping into that information via analytics to create competitive advantage in terms of claim segmentation, fraud detection, and recovery. Investment in this area is a potential game-changer for motivated companies.

Advanced Analytics Support Handling

The use of predictive modeling, for instance, can help insurers sort and segregate claims that can be routinely processed from those needing attention from more highly trained adjusters. Getting more complex claims into the hands of the right people more quickly can generate significant returns in terms of accuracy. Structured data also allows for establishing reliable injury and treatment patterns, and for identifying claims that are out of pattern and thus merit additional attention.

The need for improvement is clear to insurers. The majority of those surveyed believe that optimizing medical records processing would lead to higher efficiencies and improved customer service. Survey results indicated that the greatest returns are enhancements in customer service, productivity, and reduced claim cycle time—with 71 percent of respondents noticing either “important” or “significant” benefits in those areas. Accenture has seen that these improvements in medical record/information handling drive significant returns to insurers. This seems to be a logical stepping stone to advanced analytics supporting medical claim handling.

Given the problems inherent in receiving, organizing, interpreting, and handling medical records, perhaps insurers can be forgiven for not utilizing the latest techniques for data analytics and analytical techniques, such as predictive modeling and data mining. The survey indicated that 69 percent of insurers perceived the need for improvement in predictive modeling, while 79 percent saw the need for improvement in data mining, and relatively large percentages of insurers (19 percent for predictive modeling and 14 percent for data mining) rated themselves as “poor” in these areas.

Further improvements in efficiency in claim personnel can be realized by aligning medical data harvesting to the correctly skilled resources. One widely expressed finding is this: Most of the insurers interviewed (69 percent) said their casualty and body injury adjusters spend, on average, more than 10 percent of their time organizing and interpreting medical information.

Insurers are doing a reasonably good job of allocating the work to the most appropriately skilled resources, but they are letting these highly skilled resources spend large amounts of time on medical information activities (such as reading illegible handwriting). It's unclear whether 10, 15, or perhaps 20 percent is the “correct” amount of time; however, all of this begs the question about how that percentage of time should be spent. The use of structured data, gathered and organized by medically trained professionals, can free adjusters to work on actual claim management, increasing their productivity while reducing leakage via overpayment and fraud.

Insurers also have an opportunity to improve the integration and standardization of medical records by increasing collaboration between health care providers and P&C carriers. Industry standards for medical records requests and transmission would reduce errors and repeated contacts in search of information. While this must represent a collective effort on the part of the industry, it is an effort that will pay significant dividends down the line.

Accenture provides claim services to more than 40 insurers and understands the complexity and the high degree of integration of claim processes. Attempts to improve specific parts of a function often move the bottleneck up or down the line. A holistic approach to medical claim processing — one that addresses business strategy, process, and systems integration — is more likely to yield significant and sustainable benefits when compared to a series of one-time-only technology fixes.

Many insurers are convinced that getting medical records processing right will have a major impact on the accuracy of the ultimate claim settlement. That will help customers as well as the insurers themselves, as everyone benefits from improvements in settlement efficiency, accuracy, and certainty.