Keys to reducing losses for casualty claims

A new study from CCC Intelligent Solutions finds that carriers could save as much as 30% on payouts by improving the accuracy and management of their casualty claims. Based on two years of industry data, the report identifies the factors leading to the overpayment of claims.

Factors contributing to costlier claims
When it comes to bodily injury claims, adjusters are frequently tasked with assessing a wide range of factors and often have to determine between treatment for unrelated pre-existing conditions such as arthritis, obesity and other issues that can contribute to more complex medical conditions in a claim. The report found that unrelated injuries can severely impact severity and costs for a claim, often requiring prolonged medical treatment and increasing the billing associated with it.

The report also identified billing irregularities for medical treatment as a contributing factor to claims leakage. Unbundling service charges, duplicate billing and prices not associated with any benchmarks or regulation can increase costs as carriers end up paying for services or treatment above the normal recommendations. The report found that claims submitted to a bill review audit and manual review by a nurse resulted in an average adjustment of 65% of the cost, meaning only 35% of a claim was actually recommended for payment.

According to the report, the average medical bill submission was $26,000, which could be reduced to a recommendation of $9,000 with a 65% adjustment upon review. The suggested average leakage on a $25,000 personal auto body claim is $7,000 per claim, some of which can be attributed to unsupported or inflated medical costs.

The third factor affecting claims leakage is a shift in medical treatment as claimants seek more interventional medical care as opposed to physical therapy or chiropractic treatments.

Mitigating claims leakage
When it comes to fighting overpayment of claims, carriers have several actions they can employ. There are a host of tools like bill analysis and review engines that can sort through vast amounts of data. In addition, utilizing trained medical professionals who can review the invoices for accuracy and help identify inflated charges can have a substantial impact. Utilizing these tools can help with identifying billing inconsistencies, help create realistic benchmarks and assist claims adjusters and other staff in recognizing either potentially inflated or unrelated charges.

Complementing these efforts are training programs for adjusters to help them become better versed in negotiating payments, help them understand medical jargon and enhance their general knowledge as they discuss the claims with those involved. Despite the myriad of technologies available to review data, knowledgeable claims adjusters can be excellent resources for carriers and help reduce claims leakage.

"Now more than ever, carriers must employ targeted strategies to improve accuracy. Given ongoing challenges such as rising medical costs and treatment pattern mismatches, along with significant labor challenges in claims departments, it's clear that relying on a 'back to basics' approach to train adjusters on proper bill evaluation is not enough," said Kevin Moynihan, vice president, product management at CCC Intelligent Solutions. "Utilizing technology to identify potential issues sooner and elevate those risks to the surface in a measurable way is essential. This empowers adjusters with information that allows them to skill ramp faster and exercise good judgment."

Resources like predictive modeling and data analytics can provide early indications as to the severity of a claim or other issues that should be monitored. Early identification allows carriers to be proactive and identify effective next steps, so the claimant gets the best care, and the costs are better managed from the outset.

Identifying the issues and solutions can help carriers manage claims leakage effectively, creating a better experience for claimants and insurers alike.