Transforming Claims Management: The Impact of IoT, AI, and ML

Brian Janssen is a member of WPS Government Health Administrators executive team responsible for vision, leadership, and management of operational and technical strategy. He has a proven career in the healthcare industry, including hospital and clinic side project management, operations and process improvement, executive positions over both operations and technology, and overall technology strategy and execution.

Many industry experts claim that IoT, AI and ML are some of the groundbreaking technologies collectively transforming the world of insurance claims. What is your opinion on the long-term impact of these technologies on the claims processing and management landscape?

IoT, AI, and ML have the potential to bring about a significant transformation in the insurance claims processing and management landscape. The long-term impact of these technologies can be observed in several aspects: IoT, AI, and ML have the potential to bring about a significant transformation in the insurance claims processing and management landscape. The long-term impact of these technologies can be observed in several aspects:

Enhanced Efficiency: By automating routine tasks and leveraging AI algorithms, the claims processing time can be substantially reduced. This not only increases operational efficiency but also results in a better customer experience.

Improved Fraud Detection: Machine learning models can analyze vast amounts of data to identify patterns and anomalies, thereby helping insurers detect fraudulent activities more effectively. This will lead to considerable cost savings for the industry and ensure fair practices.

Personalized Insurance Policies: IoT devices can provide real-time data on individual behaviors and risks, allowing insurers to offer personalized policies tailored to the needs of their customers. This can result in more accurate risk assessment and improved pricing models.

Proactive Loss Prevention: IoT-enabled devices can monitor and alert policyholders about potential risks, such as leaks or fires, allowing them to take preventive action. This will not only help reduce the number of claims but also contribute to a safer environment.

" IoT-enabled devices can monitor and alert policyholders about potential risks, such as leaks or fires, allowing to take preventive action "

Enhanced Customer Experience: AI-powered chatbots and virtual assistants can provide instant support to customers, making the claims process more streamlined and user-friendly. This can lead to increased customer satisfaction and loyalty.

If that introduction sounded concise, it is because AI generated it. Despite some errors, the point has made significant transformations have already happened and now the industry must adapt and incorporate. One cannot open the news without articles on the evolution of AI, ML, and IoT evolutions at a pace unlike I have seen in my career. Focusing on claims processing and department management impacts, my human brain generated responses and long-term predictions will focus on several phases I anticipate in the upcoming years. To start, I anticipate that larger claims processing vendors will be integrating a tremendous amount of AI and ML into their core platform offerings. These investments will drive cost of insurance claim processing down, becoming new table stakes to be competitive. From a claims management perspective, this is going to allow companies to become more efficient over time as manual processing is removed. What is unique for AI and ML is that the automation has the ability to go much farther than simple manual tasks. We are already seeing ML and AI integration that augments claims processing areas not previously possible, such as replacing clinical decision-making. It must be noted, that unlike previous technical “waves” that resulted in greater focus and value on technologists, this round of advancement will have the opposite effects. In this first phase, there will be significant IT efficiencies that will be realized at the insurance company “out of the box” because these automations will be embedded within platforms and every other software offering instead of those that would have historically been developed in house by IT professionals.

Phase two will look quite different within the claims department and insurance companies as artificial intelligence becomes more mature. Once payers become more familiar with AI applications, they will likely be able to quickly build their own custom applications to accomplish specific functions and cater to specialized lines of business without specifically trained development staff. We are already seeing this today with AI ability to create content, and savvy developers have increased their output 10x. This trend will continue and allow business professionals to leverage tools and create their own technology applications, with minimal but important oversight by a few technology and security professionals. This will become an increasingly larger percentage of market shares. For example, insurance payers will be able to create modules like rules engines to process claims in lieu of large monolithic purchased platforms. Integrated delivery networks and those selling unique product lines will clearly have an advantage in this space where processing rules are much more focused and yet difficult to configure with more generalized platforms. This will also make market entry much easier given the reduction in initial capital expenditures necessary to customize infrastructure. Want to launch a product for alien abduction that requires unique processing rules to exclude Halloween and with a unique claim form? Let’s create a module for that on Tuesday. From a claims function perspective, this will also allow much more specialization in training and work product as those more general tasks will be automated and product lines efficiently tailored to specific demographics. This phase will also ultimately allow more modular approaches to immediate real time point of care or point of claim adjudication which has been the goal of the industry since the first claim processing platform was created.

" From a people management perspective, we will have to focus more time and attention to thoughtful communication to the staff that are the backbones of our business "

IoT will also change the landscape of all insurance types as we get closer to real time monitoring of behavior instead of a multi-year lag between decisions or behaviours and on which risk and premiums can be based. Who cannot notice the proliferation of Apple and Garmin watches and wonder when options will be available for those more comfortable than myself who wish to trade their daily health data for discounted premiums.

According to the latest reports, the claims processing software market is projected to reach $73.0 billion by 2030, growing at a CAGR of 8.3 percent. What according to you are the major factors that can contribute to this market growth?

In my opinion, the major factors largely center on increased platform capabilities and the penetration of new markets. Regarding new and modern capabilities, I should also add that table stakes to secure new business is also largely dependent on technological advancements in AI, Fraud, Analytics, and of course customer satisfaction. If an insurance company is going to be competitive for example in the ASO “administrative services only” line of business which is quite profitable, the platforms themselves must be capable of doing advanced analytics in order to show customer value, appropriately pay claims and detect fraud and other anomalies, as well as integrating with or even providing customer portals, IVRs integrations, and other self-service tools that fulfil customer demands. Of course, this all must be accomplished with enough automation that costs are offset with efficiency. It also must be noted that the drive towards cloud adoption is also now making those capabilities table stakes, with on premises only tools ripe for sunset. The need to have these capabilities in a cost effective and modular footprint is driving platform spend and conversions at a higher rate than before these game changing options were available. Essentially, we would expect to see more consumer demand and spend on TV’s when we go from standard viewing to high-definition capabilities. Regarding insurance technology, we no sooner got our arms around cloud computing adoption and already entering the AI and ML waves. For example, the advent of cloud-based development and deployment created a cottage industry of larger manufacturers being able to create lighter weight version of their platforms, and of course new startup platforms now directly competing for market share. Because of this, we are also seeing increase in overall market size. New cloud-based development offerings that are lighter weight are quickly putting claims processing software within reach of smaller organizations that previously would have been priced out of claims processing purchases or forced to leverage third party administrators to process behind the scenes of their products. These organizations are now able to reduce dependencies on TPAs and invest in their own lower cost platforms, thus increasing the overall market size.

What do you think are some of the latest innovations in the field of claims processing and management that can help insurers and claim managers enhance their customer services?

Some of the latest innovations to help insurance and claims managers enhance customer service have become more robust in the past few years. Insurance carriers are now tapping into more advanced analytics to better understand their customers as a foundation to build customer experience programs. These data points include both qualitative interactions with the customer, as well as quantitative data that describe actual behavior. Combined, this is leading to more focused investments on specific channels based on utilization and need. Classic channels include Portals and Customer Relationship Management application designs to guide call centers in their responses, however low-cost solutions are now including AI Generated Chabot’s and IVRs with natural language processing, and mobile first strategies to offer more self-service options than previously available. Recent advancements such as Google Duplex and most recently Microsoft’s incorporation of OpenAI into their Azure and Chabot technology are no less than monumental leaps forward regarding the ability of a payer to interact with customers and provide value in a scalable and cost effect manner. Additional analytic capabilities to track customer responses to both technical and human improvements are also easily integrated to create feedback loops to further refine the organizations approach to the customer experience. Again, in healthcare there is greater opportunity when organizations such the doctor’s office and insurance companies can collaborate on approach and execution of these implementations as the patient often do not have a clear picture of where one organizations responsibility end and another begins. Frustrations and experience that are negative are often attributed to both organizations.

Before your stint at WPS Health Insurance, what are some of your experiences that empowered you to gain deep expertise in Medicare policies and billing, co-ordination of benefits pending claims, and post adjudication work inventory?

I have had a career deeply rooted in healthcare. I originally started working on EHR implementations within hospitals and clinics, then transitioning to the payer side within an integrated delivery network. For the past eight years I have worked within commercial PPO, as well as the CIO for a Medicare Administrative Contractor.

On an ending note, what is your advice for other senior leaders and CXOs working in the claims processing and management sector?

My advice is that that Moore’s law (technology, specifically transistor technology, doubling every 18 months), is outdated. We are entering a new era of advancement that at the onset may double weekly or monthly. This is going to pose significant challenges with planning, execution, and of course personnel management within claims departments. If an implementation of new technology is going to take more than a year, there is a good chance it will be leapfrogged prior to go live. Given that, what will your pre-defined strategies entail on when to pivot? From a people management perspective, we will have to focus more time and attention to thoughtful communication to the staff that are the backbones of our business. Although technology will change the nature of our work and organizational designs across both business and technology departments, we have to keep in mind that time is not yet here.