Part III: The Current State of Claims (Conclusion)

By Heather & Trevor Garbers

This is the final article in our three-part series on claims. This was an important topic for us to cover as technological advances have changed the demand for services from our consumer, and we as an industry need to evolve to meet their expectations. What do we mean by that? Today, your OnStar system knows if you have been in a car accident and can call for help. You can even submit a claim to your car insurance carrier from your smartphone within minutes. While filing out a paper claim form and mailing or faxing it to the carrier (after waiting weeks for itemized EOBs to come in or for your Physician to complete an APS), is a good fit for some individuals to file claims, it is not a fit for the changing demographics of the workforce.

Should the employee benefits industry leverage technology to evolve similarly to the car insurance industry? This question is important for us to ask when it comes to engagement and persistency rates. If the claims process is difficult, the perceived value of the plans declines, and it impacts enrollment rates and the number of individuals canceling their coverage after the first claim attempt.

At this point, my own 80-year-old grandmother orders from Amazon on her smartphone, uses online banking to manage her accounts and even transfers $25 into my account every October 1st. Today, we have generations in the workforce that do not know what a fax machine is, have never stepped inside a physical bank, and may not own a desktop computer or printer, and we need to meet them where they are to maintain engagement of these benefits.

Our first articles in this series shared insights from the Carrier point of view and then from Brokers across different segments in the marketplace.

This time, we have interviewed stakeholders from an outside point of view, the vendors behind the systems that are trying to enhance the process today. Christy Traupe (CT) is SVP Claims and Absence with FINEOS and Tracy Funk (TF) is the Supplemental Benefits Practice Lead at Benefits Science Technologies, a Multiplan Company. FINEOS is a global software company providing modern customer-centric core software to the Employee Benefits and Life, Accident and Health industry. Benefit Science Technologies combines world-class technical knowledge and practical experience to harness powerful data science insights for the healthcare industry.

What is the average utilization of supplemental health products today and what should it be?

TF – Based on our research, the utilization of supplemental health products still remains quite low today. Our findings indicate that less than 40% of eligible claims are filed, which is a clear indication that the industry needs to work towards improving utilization. Employers who provide supplemental benefits to their employees should anticipate that their trusted advisors and supplemental carrier partners have a claims integration strategy in place to address this issue.

CT - Utilization is still low, but it is increasing. According to an Aon survey in the SHRM article, “Employees Want Voluntary Benefits but Don’t Always Understand Them,” Accident Insurance (AI) and Critical Illness (CI) utilization both went up 10% from 2021 to 2022. CI went from 16% in 2021 to 27% in 2022 and AI went from 13% to 23% across that period. I don’t know if there is a specific benchmark for what utilization should be but I do think it is a measure of success if utilization continues to increase over time.

What does claims integration mean and how does it work?

CT - Claims integration is treating a claimant’s life event that may result in multiple benefits as a single connected event. Other ways to frame it are using the data from one claim to identify other benefits the claimant might be eligible for; or allowing the claimant to file once with the carrier without having to specify which benefits they are filing a claim for. With claims integration, modern technology identifies the coverages a claimant has so that the claims managers know all the available benefits to review and approve. For example: A claimant might file a claim because they were in a car accident and had to stay in the hospital for surgery. They call the carrier to start a Short-Term Disability (STD) claim, but they also have AI and Hospital Indemnity (HI) that they may have forgotten about. As the STD claim is entered into the system, the case manager is notified that there are also AI and HI benefits available, so they can process all the claims at one time and the employee can be informed of – and receive payment for -- all benefits available to them at the same time.

TF – When it comes to claims integration, obviously the medical carriers that provide both medical and supplemental products have a competitive edge in implementing advanced claiming strategies due to their access to medical claims data. Meanwhile, other supplemental carriers that compete with these medical carriers may be actively seeking ways to comply with regulations, while still enabling their clients to maximize the value of their purchased products in a similar fashion. This involves a thorough assessment of the supplemental benefit plans and matching relevant medical claims codes such as ICD10, CPT, and DRG to those benefits.

As claims integration is growing in importance, why isn’t it more mainstream today? What works or doesn't work when it comes to claims integration?

TF - Access to medical claims data is crucial for successful claims integration, but it's not always easy to obtain. Some medical carriers may be hesitant to share data with perceived competitors, which can cause obstacles during implementation. It's also important to consider the supplemental plan provisions and how they align with medical claims codes when moving towards an auto-pay strategy. Incorrect mapping of claims data and policy provisions can result in missed or falsely identified potential claims, leading to frustration and confusion for employees. Effective communication is essential for employees to understand the benefits of claims integration. It's difficult for employees to appreciate the value of claims integration when they have to make quick benefit elections. A well communicated plan, user-friendly benefit administration platform, compliance knowledgeable consultant, compliant third-party data aggregator, and a supportive supplemental carrier are all essential components of a successful claims integration program. It's vital for carriers to clearly explain their process and get stakeholder buy-in early on.

CT - What works and doesn’t work both come down to data. What makes claims integration successful is having data in a single-source system and having that data well-defined. Having to pull data from multiple systems makes it more challenging because integrating across systems alone is difficult, and if those systems are older legacy systems, that will make it even harder. Getting the data translation to sync up between two systems will take a lot of planning, mapping, and testing to make sure it is consistent across systems. This isn’t impossible, but it will take time and planning.

What compliance regulations hinder additional efforts? Are there limitations to how data can be shared?

TF - For claims integration to be effective, there are various compliance requirements that must be met. Foremost, members must provide authorization for their claims data to be used for the purpose of identifying or paying out supplemental claims. While this can impact utilization, it is crucial for individuals to have the right to choose whether or not their personal claims data is used for claiming on a supplemental benefit. In addition, there must be an agreement in place between the health plan and the party that receives the medical claims data. For self-insured plans, this is typically a Business Associate Agreement (BAA).

Furthermore, the supplier of the medical claims data must also have a data share agreement in place to share the medical claims data. Medical carriers are accustomed to collaborating with trusted third-party data partners to assess the appropriate protections and ensure that there is a chain of BAA custody between the relevant stakeholders.

Where do you anticipate claims integration to be 2-3 years from now?

CT - As with everything today, technology will be a key component. Carriers that are still using multiple systems and/or legacy systems will definitely be trailing in the market for a few reasons. Claimants should expect an easy process to file for their benefits and get paid quickly. Because claims integration helps claimants to receive the fullest benefits possible to protect their financial well-being, it will become all the more important. Every organization is trying to find ways to cut costs, increase efficiency and raise customer satisfaction. If carriers can process multiple claims with fewer case managers because of claims integration, they can significantly reduce overall costs.

The adoption of auto-pay strategies will likely occur gradually as carriers become more comfortable with the data they use for claims integration. The level of sophistication of their integrated claims solution will determine how quickly a carrier is confident enough to move towards auto-file or auto-pay options, and most carriers will proceed cautiously. Stating that a carrier auto-pays supplemental claims is a powerful statement, and the carrier will not want to be in a position where they must revoke this due to unexpected outcomes. The most successful carriers in this area will have the capability to oversee the claims that are auto-paid and have numerous mechanisms to ensure their success, ranging from specific claims to a dollar threshold.

How can we increase utilization on these plans outside of claims integration?

CT - Ongoing education is the key to increasing any type of benefits utilization. A once-a-year communication that goes out during open enrollment is not enough to expect people to remember they have benefits available. You must meet people where they are and provide them with easy access to materials however, they would like to access them. Again, technology can be part of the solution. For example: campaigns through portals that popup banners to remind people of voluntary benefits that might be available, or short ondemand videos on an intranet site that can be viewed at an employee’s convenience. There are apps that can house all of your benefits information in one place, so a person can just look in the app to understand all the benefits they have signed up for when they need to file a claim. Employers can go beyond the carrier and work with all their vendors to include information in communications they are sending.

Our goal with this publication is to share information and thought leadership to drive innovation in our industry. Innovation in this context, means enhancing the member experience when it comes to claims. To get there, we need more widescale adoption of:

A completely online, mobile optimized or app based (did we mention paperless?), claims submission process.

Use of integrated technologies to assist in proactively notifying members of potential claims and eliminating redundancies in processing multiple claims for the same event.

More engagement with the consumer to enhance their comprehension of the plans and proactive nudges to file claims throughout the year. We’ve seen a shift away from mailing employees a copy of their certificate of coverage after they enroll, making the 18 minutes spent enrolling in benefits each year, the only time an employee thinks about these benefits throughout the year.

As these benefits are now mainstream, as clients expect to see an ROI on their benefit programs and as employees’ expect to see more value for their dollar, we need to leverage technology to enhance the employee experience if we want to appeal to the next generation of workers and increase plan adoption.

Christy Traupe, SVP Claims & Absence, FINEOS

Christy Traupe, SVP Claims and Absence, FINEOS - Christy has over 20 years of experience in disability and absence management. Prior to her position at FINEOSS, she spent 11 years at Reed Group as director of operations and director of product and quality, and 4 years in the employer space at DaVita where she led the leave of absence and the health and welfare teams.

Tracy Funk, Supplemental Benefits Practice Lead, Benefits Science Technologies, a Multiplan Company

Tracy Funk, Supplemental Benefits Practice Lead at Benefits Science Technologies, a Multiplan Company – Tracy is a seasoned professional with a wealth of experience in the employee benefits industry. At BST she is responsible for cultivating and expanding partnerships with supplemental benefit providers while driving innovation in the market. Tracy lives in Roswell, GA and is passionate about helping employers and employees maximize the value of their benefit plans.