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Tech vendors focused on enhancing existing tools
By Michael Bradford
What is old is new again in claims management technology for self-insured employers.
Complex and expensive systems developed in recent years to help self-insureds or their
third-party administrators manage property/casualty and health care claims are being
enhanced and upgraded as vendors seek to make their current offerings better, rather than
rolling out completely new systems.
"I'm not aware of any watershed changes on the claims management side of
things," said Ralph Kimmich, director of compensation and strategic initiatives at
Southwest Airlines in Dallas. He said the airline recently switched to a different claims
administrator for Southwest's self-insured health benefits, in part because the new
insurer had made a bigger commitment to invest in and develop its technological
capabilities.
Other self-insureds agree that they don't expect to find a new "killer
application" that will steer them toward a particular vendor or make claims
management a walk in the park; they just want a logical and easy-to-use system.
"A claim is a claim," said Gregory J. Bych, deputy director of risk management
for the city of San Diego. And managing claims means going through a certain
"consistent process. I haven't seen anything that's new or late and great" and
that will radically change the way claims are handled, he said.
San Diego in April completed an overhaul of its claims administration system for its
self-insured workers compensation program, choosing a tool from Valley Oak Systems because
it had up-to-date user capabilities "that we really wanted in a system," Mr.
Bych sid. In evaluating proposals from vendors, "my observation was that they all
could do claims management; the problem was, some of them were very dated," he said.
The user capabilities included an interface with a bill review vendor and one with a
24-hour employee call center that allows automated injury reports to be promptly entered
into the system.
Mr. Bych pointed out that the city's claims adjusters really liked the VOS Portal system
because of the way it "functioned logically," in much the same way adjusters
think. "We took a big note of that."
When shopping for a system, risk and benefit managers are finding few new service
providers. The complexity and expense of bringing systems to market, along with some
consolidation among vendors, has helped hold steady the number of vendors and new
products, observers say.
"I haven't seen any significant new entrants," said Richard Denning, president
of Shelter Island Risk Services in Shelter Island, N.Y. "It's likely that we may be
seeing some dropouts."
To distinguish themselves, vendors tout their particular strengths and emphasize
enhancements that improve their offerings.
GAB Robins North America Inc., for example, looks to help companies that face data
conversion challenges when accumulating claims information from different sources in
different formats.
"We see it as a core competency," said Mike Mullen, Parsipanny, N.J.-based vp
and chief information officer for GAB Robins. "We decided to embrace that. Five years
ago, no one wanted to do it."
GAB's ClienTelligent system uses an integration model to aggregate the data and arrange it
so that users can see in one location the different types of information pertaining to a
claim, Mr. Mullen explained.
Many employers look for systems that can consolidate data into a common and readily
accessible format.
At Verizon Communications Inc., Marsh Inc.'s STARS system pulls together claims
information from around seven third-party administrators and insurers that the
communictions company uses to manage its claims. Verizon needs the information to spot
claims trends, said Rachel Kitchen, specialist-risk management at Verizon in New York.
STARS is enhanced about "once a year," according to Ms. Kitchen, with the
biggest change for Verizon being the system's move to a Web-based environment about two
years ago.
Indeed, the Internet is playing a big role in claims management. Among the major changes
to claims systems, "one, obviously, is Web-based applications," said James Kwak,
vp of marketing at Guidewire, a systems provider in San Mateo, Calif. "Risk managers
can access information using Web-based browsers, and it now becomes easier to report
losses from wherever they happen."
Simultaneous access to information through the Web allows "anyone in the risk
management department to look at a claim," Mr. Kwak pointed out, and the claims
information can provide clues on how to improve loss control.
Liberty Mutual Insurance Co. recognized the importance of multi-user access by adding a
new alert capability to its RISKTRAC system.
"Organizations want to know more quickly what important things are happening,"
said Alicia Rawnsley, Portsmouth, N.H.-based director of marketing-risk management
information systems at Liberty Mutual. Newly reported claims, changes in reserves and
other information can be sent to various personnel throughout an organization with the
alert function, she explained.
The alert capability can be set up to allow a self-insured employer to direct specific
claims-related information to certain departments rather than to all users, Ms. Rawnsley
said. Management, for example, can be alerted that thresholds have been reached in terms
of dollar amounts of numbers of claims.
Document management is a feature that has made strides in claims management systems and
continues to be popular, according to Mr. Kwak. Converting paper documents to electronic
files makes it easier for people to share information, he explained, speeding up the
administratio process.
Dakota Imaging Inc. continually develops new imaging services and enhances existing ones,
said Brant Stevens, senior vp of sales at the Columbia, Md., company. Its latest versions
have made big strides in reducing to a "very small number" the number of data
fields that have to be keyed in after a document is scanned into an electronic format, he
said.
The Dakota systems have gotten better at recognizing anomalies in information on manually
prepared forms and correcting them automatically as documents are converted to an
electronic version, Mr. Stevens explained.
Mr. Bych of San Diego said more technology options are appearing, with vendors giving
employers the choice of going to application service providers, Internet systems and, to
an extent, wireless applications. "Vendors are giving more flexibility on what you
can access, where and how," he noted.
"A lot of companies are looking at mobile technology" said John Sarich, Omaha,
Neb.-based insurance industry marketing manager at software maker FileNet Corp. That means
going out into the field with a laptop computer and digital camera and sending it, in some
cases through wireless methods, to a home office. "That takes a lot of time and steps
out of the process," he said.
Such methods, though, have not yet caught hold, as companies and insurers are still trying
to determine the best ways to apply them, Mr. Sarich remarked.
Despite the enhancements made to claims administration systems, there remain areas some
employers would like their vendors to address.
Mr. Kimmich of Southwest Airlines said he is "still waiting for better data to come
out of the workers comp side of things." The "state-by-state" nature of the
coverage makes it difficult for employers and outside claims administrators to respond to
filing requirements and efficiently produce useful claims management data, he noted.
Southwest carries a "very high retention" on its workers comp exposure and uses
outside administrators to handle claims, Mr. Kimmih said.
Ms. Kitchen of Verizon said interpreting claims information would be easier if insurers
and TPAs used a common data format. "Every system is limited by the type of data it
can capture," she said, and while some systems can be customized to interpret varied
formats, that requires additional programming.
Mr. Denning of Shelter Island pointed out that employers shopping for systems should be
aware that the features that are touted are often "the tip of the iceberg...It's easy
to show beautiful screens," but he cautioned that buyers should look closely at the
technology's functionality before deciding on a system.
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Kevin Confetti