Whether you need to file a business insurance claim for property damage, an employee injury, or another type of workplace incident, the claims administration process is going to include many of the same steps. From notifying your insurance company about the incident to participating in the investigation process, your ability to administer a claim promptly and accurately will ensure an efficient resolution and payout.
Here’s what you need to know about the life cycle of a claim, and what your roles and responsibilities are at each stage of the insurance claims lifecycle.
What Is a Claims Lifecycle?
The life cycle of a claim refers to the steps that an insurance claim goes through as it moves through the claims administration process. This multi-step process requires the input of multiple stakeholders, including the policyholder, claims adjuster, and anyone else involved in the incident, such as a witness to a workplace accident.
Some types of insurance, such as medical insurance, have a more complex process. The life cycle of a medical claim may involve steps such as prior authorization and medical billing and coding. Medical billers and coders review healthcare claims to ensure that they’re categorized and reimbursed properly.
For this article, we’ll be focusing on the lifecycle for commercial insurance claims from the perspective of a business trying to track and streamline its claims.
5 Steps to the Insurance Claims Lifecycle
The insurance claims administration process can vary depending on the type of claim you need to make and the size of the loss. In general, you can expect to move through these five steps of the claims lifecycle.
Some of these steps require your active participation, while others will be handled by your insurance provider or another third party.
The more you can streamline the claims management process, the more likely you are to get reimbursed and avoid the top six claims processing pitfalls.
1. Notification
The claims lifecycle starts when you notify your insurer about your loss or incident. This report is referred to as a first notice of loss (FNOL), and contains basic information such as your insurance policy number and the date and time of the incident.
For some claims, such as a workers’ compensation claim, you’ll also need to file a first report of injury with your state’s Department of Labor or another regulatory body.
The first notice of loss or injury isn’t the same as a formal insurance claim submission. Once you’ve filed an FNOL with your insurance company, they’ll assign an adjuster to your case and follow up to let you know what other information they require.
2. Investigation
Once you’ve submitted a claim, the insurance company (or payer) will investigate it to substantiate it and determine your eligibility for a reimbursement. Although this part of the process is out of your hands, it will help if you’ve thoroughly documented the loss and can provide detailed evidence about the insurance claim.
If there are multiple parties involved, your insurance company will need to determine who has financial responsibility for the incident before initiating a payout.
They may also need to interview witnesses and undertake an incident investigation if your insurance claim is related to a work injury or accident.
3. Adjudication
Adjudication is the part of the process in which the claims adjuster determines what is and isn’t covered by your insurance policy. In other words, your claim is valid, but how does it line up with your insurance coverage and your deductible?
The insurance adjuster will review your policy and provide an explanation of benefits (EOB) so you understand how your insurance policy applies.
You can streamline the adjudication process by only submitting claims that meet the criteria of your insurance policy and are less likely to be disputed.
4. Resolution
At this point, your insurance provider will decide whether to pay the claim in full, deny the claim, or offer a partial payout or settlement. If you aren’t happy with the outcome, you may be able to negotiate with the insurance company for a better deal.
For example, maybe you disagree with the insurer’s assessment of damage, and you want to get a second opinion about the cost of repairs or replacement.
Remember that the life cycle of a medical claim is more complex, especially if a work injury is covered by Medicare or Medicaid in addition to your insurance company. Be prepared for a lengthier medical coding and billing process.
5. Payout
If your insurance claim is successful, you can expect to receive your payout as agreed with your insurance adjuster. In some cases, you’ll receive a cash settlement or direct payout. In other cases, the insurer may pay a vendor for repairs or replacement.
If your claim is related to a workplace injury, your workers’ compensation policy may cover medical expenses, lost wages, and other related costs.
Check with your injured employee to ensure that they know their rights and to see if they qualify for other benefits like short-term disability insurance.
Best Practices for Insurance Claims Management
Businesses that only file the occasional insurance claim may be fine leaving the process in the hands of their insurance provider. But businesses that file insurance claims often should take an active role in the claims management lifecycle. Here are three ways to streamline the claims management process to achieve a faster resolution.
1. Digitize and Automate
Filling out paperwork can be stressful for everyone involved, especially if it relates to a workplace injury or another serious incident. By using a claims management platform like Pulpstream, you can digitize and automate key parts of the process so it’s more efficient and less stressful for your employees and your HR team.
For example, you can use it to generate documents such as claims notifications and OSHA reports, and automatically fill them in with insurance information and patient information so your HR team doesn’t have to do it manually.
2. Ensure Confidentiality
Depending on the type of claim, the administration process may include a workplace investigation involving witness interviews and the collection of evidence. Even if the entire workplace seems to be involved, keep things confidential, especially when it pertains to sensitive information like medical records.
Some laws, such as the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA), may come into play after an injury or accident, and both have strict confidentiality rules that employers must abide by.
3. Use Claims Analytics
Using a cloud-based claims management automation platform won’t just speed up the claims lifecycle. By standardizing workflows and collecting the right data, you’ll be able to find patterns and make better decisions using insurance claims analytics.
For example, you can use Pulpstream to analyze trends in insurance claims, such as claims by month, claims by type, and claims by age group and tenure.
Use this information to uncover workplace safety issues and identify problems like insurance fraud or FMLA abuse.
Streamline the Claims Process With Pulpstream
The insurance claims lifecycle varies in complexity depending on the type of claim, but it usually involves key steps such as notifying your insurance provider of a loss or incident and working with them through the investigation and adjudication process. By taking an active role in the claims management process, you can shorten the time from claim submission to resolution and reduce the likelihood of a denied claim.
Pulpstream’s all-in-one claims management platform allows you to administer any type of claim, from workers’ compensation to general liability. Initiate claims from desktop or mobile devices, and attach photos, notes, and other supporting documents. Plus, use our intuitive reporting dashboards to keep track of long-term trends.
Contact us today to request a demo and see how you can enhance the entire claims management process with Pulpstream!
