case study for insurance

Insurance Case Studies: The Ultimate Guide

How do you show your prospects exactly what your company can do for them? With a case study. Insurance case studies provide buyers with the solid facts, figures and performance examples they need to make a purchasing decision.

What Is a Case Study?

A case study is a powerful marketing tool that is often used in the middle or bottom of the sales funnel, to help buyers develop a preference for your offering. Case studies increase buying confidence and validate the buying decision. They prove that your product or service performs as promised.

Case studies change the conversation from telling to showing. Instead of just telling prospects how great your brand is, you can show prospects exactly what your brand is capable of achieving. This gives prospects a more concrete understanding of what to expect and enables them to step into the shoes of a satisfied customer.

The Elements of a Case Study

An effective case study contains key elements that align with the buyer’s journey:

• Who is the customer? If you don’t have permission to name the customer, describe the customer by industry, size and other relevant details.
• What problem were they trying to solve? When B2B buyers are shopping for a product, they’re trying to solve a specific problem. Identify this problem so other prospects with similar problems can relate. Sometimes, there’s more than one problem.
• What other solutions did they consider? B2B buyers usually consider multiple options before deciding. This is a key part of the process, and including the details can help emphasize why your company stood out.
• Why did they choose your solution? State exactly what your company offered that other competitors couldn’t.
• What was the implementation process like? Switching B2B vendors can be a major undertaking. Describe the process so your prospects will know what to expect. Of course, you want to put your company in a positive light and focus on the positives, but you can include hiccups that occurred in the process and how you handled them. Prospects know that things don’t always go perfectly according to plan, and this shows that you’re competent and able to overcome any barriers that arise.
• How has the company benefited? In the beginning of the case study, you described the client’s problem. Now touch back on this and show how the problem has been solved. Include specific information about how the company has benefited from your product or service. For example, how much time or money has the client saved? How are they better prepared? How have you helped increase their revenues?
• What are the key takeaways for others in a similar situation? Convince prospects that they should follow the client’s example and partner with your company. Summarize your argument with key takeaways from the case study.

Case Study Dos and Don’ts

To squeeze the most value from your case study, you need to follow some best practices.

• Don’t just list bulleted facts. You might be able to pull a list of bulleted facts from your case study to use in other types of content, such as social media posts, but your actual case study should be at least two pages long to tell the story in a meaningful way.
• Do use names. Your case study will carry a lot more weight if the featured customer is named. You can also use anonymous case studies, but they are not quite as credible.
• Do appeal to emotions. Think of your case study as a story. You’re showing your prospects what it’s like to work with your company, so you need to build a narrative. This is also a good place to build an emotional argument by showing how your company can help clients deal with pain points and reduce problems.
• Don’t make your case study longer than it needs to be. Your prospects are busy, and they probably won’t have time to read an overly verbose document. Provide enough information to create a compelling story, but don’t get bogged down with unnecessary details. An effective case study will often be around two pages.
• Do include quotes. You can say that your company is great, but it sounds more convincing if one of your customers says it. The featured customer may be willing to provide you with quotes and their logo to include in your case study. As a bonus, this is also free publicity for them.
• Do get permission. If you’re naming a customer, you will need to secure their permission and allow them the opportunity to review and approve the final piece before it is used. Be sure to save their written approval in case questions arise in the future.

Case Studies Should Be Part of Your Content Library

Creating a case study can take some time and effort, but they are worth it.

According to the 2022 Edelman Trust Barometer , 63% of people worry business leaders are trying to mislead people with false or exaggerated statements. If you just say that your company can help people solve their problems, your prospects might not believe you. You need to build credibility, and a case study that provides concrete examples can help.

A case study is also a fantastic way to differentiate yourself from your competition. As mentioned earlier, case studies are often used in more advanced stages of the customer journey, when prospects are already familiar with your company and need information that’s going to guide their purchasing decision. You want to create preference for your company so you can close the sale, and a case study can help you do that.

Your Case Study Can Convert Leads for Years

Some content has a short life, but not case studies. Although creating a case study will require some effort, once you have it, you can use it for as long as you continue to offer the featured products and services, and the featured company is still a customer.

• Feature your case study on your website. You can create a landing page for your case study or case studies so prospects can find them easily. They can be offered as instant downloads or you can generate leads by gating them with a form.
• Promote your case study in social media posts. Spread the word about your case study on social media. You can always just write a post and link to the case study, but also consider designing graphics for the case study. A LinkedIn carousel post is another great way to highlight your case study on social media.
• Encourage prospects to download the study as a call to action in your blog posts . This is a practical way to encourage your audience to learn more about your company.
• Link to case studies in email nurturing campaigns . If you’re nurturing a prospect that has downloaded other content, a case study link can entice additional engagement.
• Build case studies into your sales processes . Sales professionals love using case studies as handouts as they provide a great springboard for meaningful conversations.
• Use content to develop webinars or videos . You can even use case study content as the foundation for very powerful webinars or videos.

Need Case Studies but Don’t Know Where to Start?

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Blog | Insurance

• Insurance Digital Transformation: Improving the Customer Experience

In this insurance digital transformation case study, our design thinking practice drives impactful results to the client's bottom line and customer experience.

JANUARY 29, 2018

As data analytics transform the global business community at a rapid pace, many opportunities exist for insurers to leverage information to grow their bottom line. All insurance companies are sitting on a wealth of information about their customers and operational processes. The biggest challenge insurers face with this data? There’s too much data to sort through, and it’s difficult and time consuming to translate information into actionable insights.

Making your data work harder – and more valuable -- is what the Sutherland Cloud Analytics platform is all about. It has positively impacted many companies on a global scale, combining the power of data analytics with artificial intelligence (AI) to drive insights to fuel decisions that boost your bottom line and customer experience.

Harnessing Big Data Drives Insights, Streamlines Processes

Guardian Group , an integrated financial services organization with a focus on life, health, property and casualty insurance, pensions and asset management, recently partnered with Sutherland to rapidly monetize its data assets to meet their business needs.

Prior to engaging Sutherland, the leading insurer was challenged with disparate, unsynchronized databases and inconsistent data across their organization, and basic financial and operational reporting did not deliver valuable information for executive decision making. The time was right for Guardian Group to make agile adjustments to address changing customer expectations, market needs, and regulatory mandates.

Sutherland’s Cloud Analytics Platform and associated consulting established an ongoing big data capability to facilitate a culture of leveraging insights for business decisions. Thanks to Sutherland’s cloud-based solutions, Guardian Group saw an approximately 25 percent reduction in manual efforts and associated labor cost for some activities, 20 percent reduction in claims-related processing turnaround time, and 100 percent digitization of forms now available online.

An End-to-End Analytics Transformation

Core components of the data analytics solution for Guardian Group include:

Suspense Amount Management for cloud: AI-leveraged analytics that enables insurers to wade through complex data streams and meaningfully allocate premium suspense amounts to the right policies. It’s designed to optimize cash flows to improve loss ratios, combined ratios, and current ratio.

Operational Lapse Accounts Analytics to better understand agent performance and drive optimal account management processes.

Operational solutions to help drive efficiencies and automation in customer-facing and claims management processes.

Precise customer service and predictive modeling powered by analytics capable of turning customer and market behaviors into models.

Strategic customer, agent, and policy profitability analytics to assess emerging risks, identify new revenue sources and optimize enterprise-wide profitability.

Now is the time to leverage data analytics to your drive competitive advantage and positively transform processes throughout your insurance organization.

Reduce Risk. Gain Advantage. Improve Retention.

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cfpb_building_block_activities_what-is-insurance_handout.pdf

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Case Study 4: The Digital Transformation of Insurance

• First Online: 06 February 2020

Cite this chapter

• Hubert Tardieu 6 ,
• David Daly 7 ,
• José Esteban-Lauzán 8 ,
• John Hall 9 &
• George Miller 10  

Part of the book series: Future of Business and Finance ((FBF))

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Digital is providing great opportunities for insurance firms. The ability to collect and analyze ever-increasing quantities of data makes it possible to provide insurance that is highly personalised, and AI is enabling claims to be processed faster and more accurately than ever before. However, there are also threats for market incumbents, including the rise of aggregation platforms which can seize control of the customer relationship and relegate insurance providers to mere commodity suppliers. In this case study, we explore these trends, challenges, and opportunities, before finally covering how existing firms can leverage platform-based industry ecosystems.

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Digital start-ups specialized in the Insurance market (FinTech is used for those specialized in banking).

Earnings Before Interest Tax Depreciation and Amortisation.

A discipline that merges telecommunication engineering and computer science to gather and manage information that enables the tracking and controlling of remote objects.

Electronic devices—usually capable of some data gathering, storage and/or processing capability—which can be worn in clothes or as accessories.

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Insurance Journal. (2019, October). Blockchain Initiative, B3i, Deploys Cat Excess of Loss Product for January Renewals. https://www.insurancejournal.com/news/international/2019/10/15/545507.htm . Accessed October 26, 2019.

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International Fraud Bureau: Crash for cash. https://insurancefraudbureau.org/insurance-fraud/crash-for-cash/ . Accessed October 26, 2019.

Krebson Security. (2019, May). First American Financial Corp. Leaked hundreds of millions of title insurance records. https://krebsonsecurity.com/2019/05/first-american-financial-corp-leaked-hundreds-of-millions-of-title-insurance-records/comment-page-1/ . Accessed October 26, 2019.

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McKinsey. (2018, December). Friends or foes: The rise of European aggregators and their impact on traditional insurers. https://www.mckinsey.com/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/Friends%20or%20foes%20The%20rise%20of%20European%20aggregators%20and%20their%20impact%20on%20traditional%20insurers/Friends-or-foes-The-rise-of-European-aggregators.ashx . Accessed October 26, 2019.

McKinsey. (2019, May). A new industry model for insurtech. https://www.mckinsey.com/industries/financial-services/our-insights/insurance-blog/a-new-industry-model-for-insurtech . Accessed October 26, 2019.

The Actuary. (2017, December). Strength in numbers. https://www.theactuary.com/opinion/2017/12/strength-in-numbers/ . Accessed October 26, 2019.

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Tardieu, H., Daly, D., Esteban-Lauzán, J., Hall, J., Miller, G. (2020). Case Study 4: The Digital Transformation of Insurance. In: Deliberately Digital. Future of Business and Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-37955-1_25

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How a Nordic insurance company automated claims processing

By automating unstructured data, a Nordic insurer increased its operational efficiency and improved customer experience.

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• 2. Better answer
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The better the question

How do you leverage AI to streamline insurance claims?

An insurer harnessed AI to streamline operations and boost agent capabilities.

N avigating large volumes of unstructured insurance claims data is a substantial challenge for any insurance company looking to automate repetitive yet complex tasks across its operations. The integration of advanced technologies such as automation and artificial intelligence (AI) has become a pivotal driver for the exponential transformation of insurance organizations.

A leading insurance firm in the Nordics wanted to modernize its claims management process. The current workflow required manual processing of each claim request, a time-consuming series of repetitive tasks which had to be performed by its agents. Amplifying the complexity was unstructured data from various sources, requiring detailed examination and categorization. The spectrum of claims data was also broad and varied, originating from multiple sources such as bills, invoices, cash receipts from pharmacies and local clinics, and medical treatment diagnoses with supporting documents.

Each document required thorough analysis by the agents to extract necessary data that could then be categorized based on the relevance for claim processing. As a result, customer service efficiency suffered; the teams struggled to process claims swiftly due to the limited capabilities of existing technology infrastructure that was ill-equipped to facilitate end-to-end automation.

A transformative approach was necessary. The insurance company engaged with EY teams to analyze its existing tech infrastructure and business needs. The goal was to develop an AI-based solution that could streamline their claims management process, automate routine tasks, and free up their agents to concentrate on building stronger customer relationships. By placing humans at the center of this AI-powered transformation, the company sought to augment the agents' capabilities, enhancing their performance and job satisfaction.

This strategy extended beyond a technological upgrade. It was about empowering their people, preparing them for a future where they can collaborate effectively with AI to drive impactful results. This initiative aimed to set the stage for the insurer's expansion into new markets, with their AI-powered claims management solution acting as a catalyst.

The better the answer

Transforming insurance claims with human-centric AI

An EY solution that transforms the insurer’s data process by converging business insights, domain knowledge and AI.

Transforming the insurer's traditional work environment required a robust, AI-powered solution. Manual handling of claim reimbursements involved laborious tasks like opening individual images and PDF scans, analyzing files, and uploading relevant documents to their systems. EY teams stepped in with EY Fabric Document Intelligence, an AI-powered product, to streamline this process.

Developed by EY wavespace™ Madrid and now integrated into EY Fabric, EY Fabric Document Intelligence is a technology that converts semi-structured and unstructured documents into actionable structured data. Built on machine learning and the Python programming language, the tool is hosted on an EY-secured cloud environment. It was scaled and customized to meet the insurer's specific requirements during the project.

The process was simple yet transformative. Agents uploaded the scanned copies to EY Fabric Document Intelligence, which began image cleansing by detecting relevant data. This involved removing image backgrounds, correcting document rotation and reducing noise to enhance the quality of scanned files. The product then performed preprocessing, document analysis and layout analysis. Using optical character recognition (OCR) and natural language processing (NLP), unstructured data was converted and classified. Finally, the structured data was transferred to the insurer's core claims system.

The product processes more documents over time, the system improves and has the potential to provide continuing value and insights for the insurer. Our team provided a solution that did more than just digitize and organize unstructured data. It combined EY business insights and industry knowledge within a strategic technology ecosystem to help modernize the insurer's operations. EY professionals offered comprehensive services, including solution design, system integration, data science, project management and cloud computing knowledge, with a human-centric approach.

Teams from Sweden, Denmark, Spain, the US and the UK collaborated to integrate EY Fabric Document Intelligence with the insurer's legacy system. They helped the insurer understand that AI, when guided by human insight, serves as a powerful enabler to expedite work.

The better the world works

Unlocking exponential transformation through AI-driven modernization

The EY team’s AI solution is driving accelerated claim processing, deepened customer relationships, and an enterprise-wide modernization.

The insurance firm now benefits from near real-time processing of claim documents. Since the solution's implementation, a remarkable 70% of the documents fed into the system are correctly extracted and interpreted. This crucial upgrade not only expedites decision-making but also allows agents to concentrate their efforts on enhancing customer interactions. Agents have more time to spend with their customers in providing personalized advice. This shift toward more meaningful engagements cultivates stronger relationships, maintaining trust and driving additional business value. The solution is designed in a way that it gives the required control of the automation and AI technologies to the insurance firm. The data is entered into the system and the output is driven through a controlled set of confidence levels avoiding blackbox implementation of AI. As the client was closely involved in all decision-making, they have sufficient transparency to the solution.

The AI solution has also been instrumental in facilitating the insurer's global expansion goals. The operational efficiency and customer service enhancements resulting from the implementation are sparking curiosity in other areas of the organization. The insurer is now actively exploring further modernization opportunities, recognizing the long-term business value of aligning with the right technology.

The EY-tailored solution has not only streamlined the insurer's processes but also served as a catalyst for reimagining their entire enterprise. The implementation has demonstrated how advanced AI can fuel exponential transformation in the industry, augment human capabilities, and create significant value. With EY and the insurer collaborating to place humans at the center of this AI transformation, the result is a long-term solution that empowers individuals and drives meaningful impact across the organization.

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Digital case study

Insurance claims estimator uses AI for efficiency

How insurance claims estimators can use AI to increase efficiency, reduce cycle time and improve customer experience

Our Role: PwC helped an insurtech company use AI and analytics to speed up their claims estimation process. Industry: Financial Services , Fintech Services: Emerging Tech , Artificial Intelligence Digital , Technology

Can the insurance claims estimate generation process be optimized and scaled to support exponential growth?

The insurance industry has experienced its share of technological disruption over the past ten years. As widespread smartphone adoption made it easier for consumers to submit images of collisions in support of auto insurance claims, insurance carriers were deluged, further bogging down an already frustrating and time consuming process. Where others saw chaos, our client saw an opportunity. They hired a team of experienced estimators and auto body experts and started to evaluate photos of auto damage for carriers as a service.

Drawing on their collective experience, the team would look at the photos and provide insurance companies with a preliminary assessment of the damage to the vehicle. Our client was filling a void in the industry, and their business exploded. They now service over 70 insurance companies and are a significant player in the insurtech space. Their challenge was that there are only so many experienced estimators and auto body experts available for hire, and at the rate the company was growing, they knew their growth would soon be constrained by limited resources.

Our client knew that using artificial intelligence (“AI”) and image recognition technology was a possible solution. It could address their scaling challenge and help them continue to improve customer experience. They built a data science team as a start. But then quickly found that building trust in the AI-assisted system, both for their estimators and customers, was key to making this approach successful.

Analyze the estimation process, leverage insertion points for PwC’s Analytics and AI solutions and focus on building trust with the estimators through “explainable AI”

The process

The client is laser-focused on enhancing customer experience. PwC’s AI and Analytics team realized that improving the efficiency, quality, accuracy and consistency of the estimation process would have a major positive impact on their insurance company clients and policyholders through a decrease in claim resolution time. The initial project scope was to work with the estimation team to look at the estimation process involving images and determine whether an AI model could detect which parts of individual vehicles had been damaged based on submitted photos. Automating this previously manual process was an important first step in our collaboration.

PwC’s Analytics & AI Transformation Solution

Working together with the client’s data science team and estimators, we helped create three AI models. The first was to detect and classify car damages from the images, isolating where in the image there was damage and what type of damage was represented. The second model translated damage into individual parts affected by adding additional information to the analysis, such as parts lists for damaged subassemblies, etc. The third model retrieved images of similar vehicles, both damaged and undamaged, to help estimators evaluate whether or not the part was actually damaged. The estimators were pleasantly surprised with the accuracy and depth of the results. The AI model was even catching details that estimators had missed through the manual process. So far, so good.

Building trust in the AI model

Now for the hard part. The ability of an AI model to accurately interpret images was only half of the equation. The AI model needed to be trusted by the estimators as an important augmentation of their analysis. To address this, we partnered with our client’s data scientists to implement an “explainable AI” (XAI) technique. We then used it in a novel way, showing visually why the model arrived at a particular prediction by making analytical determinations at every stage in the process. By doing this, we greatly increased trust in the model as well and demonstrated its value to the data scientists, the estimators, the insurance companies and the insurance company’s clients

“Our client’s experience is a further indication that it’s not about AI replacing human activity, but rather AI aiding and augmenting human activity. And for that to happen, humans need to trust the machine.” Anand Rao PwC Partner

PwC partnered with our client to use explainable AI to improve customer experience and establish trust in the system for its estimators.

The company’s explainable AI model was a game changer as It enabled the following:

• empowered auto claim estimators to identify where to focus attention during an assessment
• provided approaches for sharing knowledge among the estimator team to accurately determine which group should handle specific estimates
• identified 29% efficiency savings possible with full implementation of proof of concept models across the estimator team
• reduced rework and improved customer experience through reduced cycle times

Through this unique approach to explainable AI, the company has offered a powerful example to the industry of the potential power of AI-assisted processes. They now have concrete validation that an AI-assisted approach works and has the potential to improve other aspects of their overall process. The company has a clear model for growth and a foundation for scalability.

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Partner, PwC US

Francois Ramette

‎‎Partner, PwC US

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Case Studies

Protect your bottom line with prompt claims reporting.

The timing of when you choose to report an incident to your insurance carrier has a direct effect on the bottom line. This case study demonstrates how prompt claims reporting was key to recouping this property loss quickly and efficiently. Read More>

Timely Reporting of Workers Compensation Claims

Employers are busy. Injuries are unexpected events that take time from production and can disrupt the normal workflow for everyone involved. However, taking time to report a workers compensation claim as soon as possible will reap rewards. It allows your insurance company to complete a timely investigation, preserve evidence that may be otherwise discarded, and document the facts while the information is fresh in the minds of those involved. Most importantly, it allows your insurance company the opportunity to start building a rapport with your injured worker immediately. Read More>

Workers Compensation and Subrogation – Recovering Money and Lowering Premiums

Handling workers compensation claims is no easy task. Some cases are very complicated, as well as very expensive. And every state’s laws regarding the payment of workers compensation claims is different. To add to that challenge, each state’s laws also differ somewhat as to how an insurance company may recoup some or all of the benefits paid. It is sometimes possible to recover money through the process of subrogation when the work-related injury was the fault of an independent responsible third party. Read More>

Recovering from Property Damage and Employee Injury

At about 6:30 p.m. on Wednesday, July 23, 2014, a patron was leaving a pub in southeastern Wisconsin. Intending to pull straight out of his parking stall, he accidently put his vehicle into reverse and accelerated, backing into the building and caving in the wall. Meanwhile, inside the pub, an employee was serving drinks from behind the bar, which is near a cooking area with a broaster. Suddenly, scalding hot grease erupted from the broaster, splashing everything nearby. The vehicle had hit the wall that contained the cooking equipment, causing serious injuries to the pub employee and significant damage to the building. Read More>

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Whole life insurance in a lifetime financial plan: the case study.

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Click here to read the previous article in this series.

For these comparisons , I create a case study for a forty-year-old married couple with two children who are now constructing a lifetime financial plan. Jerry and Beth have determined that it is time to get serious about retirement and life insurance planning. Jerry is employed and Beth is a homemaker. These gender roles could be switched, but since life insurance is less expensive for women because of their heightened longevity, having the male be the worker is the more conservative case to consider. Jerry is seeking an additional amount of life insurance death benefit equal to $500,000. This, along with his other life insurance, will be adequate to support his family in the event of his death prior to age sixty-five.

Jerry presently has $60,000 saved in a 401(k) plan with his employer, which is invested with an equity glide path strategy representative of a typical target date fund: 80 percent stocks to age forty-five, 65 percent stocks from forty-five to fifty-four, 50 percent stocks from fifty-five to sixty-four, 40 percent stocks from sixty-five to seventy-four, and 30 percent stocks thereafter. He would like to plan for retirement at sixty-five. I will investigate a portion of his assets to be saved in the future that is equivalent to 401(k) employee contribution limits in 2019 with assumed inflation adjustments: $19,000 can be saved each year until age fifty, and then $25,000 thereafter until age sixty-five to account for the allowed catch-up contributions at those ages.

These contribution limits are inflation-adjusted such that real savings are kept the same, but the nominal amounts increase. Because life insurance premiums are fixed without inflation adjustments, the percentage of the savings directed to insurance decreases over time in real terms. Jerry expects to be in a combined 25 percent marginal tax bracket (22 percent for federal taxes and 3 percent for state taxes) in both his preretirement and postretirement years.

For investment returns, I follow the approach explained in Exhibit 3.11 from Chapter 3. Stock returns are simulated with a randomized risk premium above the fixed 3 percent bond yield. That risk premium has a 6 percent average value with a 20 percent volatility. Inflation is fixed at 2 percent annually. This implies a 1 percent real interest rate. Interest rate risk is eliminated from the analysis, as there is no possibility for fluctuating interest rates to create capital gains or losses for the underlying bond portfolio. The risky asset is based on large-capitalization stocks in the United States. Overall, this represents a 9 percent arithmetic average for stocks (7 percent in real terms). The compounded real growth rate for stocks is 5 percent. The investment portfolio is modeled using 10,000 Monte Carlo simulations for investment returns based on these capital market expectations. I assume investors earn these returns net of any investment or advisory fees. As investments are held in tax-deferred accounts, there is no further tax drag to worry about. Investors earn the gross returns and portfolio distributions are taxed as income.

The Best Options For Senior Life Insurance

Types of life insurance policies.

Life insurance is priced using the 3 percent interest rate and the Social Security Administration 1980 cohort life tables for mortality. Pricing for the term and whole life policies was provided in Exhibits 7.1 and 7.2 . Income annuities are priced in the same manner using the Society of Actuaries mortality data as explained in Chapter 4 , assuming an annual 2 percent cost-of-living adjustment for payments to match the assumed inflation rate. In Chapter 4, the income annuity was priced for females. It offered a 4.56 percent payout rate.

In this case study, we use income annuities for males and couples, and we must also account for the fact that the annuity will not be purchased for twenty-five years. The corresponding payout rates for males and couples with annuities purchased today are 4.83 percent and 3.93 percent, respectively. However, with the longevity improvements assumed by the Society of Actuaries over the next twenty-five years, the male and joint income annuity payout rates at that time are 4.47 percent and 3.75 percent, respectively. These latter numbers are what I use. It makes sense to use different mortality tables to price the life insurance and annuities on account of the different populations that use these financial products. Annuity owners will tend to live longer.

To better understand the impacts of investment volatility on the upside and downside, Monte Carlo simulations are used to create a distribution of outcomes. The exhibits report the 10th percentile, median, and 90th percentile from this distribution. We can interpret the 10th percentile outcome as a bad luck case with poor investment returns. It is possible that retirement outcomes could be even worse, but generally Jerry and Beth could expect better retirement outcomes than seen at the 10th percentile. The median reflects more typical outcomes. It is the midpoint of the distribution, with a 50 percent chance for worse outcomes and a 50 percent chance for better outcomes. These are reasonable outcomes for Jerry and Beth to expect. The 90th percentile is a good luck outcome in which investments perform very well, supporting greater spending and larger account balances.

Note that these results are presented in terms of nominal dollars to avoid reader confusion about why inflation-adjusted dollars are less than nominal dollars. This decision does not impact any comparisons for the relative outcomes between scenarios. However, readers should understand that the purchasing power of a given amount of income or wealth will be less in the future. For today’s forty-year-olds, the real purchasing power of money will be about 60 percent of what it is today at age sixty-five, and about 30 percent of today at age 100, assuming 2 percent inflation.

Click here to read the next article in this series.

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*This is an excerpt from Wade Pfau’s book, Safety-First Retirement Planning: An Integrated Approach for a Worry-Free Retirement. (The Retirement Researcher’s Guide Series),  available now on Amazon AMZN

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Case Studies: Successful Underwriting Strategies

Introduction.

Underwriting is a critical process in the insurance industry, involving the evaluation and assessment of risk before issuing policies. This process determines the terms, conditions, and premiums of insurance coverage. Effective underwriting is essential for maintaining the financial stability of insurance companies while ensuring that policyholders receive fair and appropriate coverage. The importance of underwriting lies in its ability to accurately assess risk and set premiums that reflect this risk. By evaluating various factors such as applicant history, financial status, and potential exposures, underwriters can make informed decisions that balance risk and reward. This not only protects the insurer’s profitability but also ensures that customers are charged premiums commensurate with their risk levels. Successful underwriting strategies often involve a combination of thorough risk assessment, data analytics, and innovative techniques. Underwriters use advanced data analytics to analyze vast amounts of information, enhancing their ability to predict and manage risk effectively. Additionally, implementing a balanced approach helps in setting fair premiums while mitigating potential losses. By applying these successful underwriting strategies, insurance companies can achieve accurate risk evaluation, improve financial stability, and offer competitive coverage options.

Case Study 1: Utilizing data analytics

Data analytics plays a crucial role in the underwriting process, enabling underwriters to make more informed decisions based on data-driven insights. By analyzing vast amounts of data, underwriters can better assess risk levels and potential outcomes.

How data analytics can help underwriters make better decisions

By employing data analytics, underwriters can gather valuable insights into market trends, customer behavior, and risk factors. This information allows them to make more accurate assessments and pricing decisions, resulting in improved underwriting outcomes.

Examples of successful implementation of data analytics in underwriting

• One insurance company used predictive modeling to analyze customer data and identify high-risk profiles, allowing them to adjust premiums accordingly.
• Another case study involved a lending institution that utilized machine learning algorithms to automate the underwriting process, reducing manual errors and streamlining operations.
• A third example showcases a reinsurance company that implemented data analytics to identify patterns in claims data, leading to more efficient claims processing and reduced fraud.

Impact of data analytics on underwriting efficiency and accuracy

The integration of data analytics in underwriting has significantly enhanced efficiency and accuracy in decision-making processes. By leveraging advanced analytics tools, underwriters can access real-time data, perform risk assessments more quickly, and make informed decisions that align with business objectives.

The use of data analytics also enables underwriters to identify emerging trends and potential risks early on, allowing them to proactively adjust their strategies and mitigate potential losses. This proactive approach not only improves underwriting accuracy but also enhances overall risk management practices.

Basically, data analytics has become an essential tool for underwriters looking to optimize their decision-making processes and achieve greater efficiency and accuracy in the underwriting cycle. By harnessing the power of data, underwriters can stay ahead of the curve, minimize risks, and drive sustainable business growth.

Read: HR Specialist vs. HR Manager: Duties, Pay, and More

Case Study 2: Incorporating Technology

In today’s digital age, the role of technology in streamlining underwriting processes has become increasingly vital. With the use of specialized technological tools and software, insurance companies are able to improve their efficiency, accuracy, and overall performance in the underwriting process.

Exploring the Role of Technology

Technology plays a crucial role in automating manual processes, reducing paperwork, and speeding up decision-making processes in underwriting. By leveraging technology, insurers can streamline their operations, enhance customer experiences, and stay competitive in the market.

Specific Technological Tools and Software

• Underwriting Software: Sophisticated underwriting software applications help underwriters assess risks, price policies, and make informed decisions based on data analytics .
• AI and Machine Learning: Artificial Intelligence (AI) and Machine Learning algorithms enable insurers to analyze vast amounts of data quickly and accurately, leading to more precise risk assessments.
• Blockchain Technology: Blockchain technology enhances security, transparency, and traceability in underwriting processes, reducing the risk of fraud and errors.
• Telematics Devices: Telematics devices collect real-time data on policyholders’ driving behaviors, enabling insurers to offer personalized pricing based on individual risk profiles.
• Predictive Analytics: Predictive analytics tools help underwriters forecast future risks, identify trends, and make data-driven decisions to optimize pricing strategies.

Improving Risk Assessment and Pricing

By incorporating technology into underwriting processes, insurers can enhance risk assessment and pricing strategies in the following ways

• Enhanced Data Accuracy: Technology enables insurers to access, analyze, and validate accurate data, leading to more precise risk assessments.
• Efficient Processing: Automated underwriting processes reduce manual errors, increase operational efficiency, and accelerate decision-making, resulting in faster policy issuance and better customer service.
• Personalized Pricing: With advanced data analytics and AI algorithms, insurers can offer personalized pricing based on individual risk profiles, leading to more competitive rates and improved customer satisfaction.
• Continuous Monitoring: Technology allows insurers to monitor policyholders’ behaviors in real-time, adjust pricing accordingly, and mitigate risks proactively, ensuring long-term profitability and sustainability.

Therefore, the integration of technology into underwriting processes has revolutionized the insurance industry. Enabling insurers to streamline operations, enhance risk assessment, and pricing, and improve customer experiences. As technology continues to evolve, insurance companies must adapt and leverage innovative solutions to stay ahead in a rapidly changing market landscape.

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Case Study 3: Collaboration with other departments

In the world of underwriting, collaboration with other departments is crucial for success. By working together, different departments can bring their expertise to the table, leading to more comprehensive underwriting decisions.

Benefits of collaboration between underwriting and other departments

• Enhanced risk assessment: When underwriting teams collaborate with risk management or claims departments, they can better assess potential risks associated with a policy.
• Improved product development: Collaboration with marketing or product development teams can lead to the creation of new, innovative insurance products that meet the needs of consumers.
• Efficient processes: Working with the IT department can streamline underwriting processes, making them more efficient and reducing errors.
• Increased customer satisfaction: Collaboration with customer service departments can help underwriters better understand customer needs and tailor policies to meet those needs.

Successful cross-departmental cooperation in underwriting

One example of successful collaboration is when underwriters work closely with claims departments. By sharing data and insights, underwriters can better assess the risk associated with a policy, leading to more accurate underwriting decisions.

Another example is when underwriters collaborate with product development teams. By understanding market trends and consumer needs, underwriters can design insurance products that are both profitable for the company and valuable for customers.

Collaboration with risk management departments is also crucial. By sharing information about potential risks, underwriters can make more informed decisions about which policies to accept or reject.

Teamwork leading to more comprehensive underwriting decisions

When different departments work together, underwriters can gain a broader perspective on a policy. For example, combining data from claims, risk management, and product development can help underwriters assess the overall risk associated with a policy.

Teamwork also allows underwriters to leverage the expertise of other departments. For instance, working with the IT department can help underwriters incorporate new technologies into their processes, leading to more accurate risk assessments.

Generally, collaboration with other departments is essential for successful underwriting. By working together, underwriters can make more informed decisions, develop innovative products, and ultimately, better serve their customers.

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Case Study 4: Continuous learning and development

Importance of ongoing training and education for underwriters.

Ongoing training and education are crucial for underwriters to maintain expertise. The financial landscape evolves rapidly, demanding continuous skill enhancement. Training helps underwriters stay current with new tools, methodologies, and regulations. Education ensures they can accurately assess risks and make informed decisions. Regular updates improve their understanding of complex financial products and market dynamics. Continuous learning fosters adaptability, helping underwriters respond to emerging challenges. By prioritizing ongoing education, underwriters enhance their performance and contribute to more effective risk management. This commitment to professional development ultimately supports the success of underwriting strategies.

How Underwriters Can Stay Updated on Industry Trends and Regulations

Underwriters must stay updated on industry trends and regulations to remain effective. Attending industry conferences provides insights into emerging trends and best practices. Subscribing to financial journals and newsletters offers regular updates on market changes. Joining professional organizations facilitates networking and access to industry resources. Online courses and webinars provide flexible learning opportunities on regulatory changes and market developments. Following industry leaders on social media keeps underwriters informed about the latest innovations. Regularly reviewing regulatory updates ensures compliance with new laws and standards. Staying informed allows underwriters to adapt strategies and maintain competitive advantage.

Examples of Companies with Successful Training Programs for Underwriters

Several companies excel in providing successful training programs for underwriters. For instance, Prudential offers a comprehensive training program focusing on risk assessment and industry regulations. Their program includes workshops, online modules, and mentorship opportunities. MetLife also invests in continuous education, providing underwriters with access to industry conferences and advanced training seminars. Their program emphasizes both technical skills and industry knowledge. Another example is AIG, which runs an in-depth training program featuring simulations and real-world case studies. This hands-on approach enhances practical understanding. These companies demonstrate the value of robust training programs in developing skilled underwriters.

 Read: The Role of HR in Employee Wellness and Benefits

Successful underwriting strategies are crucial for driving profitability and effective risk management. The case studies presented illustrate a range of successful approaches tailored to specific industries, showcasing their impact on enhancing risk assessment, pricing accuracy, and customer engagement. Each case study highlights how different methods were applied to manage risk effectively and achieve desirable outcomes, leading to improved portfolio quality, reduced loss ratios, and higher customer satisfaction. Key takeaways from these case studies include the importance of customizing underwriting strategies to fit. The unique needs of each industry, as well as the value of leveraging data and analytics to refine risk assessments and pricing models. These strategies demonstrate that a thoughtful, data-driven approach can lead to significant improvements in underwriting performance. Implementing successful underwriting strategies is essential for achieving consistent and favorable outcomes. By adopting proven methods and learning from industry leaders, underwriters can better manage risk, optimize pricing, and enhance overall performance. This process involves analyzing and integrating best practices into your underwriting processes to align with industry standards and market demands.

Underwriting for High-Risk Clients

Ethical Considerations in Underwriting

Guide to Insurance Underwriting Software

Importance of Detail in Insurance Underwriting

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Reimagining insurance with a comprehensive approach to gen AI

Despite forging ahead with generative AI (gen AI) use cases and capabilities, many insurance companies are finding themselves stuck in the pilot phase, unable to scale or extract value. Jörg Mußhoff  sat down with Cameron Talischi and Khaled Rifai to discuss how organizations can escape “pilot purgatory” by leveraging traditional AI and robotic process automation in addition to gen AI; the importance of reimagining domains such as claims, underwriting, and distribution; and how to address data privacy and security concerns regarding intellectual property (IP) and other issues early on. This transcript has been edited for clarity.

Jörg Mußhoff: To us, gen AI is not just hype. McKinsey has estimated that the total gen AI potential for the global economy is $4.4 trillion. 1 “ Beyond the hype: Capturing the potential of AI and gen AI in tech, media, and telecom ,” McKinsey, February 22, 2024. Many insurance leaders are asking, “How do we get the benefits from first use cases, and how do we scale and make it real across geographies and business models?” Cam, could you start us off by telling us what you see in the overarching trends in gen AI and what applications and domains have the greatest potential impact for clients?

Cameron Talischi: We’ve seen a lot of interest and activity in the insurance sector on this topic, which is not surprising given that the insurance industry is knowledge-based and involves processing unstructured types of data. That is precisely what gen AI models are very good for.

In terms of promising applications and domains, three categories of use cases are gaining traction. First, and most common, is that carriers are exploring the use of gen AI models to extract insights and information from unstructured sources. In the context of claims, for example, this could be synthesizing medical records or pulling information from demand packages. In the context of underwriting for a commercial P&C [property and casualty insurance carrier], this could look like pulling information from submissions that come from brokers or allowing underwriters to more seamlessly search and query risk appetite and underwriting guidelines.

The second category is the generation of content—namely, creative content. Think about it in the context of marketing or personalization. Again, in the context of claims, it’s communicating the status of a claim to a claimant by capturing some of the details and nuances specific to that claim or for supporting underwriters, and it’s communicating or negotiating with brokers. Use cases for coding and software development make up the last category. These are notable given the imperative for tech modernization and digitalization and that many insurance companies are still dealing with legacy systems.

Khaled Rifai: I would add one more in the context of client engagement and self-service. Think about the insured wanting to know whether they’re covered, what the statuses of their claims are, or whether they need to update their addresses or names. Many insurers are still employing people to handle these requests. With the help of gen AI, those tasks can be automated or designed for self-service. I think the long-term effects of gen AI are underrated, and the short-term effects are overrated. And that’s the dilemma many insurance companies and other corporations find themselves in. They want fast results from the benefits of gen AI applications but hesitate to invest in data management, technology modernization, organizational change, and budgetary allocations.

While we believe in the potential of gen AI, it will take a lot of engagement, investment, and commitment from top management teams and organizations to make it real. To make gen AI truly successful, you must combine gen AI with more-traditional AI and traditional robotic process automation. These technologies combined make the secret sauce that helps you rethink your customer journeys and processes with the right ROI.

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Jörg Mußhoff: That’s exactly what we’re seeing many players do. But we are still in that pilot phase. Why do organizations get stuck in this phase, and how can they successfully scale up from there?

Cameron Talischi: We are seeing a lot of organizations getting stuck in what we call “pilot purgatory” for several reasons. One is misplaced focus on technology versus what matters from a business perspective. Many organizations have identified several use cases and have development teams building these assets. But a lot of time is being spent on testing, analyzing, and benchmarking different tools such as LLMs [language learning models] even though the choice of the language model may be dictated by other factors and, ultimately, has a marginal impact on performance.

While there’s value in learning and experimenting with use cases, these need to be properly planned so they don’t become a distraction. Conversely, leading organizations that are thinking about scaling are shifting their focus to identifying the common code components behind applications. Earlier, we talked about extracting information from unstructured sources. Typically, these applications have similar architecture operating in the background. So, it’s possible to create reusable modules that can accelerate building similar use cases while also making it easier to manage them on the back end.

Another area where organizations get stuck is how they think about impact. We’ve seen many organizations source ideas from various parts of the business and prioritize them. But many of the use cases are very isolated and don’t generate much value, so the organization prolongs the pilot. If you’re not seeing value from a use case, even in isolation, you may want to move on. The better approach to driving business value is to reimagine domains and explore all the potential actions within each domain that can collectively drive meaningful change in the way work is accomplished. So that includes looking at all the levers at your disposal, not just gen AI. That approach better lends itself to scaling versus piloting an isolated use case.

Khaled Rifai: I fully agree. Reimaging domains is key because you can very quickly get to the restrictions connected to isolated use cases because of the dependencies with other systems and processes. We are at a point in time with gen AI where we should take a step back and really reimagine claims, underwriting, and distribution. By combining these technologies and thinking about how to design processes that capture the right data at the right point, we can drive meaningful change. This approach requires investments in more than just tech; it also takes quite some commitment, quite some investment, and quite some change to do so.

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QuantumBlack, McKinsey’s AI arm, helps companies transform using the power of technology, technical expertise, and industry experts. With thousands of practitioners at QuantumBlack (data engineers, data scientists, product managers, designers, and software engineers) and McKinsey (industry and domain experts), we are working to solve the world’s most important AI challenges. QuantumBlack Labs is our center of technology development and client innovation, which has been driving cutting-edge advancements and developments in AI through locations across the globe.

Jörg Mußhoff: Do you have any pragmatic advice for our clients about what they should do to set this up and develop these capabilities over time?

Cameron Talischi: Everything must be anchored in a strategic vision and a road map, but in terms of capabilities, the data setup is critically important, especially as you think about gaining scale. You need to make sure that the data underpinning the possible use cases are in usable condition. We talked about the technology stack and this notion of creating infrastructure that can build and deliver use cases at an accelerated pace. You are touching on talent and operating models, which are equally important. One of the failures of some operating models is when the effort is solely tech-led versus business-led with the technology function as an enabler. It’s important to assess how much of the development is done centrally versus within the business.

You shouldn’t wait it out, because you need to build that muscle to understand what solutions you should buy. Khaled Rifai

On the talent side, organizations will most likely pursue a combination of building and buying: purchasing some of the capabilities and use cases from external vendors and building some internally, such as use cases that tie to your IP and ways of working. To build internally, you’ll need the requisite talent to create those capabilities. For example, new roles such as prompt engineers address how we interact with models and get the right behavior out of them. You need to build that muscle and some of those capabilities through a combination of tech and business to deploy them as part of the right operating model.

Khaled Rifai: Some companies wonder what to do about data management now that gen AI is being implemented at large vendors. Should they just wait it out? Our answer is no—you shouldn’t wait it out, because, as Cam said, you need to build that muscle to understand not only how to keep your organization safe but also what solutions you should buy that will fit your needs.

Jörg Mußhoff: Besides data privacy and security, there’s also a big regulatory question. Gen AI can be biased, which raises ethical questions. In the mid- to long-term use of these technologies, what should insurance carriers focus on to avoid risk?

Cameron Talischi: First and foremost, it’s important for insurance carriers to have a comprehensive framework in place that covers major AI-related risks such as data privacy issues or issues and concerns about accuracy and hallucinations. Incidentally, insurance carriers need to account for risks that they’re exposed to via the use of gen AI by customers or other parties they interact with. The use of image generation is a good example of this because it could lead to fraudulent claims.

Regarding data privacy, it is possible to have automated routines to identify PII [personal identifiable information] and strip that data—if it’s not needed—to ensure that it doesn’t leave a secure environment. With accuracy, it’s important to, in tandem with the business, have objective measures and targets for performance. Test these in advance of the application or use case going into production, but also implement routine audits postproduction to make sure that the performance reached expected levels.

Khaled Rifai: In terms of regulation in Europe, the EU Artificial Intelligence Act has recently been passed. With room for national regulations, national regulators of the insurance industry will look at certain cases to determine standards. In my experience, the regulations are good enough for clients to work with. I wouldn’t start with high-risk cases concerning decisions that impact the life and health of the insured, but instead begin with other use cases that we’re certain we can implement in a secure, customer-friendly way. The thing to remember is that nothing is static, and the ongoing process of shaping regulations means taking things one step at a time.

Cameron Talischi is a partner in McKinsey’s Chicago office, and Jörg Mußhoff is a senior partner in the Berlin office, where Khaled Rifai is a partner.

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Health Insurance Audit Causes DC to Close Practice

What happens when a health insurance provider questions your coding? For one rural doctor, it meant the worst possible outcome.

Posted in Case Studies on Monday, August 19, 2024

Whether it's taxes or insurance, no one likes to be audited—and that's especially true for chiropractors and other health care providers, who are susceptible to insurance audits by the government (such as for Medicaid or Medicare) or by private insurance companies. 

The health care industry has seen an increasing trend in the number of audits conducted nationwide—and they're not optional. Broadly, these audits serve two purposes. First, they aim to root out fraud, abuse, and waste in the health care system. In so doing, they also seek to aid practitioners in fostering proper medical billing and charting practices in compliance with applicable laws.

There are two general forms of health insurance audits:

• Pre-payment review - the provider’s claims for payment by the insurer are reviewed before any payment is issued
• Post-payment review - the provider's claims are reviewed after issuance of payment

Often, a provider will be subject to a pre-payment review because of a prior unfavorable post-payment review decision.

Audits are often initiated through official correspondence notifying the practitioner of the insurer's intent to review a portion of the practitioner’s records concerning their insured. The most common risk areas insurers look for when auditing are the lack of medical necessity or documented corroboration for care, coding errors, and the failure to abide by the insurer’s specific policies and guidelines.

If the provider is found to have acted inconsistent with insurer guidelines, the insurer will seek to recoup the payment issued for the care. Government-led audits, such as for Medicare, provide a myriad of appeal processes which can result in federal judicial review. Private insurers also have an appeal process, but this review is likely conducted by an insurance-affiliated panel after an employee or team for the insurer conducted the audit. In either case, the at-fault provider is exposed to significant financial exposure and professional risk.

Dr. Livia Worrel owns her own practice in a rural community with limited access to chiropractic care. She employs a part-time receptionist, but otherwise operates her practice completely independently. Because of her rural location, she is frequently sought out by patients and is approved by various regional and national insurers, who she bills for payment of the care she provided.

Even with this steady referral and approval, market factors prevent Dr. Worrel from having a strong clientele, and any significant disruption to her stream of patients, or the fees she recovers for her care, could have a disproportionate impact on her business.

Dr. Worrel Gets Audited  

More than half of Dr. Worrel’s patients are insured by a regional insurer. The regional insurer has strict charting, coding, and reporting guidelines. Agreeing to treat patients insured by the regional insurer means Dr. Worrel has agreed to abide by these policies. As her practice continued to grow, the detail and clarity of her chart notes and patient records began to decline.

In August 2023, when she submitted claims for health insurance repayment, the insurer challenged her reporting and charting. Eventually, she received an audit notice from the insurer who then sent two investigators to her rural practice, seeking copies of select patient records. Specifically, auditors sought records of about 50 insured patients, which represented 2,000 claim lines for an 18-month period in 2022-2023. Dr. Worrel did not contact an attorney and did not organize her records as requested.

When the audit team arrived at her practice, Dr. Worrel was flustered and did not provide complete records. Those she did provide were inconsistent with the insurer's guidelines. For example:

• Failed to document a diagnosis in her chart notes
• Did not clearly indicate whether treatment rendered was “active” or “maintenance"
• Codes were inconsistently reported or applied
• Engaged in “chart cloning,” or reused the same entries for multiple appointments and patients

In sum, the insurer concluded Dr. Worrel inappropriately billed the insurer for the treatment rendered to these select patients.

Dr. Worrel Faces a $55,000 Penalty

Taking the data found from the select patient records, the insurer concluded the records contained violations significant enough that an overpayment clawback of $55,000 was necessary for payments made on all claims made to the insurer.

In other words, according to the insurer, the deficiencies and discrepancies in the charting of select patients led to questions about the authenticity and accuracy of claims for all patients resulting in a post-payment review and repayment penalty of nearly the entire amount paid to Dr. Worrel for her treatment.

A Pre-Payment Review Structure is Implemented

Additionally, issues with Dr. Worrel’s compliance with the recordkeeping requirements caused the insurer to conduct a weekly pre-payment review of all claims for the fourth quarter. The insurer continued to apply their guidelines, and Dr. Worrel continued to struggle with compliance, resulting in a nearly 53 percent reduction between Dr. Worrel's claims for payment to the insurer, and the amount paid by the insurer.

Ramifications

Dr. Worrel only contacted an attorney after the audit findings were shared, and only to aid in an appeal of their findings. While she was within her rights to appeal, the severity of the initial penalty was likely too significant to overcome; once auditors reach their conclusions, there is little incentive for the insurer to compromise any amount they feel is rightly owed to them.

Dr. Worrel’s attorneys were able to negotiate and successfully challenge some of the audit findings and reduce the overpayment amount by about $15,000. But even then, as a solo practitioner in a rural community, the overpayment was insurmountable. Coupling the $40,000 penalty with continued reductions to her billing submissions, Dr. Worrel was forced to close her practice and file for bankruptcy.

What Can We Learn

Contact your malpractice insurance carrier.  Your malpractice policy may have coverage that can help with the burden of a health insurance audit. In NCMIC's case, it's called the Audit and Legal Defense Endorsement for Chiropractors and includes coverage for Wrongful Billing and Related Proceedings (including private health insurance company billing audits).

Responsiveness to audits. Frustrating as they are, health insurance audits against providers are a reality. More often than not, however, an insurance audit does not suggest or indicate you or your practice has engaged in improper behavior or are otherwise not following protocols. But how you respond is important and can have long-lasting effects. Accordingly, it is important to take the following from this real-life example:

• Pay attention to your audit notice.  Make sure you understand its scope, its date range, your due date, and what records are to be reviewed.
• Use your resources. If you operate a multi-provider or high-volume clinic, make sure you immediately notify your records and compliance department. If you are a sole practitioner, it is recommended you retain a healthcare attorney to advise and represent your interests in the audit. This allows you to focus on the care you provided and aids your response to the auditors.
• Be responsive and in compliance with what the audit seeks.  Partial records or answers will likely rouse suspicions and prolong your audit. If you cannot locate all the documents immediately, request an extension; partial answers are never recommended. Do not respond to your audit unless and until your production is complete and responsive.

Recordkeeping. Poor record-keeping and charting not only weaken your position, but can also have disastrous effects to your practice. Whether your practice is large or small, whether you are a solo practitioner or part of a clinic, as the practitioner you are responsible for your charting and recordkeeping. Make sure you are aware of all charting, coding, and reporting requirements for respective health insurers.

Take your time when writing and reviewing chart notes.  Avoid duplication and sloppy charting and reporting. Learn, understand, and correctly apply the billing codes, and avoid disorganization. Taking a few extra minutes to ensure your records are accurate and complete can save you a lot of headaches. The more organized and prepared you are throughout your practice, the more likely you are to respond positively to an audit (and avoid audits in the future!).

Plan for the future and minimize your risk. Once the audit is complete, and after you receive your audit report, you should thoroughly review and correct the issues found during the audit. Use the results of the audit as an educational tool for understanding proper practices and training both for you and your staff. Not only does this make you a more responsive and diligent practitioner, but it also minimizes your future risk.

Consider an attorney or auditing contractor. You may want to   invest resources in your documentation and billing compliance by retaining an attorney or auditing contractor to perform a periodic spot audit to ensure compliance with the obligations imposed by the insurer. This action may allow you to foresee future issues, plan ahead, fix mistakes before they compound, and reduce the risk of an overpayment and reimbursement determination.

Taking the time and investing in resources on the front end can help avoid exponentially more time, money, and resources on the back end trying to contain an audit and avoid a significant overpayment.

Additional Resources

Article: What to Do Immediately if Notified of an Insurance Audit

Joseph A. Pickels is an Attorney with Brisbee & Stockton, LLC in Hillsboro, Oregon. He focuses his practice on healthcare and professional liability defense and represents healthcare providers and employers before state and federal courts, administrative and licensing boards, and with OSHA and HIPAA compliance in Oregon and Washington.

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