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An Untapped Opportunity: How to Settle Unrepresented Third Party Claims Quickly and Easily

—August 07, 2017
An Untapped Opportunity: How to Settle Unrepresented Third Party Claims Quickly and Easily

By Monica Zylstra, Vice President, Service Operations, Mitchell Casualty Solutions

Here’s a familiar scenario: A driver gets rear-ended by another driver and bumps her head. The driver, like many others who are injured in auto accidents, makes a visit to the emergency room for treatment. Fortunately, the claimant was not seriously injured in the accident, but has acquired medical expenses from the ER visit and additional ongoing treatments for her injuries. After receiving treatment, she contacts the other driver’s insurance carrier for reimbursement. The insurance carrier pays her a lump sum for the expenses she incurred. Now, it’s up to the insurance carrier to pay her medical bills.

This is where the story starts to differ depending on an insurance carrier’s method for handling third party auto casualty claims when the claimant is not represented by an attorney. Typically, insurers take one of three paths to settle these unrepresented claims, each of which lead to different results:

1. PAY IN FULL: Pay the bills related to the claim at the full price charged by the treating medical providers

In this case, a carrier usually ends up paying more than a fair price for the treatments rendered.

2. ADJUSTER NEGOTIATION: Rely on adjusters to negotiate directly with the provider

In this case, insurance carriers bog down their adjusters and take away precious time where they could be focusing on their core duties. In addition, they often get inconsistent results, since it is difficult for management to drive consistency when adjusters are not skilled or trained in provider negotiation best practices.

3. PARTNER WITH THE EXPERTS: Partner with a negotiation service that leverages a wealth of data, expert negotiators, and a history of successful provider negotiations for third party claims, specifically facility bills.

In this case, an insurance carrier that chooses to use a negotiation service will have the most success in paying the fairest price consistently without disrupting their workflow or putting extra, time-consuming tasks on their adjuster’s plates.  This is the ideal way carriers should handle unrepresented third party claims to save on both hard and soft costs.

Why Partner with a Negotiation Service?

Impactful Solutions and Results

Choosing the third path, which leverages the services of expert negotiators who negotiate directly with providers on unrepresented third  party claims, can positively impact insurance carriers’ outcomes—20–30 percent savings on average according to Mitchell’s negotiation data. That can make a significant difference, especially for carriers that weren’t previously successfully negotiating on unrepresented claims.

Specifically, a negotiation service can be very successful in negotiating facility bills. As an example, in a span of six months, Mitchell’s negotiation service successfully negotiated more than 3,000 facility bills from third party claims on behalf of auto insurance carriers. On average, each bill amounted to $3,500 in charges. Mitchell’s expert negotiators were able to secure an average savings of $800 per bill – that’s about $3 million in total savings from the original charged amount.

According to Mitchell data, there has been a significant increase since 2010 in claimants seeking emergency room treatment. As more and more claimants go to the emergency room, insurance carriers should have effective methods in place to make sure they can get thefairest price on these and other types of facility bills.

Easy Implementation & A Simple Workflow

Sometimes, adding a new solution to an insurance carrier’s claims processing workflow can pose many challenges and difficulties, like long implementation processes and high IT costs. A negotiation service doesn’t come with any of those issues—it is very easy to implement and significantly less start-up costs. Negotiators can help insurance carriers get impactful results quickly without changing workflows or adding additional tasks to their adjusters’ plates.

Here is a simple example of how a negotiation service can simply and easily fit into an insurance carrier’s workflow:

  1. The adjuster sends a claim (a single bill or group of bills) to the negotiation service by leveraging existing integrations or through a simple web portal, customized to what fits best for the carrier’s workflow.
  2. The negotiation service successfully negotiates the bill(s).
  3. Adjusters receive the negotiated bill(s) back to them in their adjuster workspace in a timely manner.
  4. The adjuster arranges for payment of the bill(s) at the negotiated price.

Choosing a Negotiation Service

When it comes to choosing a negotiation service, it’s important to remember that not all are equal. In order to get the best results, there are three main areas to consider when choosing a negotiation service: data, technology and expertise.

Data

A powerful, successful negotiation service is backed by data. A wealth of data can provide invaluable insights that can not only save time in the negotiation process, but also show negotiation patterns. Ideally, a negotiation service should have a history of working with almost every provider in the country and have records on the process and outcome of each negotiation. This type of data provides insight to negotiators in advance of provider outreach. For example, the negotiation service should keep track of who the correct contact is at each facility, if a certain provider is typically more difficult to negotiate with and many more characteristics of how past negotiations went with each provider. By having this type of information in advance, negotiators can use different tactics and methods that can lead to more successful negotiations.

Technology

A robust technology platform takes all of the data a negotiation service collects and makes it actionable. Each negotiator should work out of a technology solution that collects, analyzes and displays the most important data and history on each provider to help with the  negotiation process. This type of technology helps keep turn-around times low and make negotiations successful.

Expertise

The third key to a successful negotiation service is expert negotiators with a history of results. Negotiators should be trained in best practices and have experience calling providers on a daily basis and building relationships with the provider market. This type of expertise results in better and more consistent outcomes for the insurance carrier.

By choosing both to negotiate third party unrepresented claims and to use a negotiation service to do so, insurance carriers are filling a major gap in their claims process. A negotiation service helps carriers get better results on unrepresented claims quickly without disrupting workflows or adding to their employee’s already-full workloads.

 

Interested in third party claims processing? Read more of our third party blog series!

 

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