New software helps insurers cut claims and payment costs

Taking a major step toward simplifying an insurance industry awash in time-consuming and costly paperwork, HNC Software – a predictive software company – recently introduced two new software solutions that automate both the payment and claims procedures required in insurance underwriting. HNS plans to extend the availability of the solutions through an ASP (application service providers) partnership with Healtheon/WebMD later this year.

Utilizing existing industry checklist forms, HNC’s CompAdvisor 3.0 and AutoAdvisor 3.0 allow underwriters to scan in information that has traditionally been handed off from department to department – reducing a 10-step manual process to three steps using scanners and Internet processing.

Sean Downs, a senior vice president at HNC’s insurance division, said the standard industry processing speed has been 75 medical bills per person, per day. “We applied (our technology) to the bill review process and increased throughput to 400 to 500 bills per person, per day,” Downs said.

HNC’s CompAdvisor 3.0 and AutoAdvisor 3.0 are complete rewrites of current HNC software using open architecture, which allows customers to modify the rules by which data is processed to meet their own individual workflow and local policy needs.

Available immediately on Windows NT, the two solutions will be offered via a pay-as-you-go ASP model through Healtheon/WebMD sometime in August.

While other Internet-based insurance services, have been providing quote and claim processing in a front-end, customer-centric model, HNC’s solutions are targeting the back-end processing requirements.

Allenbrook, a Massachusetts-based supplier of business-to-business insurance solutions for companies such as Geico Insurance, also plans to offer its services through an ASP model later this year, said Tim Pease, the company’s senior vice-president of strategic business development.

“We’ll be extending the functionality of (Allenbrook services) to the Internet in stages,” Pease said. “And by the end of the year, you’ll be able to do a quote, price the product, edit it, issue the policy, put the policy in a customer’s hand, and use the application to modify the policy down the line.”

By its very nature, the insurance industry has been slow in adopting cutting-edge technology solutions, said Jamie Bisker, a research analyst for insurance practices at the Tower Group, in Needham, Mass. With that in mind, Bisker feels that large insurers will face a greater challenge when it comes to making years of accumulated data accessible to a modern, Web-based network.

“Insurance is interested in e-commerce, but traditionally insurance has been a risk-adverse industry,” Bisker explained.

“That’s why the middle market will have a slight advantage. They don’t have the titanic legacy volumes of data in creating their own system, so they can probably turn quicker than a Nationwide or Farmers,” Bisker said.

Because of US federal government mandates that require Medicare and Medicaid payments be sent electronically, group health insurers are already 60 percent automated, said HNC’s Downs. “That’s what we’re trying to do right now with property and casualty underwriters.”

“The next step will be bringing the bills over the Internet without scanning or data entry and making the bill review fully automated, then [sending the claim] back over the Internet and [getting] an electronic funds transfer,” said Downs. A pilot program for that endeavor will be available this summer.

HNC Software Inc., in Irvine, Calif., is at Allenbrook Inc., in Lowell, Mass., is at