The 3 Most Common Pain Points of Claims Processing for TPAs

Companies are reimagining their processes for smoother, cleaner operations. How can insurance TPAs do the same for pain points in their claims processing?

Anyone in the insurance industry knows that TPAs can play a critical role. TPAs, or third-party administrators, bridge the gap between insurance companies and their clients to process claims, facilitate administrative processes, and create a better experience overall. TPAs work to ensure that claims are processed with quickness and efficiency while still maintaining impeccable standards.

However, the tasks faced by these administrative experts aren’t without their challenges. For one, it is virtually impossible for TPAs to meet rigorous standards using a manual claims process because it is slow and prone to human error. Consider the small but significant mistakes that may arise when TPAs must manually scan information, attach PDFs, send emails, and take data from various sources throughout the claims process. One seemingly minor oversight can quickly snowball into a serious miscalculation or breach of privacy.

Business is evolving, with companies in all industries reimagining their processes for smoother, cleaner operations. TPAs are now in a position to do the same by recognizing and addressing the critical hurdles in their workflows. Consider these three common pain points for TPAs, and ways that you can evolve to overcome processing setbacks.

Major Challenges in Claims Processing

1. Processing Speed and Customer Satisfaction

Insurance is a unique industry that suffers from a level of detachment between customers and providers. After all, when customers purchase an insurance policy, they don’t tend to keep in touch. Most likely, they’ll only contact their insurance company when a loss occurs, and they need to make a claim quickly. 

Claims processing is one of the only meaningful touchpoints between policyholders and insurers and an incredibly vital factor in customer satisfaction.

In years gone by, it was silently understood that claims processing could be a lengthy process, especially if an insurance claim required much investigation. Now, with the advent of smartphones and other modern technologies, customers have higher expectations from their service providers. Policyholders can want insurers to provide immediate satisfaction, complete with regular updates and quick payouts. Even claims requiring investigation move much faster in the digital age, with customers able to submit evidence via email or through insurers’ branded mobile apps.

To complicate matters further, when customers file a claim, they’re probably starting from a place of negative emotions. There may be injuries or losses involved, traumas endured, or serious financial blows at stake. So when processing seems slow or opaque, customers will be quick to feel frustrated or even desperate — a bad place to be, considering that studies from Global PwC state that over 70% of all customer purchasing decisions are influenced by the quality of the service they receive.

If policyholders constantly need to hassle TPAs for updates or are unaware of who is processing their claim, they will feel that their issues are not a top priority. Claimants in especially vulnerable situations require a level of sensitivity and quickness that can be challenging for TPAs to balance while managing their workload. TPAs following outdated workflows may find it difficult to live up to the turnaround speed expected by customers, especially if they still rely heavily on manual processes.

2. Compliance 

Out of every pain point facing TPAs, compliance may be the most significant. Ensuring that the intricacies of insurance claims are precise and accurate is a tall order but a necessary one. TPAs must not only dot every I and cross every T to see that claims aren’t rejected on a technicality, but they must also manage compliance across many jurisdictions.

Local compliance is a major time consumer for most TPAs, who must research the variables of the case to create a list of the needed paperwork and then check and re-check that the completed documents are in order. Because paperwork and regulations can vary widely from state to state, skilled TPAs must understand how to navigate these choppy waters to include and accurately complete all the documentation required.

3. Inefficient Processes 

This final pain point sits at the crux of the first two. How can TPAs provide fast processing while meeting all compliance requirements and assuring accuracy? The only possible answer is through efficient workflows. Unfortunately, many claims processing systems are far from streamlined. The complexity of the industry, the depth or required paperwork, and the multiple systems and databases involved often mean snarled workflows that become bogged down with inefficiencies — despite TPAs’ best efforts.

Why Are These Pain Points So Persistent?

Sometimes, businesses suffer from friction and inefficiency because they haven’t recognized their internal hurdles. But when it comes to claims processing, most professional TPAs are probably all too familiar with these major challenges. So why do they continue to persist?

The insurance industry has long held a reputation as a digital dinosaur, lagging behind other sectors in the adoption of useful technologies. While some may think this is an unfair evaluation, evidence suggests that it’s not totally off-base. In a 2020 study by ACORD (Association for Cooperative Operations Research and Development), they looked at 130 of the world’s leading insurance carriers and found that fewer than 30% had fully digitized their value chain.

Unfortunately, this lag in the adoption of modern tools has a direct impact on TPAs’ workflows, contributing to all three of their major pain points — speed, compliance, and accuracy.

How Can TPAs Resolve Issues with Claims Processing?

Hands down, the best way for TPAs to deliver high-quality work while rising to new customer standards is by facilitating operational efficiency with modern technology and workflow automation.

Some companies continue to use manual processes and traditional paperwork because they feel uncomfortable trusting digital solutions. While there’s always something to be said for a worker’s ability to apply critical thinking, this isn’t a guarantee of better verification or security. In fact, because automation mitigates the possibility of human error, it provides better compliance and security measures than traditional methods.

Automation also takes pressure off individual TPAs, reducing burnout and empowering them to do their best work. Modern technology can support TPAs with features like the ability to import data, identify necessary documents on a per-case basis, and keep customers informed with automated progress updates. With these tasks handled, TPAs can turn their attention to the finer points of claims management and produce better results.

Embrace Tech Solutions with Populus

Struggling with pain points in your claims processing? At Populus Technology, our team of experts can improve your daily operations through modern insurance solutions. With software such as TotalCheckr, your company can easily automate labor-intensive processes for better speed, accuracy, and assured compliance.

Instead of manually and laboriously assuring that claims align with each state’s specific regulations, TotalCheckr allows you to validate requirements easily and ensure compliance with a single source of truth for all state titling requirements. Plus, TotalCheckr’s comprehensive database of state requirements and documents is updated every 28 days, so you can be confident that your insurance claims are in line with the most current policies.

Whether you’re updating and automating routine processes or undergoing significant restructuring, Populus provides consulting and bespoke solutions to ease the way. We can even design, develop, and deploy customized software to support your goals. So if you’re ready to ease pain points and provide better claims processing services, contact Populus today to learn more about our tailored insurance automation solutions.

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