Clients often ask questions about companies providing ancillary services to claims administrators. What makes one service provider better than another? What reputation does each enjoy? Are they offering quality, innovative products, and can they deliver on their promises?
The claims process is becoming more complex and more demanding. Companies are grappling with efforts to drive down costs and simultaneously improve services and outcomes. As a result, many are turning to outside service providers.
Vendor relationships are mutually beneficial and can help both parties achieve their goals. Whether it's "one off" assistance on a single claim file or program-wide service delivery, the claims practitioner and vendor succeed by developing a relationship based on trust and by cooperating to find solutions to any problem they may uncover during the course of the work.
The most successful relationships are built long before the services of an outside vendor are required. Proactive claims professionals do their research and become familiar with the types of services available and the expertise and skill of individual service providers. They also reach an agreement with vendors ahead of time regarding billing mechanisms and guidelines for completion of the work. Many claims organizations have formalized their expectations through letters of agreement that outline fee schedules, service guidelines, and the responsibilities of the parties. The groundwork is laid prior to the actual assignment of the work and is essential as a basis for a long-term relationship.
The most important, and occasionally most difficult, task for the claims practitioner is the process of articulating the extent of the work required and the outcomes desired. To ensure success, the adjuster must:
- Define the scope of the work to be done
- Determine the specific information and results required
- Set a time frame for completion of the work.
Vendors do not have crystal balls, and if the adjuster cannot articulate the scope of the work, it is unfair to expect the delivery of anything close to a desirable product. This process will help the adjuster clearly define the specific skills and expertise needed for a particular claim so the appropriate vendor is selected.
The skills and expertise of the vendor can be verified by contacting referrals, reviewing past case experience, and, perhaps most important, analyzing the reputation of the service provider. The adjuster should also check out the vendor's Web site to obtain an indication of the types of cases handled, to learn of particular areas of expertise, and to gain an understanding of the service delivery philosophy of the vendor.
Business networking sites such as LinkedIn can also be helpful. The claims professional can locate more in-depth information by reviewing recommendations posted on the vendor's profile, its past business associations, and other specific information about the provider that the claims practitioner is considering hiring.
Once the vendor has been selected and engaged, it is important that the claims practitioner monitor the activities that are undertaken. The adjuster should:
- Maintain ongoing communication with the vendor to ensure timely exchange of information
- Be open to new ideas and suggestions offered by the vendor
- Always follow through on commitments
- Assist the vendor in resolving problems or issues that may surface during the course of the work.
A successful outcome is the responsibility of both the claims practitioner and service provider, who are working together to achieve their agreed-upon goal. When problems occur, as they inevitably will, the adjuster needs to speak clearly about what options are possible and most desirable. Open communication leads to honest evaluation of the issues and a thorough consideration of possible solutions.
Once the assignment has been completed, the claims practitioner continues to have a significant role in the ongoing relationship with the service provider. At the conclusion of a job, the adjuster is expected to issue timely payment of fees for the vendor's service and provide a testimonial recommending their work.
These are significant relationship-building techniques that will earn the loyalty of the vendor when future needs arise. Many experts and service providers are sole proprietors with limited cash reserves. Timely payment of service fees will free the vendor to focus on claim-file issues rather than bill-collection problems. The practice will also enhance the relationship by serving as a stamp of approval for the work completed.
If the vendor has acted in good faith, provided the services as outlined in the scope of the agreement, and is worthy of hiring for a future project, the claims practitioner should be willing to provide a testimonial. Complimenting a job well done is a powerful way to strengthen the relationship and makes the claims professional a desirable business partner.
The Insurance Information Institute has estimated that claims adjuster positions have been reduced by 14% during the course of the recent recession. This means there are fewer professionals available to handle claims volume, thereby increasing the need for ancillary service providers to fill the gap. This puts a responsibility on each claims professional to learn how to maximize available resources to improve outcomes. Vendors could play a significant role in the future success of claims professionals and the organizations they represent.
Elise M. Farnham, CPCU, ARM, AIM, CPIW, is an international speaker, industry consultant and president of
Illumine Consulting. She can be reached at (770) 367-3148 or at
elise@elisefarnham.com.
