Having good partnerships with surveillance and investigation vendors is a critical operational component to the success of many Special Investigation Units. These vendors fill geographic, staffing, and specialization objectives that would be difficult or inefficient for SIUs to attain without outsourcing. Utilizing vendors to help meet operational goals can be challenging, though, and the approaches we see SIUs take can be varied, with different levels of success. We know from experience that automating the vendor management process can create meaningful efficiencies and successes in your fraud-fighting efforts.
As important as they are to the success of some SIUs, managing your vendors can be an exacting demand on the SIU staff who is charged with the task. The vendor panels SIUs employ often contain surveillance and investigation companies numbering in the dozens. And the differences between these vendors in regions covered, customer service capabilities, quality of investigators, and reputation can be very significant. The number of investigators a vendor employs in a geographic area contributes to success components like how familiar investigators are with neighborhoods, how well they blend into the areas during their investigation, and whether they can speak languages and dialects that will help them with the investigation. Good investigators do more than hold a camera. Good investigators are capable of using their adaptive skills in intelligence gathering in ways that can be an important factor in the success of an investigation. And then, of course, there’s also the issue of compliance…
Using Automated Systems to Assure Vendor Compliance
Have you ever had worries about the currency of the licensing and insurance coverage required of your vendors? Has ensuring that agreements, documents, and renewals are up to date become a difficult task that still leaves you concerned? We’d be naïve to believe that a vendor slip-up that could leave you exposed doesn’t happen from time to time. A good case management system should allow you to manage this part of your requirements with minimal effort on your part while knowing that you’ll be alerted if a vendor falls out of compliance. In fact, granting vendors secure and limited access to your case management system allows you to avoid much of the hassles and labor associated with keeping these records up to date. Good case management systems should allow import templates for this purpose which should allow the vendor to keep up to date on requirements like this easily.
Not only should you be able to keep track of things like your vendor’s agency licenses, SLA agreements, and insurance coverages at the corporate level, you should be able to track the individual investigators they employ to assure that their licenses, individual auto, and other compliance requirements are kept up to date. All the documents associated with these items can be uploaded and stored on the vendor company profiles and individual investigator profiles if you have a good case management system. If you require your vendors’ employees to be non-contracted, you may require some proof of employment to be uploaded to their profile as well, along with auto insurance documents, driver’s license, and PI license.
When your vendor is in danger of going out of compliance, both you and your vendor should be notified, and if they fall out of compliance that fact should be reflected in their profile status. Their profile status, whether that be Active, Inactive, Under Probation, or Terminated should filter your selection of vendors when you go to assign cases. We’ve actually seen one very diligent SIU add a workflow process to their system to track the restoration efforts of vendors who have been put on probation, and to flag those vendors via system warnings when a case is assigned to them during their probation period.
Using Vendor Qualifications to Help Determine Which Vendors Should be Assigned Cases
Beyond compliance, you can also record qualifications on your vendors and their investigators. Each vendor company profile can contain checkboxes for lines of business, types of investigations, investigation locations, charge-out locations, and pricing. Skill levels and types of tasks (e.g., Surveillance, Statement, and Scene Investigation), eligible locations, etc., can also be checkboxes on individual investigator profiles that can qualify them and filter them for investigation selection. The system can be set so that if a vendor or an investigator fails any of the qualifications, they are excluded from the selection process on a case.
The data you collect on vendors and their cases can be used to determine which vendor is best to do a job. At a minimum, this data can be qualifying information like licensing, geographic locations, and minimum score summaries. A good case management system should filter and qualify vendors based upon these determinants.
But if you are so inclined, the information you are capturing can do much more for you. Your case management system should allow for easy uploads of useful information. At the very least this supports your vendors as they keep licensing, qualifications, addresses, skill set, and seniority details current. This can send compliance alerts when a license is expiring so that nothing slips through the cracks. But if you get even more relevant data during this upload, the selection and evaluation of investigative vendors becomes even more refined, creating force multiplier efficiencies.
For example, if you decided you wanted to create a geographic analysis of the investigators each vendor employs in a given area, you could do so by having the vendor maintain and upload a list of their investigators directly. You could then use geographic analysis to evaluate who the best vendor is for the job. It’s no secret that try as some national firms may to provide consistent quality everywhere, most of them experience deficiencies in certain locations where their management is lacking or good investigators are hard to find.
Accumulated scoring reports by vendor are useful in the allocation process as well. Over time, these scoring mechanisms help you find the best vendor and case allocation fits.
Which of your Vendors’ Field Investigators Should get the Case?
If you assign cases to vendors simply because they are compliant and licensed in a state, you may be missing some opportunities to pinpoint the best person for the job on your vendors’ rosters. A vendor may be sending their investigators hundreds of miles to do your case because of lack of staffing availability and you may not even know it. Vendors often take losses on cases to accommodate important clients, and they don’t want to reveal a staffing hole that could be viewed as a deficiency.
Aside from the economic burden on your vendor partner, the investigator they send may have no familiarity with the local neighborhood and may not blend in well in the area, which could compromise the investigation. A good case management system will allow you to calculate mileage and cost, and plot all the vendors’ investigators on a map. This will help determine who is closest and allow you to drill down to see what their language and skillsets are. Ultimately, it gives you the opportunity to request the best person for the case, or select from several who fit well for the job instead of leaving the decision up to the vendor.
In the end, finding the best, most qualified and most effective investigator to work the case can be tricky. But through the help of automated systems and procedural change, this task can become much more manageable and the advantages you gain can be noteworthy.
Using Automated Systems to Evaluate Your Vendors’ Performance
Do you score the quality of vendor investigations, record mitigation and vendor costs on your cases, and record outcomes? If you do, you’ve taken some steps already that can be advantageous in evaluating vendors, and eventually choosing to whom you refer a particular case. If you are recording these metrics in your case management system, you should be able to get some very useful data out of that system to help you improve the quality of the investigations you are getting from your vendors and deciding who gets your cases.
At a high level, scoring your vendors on things like the overall quality of an investigation, turnaround time, video quality and usefulness, communication, etc., can really pay off in the long run. Over time, you’ll have the ability to communicate areas of needed improvement with your vendors and give yourself an opportunity to set your expectations with them. Believe it or not, your vendor partners are grateful to get this feedback. They genuinely want to give you the best service they can and hearing your perspective on things is invaluable to them.
It might surprise you to learn that a good number of your vendors are performing internal, very detailed scoring of their investigations already. In our consultative discussions with investigative firms, we’ve seen a large array of how this particular cat is skinned, especially when it comes to measuring video. But overall, the adage “that which is measured, improves,” has proven to be a universal truth. We’ve seen some of the better firms out there show an eagerness to share this information with their clients, usually in the form of periodic stewardship reports.
On the other end of that process, we’ve seen successful SIUs have cadence meetings with their vendors to review quality and SLA compliance, and to facilitate an open dialogue designed for improvement. They’ve reported consistent improvements from these routines. You’ll want these meetings to be spread out far enough so that sufficient information can be gathered between them and there is enough time for targeted improvement. If you have a large vendor panel, these meetings can be overly burdensome, so communicating expectations can become less bi-directional. Overall, however, communication is important, and if you have measured elements to convey that’s all the better.
Using your Automated System to Ensure Adherence to Budget and Pricing Agreements, as well as Reporting Requirements, SLAs, and Special Instructions
Has monitoring and reviewing vendor invoices, pricing, and the budgets they’ve been given ever been a burden to you and your SIU staff? If so, that’s some fairly expensive bill review. An analysis of the opportunity cost of a single investigator having to divert their efforts away from case resolution for the purpose of administrative work can be alarming. If, however, the vendor is entering the billable hours, mileage, expenses, flat fees, etc. into your case management system, your system should be able to do a lot of the work for you. Such a system can produce the invoice based on the agreed-upon pricing and budget, or produce a quick review sheet that makes the vouching of their invoices a secondary concern as you review the quality and outcomes of their work.
What about the handling of the case itself? Every insurer has certain requirements that they expect their investigation vendors to adhere to. On the front of this process, your system should spit out the special requirements and procedures to your vendors during the assignment process of every case. By doing this, there is never a misunderstanding. Additionally, checklists should be available to vendors every time they enter a case update so that they can “follow the bouncing ball” related to your procedures.
And what about case reporting? Most vendors have their own case report formats, and while that certainly can be appreciated from their own branding and standards viewpoint, having multiple case report formats complicates the process for those who are charged with reading them. If your investigative vendors are giving you routine updates on their cases, along with still photos and other documentation, those updates can be converted to case reports in the format you desire. Having this kind of consistency can make the case report review a much simpler process.
But what if you could do both the bill review and case review processes at the same time?
The Work and Bill Review Efficiency Yield
Some time ago we at Polonious did a time-and-motion study on the administrative tasks associated with case processing once automation was added. What we learned surprised even us. It turned out that the biggest efficiency gained was achieved not simply because of automation, but from automation that facilitated a procedural change. That procedural change involved reviewing and vouching the hours and expenses associated with a case update, concurrently with that case update. We found that doing a review of a vendor bill immediately before or after reading the case update from the vendor reduced the amount of time it took for the SIU team to process the case. This not only reduced the labor involved, (thus freeing SIU personnel to do more important things), but also improved the cycle time on the case tremendously. That’s because some of these review tasks were acting as bottlenecks to the file-closing process.
What causes these types of efficiency gains? One explanation is a phenomenon called Task-Switching. It turns out that cognitive attention shifts require more mental energy and a “restart” to the process altogether. If two related tasks can be done together – in this case, reviewing updates, evidence, and related costs, the “restart” can be avoided at the conclusion of the case. Once the SIU has “approved” the update, that part of the case never has to be re-addressed, and folks can move on to the next task.
What makes case updates to your system from vendors even more vital is that you can require them to upload their evidence in the process as well. Once that’s achieved, you will have evidence and data in the same system. Your videos, photos, and other documentation can be referenced easily, and again, compared concurrently with case updates and billing information.
Panel Management Dashboards and Management Reporting
Is it possible for SIU management to oversee most vendor-allocated cases through a case management system? We think so. And that task becomes even easier when you have dashboards to work with and reports that assist in case and performance evaluation.
Dashboards in your case management system should allow you to evaluate the timeliness, status, and quantity of the cases your vendors are working in real-time. You should be able to configure your dashboards so that you can narrow down by region, case type, vendor, status, due date, or any other operational view you need, and you should be able to drill down into the individual case to do more evaluation. The dates of action, inaction, case assignment, and case movement should all be automatically recorded in the system, so escalations can occur within the dashboard itself in real-time and alerts and warnings can be sent to the appropriate parties.
Ultimately, reviewing the performance of your vendors in their aggregate can come down to a few key financial metrics. At the highest level is the return on investment. How much mitigation was achieved by each of your vendors in relation to their cost per case?
The four quadrants of this matrix can help you easily identify where you are getting the most bang for your buck, where the highest savings are in relation to investigator cost, with the ‘star’ operators being in the upper right-hand quadrant. When these financial measures are compared with operational case evaluations, the results can be quite telling.
In the end, whether you employ some or all of the automation and process improvements outlined above, vendor accountability goes hand in hand with your vendor partnerships. Systems like these provide for process improvement, but also solidify the trust between the vendor and the SIU and more clearly layout expectations.
Because of the unusual environment, we’re all adapting to now, more and more investigative organizations are searching for solutions that will help them manage their cases in a setting where personal contact and face to face meetings are not possible.
One solution many managers are turning to is a virtual interview platform that allows you to record video statements over the web with some interesting and helpful features. Companies like Splashlight Telehealth, located in Des Moines, Iowa, and Eviid out of The United Kingdom, can provide a number of significant advantages to investigative organizations.
Virtual interview platforms like these can be good solutions for anyone charged with conducting recorded or non-recorded statements, alive and well checks, examinations under oath, property damage inspections, activity checks, and remote depositions. They’ve been used in all types of claims and investigations, and the efficiency gains and operational advantages to them have been impressive.
According to Scott Gayton, Executive Director at Claims Bureau USA, a nationwide surveillance and investigation company, using this kind of virtual interview technology has too many advantages to ignore. His company recently made the decision to go with Splashlight’s 3V product and he’s excited about the potential he sees. Gayton sees the improvements they’ll realize in turnaround time as an unheralded aspect of going to this program as opposed to in-person interviews.
“It’s so much quicker than trying to schedule an interview that might need to be rescheduled more than once to coordinate schedules,” Gayton said. “If someone has to cancel because they had to leave the house, you just tell them, that’s ok, we’ll just call you for a teleconference when you get home.” He added, “Getting a quick interview is especially important to a claims analyst who may be trying to make a quick decision on a claim payment.”
Gayton also cited cost savings as a factor. Personnel can be costly, and an alive and well check that potentially consumes five-minutes of face-to-face time can require a trip across town, tracking down a claimant, or dealing with scheduling issues. All that can add up.
Some insurers are currently operating under a moratorium on fieldwork, which makes conducting interviews a challenge for special investigation units. This type of solution can be the perfect remedy for someone under those restrictions, or who might be required to pay hazard pay to their employees under the current conditions.
Polonious is very familiar with Splashlight’s 3V product as we began integrating their technology into our case management system in the middle of last year to make these advantages available to our customers. We’ve seen an uptick in interest lately in the use of Splashlight’s 3V technology through our system. This is primarily due to the recent suspended travel mandates and restrictions on contact. Polonious automates the routines required to set up these interviews, creates the interview case in Splashlight, sets scheduling and details on the interview and captures the data and media that is the product of them.
What makes these types of solutions different from using, say, a Webex or Skype type of solution? Well, aside from the bandwidth strain we’ve seen lately on those types of platforms as workforces transition to telecommuting, the Splashlight 3V application provides some advantages that others can’t.
First, the interviewee doesn’t need to install an app or have any additional hardware other than their mobile device or laptop. Potential technology hiccups inherent in those platforms can derail an interview and can be avoided by using a recorded statement solution. That also makes the meeting location much more flexible. If it’s for an assessment of physical damage, for instance, the interview and inspection can be done as the claimant is walking from site to site to show the damage. You can also schedule meetings through the platform (a big advantage when it comes to coordinating) which also allows you to avoid bouncing between multiple apps. Additionally, Splashlight provides interpreters and a transcript if that is what you require.
Since multiple screens can be open at the same time and things like ancillary footage can be shown, a claimant’s reaction to the introduction of evidence can be captured for posterity. This can actually add a bit more to the evidence gathered as some of these reactions, (for example to video of a staged accident), can be quite interesting and even amusing.
If you’d like to find out more about how the Polonious Case Management System integrates with products like these to make your operation more efficient, contact us at 888-650-7656 or come to our website at Polonious-Systems.com.
Insurance Special Investigation Units (SIUs), as much as any other business unit, are under constant pressure to prove their value to company stakeholders and budget-setters. Things like ROI and value are not always made clearly apparent to people in charge of allocating resources, and the justification for devoting more budget to anti-fraud resources can sometimes be vague. To that end, data and measurement can become a valuable tool for SIU leadership. An important use of your data may be to prove the value of the unit itself, to justify its usefulness and procure resources. What, then, are some of the best ways we can accomplish this? Let’s think about your internal stakeholders – senior leadership and the claims department. What are some of the things most important to them? Can they be measured and reported?
Protecting the brand
For leadership and the wider business, protecting the company’s brand is a principal concern. As an SIU tasked with investigating and reducing fraud losses, this may seem like a duty more suited to customer service, public relations, or marketing. However, fraud investigations are sensitive topics for customers, particularly if they are the subject of a perceived or alleged false accusation. Your SIU is challenged with minimizing fraud losses without negatively affecting the overall claims experience for normal customers. What happens when these negative interactions with SIUs occur? Well, here’s what can happen sometimes:
While we need to be forthright in hunting fraud, a hostile claims process and a long cycle time on claims that turn out to be genuine can be seriously damaging to your brand, possibly leading to social media complaints, bad press, and complaints to regulators.
The question is: How do we demonstrate to our leadership and our claims department that we are fighting fraud while keeping the cycle times reasonable and the overall customer experience positive?
In later parts of this series, we’ll talk about how to reduce false positives so customers with genuine claims don’t experience claim delays, and how we can use metrics to reduce cycle times even on claims that are genuine. We’ve seen a couple of social media complaints that are essentially about claim cycle times. What statistics can we track that will help us with brand protection? Let’s take a look at this graph of average claim settlement time:
You can see on this hypothetical chart for an SIU, that the average claim settlement time is going up over recent periods. According to a 2014 Coalition Against Insurance Fraud survey, most investigations on commercial line files are concluded within 60 days. This unit is trending above the norm which could raise concerns. On the other hand, if you’re lowering cycle time, you can clearly demonstrate this to management and prove some of your value.
Tracking customer complaints, tracking compliance, and measuring claims unit satisfaction are some other ways of showing your commitment to brand protection. By using these metrics, you can demonstrate that you are upholding, and even improving, the brand value. The next question is likely to be “What are the outcomes of your claim, and how efficiently are we achieving them?”
In Part 2 of this series, we’ll continue to explore metrics with a discussion about the return on investment.
In the first part of our series on proving value, we discussed brand protection and how it affects the perception of senior management towards your Special investigation Unit. In this, the second part of our continuing series, we’ll explore Return on Investment metrics and how they can help prove your value.
Since SIUs are under constant pressure to prove their value to budget-setters and company stakeholders, things like ROI can be a valuable measurement tool for helping you get the resources you need in your fraud-fighting efforts. Your justification for devoting more budget to anti-fraud resources may rely on your ability to measure and reflect the key performance indicators that are important to senior management.
Fraud savings – a wellspring of provable value According to the Coalition Against Insurance Fraud, fraud can cost many insurers upwards of 20% of the total book of business. The national average is closer to 10%. If your company is able to run things at a lower fraud rate, how substantial is the impact you’ve made on the claim overall, and how can you report this savings to your senior management?
The three elements of ROI are: • Savings and restitution • Costs: Payroll, vendor costs, allocated costs and other SIU costs • A metric showing how the savings relate to how much you’re spending on investigations
Other key questions we’ll talk about in future parts of this series will center around how we can improve fraud recognition so claims handlers send us more or better quality cases with fewer false positives, and how we can improve the technology we’re using to do the same. Today we’ll focus on fraud savings.
Calculating Savings from Anti-fraud activities
The first component of ROI is savings and restitution. Restitution is pretty straightforward, as it’s calculated based upon dollars collected from judgments and agreements with providers. Most insurers only add that to the equation when the payment is received. The bigger question is how to calculate mitigation and savings.
Below we see another study by the Coalition Against Insurance Fraud. Most insurers have a defined method of calculating the savings generated through their anti-fraud activities. You can see from the chart below, that using the actual or estimated dollar amount at the time the claim is made is the most common method. Another common method is to use the reserve amount at the point when either fraud is determined or suspected. Since these measurements are not mutually exclusive, you can use a combination of them to get different pictures of what your SIU is producing. The case management system you use should track this information and report on it easily.
The chart above, a sunburst graph, shows your financial exposure broken down by lines of business (the inner circle) and claim types (outer circle). So, for example, you can look at Auto and see that there are two claim types for that line of business – Accident, with $1,386,054 exposure, and Theft, with $842,530 exposure. This kind of graph can show you which lines of business and claims are costing your organization the most money. The next step is to analyze the other side – the potential or actual mitigation on those claims, which are shown here:
The prior graph showed you what your organization is paying by claim type, but those may be legitimate claims and a legitimate cost of business. More important to the SIU is the potential mitigation against these claims, i.e. the amount that can be avoided due to your discovery of potentially fraudulent claims. Comparing these two sets of data can be valuable to your organization for planning purposes, (we’ll get to that later in the series), but it can also be an asset when communicating the value of your SIU to senior management. This data can give them a better perspective on lines of business that may be more vulnerable to fraud, and provide further insight into what you are doing about it. Shown another way, claims savings by line can give perspective on where your investigation results have the most impact:
Tracking saving by outcome can also be a valuable communication point internally to your SIU and senior management. In the sample chart above, which tracks savings by case outcomes, withdrawn claims are the largest savings. This could be due to a number of factors. Perhaps the customer withdrew on their own, or perhaps they knew the claim was not on the up-and-up and pulled it before it could be investigated further, thus avoiding legal consequences or embarrassment. In any case, it can be a reflection of some of the success brought on by your SIU. A word of caution, however, this figure can be an element of brand damage that we mentioned in our last discussion. It’s possible the slice can represent some customers who lost trust in their insurer due to a perception that an investigation is being unfairly conducted on a legitimate claim.
In the next part of our series, we’ll delve further into the elements of ROI and discuss some more ways of proving SIU value.
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