I saw yet another article about the claims being paid by the BP Fund this weekend – BP fund czar promises bigger, faster claims – and it struck me that every time there is a disaster we go through this. Something happens, lots of people need to make claims, some process gets set up and then we get news stories about people who have to wait too long to get their money. Then the process gets expedited in some way and we get the follow-up news stories about fraud because people are rushing. And so on.
Yet the insurance industry has examples of companies that do instant claims approval without creating fraud problems. These companies define the claims validation, completeness and approval decisions so they can be automated. They write the rules for validating, checking and approving claims as well as some to detect fraud. They use neural networks and data mining techniques to find the patterns that might indicate fraud or at least groups of unusual claims that warrant manual review. And they plug these decisions into a basic business process management or workflow framework. The only thing that really makes this hard for most insurers is that they have a ton of legacy systems to deal with.
So why doesn’t the government create a generic information system for handling disaster claims. It knows what processes and decisions are going to be needed. It knows it is going to collect certain information, apply some standard rules and mine the data for fraud and other patterns. It can’t completely nail down the data or the rules but it should be able to get to a system that’s ready to go as soon as the necessary details are added. And because it is using business rules and business process management to manage the logic and workflow it will be easy to add and change things to match the particular disaster concerned.
No need for paper forms, manual review or all this delay and hassle. No need for “Fund Czars” and news conferences. Just claims entered, checked and approved quickly and efficiently. You could even have a set of rules to determine who was paying so you could handle things like the gulf oil spill where companies and government agencies are both providing money.