Handling Disability Income (DI) and Long-Term Care (LTC) claims can be quite a challenge for insurers. The processes are often bogged down by a high volume of claims, complicated eligibility checks and scattered touchpoints across multiple systems. What does this mean for clients? A lot of waiting before they see their benefits. For insurers, inefficiencies, increasing costs and fraud detection hurdles stand in the way of smooth operations. Now, imagine transforming this entire workflow using innovative technology, smart data and robust analytics. The result? Quicker processing, shorter wait times and an enhanced customer experience.
Understanding the core problem
DI and LTC claims have become tougher to manage, especially with a significant uptick in numbers over recent years. In 2023 LTC benefits paid out amounted to US$14.1 billion; a CAGR of 6.7% from 2020 - as reported by the American Association for Long-Term Care Insurance (AALTCI).The manual processes used to handle these claims are falling behind. Claim handlers are tasked with ordering, verifying and reviewing mountains of medical, financial and occupational records. This approach drags the process out—clients can be left waiting for up to 90 days approx. for their benefits. The bigger problem? Disability fraud, which costs insurers a hefty $7.4 billion in 2023. (Forbes Advisor). In 2024 , The Justice Department has recovered more than $2.75 billions in false claims against long-term care providers.
Moreover, the process requires continuous eligibility assessments and the handling of ongoing administration tasks for ongoing/continued claims and claim analysts are spending same amount of effort adjudicating continued claims as new claims, The fragmented approach currently in place also limits insurers' ability to catch and prevent fraudulent claims. This is where the power of technology and data can change the game.
Leveraging technology and data to transform claims handling
To address these long-standing challenges, insurers need to make full use of the latest technology and data analytics. Automating the claims process can remove much of the burden from claim handlers, making it faster, more accurate and have them focus on more complex claims requiring their attention. Here’s how these tools can make a real difference:
| Leverage data, analytics and technology for personalized experience and streamlined claims process |
| Intake | Assignment | Eligibility check & adjudication | Claim payment | Ongoing claim administration | Reporting | |
| Omni-channel claim submission | Auto assign claims as per complexity, examiner’s availability, skill sets, etc. | Verify claim eligibility via integration with PAS, digital plan of care, providers database for LTC | Automated calculation of complex claims benefit amount via calculation engine | Recertify claims via Business process management (BPM) | Monitor performance of claims team via dashboard | |
| Reflexive questionnaire to generate relevant claim forms, smart fill them and auto create claim in claim admin system | Automated ordering of required medical, financial and occupational records | Extract, summarize, synthesize historical claims and other claim docs.Streamline adjudication via rules engine and STP of qualified expenses | Enhance claim payments reconciliation by automating cleaning and transformation of data from invoices, statements and other unstructured documents | Digital assessment tool to conduct periodic benefit eligibility assessment as per appropriate schedules of recertification | Leverage data warehouse to identify count of claim denials along with reasons , claim reserves required for a given period and support required for reporting to state regulators | |
| Ingest unstructured data and restructure it for utilization | Auto match trailing documents with existing claim case | Verify occupational duties electronically and calculate individual degree of occupational disability levels via algorithms & rule-based approach | Select claim admin system that meets LTC, DI benefit payment options | Flag claims for continuing review based on identification that has likelihood of medical improvement | Alert managers based on count of pending Claims | |
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Data-driven case management |
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Automated fraud detection –Analyze unbiased external public data on insured’s activities, behaviors and run algorithms |
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Document management and personalization |
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1. Streamlining the claims filing and evaluation process
One of the biggest bottlenecks in claims processing is the filing and evaluation stages. When a claim comes in, it requires meticulous checks across multiple documents and systems—these include medical, financial and occupational details. Automating these processes can drastically speed up verification and accuracy. AI-based platforms, for instance, can quickly digest and analyze medical records and create structured view, which can assist claims analysts in making faster decisions.
Additionally, AI systems can allocate claims based on complexity and available resources, which means claim handlers are working more efficiently. Automation also allows insurers to leverage rule-based engines that handle straightforward claims without human input.
2. Cutting down processing times and lowering costs
It’s not a secret: insurers need to process claims faster and at a lower cost. Automation is the way forward.
For instance, claim handlers often spend an equal amount of time on both new and ongoing claims. With automated tools, tasks like ongoing disability or long-term care recertification can be flagged based on pre-determined rules, ensuring only the most complex cases require manual attention. This not only reduces administrative costs but also allows insurers to handle a larger volume of claims effectively.
3. Improving fraud detection and prevention
Fraud in DI and LTC claims is a growing concern for insurers, particularly given the financial implications. Disability fraud often occurs when claimants misreport information or errors are made during the payment process. Insurers are also experiencing LTC fraud when claimants misrepresent impairments in an attempt to satisfy benefit eligibility. This is identified as the highest reason followed by LTC providers billing for services not rendered with independent providers. This results in billions of dollars lost annually. To better tackle this problem, insurers need more than traditional fraud detection techniques—they need AI-powered fraud prevention systems.
AI and machine learning algorithms can sift through massive datasets, including public information and claimant behavior patterns, to flag any inconsistencies. These tools are designed to catch potential fraud early, reducing the likelihood of fraudulent claims progressing. With these tools in place, insurers can focus their resources on investigating high-risk claims while allowing straightforward claims to flow through seamlessly.
4. Delivering a tailored, efficient claims experience
In today’s fast-paced world, clients expect quicker and more transparent interactions with their insurers. They want to know the status of their claims and expect answers without the runaround. Insurers can meet these expectations by offering omnichannel platforms that allow clients to submit claims online, over the phone, or via email. AI systems can auto-generate pre-filled claims kits, making data collection smoother and reducing the back-and-forth.
On the flip side, insurers can benefit from AI-driven case management systems that allow them to prioritize claims requiring more attention, all while delivering a personalized experience.
Practical solutions for insurers
The key to overcoming these challenges is leveraging data, technology and automation to streamline workflows. Here’s a breakdown of actionable solutions insurers can adopt:
1. Efficient document management and workflow automation
Insurers must focus on digitizing records and automating document workflows. With AI-based platforms, medical, financial and occupational data can be handled quickly and efficiently. The result is better accuracy and faster decision-making.
2. Advanced fraud detection systems
Traditional fraud detection isn’t enough anymore. Insurers must adopt AI and machine learning models to assess claimant data, external behaviors and patterns to flag potential fraud early on. This approach enhances the overall security of the claims process.
3. Data-driven claims management
AI-powered claims management systems allow insurers to automate much of the claims adjudication process. This includes everything from filing claims to handling ongoing recertification. The goal is to reduce claim durations and improve efficiency.
4. Improving customer experience with omnichannel integration
Providing clients with multiple ways to submit claims—whether online, over the phone, or via email—improves their experience. Automated systems, such as smart claims kits, streamline the journey from start to finish.
Conclusion
It’s time for insurers to leave outdated, manual processes behind. The inefficiencies, long delays and fragmented systems that have plagued DI and LTC claims for so long can be transformed with the right technology. By automating claims processes, utilizing data analytics and integrating advanced fraud detection systems, insurers can offer quicker claims processing, lower costs and better customer experiences.
Moving forward, it’s about adopting these technological solutions now to stay competitive, efficient, and secure. Insurers that invest in automation and AI will lead the way in offering faster, more reliable and cost-effective claims handling.
