The Insurance External Claims Investigation ES bundle integrates SAP Claims Management with third-party service providers that host clearinghouse databases to help insurance companies flag fraudulent claims for investigation.
This wiki discusses integration with Insurance Services Organization, Inc. (ISO), the leading insurance claims investigation provider in the United States, but the Enterprise Services in this ES bundle have been designed in such a way that they could be integrated with any such third-party service provider (for example, GDV in Germany).
Service providers such as ISO maintain claims databases. If two insurance companies send in similar claims, ISO notifies each of them (using web services or another prearranged notification method) that there is a potentially fraudulent claim that merits further investigation. This ES bundle provides communications between SAP Insurance Claims Management and ISO and could be integrated with other such providers. To give you an idea of the scale involved, ISO's database contains data on over 500 million claims from 4,000 U.S. insurance companies, as well as from 25 state workers compensation insurance funds, 636 self-insureds, 452 third-party administrators (TPAs), several state fraud bureaus, and law-enforcement agencies involved in investigation and prosecution of insurance fraud. ISO's database is now growing at a rate of 40 million claims per year, with over 260,000 claims submitted each day.
The Insurance External Claims Investigation ES bundle leverages enterprise SOA through communications between SAP Claims Management and third-party software such as ISO ClaimSearch. ISO has worked with the Association for Cooperative Operations Research and Development (ACORD) to build a standard data structure for claims of all types, using XML as the transport and storage format.
Once insurance providers have deployed the Insurance External Claims Investigation ES bundle to integrate SAP Claims Management and ISO ClaimSearch, the functionality for initiating a claims investigation, is merged with all claims processes. A tab is automatically added to the SAP Claims Management UI,where claims handlers can view investigation results (which are triggered automatically when a claim is saved). Claims handlers can also manually trigger an investigation using a button in the user interface.
By and large, the claims investigation process is automated. Business rules have been established whereby flags are raised at predefined phases in the lifecycle of a claim. Each time a claim is created and saved, for example, it is automatically placed in a queue from which it is sent to ISO for processing.
Modifications to claims also trigger flags for investigation. For instance, any time information about a business partner involved in a claim is changed, such as name, address, social security number, driver's license number, or other personal information, it is automatically placed in a queue from which it is sent to ISO for processing.
More often than not, investigation results prove claims to be authentic. However, they may return evidence to the contrary as well.
ISO delivers the results of its investigation to SAP Claims Management via a web service. If the investigation contains potentially fraudulent or suspicious circumstances, SAP Claims Management automatically sets the ClaimSearch "hit" flag (located in the user interface) to "Yes," creates a task for further analysis, and assigns it to a respective claims handler. ISO maintains all claims that are sent to the ClaimSearch system and periodically checks claims against newly input claims.
An insurance claim might not raise a red flag, so to speak, right away. If the insurance company deploying this bundle sends a claim in first, there won't be a match yet in the ISO database. However, if another insurance company later submits a similar claim, ISO will notify both insurance companies of the potential problem, again using a web service.
If a claim matches a previous claim, both the insurance provider that originally submitted the claim for investigation and the second insurance provider, which submitted a similar claim, are informed of the "hit" via the appropriate service operations. Where insurance provider number two, however, will receive a confirmation "hit" with its notification, insurance provider number one will simply receive notification that provider number two received its "hit" for a similar, potentially fraudulent claim. At that point both providers can collaborate on an investigation.
Any insurance company can benefit from deploying the Insurance External Claims Investigation ES bundle.
The roles in the insurance industry that will use this bundle include:
- Claims handler
For details on Service Operations, Business Objects and Process Components, please check the ES Workplace.
Insurance providers that deploy the Insurance External Claims Investigation ES bundle can further their cost savings, improve their efficiency, and increase their flexibility. Quite simply, the faster providers detect fraudulent claims, and the more they detect, the more their profit margins will widen. The bundle's services are called directly from within SAP Claims Management, so there is no need for custom integration to submit claims to agencies for investigation. Moreover, the investigation process is almost entirely automated, resulting in saved research time for claims handlers.
The following section explores five use cases for the Insurance External Claims Investigation ES bundle. Each use case provides concrete examples and shows how different outcomes can be achieved by using the Enterprise Services in different combinations. While these examples illustrate a few of the ways that this ES bundle could be used, the intention is to show the flexibility and reusability of these Business Objects and enterprise service operations so that you will have a clearer understanding of how to best deploy them in your own environment. This wiki is also a space for you to share knowledge and collaborate with others who are implementing the Insurance External Claims Investigation ES bundle.
Like most insurance providers today, Blue Sky Insurance needs to ensure that the claims it pays are genuine. Blue Sky deployed the Insurance External Claims Investigation ES bundle and contracted with a claims investigation company called ISO to help them with the process of ferreting out potentially fraudulent claims.
Since business rules have been established whereby claims are submitted to ISO automatically, Frank, a claims handler with Blue Sky, merely needs to process his claims as usual. At the pre-determined trigger, claim information is automatically sent to ISO for investigative processing by invoking the Request Insurance Claim Investigation service operation, which uses the Insurance Claim Investigation business object. ISO ClaimSearch functionality compares key data from the new claim against data in the ISO database. The analyzed data includes loss dates, names and numbers of claimants, names of insured customers, witnesses, and locations.
Once ISO processes a claim, its system automatically invokes the Change Insurance Claim Investigation based on Investigation Confirmation service operation to deliver the results of its investigation to Blue Sky.
During the life of a claim, participants or their demographic information (name, address, phone number) may change. Any time Frank, the claims handler from the previous scenario, updates a business partner associated with a claim and saves the claim, the Request Insurance Claim Investigation enterprise service is triggered and the claim is placed in a queue from which it will then be sent to ISO for investigative processing.
Blue Sky sends out all its claims to ISO once a day in a batch (this timing is configurable). It may receive back a confirmation hit, indicating that particular claims may be fraudulent and require further investigation. ISO ClaimSearch automatically invokes the Change Insurance Claim Investigation based on Investigation Confirmation service operation to deliver to Blue Sky those claims that receive a "hit" using an ACORD standard SAP Claims Management Investigation message (see Figure 1 for an example).
Once it has been received by Blue Sky, SAP Claims Management automatically sets the ClaimSearch "hit" flag (located in the user interface) for the suspicious claim to "Yes," creates a task for further analysis, and alerts the claims handler who should follow up on the suspicious claim to determine whether fraud has occurred, or whether the situation is just a coincidence.
If Blue Sky is the first company to send ISO a fraudulent claim, there will not be a hit until later, when a second company submits a suspiciously similar claim.
When ISO receives a claim which matches one that is already stored in its system, it sends notifications to both the insurance provider that submitted the first claim and the insurance provider that submitted the second, potentially fraudulent claim. To notify Blue Sky at a later date, ISO invokes the Change Insurance Claim Investigation based on Requested Notification service operation.
Once this message has been received by Blue Sky, SAP Claims Management automatically sets the ClaimSearch "hit" flag (located in the user interface) for the suspicious claim to "Yes," creates a task for further analysis, and alerts the claims handler who should follow up on the suspicious claim to determine whether fraud has occurred, or whether there is just an error on someone's part.
After the investigation and evaluation phase of a claim is completed the claim handler may proceed to settle the claim. But before he takes this step, Blue Sky's best practices recommend that he sends the claim to ISO one more time to ensure that the claim is valid. To do so, he presses a button in the user interface, which invokes the Request Insurance Claim Investigation enterprise service and the claim is placed in a queue from which it will then be sent to ISO for investigative processing. The claims handler waits a day and comes back to check the response. If no hit was received after a period of time has elapsed, giving ISO a chance to check and respond, the claims handler can safely settle the claim.
- SAP ERP 6.0
- SAP enhancement package 3 for SAP ERP 6.0
- SAP NetWeaver Process Integration (formerly XI)
- SAP Claims Management