“Risk Management” & “Claims Management Best Practices”
The magic of insurance is in the reality of management of risk or “risk management.” The insurance industry, more than almost any sector of business is keenly aware of the concept of “Risk Management,” or the equitable transfer of someone else’s risk to the insurance company! Check any insurance sales presentation or claims management “state of the state” address, and what is the underlying message you hear being talked about, other than hedging one’s risk against an eventuality or unanticipated event in one’s life or business. Not only does the insurance company sell risk management, but they also have to be better able to appraise and control their own risks.
As a part of risk management, insurance companies not only determine the probability of a risk occurring via actuarial factors, but they also determine the sales, underwriting and claims processing risks, etc. As a transcription services company, we are exposed to the claims management side of the equation and represent risk. “Best Practices” vary from company to company as it relates to hiring a transcription services company but are put into place to minimize exposure or risk. If best practices processes or processing are not followed or are poorly designed, potential financial risks to the insurance company go up. Inaccurate recorded interview transcripts lead to inaccurate conclusions. Having to give vendors long lead times leads to the risk of wasting money on transcription that end up not being needed and yet paid for. I’m not saying anything new here (except possibly the view on turnaround times) and am preaching to the choir.
Have we lost our mind speaking of this?
Why would a transcription services company be writing a blog about the risk management and best practices of their vendors or potential vendors? Can’t this only make it hard for the vendor? For the last 17 years, we’ve had the opportunity to work with various insurance companies and in fact, we are one of the largest providers of insurance transcription in the country. Although we are on the outside looking in as an outsourced insurance transcription company vendor, we have seen many things throughout the years and also see the vendor tricks and spin that keep companies from getting the true understanding of how they, the vendor, operate their businesses. Do their operational process and sales spin create increased risk? You bet they can, especially if left unchecked by the carrier. Let me give you a non-insurance carrier example that you will recognize, I suspect.
Catch me if you can!
I recently attended a presentation by Frank Abagnale, the great con artist that the movie “Catch Me If You Can” starring Leo DiCaprio was written about. Frank was captivating (of course) and had turned to doing the responsible thing rather than the lying and deceit. Although he was never actually a medical doctor, an airline pilot, executive, etc., he did have the ability to move in those worlds and appear very real to those hiring him or allowing him to be in their presence. I’ve often heard that the things in life that have the greatest effects on us are the books we read and the people we are exposed to and unfortunately, many got to meet Frank Abagnale, one of the biggest con artists of our time. Those companies that Frank involved himself in were truly affected, and their risk definitely went way up when he was around. Again, Frank Abagnale has now turned his efforts to helping companies and the FBI minimize risk and fraud rather than perpetrating it.
Quotes from Frank Abagnale:
- “If my forgeries looked as bad as the CBS documents, it would have been ‘Catch Me In Two Days’.” (when asked of his opinion of the Killian memos)
- “What I did in my youth is hundreds of times easier today. Technology breeds crime.” (Frank Abagnale on how easy it is with modern technology to commit fraud)
Why would I be talking about Frank Abagnale? He’s the perfect example of the unintended risk, “risk management” that outsourcing to transcription vendors can represent if “best practices” are weak, ignored, or relationships are based too much on the sales process and not enough on the verification of sales representations. You may say, we’ve been working with this company for years, and the status quo has proved out but that may not be enough (although that can say a lot).
Frank had a keen eye for cracks in risk management, best practices and the status quo! He couldn’t help but develop that eye with how he viewed the world and his lack of ethics, morals and values. Anyone who is exposed to something day in and day out for years, sees many things as a result.
After 17 years, we too have seen cracks in risk management, best practices and status quo in our company as well as the companies we serve. We’ve seen companies who approach the importance and quality of the recorded interview or recorded statement as extremely critical to their risk management strategy due to importance of capturing information before the attorneys, neighbors, family and friends enter the legal picture. We’ve seen companies who know that in addition to transcription quality, there are a number of other areas that are critical for data safety. Ask some of the top companies who have ended up on the television program 20/20. We’ve seen companies where the risk management tide flows from one end of the spectrum to the other on a year-to-year basis. Yester-year, it was risk management in the area of quality, this year in the area of data security and three years ago, price was all that mattered with little or no risk management or best practices applied. It appears that some companies treat the quality and turnaround times of recorded interviews like they are not terribly relevant to their risk management. We tend to be a great fit for those companies that place the importance of risk management of the outsourced recorded interviews high.
The hiring, vetting and retaining of the transcription services companies can be seen throughout the hiring and/or relationship process. We’ve also seen companies who, although I’m sure they understand the importance, may not have clear and concise best practices of hiring transcription services companies.
In fact, we are seeing some organizations looking at the transcription procurement process and service level objectives that accomplish the task of manage risk as well as control costs. Today’s organizations can actually reduce claim costs by maximizing or developing stronger claims management risk strategies and best practices through service level agreements that are very effective and underutilized.
Feel free to reach out and get more answers to the ways we reduce risk, costs, and the way the relationship is built with the transcription vendor.
I’m Terry Hurst and you can reach me toll-free at 1-800-371-4315 or at TerryH@TranscriptionExpress.com