Capturing Effectiveness and Efficiency
What seemed impossible a few years ago has now grown into a best practice for most auto carriers – the direct to provider (DTP) settlement model for unrepresented bodily injury claimants. The once revered “lump sum” model is rapidly being replaced by DTP. The number and scale of the carriers making the shift is significant in an industry where core claim handling models rarely change. In fact, until recently, most early settlement units were operating the same today as they were thirty years ago. So why and how has DTP replaced the lump sum settlement model we used for so many years?
The “why” is easy – DTP achieves the desired “trifecta” in cost containment: happy claimant, happy provider, happy adjuster. Carriers learned that the key to improving the claimant experience is making the process easier for the claimant, which includes handling the task of paying the providers. In addition to the customer experience, carriers can benefit from a discount off billed charges from many providers, previously unavailable under lump sum. Providers are open to discounting the billed charges for a quicker, certain reimbursement from an institutional payer (carrier) as opposed to a claimant who may take longer or not pay at all forcing costly collections. The adjuster is happy after creating a positive claimant experience, a settled claim with the same cycle time, and reduced specials severity with no conflict.
The “how” was always the challenge for carriers. For years adjusters have used some form of “do it yourself” approach with DTP, particularly on the larger hospital bills. But this situational use of DTP was difficult to scale because of the inefficiency of higher paid, professional adjusters making multiple calls to providers, in addition to their normal workload. Consequently, programs lacked penetration on most bill types and never moved the needle on medical specials severity or pure loss ratio. Some carriers opted for a hybrid model approach and used DTP without negotiating discounts with providers. This improved the claimant experience and kept adjusters off the phone with providers, but did nothing to reduce severity.
At Tempus we saw an opportunity to solve the scalability challenge by creating a solution that has the severity reduction benefits of DTP with the efficiency of the lump sum model. The result is our TempusDirect solution.
TempusDirect solves the scalability problem because it is effective on facility and professional service bills. While professional bills can be challenging, reducing them is critical to a successful program as they make up the majority of a claimant’s specials. TempusDirect differentiates by outperforming on the entire range of bill types, from ER Physicians and chiropractors to large hospital bills.
Our goal was to make TempusDirect as efficient as the lump sum model it replaced. Importantly, we wanted to align our product innovation efforts with what we observed the most innovative carriers doing with claims models and segmentation. Carriers continue to split the process v. professional components of the adjuster’s role. This optimizes the time and talents of adjusters to evaluate, negotiate and settle with the claimant, and removes process-oriented work by sending the medical bills to a central repository for review, provider negotiation and payment. TempusDirect aligns with the process v. professional task split, and for the many carriers that aspire to achieve that segmentation now, TempusDirect is capable of retrieving, discounting and paying the provider directly, leaving the adjuster free to handle core claims work.
Our Tempus Promise is “always listening, innovating and serving with a sense of urgency.” We recognize that cost containment is dynamic and that state regulations and the behaviors of providers and attorneys are always changing. Our solutions are built to last because they are built to evolve. We never stop innovating and stay one step ahead because this business is our passion and we live this Promise every day.