BPM and BRM – an award-winning team

The claims processing automation project at the German insurance company HanseMerkur was the first joint project of inubit and Bosch Software Innovations – and it turned out not only to be a successful kick start for our customer, but also proof of the good interplay of our Business Process Management (BPM) and Business Rules Management (BRM) Suites. On December 19, the jury of the Global Awards for Excellence in BPM & Workflow honored the project with the Europe Gold Award. The jury stressed particularly that thanks to the automated processes on the basis of the inubit Suite (BPM) and Visual Rules (BRM), HanseMerkur was able to handle revenue growth of 15-20 percent and comparable growth in the number of cases without increasing staff. Nearly 30% of claims processing can now be issued automatically.

The story behind

To understand why HanseMerkur initiated the project in the first place, let’s take a look at how insurance companies work. Currently mainframe computers and sparsely standardized applications (known as contract management systems) dominate insurance companies’ IT landscapes – and the HanseMerkur insurance company is no exception. The expectation of introducing a BPM platform to control all business processes was an increase in software development efficiency as well as higher flexibility regarding business application modifications. A decision management component was to be used to complement the process management platform and ensure human intervention when necessary, i.e. if data is missing or unclear.

One of the enhancements the project provided was to enable the operating department to define business rules for process control in a graphical way themselves, so that they could be automatically applied to process execution afterwards.

Besides introducing a complete new architecture (SOA and process-orientation), the project organization was also changed completely as SCRUM was introduced. Furthermore, a complete development paradigm was created, covering all stages from functional analysis through two-step process modeling, rules modeling, object modeling and final implementation in an iterative way.

Claims processing yesterday and today

The claims process used to be a highly manual process. The following picture provides an overview of this process as it used to be at HanseMerkur.

Claim Assessment Process Before

Claim Assessment Process Before

1. Handing in claims

The customer sended in the claim via regular mail.

2. Preprocessing

The document was scanned and sent to a clerk.

3. Claims processing

Specialized personnel had to check manually
– if the insurance number covers the claim,
– if the data provided in the document is correct,
– if all required information is available,
and then match tariffs with claim positions, if applicable.

4. Postprocessing

Finally, the closing report was sent back to the customer via mail.

Today, this time consuming processes run highly automated as we see in the following picture.

Claim Assessment Process After

Claim Assessment Process After

1. Handing in claims

The customer either sends the claim by regular mail or via iPhone App. The latter is a new way of handing in claims: A picture of a data matrix on the claim document is captured with the iPhone and then transferred via iPhone App directly to the insurance company.

2. Preprocessing

With the help of this data matrix, detailed billing data can be retrieved electronically from a data hub for private medical care clearing centers, which collect and share billing information between doctors, patients and insurance companies. By the same means, the data on the claim documents sent via regular mail can be retrieved without the need for data capturing. The share of invoices containing this data matrix is constantly increasing.

3. Claims processing

The billing data is then submitted to various processing channels depending on the type of document. For example, prescriptions are processed differently for outpatient treatment and for hospital treatment bills. Whereas previously these were manual steps as described above, the allocation to these channels is now accomplished automatically using decisioning components based on the Business Rules Management System. Human intervention is only necessary if data is missing or unclear. After these rules have been processed, the results may or may not be collected for the next processing steps, first checking for regulatory correctness, then the application of tariff rules, depending on whether all necessary information is available and correct, and whether the contract covers the claim.

4. Postprocessing

The last step covers the same post-processing as in the original process. Today, the closing report can not only be sent via mail but also electronically once the means of transportation for this sensitive kind of data is clear.

Besides a more efficient claims process, changes to this process can quickly be implemented due to the component services architecture. For instance the adaptation required to implement the new pharmaceuticals realignment law now requires a couple of days, mostly taken up by optical recognition of a pharmaceutics code and the process of transferring data to the pharmaceutical industry. Before, this change would have taken several hundred days in order to be implemented.

Savings in Numbers

For those who are interested in numbers: This project resulted in € 750.000 cost savings per year. In addition, the implementation of a rules engine for regulatory rules resulted in an increase of 1% in claims rejection or over € 1.65 million per year and growing. As the Jury pointed out: a strategic goal that could only be achieved by implementing an innovative business solution.

How about you? Can you report of similar BPM and BRM applications in insurance companies, or have you made different experiences? I am curious to learn more about them!

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About the author

Elena Kurch

Elena Kurch

I am a Senior Digital Engagement & Communications Manager at Bosch Software Innovations and cover the Internet of Things (IoT). I have been part of our journey across the IoT for more than 7 years now, working in various positions within our international marketing team, focusing on social campaigns and digital content production. I hold a master of arts and personally enjoy living in Berlin with everything that comes with it.