Benefits of Outsourcing Insurance Claims Processing Services

Benefits of outsourcing insurance claims processing services
  • Avatar photo Victor Bala
  • Jun 27 2024
  • Reading Time: 7 minutes.


One of the basic building blocks in the insurance sector is claim processing. This sort of fraud impacts consumer satisfaction, which can help both the insurance company look better in the public eye and the employer’s bottom line. Fast and accurate administration may help in keeping the promise of financial protection, it also helps, in addition, to build consumer trust, which in turn, improves retention rates and increases word-of-mouth referrals. This competitive edge is crucial to Ambetter throughout the highly competitive insurance market and for the life span of the company’s growth and strategic goals.

What is more, claims processing not only lowers operational costs by avoiding unnecessary losses but also provides help in the tracking and prevention of fraudulent activities, thus the company does not incur any losses. It also ensures regulatory compliance and enables insurers to uncover crucial data learnings from a claims perspective for enhancing risk assessment and underwriting measures.

Advantages of Outsourcing Insurance Claim Processing for Insurers

  • By outsourcing claims processing, insurers can operate more efficiently by capitalizing on a third-party supplier that is specifically designed to handle these functions. As a result, operational costs are reduced as insurers do not need to pay for expensive claims processing staff, technology & infrastructure in-house.
  • Moreover, the specialist insight of insurance outsourcing medical billing companies further strengthens the claims processing for any insurance company by expediting the process, making it easier for them to settle claims faster and keep customers happy.
  • In cases of high claim season or during a disaster, this is another reason to use the services of claims outsourcing, as it allows for the external companies to expand their operations quickly to handle claims that may have increased and policyholders that need assistance.
  • This flexibility and business continuity enable insurers to maintain service levels without hiring and training additional workers.
  • Outsourcing non-core services like claim processing allows insurers to devote more resources and attention to their key business activities, including underwriting, risk assessment, and customer service, thereby increasing their business strengths.
  • Reputable outsourcing healthcare billing providers often invest in advanced insurance claims processing technology and tools, benefiting insurers without the requirement for significant upfront investments in technology infrastructure.
  • Insurance claims outsourcing partners, well-versed in industry legislation and compliance requirements, assist insurers in ensuring that their claims processing adheres to all necessary regulatory standards.
  • Specialized outsourcing partners have mechanisms in place to detect and prevent fraudulent claims. This helps insurers decrease their exposure to fraudulent actions and associated financial losses.
  • Most outsourcing agreements include thorough reporting and performance indicators for claims handling, enabling insurers to monitor the effectiveness of the outsourced relationship and make data-driven choices.

Considerations on Outsourcing of Claim Processing Services

Key considerations include:

A. Selecting the Right Outsourcing Partner

Conduct thorough research and analysis on your potential outsourcing partners. Search for providers that have a proven track record in insurance claims and public safety answering point (PSAP) experience, all the while having a good reputation for dependability, transparency, and quality in claims handling. Additionally, check that the outsourcing partner understands the complexities of the insurance sector, such as relevant rules, compliance standards, and best practices. Consider the vendor’s ability to handle fluctuating claim volumes, particularly during peak seasons or periods of elevated claims activity. They should also be able to grow or shrink as needed.

B. Protect Data Security and Compliance

Because data security is imperative to the insurance sector, ensure the outsourced vendor follows stringent data protection protocols and complies with the necessary data privacy regulations. Incorporate stringent data protection and access clauses into the agreement.

C. Maintaining SLA

Culture, communications, customization, collaboration, and commitment. Develop clear SLAs that detail what your expected turnaround times, processing times, quality, etc. will be. In addition, they should provide proper means of communication to notify you of the claims and difficulties. Consistent communication is essential for transparency and alignment. Also, discuss your unique requirements with the vendor and assess their willingness to tailor their services to your company’s processes and demands. Determine whether the vendor’s values and work culture are consistent with those of your firm. Behavioral alignment is one source of a superior partnership.

D. Technology, Training, and Infrastructure

Evaluate vendor technology and tools for claim management and processing. Check that their systems are current, can handle your claims volume, and are compatible, if applicable. Understand their claims handling training and experience. They need to be a team of experienced and knowledgeable people who know the quirks of your insurance products and workflows.

E. Disaster Recovery and Business Continuity

You need to ask about the disaster recovery and business continuity policies of the vendor. With strategies to ensure business continuity in the event of unforeseen outages.

F. References and Case Studies

If you want to know the outgoing vendor’s track record, demand some case studies and contacts, and you will get the truth out of either. Know about the insurance companies they have worked for. Evaluate the success stories. This could give you a good idea of their overall abilities.

G. Costs, Contracts, and Transition Plan

Know the terms and conditions of the outsourcing contract. Ensure there are no additional undisclosed costs and that the agreement spans every part of the partnership dealing with cancellations. Discuss how the transition from in-house to outsourced processing will be managed to establish a well-defined transition strategy to minimize interruptions during the changeover.

H. Legal and Compliance Considerations

Legal concerns like copyright, liability issues, and jurisdiction. Additionally, make sure that protection is provided for both parties in the outsourcing agreement.

Why should you outsource insurance claim processing services to Velan?

Velan HCS commitment to data security and privacy ensures the confidentiality of sensitive information. Our flexible solutions can handle variable claim volumes, guaranteeing smooth operations during peak periods. Partnering with Velan will enable you to optimize costs and reduce risks by emphasizing compliance, transparency, and specialized services. This allows you to focus on your key talents, eventually generating business success in a competitive environment.

Avatar photo

Victor Bala

Medical & coding

About the Author:

Victor has over a decade of experience in delivering revenue cycle management services to the US healthcare providers. He has a proven track record of accelerating revenue collection by streamlining the billing, coding and AR processes. His team at Velan has been delivering revenue cycle management cycle, appointment scheduling, pre-authorization and credentialing services to physicians, group practices, and hospitals.

He can be reached at [email protected]

Considering the complexities of healthcare billing in the USA, why choose Velan HCS for your billing services?