Professional Documents
Culture Documents
January 2010
On behalf of the IBM Analytics Solution Center in Washington, D.C., we are pleased to present this white paper,
“Advanced Analytics for Smarter Benefits, Claims, and Entitlement Management.” Improving the performance of the
nation’s systems that handle benefits, claims, and similar citizen requests has been on the top of many agencies’
priority lists. Recent newspaper headlines have highlighted the need to improve these systems. Fortunately, today’s
enterprise information management systems with advanced analytical capabilities can be employed to provide faster
processing, while at the same time reducing fraud and improper processing.
This white paper introduces the field of analytics, and discusses how analytics can be utilized in claims and benefits
processing systems. It also provides an example of how such a system was developed for the U.S. Social Security
Administration.
We hope that this white paper will be useful to managers across the government as they continue to transform their
agencies to meet the needs of their constituents.
• Help clients understand how analytics can benefit the performance of their mission through thought leadership events.
• Demonstrate analytics solutions and technology options for solving your organization’s mission problems.
• Provide collaboration to seek and explore innovative, yet realistic, technical approaches.
Customers, Partners and individuals are invited to join this community by visiting our web site at www.ibm.com/ascdc (IBM
DeveloperWorks registration required to join).
We provide access to a range of useful content regarding information technology that can be applied to the missions of
government departments, agencies, and organizations. Contact ASCdc@us.ibm.com to get more information or to ask us a
question via email.
Introduction of 97 days back to only 20 days.
Claims processing is fundamentally a customer service While processing speed and throughput are important
business, evaluated in terms of effectiveness in measures of the effectiveness of a claims handling
delivering benefits to claimants. Particularly in the system, consistency in the way claims are handled and
government domain there is a tension between the view avoidance of fraud and abuse are essential as well.
of benefit programs as entitlements and the demand of Confidence in the fairness of a government program is
the electorate that public resources not be wasted. In undermined when similar claims may be honored in
times of stress, such as natural or economic disasters, one geographic region and denied or only partially
both the number of claims to process, and the urgency granted in others. This kind of inconsistency can result
of those claims in terms of human need and suffering when human beings are forced to interpret complex
are elevated. guidelines and can not easily reference previous
experience or evolving trends.
The extreme cases of problems in claims handling are
of course the ones that rise to the level of news Sources as diverse as USA Today and the US Senate
coverage. Still when some figures come to light, such Panels on Healthcare report that as much as 10% of
as the average of 196 days required from the time a the more than a trillion dollars spent each year on
claim for veterans benefits is submitted to the Veterans healthcare in the United States may be wasted on
Administration until the final disposition of that claim, or fraud and abuse. Clearly the problem is a significant
the average of 145 days required by the US Immigration one. While organizations may devote a lot of effort to
and Naturalization Service to process an application for chasing down and recovering payments in the case of
citizenship, it is hard to argue that improvements are not fraudulent or flawed claims, better still would be to
warranted. At the other end of the spectrum, when the identify the questionable claims before payment is
Center for Medicare and Medicaid Services determines made, as part of the claims processing workflow.
how to satisfy a claim within an average of 5 days, some
could wonder whether unjustified claims are being paid The solution to smarter claims handling derives from a
without being subjected to proper scrutiny. At either combination of improved process design, application of
end of the scale, applying more intelligence to the information technology, and accommodation of the
processing of claims or requests can ensure timely people who will use the technology and conduct the
handling without compromising on verification of the process. Simplifying and facilitating data entry and use
validity of those claims. The Appendix to this paper of content management systems make unstructured
outlines a solution developed by IBM for the U.S. Social data more accessible and usable. Introducing rule-
Security Administration, using the principles described based management of the workflow associated with
in this paper which allowed the processing of certain claims processing ensures greater consistency and
classes of disability benefits to be cut from an average transparency in the handling of claims, as well as
contributing to more expeditious processing. And the
factor that actually makes the process “smarter” is
analytics. Analytics contribute to understanding how
the system operates, allow you to develop rules for
governing and directing the flow of claims that reflect
both organizational objectives and a deep
understanding of actual and intended outcomes, and
support continual reassessment of both internal and
external factors and their impact on the effectiveness of
the claims handling process.
Analytics the creation of structured metadata and indices.
The term “analytics” appeared a couple of times in the Descriptive analytics help provide an understanding of
introduction, but what does this term refer to? In fact, the past. Predictive analytics use the understanding of
what we call analytics today is really an extension and the past to make “predictions” about the future. For
aggregation of efforts that have been pursued for a example, a particular type of claim that falls into a
number of years, as people have tried to apply category that has proven troublesome in the past might
computers to help improve the quality of decisions being be flagged for closer investigation. Descriptive
made by human beings. analytics may begin by providing a very static view of
We further subdivide analytics into three categories of the past, but as more and more instances are
increasing complexity and impact: descriptive, accumulated in the experience base of the system, and
predictive, and prescriptive. with algorithms that can execute in very short periods
of time, this evaluation, classification, and
Figure 1: Analytics Landscape categorization can be performed repeatedly endowing
the overall work process with a measure of adaptability.
Predictive modeling What will happen next if ? the area of predictive analytics. Predictive analysis
Forecasting What if these trends applies advanced modeling techniques to examine
Mission Impact
Predictive
Simulation What could happen…. ? scenarios and help detect hidden patterns in large
Alerts What actions are needed?
quantities of data to project future events. It segments
Query/drill down What exactly is the
and groups individuals to predict behavior and defines
Ad hoc reporting How many, how often, Descriptive
In many cases, the key to better leveraging advanced Figure 3. Smarter Benefits/Claims Processing System
Challenge: A recent challenge faced by SSA focused on the both the time required for
reviewing and approving disability benefits for disabled citizens and the
consistency of these determinations across the country. The backlog generated
had come to attention of Federal oversight organizations such as the General
Accountability Office, which only added to the urgency on the part of the SSA.
Solution: Extending prior work at SSA with structured data mining tools such as logistic
regression, IBM expanded its suite of predictive models to include advanced text
analytics to infer meaning from unstructured data in disability applications so that
SSA could automatically score applications to identify potential quick decisions.
Benefits: The predictive model for reviewing new disability applications has reduced the
average cycle time for approving an application from 90 days to 20 days for
selected cases and continues to drive the agency toward higher levels of
consistency across the system. The Quick Disability Determination (QDD)
process has been featured in Congressional testimony and numerous press
releases from the SSA as one of its most successful programs.
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