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How do ML and AI help you settle medical claim insurance faster?

How do ML and AI help in the medical claim insurance sector?


‘AI is a vital part of the fourth industrial revolution and will impact every aspect of people’s life’- Fei Fei Li, Professor at Stanford University.

Artificial Intelligence has been one of the most reformative technological inventions in the history of humankind as it has made information systems more adaptive for humans. Over the years, AI has played a definitive role in redefining different industry sectors & sections and the insurance sector in this context has a similar story as well.

We need no superlative analysis to understand the importance of medical insurance, especially in the present turbulent times of the global pandemic. Artificial Intelligence (AI) and Machine Learning (ML) have proved to be a vital cog that has streamlined end-to-end claim settlement, thereby increasing customer satisfaction. The mediclaim management process can now be done faster and better with fewer or no errors.

Gartner, in 2016, predicted that almost 1/3rd of the companies on a global level would use AI in at least one aspect of their sales process by 2020. ML and AI have left no stone unturned and brought a paradigm shift in different industries such as healthcare, aviation, ecommerce, and the insurance sector.

A brief understanding of mediclaim settlement

In the realm of the insurance sector, mediclaim settlement means an agreement form between two different parties which allows the smooth handling of the health insurance disputes. The process of mediclaim settlement begins when a policyholder asks his/her insurer to avail the medical services covered in the policy. With the benefits mentioned in the policy, the policyholder can either get a cashless treatment or get a reimbursement for availed health services.

In mediclaim settlement, the insurance company then reviews the claim. The insurance company matches the claim with their record in the claim management software to see if the claim is genuine or malicious. Moreover, there have been cases where the mediclaim insurance companies have instigated investigative operations to find the genuineness of the claim done by the policyholder. AI has been a breath of fresh air for the healthcare insurers as it allows them to manage claim settlements better. Here is how it is done:

  • AI can predict the pattern of the claim volume so that the insurers can make themselves prepared.
  •  Through in-depth data analytics, insurers can automate the process of fraud detection.
  • It helps them to pre-assess the claims while simultaneously automating the damage evaluation process.
    After understanding the changes in brief that Artificial Intelligence (AI) and Machine Learning (ML) has brought in the insurance sector, we now dig deep to see the role these two techniques play.
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Role of AI and ML in the health insurance sector

The expansion of AI and ML in different industry sectors, especially in the last decade or so has opened new avenues for the insurance industry and has allowed the insurers to provide a better customer experience. The insurance sector has been marred by three major issues that are proving to be a hurdle for the insurance personnel to deliver a quality customer experience. They are:

  • Not reaching to their targeted customers at the right time
  •  Not providing right products according to the requirement of the customer
  •  Not giving on-time claim to their customers and failing to find the spurious claims

Artificial Intelligence can streamline the redundant processes that creep-in into the medical insurance system and create confusion among the employees. In a typical mediclaim insurance firm, the team consists of agents, brokers, claim investigators, etc. A technologically advanced system like healthcare insurance software consisting of AI and ML will help keep the work in order and increase the efficiency of the employees.
AI-powered solutions help in simplifying the kerfuffle and enable the mediclaim insurers provide more value propositions to the customers

AI can be the catalyst for faster healthcare insurance claims

healthcare insurance claims

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A few unique steps in the AI-enabled insurance work process would help the customers complete the mediclaim settlement work swiftly.

Analysis of the information provided

The below mentioned information/data is first drawn out from the medical document to kick-start the process of healthcare insurance claim settlement through AI

  • Necessary information like the diagnosis report of the customer, severity and type of disease, etc. is first extracted from the document in a textual format.
  •  Following this, information about CPT (Current Procedural Terminology) codes- the service or procedures performed on the patients are also extracted.

The importance of both the systems mentioned above is that the first one is necessary to process the information and the second one looks at the authenticity of the information.
Fraud Analyzer
Insurance companies lose a significant amount of money to fraudulent claims; nevertheless, such a problem can be rectified with cognitive Artificial Intelligence technology.
When an AI-powered system analyzes several symptoms and diagnoses, it can come up with a tentative treatment for the disease. This treatment will enable the insurers to gauge a tentative cost of the disease, based on different factors like the severity of the disease, location of the hospital, etc.
So when a customer files for an insurance claim, the insurance provider can refer to their data and save themselves from future mishaps.

Processing the medical invoices

With the help of AI, the medical invoices can be automated, ruling out the chances of human intervention. It is a four-step process as mentioned below.

  • Bounding boxes around the medical invoice text
  • The boxes then go through a scene text decoder which uses a sequence neural network.
  •  LDC (Levenshtein Distance Correction) is applied to the localized boxes for better accuracy
  • Each line item is then put in a specific insurer category.


After completing the process, if the final settlement amount is within the predefined range with no red flags, the mediclaim is sent straight to its account settlement department for its final processing.

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Benefits of using AI and ML for mediclaim management

ML for mediclaim management

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Artificial Intelligence has helped many industries synchronize their scattered departments and structure to avail benefits. For the insurance sector, AI and ML can be the tonic that could automate their entire process. Let us see the positive changes at AI and ML can bring in the insurance sector.

A continuous flow of information

By using the data processing capability of AI, the insurers can maintain the flow of information to be exchanged between two departments in a hassle-free manner. There will be a common platform that will become the connecting link between the two departments, and the information can be transferred easily without breaking the chain.

In addition to the free flow of information, the insurance companies with the help of machine learning can assign tasks to their employees better. The orderly distribution of tasks will prove vital in the overall elevation of the service quality provided by the mediclaim insurance company to its customers.

Better customer interaction with chatbots


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Rising demands of chatbots

According to Accenture’s research, around 3/4th of the customers, irrespective of the industrial genre, like to interact with modern technologies and appreciate if the insurance advice is computer-generated.

By including intelligent chatbots in the system, the insurance service provider company can educate the customer about the mediclaim policy and address their confusion. Customers are often annoyed by seeing the document’s length and thus make a mindset that the insurance company would cheat them.

With the chatbots, the customers can either type or use their voice to communicate their problems directly to the concerned department. An AI-enabled mobile app for healthcare will prove a perfect guide for the customers to help understand the nuances of the policy in a simple way.

Moreover, the chatbots can also be utilized for lead generation, customer retention or promotions apart from being the point of contact for customer queries. Chatbots with NLP support and sentiment analysis would be perfect as it would assess the customer response and provide the solutions more effectively.

ML backed predictive analysis.

Mediclaim insurance providers should understand that this is an era of personalized service. Customers these days look for more sophisticated services from the insurance personals. With the help of machine learning strategy backed predictive analysis, the insurance companies can get an idea of their customer’s preferences and tailor a health insurance policy accordingly.

The predictive algorithms can help the company scan the customer’s past hospitalization record, get a clear idea of their medical history and then render the most relevant policy. With predictive analysis and Artificial Intelligence, the companies can respond to the customer in a well-directed way, thus increasing their service quality.

What’s in store for the future?

While insurers are still facing some tough times in the present market, they are very hopeful and about the potential of Artificial Intelligence. The insurance companies can use AI and ML backed claim management software and work on multiple facets like damage analysis, self-service guidance etc. better.

In the next ten years, the insurance industry is bound to undergo some emphatic changes because of the rapid advances in AI technology. By harnessing the cognitive learning insights, the insurance companies can redefine their mediclaim management system and create a win-win situation for the customers and themselves.

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