When it comes to regulatory compliance, we’re accustomed to reading depressing stories about how the creeping costs of compliance are killing profits at financial and healthcare companies. The depression is real, not imagined. The cost of compliance has skyrocketed in recent years.
The financial services industry is awash in compliance costs. Government regulations such as the Dodd-Frank Act of 2010 added more mandatory reports, data gathering requirements and paperwork to an already over-burdened sector. Differences in financial regulations across the world are costing businesses $780 billion a year, according to a report in the Financial Times.
The cost of compliance has skyrocketed in recent years. Government regulations such as the Dodd-Frank Act of 2010 added more mandatory reports, data gathering requirements and paperwork to an already over-burdened sector.
The report found that institutions spend up to 10 per cent of annual revenue dealing with a patchwork of divergent regulations and smaller companies are facing disproportionate costs to keep up. Much of the cost is spent because of the different sets of rules across different countries.
For the heavily regulated healthcare industry, the Healthcare Effectiveness Data and Information Set Audit, or HEDIS, adds even more complexity. HEDIS is a comprehensive set of standardized performance measures designed to provide purchasers and consumers with the information they need for reliable comparison of health plan performance. Healthcare plans use HEDIS to evaluate the performance of their provider network, but the process is complex, involving a lot of service-related data in a variety of formats. The annual cost to report this data has been estimated to be over $15 billion.
Regulatory compliance is very costly and creates a negative drain on company resources and the bottom line. Every company in financial services or healthcare has no choice but to comply.
Regulatory compliance is very costly and creates a negative drain on company resources and the bottom line. Every company in financial services or healthcare has no choice but to comply and must implement processes to keep control. No wonder compliance is widely disliked in the C-suite. It can be difficult for managers to secure funding for compliance process automation.
Old dog, new tricks?
But what if you could teach your compliance process to produce some positive results for the company, in addition to keeping you out of trouble?
Buried within compliance-oriented requirements lies the opportunity to improve business outcomes. The underlying benefit common to these processes lies in the ability to access and use key information, which an automation system can unearth.
Turn lending compliance into a revenue accelerator
Take for instance mortgage loan origination. There are post-funding processes for which automation will not only improve compliance but could also generate new revenue opportunities.
For example, over the life of a mortgage loan it can be sold on to different finance servicing companies. Known as service rights acquisition, the process requires both parties to share sensitive information and the procedures must adhere to strict internal compliance and external regulatory requirements. The quicker the process, the faster the seller can recognize revenue and the faster the new servicer can benefit from the new service fees.
Each services acquirer has a different set of documentation requirements including the order in which the documents are to be arranged, called the “stacking order.” The seller must quickly and efficiently comply, which on the surface may appear simple, but in reality is often cumbersome and error prone. The buyer, on receiving the documentation, verifies receipt of all required information and then verifies the loan summary data against the documentation. Even though documents are provided in a specific order to support quickly locating each one, manual processing is still very slow. Verifying the specific data within each document is even slower yet.
This is where automation comes into play. Even in an ideal situation where the seller has provided a remarks page along with the loan file, automation can make the process quick, efficient and controllable.
The use of this automation as an “assistive technology” can significantly reduce the time to complete the loan servicing transfer. In this case, automating for compliance also accelerates the time to revenue.
Use HEDIS automation to improve healthcare plan outcomes
Automation starts with records sorting. The submissions of medical information from providers often come through the mail or fax machine as a large multi-page file of medical records. Each record represents a specific encounter where medical services were provided.
While review of this data is still best accomplished by subject matter experts, there is a lot that can be done to automate the supporting processes, which can reduce both the time required and the associated complexity.
Ideally, each individual record has already been identified and separated, otherwise your expensive subject matter experts must waste valuable time on this clerical work. Traditionally, this process was labor-intensive as there has been no reliable way to distinguish one record from another. Each document is different and does not always contain the same data. Additionally, two service records can be on the same page or begin and end on different pages. Therefore, attempts at constructing a rules-based approach to automate this process often fails. Another technique needs to be used.
Using natural language processing techniques along with deep learning neural networks, key information such as dates can be analyzed along with other text to understand which dates are likely to be the service date.
Using natural language processing techniques along with deep learning neural networks, key information such as dates can be analyzed along with other text to understand which dates are likely to be the service date. This data needs to be parsed at the document level to get an understanding of how one page relates to the next and if a single page is part of two different records. Other textual information is further analyzed to locate the optimal “split point” for each logical record.
Once individual records are created, further automation is used to analyze each record, looking for key phrases that indicate symptoms, medical conditions and treatment recommendations including referrals to specialists. This data can be located and highlighted for reviewers such that the process can remove most of the tedious work associated with stepping through individual records and scanning text looking for specific information.
The new workflow not only helps with compliance, it can bring several positive benefits that taken together will improve patient outcomes.
- You can cut hours out of the typical time to process patient audits.
- By analyzing actual patient medical charts, you have a far more comprehensive and richer data set.
- You can identify inconsistencies within the structured claims database and thereby improve patient data.
There could be a positive business opportunity hidden within your compliance processes. The first step is to investigate your options to automate the compliance process and learn how to reuse the data for positive outcomes. If you are unsure where to look, contact an expert to begin the conversation.