Insurance companies play a key role in keeping people financially secure amidst life’s uncertainties, such as illnesses, accidents, and deaths. They pay out claims to clients who experience loss to hopefully prevent the latter from depleting their personal savings. However, they can only do this if they properly manage the premiums they pool — medical records help them achieve that.
In this blog, we’ll explore how insurance providers use medical records.
Verifying information on applications
Insurers typically require applicants to undergo a medical exam and/or submit medical records before issuing them a policy. They use these medical data to validate all the details provided in an application. They also use these to check if any pre-existing medical conditions, family medical history, or other pertinent data were omitted.
Insurance companies use a process called underwriting to gather data about an applicant and assess the risk involved in offering them a policy. Reviewing an applicant’s medical records helps insurance companies determine how likely the applicant will make a claim in the future. This helps them decide if and how much they’ll charge for coverage.
For example, an applicant with pre-existing medical conditions like diabetes or high blood pressure will likely have higher premiums compared to someone who doesn’t. They may even have difficulty finding a provider willing to cover them because of their high risk profile.
Sharing of databases
In the United States, most insurance companies are part of the Medical Information Bureau (MIB), which is an organization that maintains a database of medical data taken from individuals' insurance applications. This database is shared by over 600 life and health insurers.
If an insurance provider finds that an applicant has a severe medical condition that can impact that person’s health or longevity, they can report that information to the MIB. The MIB’s database allows providers to crosscheck if an individual’s past records conflict with what was provided in a new application, protecting them from errors, omissions, and misstatements in an applicant’s health statement.
Insurers can also tap into the prescription drug databases maintained by third parties like IntelliScript and MedPoint, in addition to the MIB’s database. This allows them to obtain information about an applicant’s medication purchases (i.e., dosage, number and frequency of refills, and the specific type of illness being treated).
Computing the value of claims
When it comes to policies such as individual disability income insurance or long-term disability insurance, claims adjusters extensively review medical records to understand the extent and severity of a claimant’s condition. This allows them to decide the value of a claim.
Claimants who are unable to work due to a disabling injury or medical condition typically receive massive compensation. However, the claim may be minimized or even denied if medical records reveal that the injury or condition isn’t very grave.
Adjusters also periodically review medical records to find changes that may show that the claimant is no longer disabled, allowing them to discontinue benefits.
Insurance companies need an efficient medical record retrieval process
Given the crucial role that medical records play in the work of insurers, the process of obtaining these must be quick and accurate. Fortunately, insurance providers can outsource the retrieval process to specialists like Record Retrieval Solutions (RRS).
Related reading: Why record retrieval services are ideal for insurance companies
We at RRS make it easy for insurance companies to secure medical records. They simply need to submit a record request via our online portal and we’ll take it from there. Using the same portal, insurance companies can check the status of their orders and download their requested records. They can also expect to receive their paperwork in 12 days on average.
Interested in our services? Contact us today to get started.