An Introduction to Artificial Intelligence: AI, UX & The Human Expert
LegalMay 30, 2019

The future of claims litigation technology: Artificial intelligence in legal billing

This post focuses on how AI technologies can help claims professionals work more efficiently and effectively. In the next post, the last in this series, Vince will write about tools that support “red flagging” of potential problems with claims, such as fraud or challenging precedents in the case law.

Twenty-ish years ago, legal invoicing was changed forever by technology. Starting then, insurance carriers went from receiving paper invoices from law firms – which often meant invoices languished in people’s physical inboxes for months – to electronic bills that could be adjusted and approved much more efficiently.

Time to cut the check went from being counted in months to being counted in days. This opened the door for better auditing of billing guideline compliance, as well as benefits like fast pay discounts. Carriers could now save real money by using electronic billing technology. There was a benefit on the law firm side, too. Firms now could spend less time tracking down each invoice through complicated and lengthy audit processes just to find out which invoices were still outstanding and when they could expect to be paid.

Improving on e-billing

Today, e-billing has been adopted by the vast majority of companies in the insurance industry. Carriers now receive most of their invoices electronically, which means they can perform analytics and draw insights from the rich data set electronic invoices generate.

Recently however, many companies have been asking how this technology could improve, as there is some friction in the system. Reviewing invoices, even in their digital form, can still be a time-consuming process now that billing guidelines have become more complex. In addition, not all law firms are able to bill electronically, which means that a percentage of invoices is still received in “paper” format (although these days, this usually takes the form of a PDF file sent through email rather than an envelope and stamp). In addition, law firms often don’t understand how to properly conform to all billing guidelines. This can introduce unnecessary challenges to what should be a very straightforward process: paying for the requested legal work.

How AI can help

Artificial intelligence (AI) is primed to address all of these issues. AI technologies such as natural language processing, which enables a computer to read an invoice similarly to how a human would, allows software to dissect an invoice in much the same way your claims examiners or bill reviewers might do. The technology can break down what type of work was done, whether that work was appropriate as per the billing guidelines, and even if that work was reasonable.

This capability is most effectively used by introducing human reviewers to the process after AI takes a first pass. When people come into the process, the invoice has already been screened in a way that is transparent and easy to understand, with potential guideline violations flagged. The invoice reviewer starts with a roadmap directing them to these line items where the invoice might not comply with the contracted legal services agreement. When the billing law firm can see the same results, it gives them insight on how they can make future invoices guideline-compliant so they can be paid in full and faster. It’s a win-win situation on both sides of the billing process.

In addition, AI technology can also read PDF invoices and convert them into a format that electronic billing platforms can utilize. Invoice conversion has been done manually for some time, but it is resource and cost intensive. AI’s ability to read quickly and translate the real intent means that it dramatically increases both the speed and accuracy of the conversion work.

A transparent and cooperative approach

This technology is able to add a great deal of transparency. By using AI tools that deliver information to both the law firm and the carrier, the parties operate from a position of shared understanding and can make better decisions faster. In the end, the law firm can operate more efficiently and get paid more quickly for the good legal work they have done.

For claims professionals working at carriers, these tools allow them to spend less of their day on lower value work like invoice review and focus on resolving the claims of policy holders and delivering value to the insurance carrier’s clients.

To learn how Wolters Kluwer’s ELM Solutions can help you improve your operations with AI, read about LegalVIEW® BillAnalyzer and Intelligent Invoice Conversion and download our whitepaper Meeting Challenges and Predicting the Future: Artificial Intelligence in Claims Litigation.

Vince Venturella
Associate Director, Technology Product Management - Insurance
Vince is the product manager responsible for the development of Wolters Kluwer's ELM Solutions insurance solutions. Vince is a graduate of The Ohio State University in Columbus, Ohio.
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