All these questions (except number one) are from the book “Fundamentals of Business Process Management”, 2nd Edition, by Marlon Dumas, Marcello La Rosa, Jan Mendling, Hajo A. Reijers, Springer.
1– Scenario: Disability Insurance Claims Handling at InsureIT
We consider the following business process for handling insurance claims for disability insurance (Disability Insurance is a form of insurance that insures the beneficiary’s earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work) at an insurance company InsureIT.
The process starts when a customer lodges a disability claim. To do so, the customer fills in a form including a 2–page questionnaire describing the disability. The customer can submit the form physically at one of the branches of InsureIT, by postal mail, fax or simply via e–mail (digitally–signed document). When a claim is received, a junior claims officer first enters the claim details into the insurance information system. Data entry usually takes 10 minutes.
The same junior claims officer performs a basic check to ensure that the customer’s insurance policy is valid and that the type of claim is covered by the insurance policy. It is rare for the claim to be rejected at this stage (it only happens in 2% of cases). Otherwise the claim is marked as “eligible” and moves forward in the process.
Next, the claim is moved to a senior claims officer who performs an in–depth assessment of the reported disability and estimates the monthly benefit entitlement (i.e. how much monthly compensation is the claimant entitled to, and for what period of time).
In the case of short–term disability benefits, the senior claims handler can perform the benefit assessment without requiring further documentation. In these cases, the benefit assessment takes 20 minutes.
Once a decision is made, the senior claims handler registers the entitlement on the insurance information system and informs the customer of the outcome via e–mail or postal mail. However, in the case of long–term disability claims (more than three months), the senior claims handler requires a full medical report in order to assess the benefit entitlements.
Senior claims handlers perceive that these medical reports are essential in order to assess the claims accurately and to avoid fraud. Once the senior claims handler has received the medical report, they can assess the benefits in about one hour on average.
The senior claims handler then sends a response letter to the customer (by e–mail and post) to notify the customer of their monthly entitlement and the conditions of this entitlement (e.g. when will the entitlement be stopped or when is it due for renewal). The entitlement is recorded in the insurance information system.
Later, a finance officer triggers the first entitlement payment manually and schedules the monthly entitlement for subsequent months. The finance officer takes on average 20 minutes to handle an entitlement. Finance officers handle payments in batches, once per working day.
When a medical report is required, a junior claims handler contacts the customer (by phone or e–mail) to notify them that their claim is being assessed, and to ask the customer to send a signed form authorizing InsureIT to request medical reports from their health provider (hospital or clinic).
Health providers will not issue a medical report to an insurance company unless the customer has signed such an authorization.
Test 2.
All these questions (except number one) are from the book “Fundamentals of Business Process Management”, 2nd Edition, by Marlon Dumas, Marcello La Rosa, Jan Mendling, Hajo A. Reijers, Springer.
Insure IT’s sales department estimates that the extreme delays in handling disability claims costs EUR 50K per year to Insure IT in lost sales of insurance policies due to unsatisfied customers and the resulting negative publicity.
Given the persistent problems with obtaining health reports in a timely manner, claims handlers have tried to negotiate with several health providers a faster approach to obtain medical reports. A handful of health providers (the more cooperative ones) are willing to accept medical report requests by e-mail to save 2-3 working days.
However, the majority of health providers do not see any incentive to put more resources into issuing medical reports for insurance companies.
They perceive that their customers are the patients. The process of issuing medical reports to insurers is secondary for them.
a) Propose a set of changes in the process. For each change, you should provide:
A. A brief description of the process change;
B. Which issue(s) are being addressed by the proposed change;
C. How feasible is this change? In other words, how likely it is that the change can be
implemented in a way that the benefits of the change exceed the costs in the medium- term (six months to one year timeframe).
If the change requires an upfront investment, describe what investment is needed and how likely it is that this investment is justified given the impact of the issue that is being addressed.
b) Draw a “to-be” BPMN model that incorporates your proposed changes.
2- Explain the similarities and differences between production and ad hoc workflow systems. Include in your explanation a reflection on the type of support they provide on the one hand and their orientation in the spectrum of data versus process on the other.
3- Classify the following objectives of the various organizations described that use a BPMS and use the categories of advantages: Workload Reduction, Flexible System Integration, Execution Transparency, and Rule Enforcement.
• A legal company wishes to track all the participants it has involved in its
formalized process for the preparation of litigation cases.
• A governmental agency wishes to reduce the penalties it must pay for late
payments of invoices.
• A bank wishes to demonstrate to its external auditor that it strictly enforces the
principle that each large loan is approved by two separate clerks.
4- Identify the type of the tasks in Figure 1, and represent them using appropriate BPMN markers.
5– Consider the following business processes. Identify which of these models can be automated and justify your choice.
1. Recruiting a new soldier.
2. Organizing a court hearing.
3. Buying an item at an auction on eBay.
4. Managing inventory assets disposition.
5. Booking a trip online.
6. Handling an IT–system maintenance job.
7. Servicing a used car at a mechanic.
8. Making online trade customs declarations.
9. Processing employee payrolls.
10. Synchronizing data servers in a distributed environment.
