Introduction
Over six weeks, the median time for Digit Insurance to decide on cashless pre-authorisation requests from network hospitals rose from about 45 minutes to 95 minutes. IRDAI's 2024 health insurance master circular expects insurers to decide on cashless requests within one hour, so the share of requests breaching that limit has jumped. Hospitals are complaining, and some patients' families have been asked to pay deposits. This is a hard problem because health claims involve the insurer, sometimes a third-party administrator (TPA), hospitals, fraud controls and seasonal disease patterns. I'll work through a structured root cause framework.
I'll clarify the metric, rule out external factors, map the claims process, decompose the time into stages, prioritise data, form hypotheses, test them, and then decide and plan a fix.
Step 1
Clarifying Questions (3 minutes)
- Metric definition: Time from receipt of a complete pre-authorisation request to a decision (approve, partial approve, query or deny). Does the clock pause when a query is raised? Assume the reported metric includes query time.
- Scope: Retail and group health? Assume both, with the rise larger in retail.
- Volume: Has the number of requests changed? Assume volume is up about 20%.
- Processing: In-house team, TPA, or both? Assume most retail claims are processed in-house; some group policies go through a TPA.
- Recent changes: Any system releases, rule changes or team changes? Assume a new fraud and abuse detection model went live eight weeks ago.
- Geography: Any concentration? Unknown.
Problem statement: Median pre-authorisation decision time more than doubled over six weeks, with request volume up 20% and a new fraud model launched shortly before.
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