First Notice of Loss, like many insurance-related niches, uses a litany of acronyms to describe the methods and nuances relevant to both providers and “consumers.” It is complex for those who use it, including providers and consumers. For purposes of this article, consumers can be considered applicants, and providers can be insurance carriers, TPAs, and FNOL call centers. Let’s start by defining the first loss indicator. An initial damage report notifies the appropriate insurance provider of the theft or destruction of items covered by the terms of a particular policy. Notification may often precede the filing of a formal claim. Many insurance providers use a specific process and/or documentation to capture an initial claim, while others only provide basic guidelines. The concept is simple enough: an individual or business encounters damage (fire, theft, vandalism, healthcare, etc.) and contacts an insurance provider or third-party agent to notify them of the loss. From here, however, there is a litany of acronyms used in this process. Some of the more common acronyms and definitions are listed below in alphabetical order:
absence notification systems (ARS): Employee feedback systems that can increase employee satisfaction while reducing employer costs.
Average response speed (AS A): The metric used to determine the efficiency with which an organization responds to incoming FNOL calls and claims.
Average time to abandonment (AT A): The average time a requester waits before ending their call.
All trunks busy (ATB): A phone status that indicates limited call throughput and that all trunks are in use. This means the trunk group cannot accept new incoming or outgoing calls.
call handling times (CHT): The time a FNOL call center representative spends with a claimant, including post call processing. This is also known as the average processing time.
Electronic Data Interchange (DFU): An industry standard for the electronic transmission of data that enables efficient and accurate communication for all parties involved in claims management. Accurate EDI integration is important at FNOL as missing or inaccurate data can result in fines and penalties.
First loss report (FNOL): A condensed process that may or should include incident reporting, claims management, government filing, data recording and retrieval, and customer service.
First report of the incident (FROI): The time at which claims processing begins or the notification of absence is made.
First injury report (FROI): FROI refers to compliance with workers’ compensation. Whether or not an employer agrees with an applicant, an FROI must be submitted. These reports are typically required when an employee misses 5 or more days of paid work due to an injury and must be submitted within seven business days of the fifth day of missed work. Each state uses its own FROI form.
Full damage and incident reporting (FCCR): Solutions that increase productivity and reduce costs for commercial and personal insurers, self-insured companies, third-party administrators and managed care organizations.
damage report (IR): Well-defined incident reporting procedures help to process claims and reduce claims payments, processing costs and administration costs. Both medical costs and litigation can be mitigated through effective incident reporting.
recording specialists (IS): FNOL call center staff trained in claims handling and FROI procedures.
Subsequent report of the incident (SROI): Matching the status of the reported issue with the status and method of resolution.
Third Party Administrators (TPA): An organization that processes insurance claims or certain aspects of employee benefit plans for a separate entity. A TPA typically handles claims processing for employers who fully self-insure their employees.
Accurate, timely and efficient response to the initial claim notification, intake and reporting are important for both employer and employee. Some of the most important work can be done in the first few minutes. A well-documented FNOL process and procedures greatly improves data accuracy and reduces the amount of work required later in the process. An efficient and automated process can lower costs and reduce errors. This can lead to consistently better outcomes for everyone involved.
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