Claims Management: When and How to Engage Vendors

Whether it’s a surveillance expert, medical management service, or digital investigator, bringing in the right vendor at the right time can make all the difference in handling a claim. This blog breaks down key factors to consider when engaging vendors and how they can support a smoother claims solution process.

The Importance of Timing in Claims Management

Engaging a vendor too early or too late can lead to unnecessary expenses, inefficiencies, or missed opportunities. For example:

• Premature Outsourcing: Involving vendors prematurely, before gathering sufficient information, might lead to redundant or irrelevant investigations.
• Delayed Outsourcing: Delayed vendor engagement can result in missed evidence, increased claim costs, or escalated disputes due to long delays.

The Stages of Vendor Engagement

The moment a claim is filed, the clock starts ticking. You are tasked with collecting key details such as —what happened, who was involved, supporting documents (photos, police reports, medical records), and, of course, the claimant’s statement.

But here’s where it gets interesting: knowing when to bring in a vendor can make or break a claim’s outcome.

To decide when to bring in a vendor, it’s essential to understand the claim’s lifecycle and identify critical points where external expertise, like those of a social media investigation or IME, could bring value. Here are the primary stages:

1. Initial Stage

 Spot a red flag? If statements don’t add up, injuries seem exaggerated, or documentation looks fishy, it’s time to call in fraud experts. A 2-day surveillance or internet mining investigation can piece together missing information from the claimant’s statement quickly and without draining your resources or time.

Dealing with a complex injury? Bringing in an independent medical examiner (IME), or Medical Canvassing expert early on – ensures treatment plans are necessary and cost-effective.

2. Verification Stage

Once the claim is categorized and the initial details have been gathered, it’s time to investigate.
The second stage of this process is used to verify facts, contact witnesses, and analyze estimates—whether it’s medical bills or property repairs.

Specialized knowledge needed? If you’re dealing with a workplace injury, a natural disaster claim, or something highly technical, you might need the knowledge of an expert or additional resources.

Physical evidence at risk? If a claim hinges on damaged property or accident reconstruction, speed is everything. Bring in forensic experts immediately to document and assess the evidence before it is tampered with is essential. One great example is the use of an Event Data Recorder (EDR) aka Event Data Retrieval.

3. Ongoing Claim Evaluation

Even a well-managed claim can take a turn. Maybe medical records don’t match up, treatment costs keep climbing, or recovery timelines stretch way beyond expectations.

Inconsistent medical records? A Peer Review or Bill Review can step in to assess whether treatments are necessary and whether charges on the medical bills are fair and reasonable.

Handling a high-value claim? The larger the financial investment, the more thorough the research—and the same principle applies to claims handling. When closing a high-value claim, such as a $3 million life insurance payout, due diligence is essential. Every detail must be meticulously verified to ensure accuracy and prevent fraud.

4. Dispute or Litigation Phase

When a claim escalates into a dispute—or worse, litigation—adjusters need airtight evidence and expert backing from physicians or investigators. Whether it’s a denial challenge, conflicting medical opinions, or accusations of bad faith handling, having experts back your claim is crucial.

Need to strengthen your case? Courtroom-prepped investigators, IME doctors, and Case Managers can provide crucial reports and testimony to back up your position.
Digital evidence matters. OSINT (open-source intelligence) can uncover a goldmine of hidden details—whether it’s social media activity contradicting a claim or electronic records that reveal inconsistencies.

Your goal is to have a bulletproof defense – so is ours.

Cost vs Benefit

Claim Complexity

The complexity of a claim heavily influences the need for vendor involvement. For example:
• Straightforward claims (e.g., minor vehicle damage) often require no vendor engagement.
• Complex claims (e.g., multi-party liability, catastrophic injuries) benefit from early expert input.

Cost vs. Benefit

Evaluate whether the potential benefit of a claims partner/vendor outweighs its cost. This involves:
• Assessing the claim’s value.
• Estimating the potential savings or risk mitigation achieved by vendor involvement.

Regulatory Requirements

Certain jurisdictions or claim types may mandate SIU or Physician involvement, such as:
• Independent medical examinations for disputed injury claims.
• Utilization reviews for workers’ compensation cases.

Red Flags and Risk Indicators

Here are some examples of red flags that almost always signal potential fraud:
• Multiple previous claims by the same claimant.
• Delayed reporting of the incident.
• Contradictory witness statements.

Case Study: Early vs. Late Vendor Engagement

Let’s look at these two scenarios:

Scenario 1: Early Partnership

A workers’ compensation claim involves a back injury with conflicting medical reports that suggest the claimant had a preexisting spinal injury. Sarah, Claims adjuster at Company A employs a claims partner that:
• Coordinates an Independent Medical Examination.
• Conducts a Medical Canvass for the surrounding 100 miles near the claimants’ residence.

Result: The claim resolves quickly, saving the insurer significant costs.

Scenario 2: Delayed Partnership

An auto liability claim escalates into litigation due to a 3 month delayed EDR report that has been wiped out after the accident. The adjuster engages a forensic expert 6 months after the initial claim was filed.

• Scene investigation concludes that the accident was unlikely to have occurred as reported by the claimant
• Experienced investigator acquires conflicting Recorded Statements from all parties involved in the accident

Result: While the claim is eventually denied, the delay leads to higher legal expenses and prolonged resolution.

Engaging a claims partner for a claim can be a daunting process especially if you are handling a large caseload of claims that all have various red flags and you are not sure they are worth the added expense. The more informed you are about recognizing red flags and leveraging your own knowledge then the more that engaging a vendor will feel like a tool not a hurdle in your claims success.

By understanding the claim’s lifecycle, recognizing red flags, and leveraging technology, insurance adjusters and risk managers can make informed decisions that optimize outcomes. Remember, the key is balancing timeliness with necessity— engaging vendors at the right time is a crucial aspect of this.

Let the timing of your vendor engagement be a tool, not a hurdle. Talk to an expert today about any claims questions you may have.