WORKFLOW COMPLIANCE
by Laura Nettles
Workflow is certainly the buzzword these days. Everyone's looking to streamline workflows. Workflow improvements are at the top of the enhancement list for all the automation vendors. How do you ensure that your service providers are complying with the workflows you've put in place? Laura Nettles offers some information that should help.
First, let's distinguish between workflows and procedures. These terms are often used interchangeably. However, procedures usually include only standards for performance. Workflows — properly documented and implemented — integrate the procedure and the process. For example, your procedure requires you to follow up on binders every 30 days. The workflows include the step-by-step instructions on how to use the diary system for follow-up and how to extend the binder. By monitoring workflow compliance, we ensure that procedures are followed.
The workflow audit is all about compliance. The best, most thought out, best-documented workflows are of little or no value if no one follows them. Most agencies have good procedures. The key is getting people to follow them by using a workflow audit.
Workflow audits help you monitor compliance with agency workflows and procedures by identifying weaknesses in your services and processes at the individual level. These audits measure the quality of your workflow implementation, with a focus on E&O control and effective use of technology.
The workflow audit is also about individual accountability. You can measure individual, department, and agency compliance with procedures, and then include the measurement as part of your performance appraisal process. This usually translates into results. Service providers want positive reviews. Tying performance to workflow compliance will make compliance a priority. Instead of service providers claiming that you never trained them, they'll be asking for training. Everyone wins.
How do you put an effective workflow review process in place? Here are the key components.
- Identify the audit team;
- Determine the frequency of the audits;
- Define what will be audited;
- Set the scoring;
- Perform the audit; and
- Determine how audit results will be distributed.
PREPARING FOR THE AUDIT
The most successful audit teams aren't really teams at all. Whenever we put a group together and call them an “audit team,” they're branded as traitors looking to catch their fellow employees doing something wrong. No one wants to participate because of the branding. Let's face it: Mention “audit” to service providers and everyone runs and hides. No one wants to be audited — but it's far worse to be on the audit team.
Instead of a set audit team, we'd recommend using a rotating team. Have each service provider participate on the audit team once a year, so that everyone has a turn. A good workflow audit can be an invaluable learning experience. Imagine what you could learn about your agency workflows if you had to review transactions and determine if they were processed within the guidelines. This is detailed stuff. Service providers are quite effective at evaluating workflows.
Together with service providers, the Quality Manager and IT professional should participate on the audit team. You might also include the department manager; they'll learn a lot during the process. At a minimum, the department managers should participate annually.
If you have branch offices, we'd recommend that each location have its own team. Have the Quality Manager attend all the audits to ensure that the offices are all following the same guidelines.
Once you've established the team, determine how frequently you will audit. Remember, auditing is a process, not a project. The number of service providers determines the frequency. The perfect number for the audit team is four to six service providers plus the managers. To establish the frequency, divide the total number of service providers by six. For example, 24 service providers divided by six providers per audit team equals four audits per year. This means your audits will be quarterly. If you have 36 service providers, the audits would be every other month. This way, each service provider participates once a year.
Establish what you're going to audit at the beginning of each annual audit cycle. Perform the same type of audit for all service providers. Once a cycle is completed, you can change the focus of the audit. Because most service providers spend most of their time processing certificates, endorsements, and renewals, we recommend auditing these transactions in the first cycle. Remember, you can't audit everything. By its very nature, an audit is a sampling. However, you can control what you sample. Pick three workflows and audit transactions that fall within the workflow. Certificates, endorsements, and renewals encompass a lot of transactions, including binding coverage, invoicing, and policy checking. This is a good place to start.
To score the results, keep things simple by using a compliance ranking of 1 to 5, with 1 as non-compliance and 5 being total compliance. This gives the auditors some flexibility. For example, if everything in a procedure was right except a description, it could be ranked a 4. If there were no supporting documentation in the t-file, the ranking could be a 1. A perfect renewal could be a 5. Once the audit is performed, add up the points, calculate a percentage, and tabulate the results by individual, department, and location.
PERFORMING THE AUDIT
Conduct an all-day meeting with the audit team in a conference room. Make sure that you have access to the agency management system, preferably projected on a screen. Have a copy of agency procedures and workflows, preferably online.
Here's the secret: Audit only transactions for the service providers participating on the audit team. The team audits their own transactions. For an agency with good automated workflows, the actual audit is quite simple. Here's what you do:
- Select a one-week period for the audit. Be sure to select a period in which the audit team was present for the entire week.
- Print or view the activities for the one-week period for each member of the audit team. Select the transactions from each category you want to audit for each service provider (such as certificates, endorsements, and renewals). Select the number of transactions based on the total number of transactions. I like to select about 5%. Highlight the transactions to be audited (the Quality Manager can complete Steps 1 and 2 before the meeting).
- Audit each transaction by following it all the way through. If your first transaction is a certificate of insurance, refer to your workflows and compare the transaction to the workflow. For example, is the source of the request documented electronically and/or filed in the t-file? Was the certificate completed within the allotted time frame? Was the activity properly closed? Was the holder entered according to the agency guidelines? Does a duplicate holder exist?
- Follow through each transaction to completion. If you select a transaction for receipt of a policy, pull and check the policy according to the guidelines. If you choose a transaction of issuing binders, review the binders to ensure that the coverage ordered is what was bound. Don't shortcut the process.
- Score the transaction and enter the score on a spreadsheet. The column on the spreadsheet should include the person being audited, transaction audited, compliance issues, comments, and score.
- Once the audit is completed distribute the results to all service providers (without the provider's name) so that everyone can benefit from the findings.
Laura Nettles is president of Nettles Consulting Network, an Atlanta-based firm that helps insurance agencies and brokerages maximize their profits by integrating technology, workflows, and people, For more information, call (404) 325-0023, fax (404) 325-1030, e-mail [email protected], or visit www.NettlesConsulting.com.