Design scalable insurance claims processing system

You are asked to design an insurance claims system for a health-focused insurance company. The system should support end-to-end claim handling, from submission to payment, and be robust enough to support future growth.

Assume the following high-level requirements:

Actors

• Members / policyholders : Submit claims, upload documents (e.g., receipts, medical reports), track claim status.
• Providers (e.g., clinics, hospitals): Optionally submit claims on behalf of members.
• Claims adjusters : Review claims, request additional information, approve/deny claims, and trigger payments.
• Admins / operations : Configure rules, view dashboards, run reports, audit history.

Core functionality

1. Members/providers can submit a claim that includes:
   • Policy and member identifiers.
   • One or more claim items (e.g., procedures, services, medications) with dates, codes, and amounts.
   • Attachments (PDFs, images) as supporting documents.
2. The system validates claims against policy coverage and business rules (e.g., coverage limits, pre-authorizations, exclusions).
3. Claims go through a workflow:
   • Submitted → Under review → Pending info → Approved → Denied → Paid.
4. Members can view claim status and history via a web or mobile app.
5. Adjusters can prioritize, search, and process claims efficiently.
6. On approval, the system integrates with a payment system to pay providers/members.
7. The system maintains an audit trail for compliance (who changed what and when).

Non-functional requirements (assume a mid-sized insurer)

• Should handle tens of thousands of active users and millions of claims over time.
• High availability and durability of claim data (no data loss).
• Reasonable latency for common operations (e.g., < 200–500 ms for viewing status).
• Strong security and access control (claims contain sensitive health and financial data).

Design this system. In your answer, describe:

1. API and user flows for key operations (submit claim, view status, adjuster processing).
2. A high-level architecture (services/components, how they interact) and data storage choices.
3. A suitable data model for core entities (Claim, ClaimItem, Policy, Member, Attachments, ClaimEvents, etc.).
4. How you would implement the workflow/state machine for claim processing.
5. How you would handle scalability , reliability , and data consistency across services.
6. How you would secure the system (authentication, authorization, data privacy, audit logging).
7. How you would integrate with external systems (payment processors, existing policy administration systems) and support reporting/analytics.