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League·Software Engineer·Onsite - System Design / Architecture·Senior

SeniorPrefer not to say
Jul 2026Remote

Summary

System design round at League for a Software Engineer position. The whole thing was one big design question about an insurance claims processing system, end to end. Pretty involved, lots of moving parts.

Questions Asked (7)

Q1

Design an end-to-end insurance claims processing system for a health insurer, covering the full claim lifecycle from submission through validation, human review, and payment.

System DesignTechnical Trade-offs
Author's notes

Big open-ended one.

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AI HintsAI Generated

Suggested Approach

Start by clarifying requirements and scope, then design a high-level architecture that separates concerns into ingestion, validation, adjudication, human review, and payment. Walk through the claim lifecycle, emphasizing scalability, reliability, and compliance, and discuss trade-offs for key components like rules engines and workflow orchestration.

Pro tip: Proactively address data privacy (HIPAA) and auditability, and suggest using a rules engine for automated adjudication to balance flexibility and performance. Also, mention the importance of idempotency and exactly-once processing in payment to avoid duplicate payouts.

1. Clarify Requirements and Scope

Ask questions to understand claim volume, latency requirements, regulatory constraints (e.g., HIPAA), and integration points with existing systems. Define functional and non-functional requirements.

2. High-Level Architecture

Outline the main components: API gateway for claim submission, message queue for asynchronous processing, validation service, rules engine for auto-adjudication, human review workflow, payment service, and data stores. Explain how they interact.

3. Deep Dive into Key Components

Detail the validation process (e.g., schema validation, eligibility checks), the rules engine (e.g., Drools, custom DSL), and the human review workflow (e.g., task assignment, escalation). Discuss how to handle failures and retries.

4. Data Model and Storage

Describe the data model for claims, including status tracking, audit logs, and document storage. Choose appropriate databases (e.g., relational for transactions, NoSQL for documents) and discuss indexing and query patterns.

5. Scalability, Reliability, and Trade-offs

Discuss scaling strategies (horizontal scaling, partitioning), fault tolerance (idempotency, dead-letter queues), and trade-offs (e.g., consistency vs. availability, synchronous vs. asynchronous processing).

Key Points to Mention

  • Use of a rules engine for automated adjudication to allow business users to update rules without code changes.
  • Idempotency and exactly-once processing in payment to prevent duplicate payments.
  • HIPAA compliance and data encryption at rest and in transit.
  • Asynchronous processing with message queues (e.g., Kafka, RabbitMQ) to handle spikes and decouple services.
  • Audit trails and logging for every state change to support compliance and debugging.
  • Human-in-the-loop workflow for exceptions, with prioritization and SLA tracking.

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q2

Walk through the state machine for claim processing and explain how you'd make each state transition atomic while preventing two adjusters from processing the same claim simultaneously.

System DesignData Modeling
Author's notes

I drew out the states fine (submitted, under review, pending info, approved/denied, paid) but fumbled the concurrency part.

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AI HintsAI Generated

Suggested Approach

Start by defining a clear claim state machine with states like Submitted, UnderReview, Approved, Denied, and Paid, then explain how to enforce atomic transitions using database transactions with optimistic or pessimistic locking. Emphasize preventing concurrent processing by using a claim-level lock or version field, and discuss how to handle conflicts gracefully.

Pro tip: Mention that you'd use a conditional update (e.g., UPDATE ... WHERE status = 'Submitted' AND version = X) to ensure atomicity and detect conflicts, and that you'd log failed attempts for auditing. This shows you understand both correctness and operational visibility.

1. Define the state machine

List the states a claim can be in (e.g., Submitted, UnderReview, Approved, Denied, Paid) and the allowed transitions between them, including who or what triggers each transition.

2. Choose a concurrency control strategy

Decide between optimistic locking (version numbers) and pessimistic locking (SELECT FOR UPDATE) based on contention and performance needs, and explain why one fits better.

3. Implement atomic transitions

Use database transactions with conditional updates (e.g., UPDATE claims SET status = 'UnderReview', version = version + 1 WHERE id = ? AND status = 'Submitted' AND version = ?) to ensure the transition only occurs if the claim is in the expected state and version.

4. Prevent simultaneous processing

Assign a unique adjuster ID or lock token when a claim is picked up, and reject attempts by other adjusters to transition the claim until the lock is released or expires.

5. Handle conflicts and edge cases

Describe how to detect and respond to failed transitions (e.g., return a 409 Conflict, notify the adjuster, and log the event), and discuss timeout or retry mechanisms for stale locks.

Key Points to Mention

  • State machine design with explicit states and allowed transitions
  • Optimistic vs. pessimistic locking trade-offs
  • Atomic conditional updates using version numbers or status checks
  • Claim-level locking or assignment to a specific adjuster
  • Handling concurrent modification conflicts (e.g., 409 responses, retries)
  • Auditability and logging of state transitions and failed attempts

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q3

How do you avoid the dual-write problem when a claim approval needs to both update the database and trigger a payment?

System DesignAPI & Integrations
Author's notes

Blanked for a moment.

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AI HintsAI Generated

Suggested Approach

Start by defining the dual-write problem and its risks, then present a reliable pattern like transactional outbox or event sourcing to ensure atomicity. Explain how you would implement it, handle failures, and ensure idempotency in the payment system.

Pro tip: Emphasize that the outbox pattern decouples the database transaction from the payment trigger, and mention that idempotency keys are essential to prevent duplicate payments if retries occur.

1. Define the problem

Explain that dual-write occurs when two separate systems (database and payment service) are updated non-atomically, leading to inconsistencies if one fails.

2. Choose a pattern

Select a pattern like transactional outbox, event sourcing, or two-phase commit (though 2PC is often impractical). Describe how it ensures atomicity.

3. Implement the solution

Detail the steps: within a single database transaction, update the claim status and insert an event into an outbox table. A separate process polls the outbox and triggers payments.

4. Handle failures and retries

Discuss how to handle payment failures with retries, dead-letter queues, and idempotency to avoid duplicate charges.

5. Ensure consistency and monitoring

Mention monitoring, alerting, and reconciliation to detect and resolve inconsistencies between the database and payment system.

Key Points to Mention

  • Transactional outbox pattern
  • Idempotency keys for payment APIs
  • Event-driven architecture with message queues (e.g., Kafka, RabbitMQ)
  • At-least-once delivery and exactly-once processing
  • Compensating transactions (Saga pattern) for rollback
  • Monitoring and reconciliation processes

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q4

A pending-info SLA timer fires on a claim waiting for member documents. What does your system do, and why might auto-denying by the clock be the wrong call for a health insurer?

System DesignTechnical Trade-offs
Author's notes

Liked this one actually.

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AI HintsAI Generated

Suggested Approach

First, describe the technical behavior of the SLA timer: it triggers a workflow event that could auto-deny the claim. Then, pivot to the business and ethical implications, explaining why auto-denial is risky for a health insurer—member harm, regulatory violations, and reputational damage—and propose a more nuanced alternative like pausing the timer or escalating for manual review.

Pro tip: Show that you understand the difference between a technical SLA and a business SLA: the timer is a signal, not a decision-maker. Emphasize that in healthcare, the cost of a false denial (member harm, regulatory fines) far outweighs the cost of a delayed decision.

1. Explain the technical trigger

Describe what happens when the pending-info SLA timer fires: the system likely emits an event, updates the claim status, and may trigger an auto-denial workflow. Mention that the timer is typically configurable and tied to a specific SLA (e.g., 30 days).

2. Identify the default action and its rationale

State that the default action might be to auto-deny the claim to meet the SLA and avoid paying unsubstantiated claims. Explain that this is often driven by operational efficiency and cost control.

3. Analyze why auto-denial is problematic

Discuss the negative consequences: members may have submitted documents but they were lost or delayed; auto-denial can lead to denied care, regulatory penalties (e.g., CMS guidelines), and member dissatisfaction. Highlight that healthcare claims often require human judgment.

4. Propose a better system behavior

Suggest alternatives: pause the timer if documents are received but not yet processed, send reminders before the deadline, or route to a human reviewer for extension. Emphasize designing for exceptions and grace periods.

5. Summarize trade-offs and design principles

Conclude by balancing technical efficiency with business and ethical considerations. Advocate for configurable SLAs, audit trails, and member-centric design that prioritizes accurate adjudication over speed.

Key Points to Mention

  • SLA timers are operational tools, not clinical decision-makers; auto-denial can harm members and violate regulations.
  • Healthcare claims often have complex exceptions (e.g., documents submitted but not yet indexed) that require human review.
  • Regulatory compliance: CMS and state laws mandate specific timelines and prohibit automatic denials without proper notice.
  • Member experience: auto-denial erodes trust and can lead to appeals, increasing administrative costs.
  • System design: implement configurable timers, grace periods, and escalation paths rather than hard auto-denial.
  • Data integrity: ensure the system can distinguish between 'no documents received' and 'documents received but not processed'.

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q5

A payment request to the external processor times out with no response. How does your system guarantee the provider gets paid exactly once when you retry?

API & IntegrationsSystem Design
Author's notes

This is basically the idempotency key question in disguise.

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AI HintsAI Generated

Suggested Approach

Start by framing the core problem as achieving exactly-once semantics in a distributed system, which typically requires idempotency and reconciliation. Then walk through your design: using a client-generated idempotency key, persisting payment state, and implementing a retry mechanism with exponential backoff and a reconciliation job to resolve ambiguous outcomes. Finally, discuss how you handle edge cases like duplicate requests and how you ensure the provider's system also supports idempotency.

Pro tip: Emphasize that exactly-once is achieved through at-least-once delivery plus idempotent processing, and that the provider must support idempotency keys—otherwise, you need a reconciliation process to detect and correct duplicates. This shows you understand the practical limitations and the need for end-to-end coordination.

1. Clarify the problem and constraints

Acknowledge that network timeouts create uncertainty: the request may or may not have been processed. State that exactly-once requires idempotency and coordination with the provider.

2. Design idempotent requests

Generate a unique idempotency key per payment attempt and include it in the request. The provider should use this key to deduplicate and return the same response for repeated requests.

3. Persist state and retry safely

Before sending, record the payment intent and idempotency key in your database. On timeout, retry with the same key using exponential backoff and jitter, ensuring you don't create a new payment.

4. Implement reconciliation

Run a background job that queries the provider for the status of payments with unknown outcomes, using the idempotency key or a transaction ID, and updates your records accordingly.

5. Handle edge cases and failures

Discuss what happens if the provider doesn't support idempotency: you might need to use a two-phase approach or manual reconciliation. Also cover how to avoid duplicate retries from multiple threads or services.

Key Points to Mention

  • Idempotency keys: unique client-generated keys to deduplicate requests
  • At-least-once delivery + idempotent processing = exactly-once semantics
  • Persistent state: storing payment intent and status before sending
  • Retry strategy: exponential backoff with jitter, and a maximum retry limit
  • Reconciliation: querying the provider for unknown transaction statuses
  • Provider support: ensuring the external processor supports idempotency or has a query API

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q6

An admin tightens a coverage rule. Should that change retroactively affect claims already adjudicated under the old rule, and how do you version rules to prevent silent re-adjudication?

Data ModelingTechnical Trade-offs
Author's notes

Didn't see this angle coming.

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AI HintsAI Generated

Suggested Approach

Start by clarifying that retroactive application should be a deliberate, auditable business decision, not an automatic side effect of a rule change. Then explain how to version rules immutably and pin each adjudication to the exact rule version used, so re-adjudication only happens when explicitly requested.

Pro tip: Emphasize that adjudication records should store the rule version ID and a snapshot of the rule logic or parameters, not just a foreign key to a mutable rule. This makes historical decisions reproducible and prevents silent changes when rules are edited.

1. Clarify the business intent

Ask whether the tightened rule is meant to apply only to new claims or also to past ones. Retroactive changes can create legal, financial, and trust issues, so this must be an explicit product decision.

2. Separate rule definition from adjudication

Model rules as immutable, versioned entities and store the rule version ID on every adjudication record. Never mutate a rule version that has been used; create a new version instead.

3. Design for explicit re-adjudication

If retroactive application is desired, build a separate, auditable process that identifies affected claims, re-runs them against the new rule version, and records the change with a reason and timestamp.

4. Prevent silent re-adjudication

Ensure that normal claim processing always uses the rule version pinned at adjudication time. Any re-adjudication must go through a controlled workflow with approvals and audit logs.

5. Address edge cases and communication

Consider partial retroactivity, effective dates, and how to communicate changes to affected parties. Provide tooling to compare outcomes between rule versions before committing to a re-adjudication.

Key Points to Mention

  • Immutable rule versioning with unique IDs and timestamps
  • Storing rule version ID and rule snapshot on each adjudication record
  • Explicit, auditable re-adjudication workflow with approvals
  • Effective dating and temporal data modeling
  • Impact analysis and dry-run comparison between rule versions
  • Communication and compliance considerations for retroactive changes

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q7

Adjuster search across claims gets slow as data grows. How do you serve queries like 'all under-review claims for member X over $500, sorted by age' without hammering the transactional database?

System DesignTechnical Trade-offs
Author's notes

Straightforward answer here: maintain a separate search index (something like Elasticsearch) fed by change data capture from the primary store.

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AI HintsAI Generated

Suggested Approach

Start by clarifying the query pattern and scale, then propose a read-optimized secondary store (e.g., a search index or materialized view) that is updated asynchronously from the transactional database. Explain how this offloads complex filtering and sorting while keeping the primary database focused on writes.

Pro tip: Emphasize that you would measure query latency and database load before and after the change to validate the solution, and mention that you'd consider data consistency trade-offs (e.g., eventual consistency) and how to handle them (e.g., versioning or read-your-writes).

1. Clarify requirements and constraints

Ask about query frequency, data volume, acceptable latency, and consistency requirements to understand the problem scope.

2. Evaluate current bottlenecks

Identify why the transactional database is struggling: complex filters, sorting, lack of indexes, or resource contention with writes.

3. Propose a read-optimized solution

Suggest a secondary store like Elasticsearch, a materialized view, or a denormalized read replica, and explain how it handles the query efficiently.

4. Design data synchronization

Describe how to keep the secondary store updated: change data capture (CDC), event streaming, or batch jobs, and discuss trade-offs.

5. Address consistency and failure modes

Explain how to handle eventual consistency, stale data, and failover, and how to monitor and alert on sync issues.

Key Points to Mention

  • Use of a search index (e.g., Elasticsearch) or a read-optimized database for complex queries.
  • Change Data Capture (CDC) or event-driven updates to keep the secondary store in sync.
  • Denormalization and indexing strategies to support filters and sorting.
  • Caching for frequently accessed queries.
  • Trade-offs between consistency, latency, and cost.
  • Monitoring and metrics to validate performance improvements.

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.