Work-related injuries or illnesses can be devastating for the employees involved and their families and may in some cases prevent injured workers from returning to their job or working altogether. For employers, a workers compensation claim can have significant financial and operational consequences.
Many organizations carry out claim reviews to help identify potentially problematic claims, allowing them to focus on managing them effectively. However, the practice of reviewing all open claims, especially for large organizations, often means they spend time discussing claims that ultimately result in minimal, if any, impact. This may be because the path and the overall cost of the claim will not change significantly, which could be due to the permanent status of the injured worker’s medical condition and treatment, along with findings made by a specific state’s workers compensation board.
Today, more organizations recognize the importance of focusing on claims where they can make a difference and reduce their workers compensation total cost of risk while helping injured employees recover and return to work, whether to their original jobs or modified or light-duty positions.
Early intervention can be instrumental in reducing the risk of problematic claims becoming even more challenging. However, organizations, especially those with many open claims, sometimes struggle to identify the specific claims that would most benefit from being addressed promptly.
Organizations seeking to resolve claims and help their people recover and return to work should consider the following actions to streamline the process and improve outcomes.
1. Take a data-focused approach
Analytic tools can help identify those claims that would most benefit from early intervention, providing organizations and their third-party administrators with a more targeted list of claims for resolution. Artificial intelligence and predictive modeling are already used to parse data and identify these claims more quickly and effectively. Programs that use AI can help with the early identification of potentially problematic claims in between claim reviews, allowing an organization to intervene more quickly than it typically would. Analytics-based platforms can alert employers and their TPAs when new information could make a claim more costly. Analytic tools can also help identify claims that have the potential of being settled, allowing organizations to focus their efforts there.
Take the example of a large retailer that was concerned it was not discussing the claims that required the most attention at claim review meetings. The organization’s claims team focused on claims with high total incurred values, leading to the same cases being discussed during consecutive meetings with minimal results. The retailer decided to change its selection process and work to identify the most complex claims at different points in the claim life cycle. Using an AI-driven program, they could select cases whose outcomes could be significantly improved through early intervention and ensure that there was a well-defined action plan to resolve the issue as quickly as possible and improve the outcome for the injured workers.
2. Extract the relevant insights
Analytic tools can provide significant amounts of information about claims. To use this data effectively and drive positive claim results, though, organizations should extract relevant insights that can help them identify the claims that require intervention. For example, the claim outcome may be affected if an employee is out of work for a prolonged period or has retained legal representation. Critical information is often raised during claim reviews, underscoring the importance that key participants — including the policyholder, the claim provider, and the broker’s claim advocate — are present to discuss the claims.
This process can also help uncover any areas of opportunity that might impact claim-related costs and identify actions that can address these issues. It is also important that claims are not reviewed in isolation and to consider any possible issues that could keep an injured individual from returning to work, such as related comorbidities or psychosocial barriers.
In another example, a logistics company was experiencing a rise in workers compensation cases that took longer to process and were more expensive to resolve. The organization reviewed its data through a dashboard that enabled risk managers to determine that several open lost-time cases involved representation by an attorney and that these cases typically took longer to resolve and involved increased costs. Based on these insights, the risk management team decided to increase the focus on injured workers soon after an incident, setting up a process of open communication, providing them with needed education and ensuring transparency about their cases and the process. This program led to expedited claim resolution and a corresponding reduction in cases involving legal representation.
3. Make actionable decisions
The most effective claim reviews identify problematic claims and internal processes and procedures that may negatively affect their resolution and determine opportunities for improvements that can benefit both the organization and its workers. It is also essential to decide on the next steps required to help resolve them — for example, assigning a nurse to oversee a worker’s recovery or pricing a claim for settlement. Having a plan and assigning individuals to take ownership of each action is critical. Advanced tools can create checklists that allow organizations and their TPAs to keep track of actions required and flag the need for follow-ups.
As organizations take action to improve their claims outcomes, they should also consider how their response and communication might affect open claims. For example, is there a company-wide- policy on communications with injured employees before and after they have filed a claim?
In a final example, a financial institution was concerned that action items discussed during claim review meetings were not being followed up on since the status of the files remained the same from one review to the next. Notes were taken, but there was no consistent process to ensure the agreed-upon actions were being taken to resolve open cases. The organization implemented a digital claim review process that automatically generates action items and notes following each claim review meeting. This information was shared with the TPA, which worked with the risk manager to establish time frames for each action item. This allowed the team to ensure the agreed-upon tasks were completed and communicated to the relevant stakeholders as needed. The more streamlined process created by the digital tool helps ensure that needed follow-ups occur within the approved timeline to advance or fully resolve open cases, leading to more positive outcomes for both the organization and impacted workers.
Adopting an analytics-driven approach to managing open workers compensation claims can help organizations improve claim outcomes. Prioritizing early intervention, leveraging data-driven insights, and implementing innovative solutions can help optimize workers compensation processes and reduce the total cost of risk.
Dennis Tierney is a managing director and national director of workers compensation claims at Marsh Advisory’s Workers Compensation Center of Excellence. He can be reached at dennis.p.tierney@marsh.com.