Better performing workers’ comp claims organizations utilize key performance indicators, data analytics and an advocacy-based model to successfully manage claims, according to Rising Medical Solution’s most recent Workers’ Compensation Benchmarking Study.
The annual study surveyed 492 claims leaders representing national insurers and third party administrators, risk pools and government entities nationwide to highlight the methods that drive success in their organizations.
“We’ve heard from the claims community about difficulties identifying which best practices actually move the needle because industry data is often limited or unavailable,” said Rachel Fikes, vice president and study program director at Rising Medical Solutions. “Providing quantitative, primary data to substantiate various methods in claims management was the next logical step in the study’s evolution.”
According to the study, better performing claims organizations are more likely to:
- Link key performance indicators (KPIs) to desired claim outcomes – returning to work at equal or better fitness prior to the injury.
- Employ claims decision support tools – such as workflow automation, advanced analytics, and predictive modeling – and use them more frequently throughout the claim lifecycle.
- Leverage numerous data sources to develop analytics, like Evidence-Based Medicine (EBM).
- Utilize an employee-centric, advocacy-based service model to improve claim outcomes as well as talent retention.
- Engage sooner in emerging and/or particularly challenging industry areas, such as adopting value-based care models and implementing formal knowledge transfer programs.
- Use pharmacy metrics as a measure of provider quality/outcomes.
- Link provider quality/outcome measures to provider contracts & Letters of Agreement.
While more than 50 percent of survey respondents indicated they utilize KPIs, there’s still room for improvement, Algire said.
Though functional recovery was noted as a benchmark to success, principal study researcher, Denise Zoe Algire, said it isn’t measured because it isn’t an easy measurement to execute.
Advocacy Model Emphasized
The study found that an advocacy-based claims model, “described as an employee-centric customer service claims model that focuses on employee engagement during the injury recovery process, removes adversarial obstacles, makes access to benefits simple, builds trust, and holds the organization accountable to metrics that go beyond cost containment”.
31 percent of respondents have already implemented an advocacy model. Most claims organizations may consider it in terms of the value to the injured workers, but according to the study’s participants, the most significant impacts ranked by participants include employee engagement, transforming the image of the claims profession and connecting claims talent strategy to organizational mission.
“Industry leaders identified this dual incentive during the study’s 2015 focus group research, suggesting organizations elevate claims as a purposeful profession, emphasizing its social factors by “rebranding” the claims adjuster as an advocate,” wrote Algire.
“There’s really a dual value because when you empower claims professionals to be advocates and to be focusing on their primary role, which is delivering benefits. There’s historically this cynical view, I think, of claims management…I think this provides an opportunity for the claims examiner to be viewed more in a correct lens and that is as an advocate of delivering benefits to injured workers,” Algire added in an interview discussing the study results.
Self-insureds were more likely to have this model than other organizations.
Algire said education and retooling how stakeholders communicate with injured workers are two ways organizations can transition to this model. She offered the example of one well-known large company that changed the way it communicated with its employees. Instead of simply sending out a denial letter if workers’ comp benefits are not warranted, the company includes options in the letter to ensure the employee is aware of potential coverage elsewhere. Algire said her own company reviewed every way it communicated to employees to re-evaluate its messaging to injured workers.
Claim Outcome Drivers
According to the study, the top four obstacles to positive claim outcomes included:
- lack of return-to-work options,
- Litigation costs,
- Employer/employee relationship.
The study found that employee trust was a key predictor of successful return to work.
“Employees are more likely to seek legal representation when there is poor communication or lack of trust with the employer and/or claims administrator,” the report stated.
Sometimes fear drives litigation and a delay in return to work, Algire explained. She emphasized the value of a proactive approach to communicating with employees to address this.
The impact of psychosocial and comorbidity issues on workers’ comp claim outcome is just coming to light, she said.
“The biopsychosocial model is something that organizations are realizing…is a key indicator of claim outcomes or potential delay in either return to work or medical cost escalation in terms of medical treatment,” said Algire.
It’s something not necessarily driven by physical needs, she added. Psychosocial issues can be driven by anything from anger issues to adverse issues that affected an injured worker in his or her childhood. Workers manage injuries differently, she explained, something that can be seen in workers who sustain similar injuries but have substantially different recovery periods. Knowing that the issue exists is key to organizations being able to address the problem, she said.
Not surprisingly, adjuster caseload can impact workers’ comp claim outcomes.
The ideal caseload, according to several interviewed claims leaders, is somewhere between 100-120 files in order to achieve desired outcomes, though that figure is affected by the complexity of each claim. Caseload alone isn’t a sufficient measure, since claim outcomes can be affected by the level of administrative support adjusters have, the efficiency and number of systems staff need to access to manage claims, as well as the autonomy and settlement authority delegated to claims examiners.
Where a claim is in the U.S. can impact the outcome. The study found regional differences in the length of time a claim remained open. About 20 percent of respondents reported a high percentage of tail claims – those open five or more years.
According to the report, “Respondents who manage claims in California and in states classified as the South region report a higher inventory of claims open greater than five years.”
Another area that can drive claim outcome is talent management. Survey results reflect that 71 percent of participants have implemented one or more knowledge transfer initiatives to deal with changes in department staffing, including:
- Formal learning/training/development;
- Identify employees with key skills;
- Formal mentoring programs;
- Content management repositories;
- Retirees and senior level claims staff as trainers/coaches.
Predictive modeling was noted to be a key strategic intervention, allowing organizations the ability to identify high-risk factors throughout a claim’s life cycle. The study found that 35 percent of respondents utilize predictive analytics with the best models run on every claim throughout the lifecycle.
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