Effective Claims Management in 2019
Techniques and procedures to ensure efficiency in achieving resolution
By Patrick Sodoro , Jay Gates
Effectively handling workers compensation claims is essential to protecting the resources of employers and insurance carriers. In an environment with a high volume of workers compensation claims, it can become difficult to ensure that all claims are being handled competently. However, there are steps employers can take to make sure all cases are handled in the most efficient and cost-effective manner possible. These steps involve utilizing new technologies, effectively communicating with claimants, initiating and implementing return-to-work programs, and considering multiple factors to avoid litigation.
Aging Workforce and Predictive Modeling
As the general population continues to live longer, employees are frequently delaying retirement and reentering the workforce later in life, creating a workforce that is older than in past years. According to the Bureau of Labor Statistics, the number of workers between 55-64 years of age is estimated to make up almost 18 percent of the labor force. That means nearly one-fifth of the labor force has a higher rate of pre-existing conditions, age-related medical conditions, and chronic disease. This reality creates more variability and uncertainty when it comes to indemnity and medical losses.
Over the past decade, predictive modeling has proven to be increasingly important as a key management tool, especially as the workforce continues to age. Predictive models can supplement the claims administration process by combining claims data, such as demographic and socioeconomic factors, with detailed medical transaction data to estimate an injured worker’s propensity for high future medical costs. These models allow companies to provide appropriate medical treatment and manage providers more closely while still accounting for medical inflation. This is particularly useful in managing workers compensation claims, as it allows for more effective planning of company resources.
Exposure can be mitigated by implementing the use of telemedicine. Telemedicine is the use of electronic communication to provide clinical services to patients without requiring an in-person visit. The technology may be used for follow-up visits, management of chronic conditions, medication management, consultation with specialists, or other clinical services that can be provided remotely via secure video and audio connections. Utilization of telemedicine has led to increased access to high-quality health care services and has proven to be an effective and convenient way for patients to receive medical care.
Telemedicine can be specifically used in workers compensation claims by offering virtual face-to-face interactions, remote measurement of vital signs, prescription drug review, text alerts, and other messages regarding health information. This is especially valuable for employees who are injured and don’t have convenient places for emergency or routine treatments, such as those who work night shifts, travel, or work in remote locations. Employers and insurance carriers can utilize telemedicine to improve efficiencies and mitigate costs.
Communication With Claimants
Effective communication is paramount when it comes to closing claims in a cost-effective manner. Most claimants expect both swift and frequent communication, which is not always possible. It is best to temper claimants’ expectations from the outset by making a “what to expect” call at the inception of the claim. This call will help give claimants a more realistic understanding about the timeliness and frequency of communication.
While prompt and frequent conversation is important, the quality and tone of the conversation is equally critical. After being injured at work, claimants generally have numerous concerns, including job security and their entitlement to medical and indemnity benefits. Most claimants are unfamiliar with the claims process as a whole, so they want to know what to expect. If this information is not being communicated to them by their claims representative, then they may seek information from counsel. For example, if more investigational time is needed on the claim, then not only should this be communicated with the claimant, but also it should be made clear that it does not mean the claim will be denied.
However, if the claim is going to be denied, then the claimant should be informed and provided with the reasoning behind the decision. When claimants are given this information, they are much less likely to get counsel involved. At the time the claimant is informed of the denial, he should also be told if there is an opportunity for a nuisance value settlement. Obtaining a nuisance value settlement provides an opportunity to close the claim on a full and final basis.
The bottom line is that it is extremely important that claimants know their cases are being taken seriously and that their expectations are managed and met.
Human beings naturally crave purpose and can suffer serious psychological difficulties if this need is not adequately fulfilled. Data suggests that return-to-work programs reduce lost time by up to four weeks per employee. These programs have the potential to be more effective than other accommodations and provide a number of benefits for both employers and employees. Some of these benefits include reducing costs, encouraging employees to come back to work once they are physically capable, maintaining regular communication regarding the situation, promoting employee skill retention, and discouraging subjective exaggerations.
The longer employees remain off work, the lower the likelihood they will return to their places of employment. Thus, it is critical that return-to-work programs are emphasized in an effort to reduce the amount of time an employee remains off work and increase the likelihood of that employee returning.
How to Avoid Litigation
There are three main factors that cause claimants to hire counsel. First, the claimant believes that his claim is being denied. Whether the claimant’s belief is true or false is immaterial—perception is ultimately reality. Second, the claimant is concerned about job security once released to return to work. Finally, the claimant perceives that the claims professional believes the injury is exaggerated. This circles back to the idea that the tone of the conversation between the claims professional and the claimant is pivotal. Clearly communicating that a claim is undergoing investigation and is being taken seriously could prevent litigation and stop a claimant from feeling vulnerable, threatened, or without a purpose.
Additionally, it is important to eliminate unnecessary actions that the claimant may interpret as a threat, which can be achieved through regular verbal communication and prompt reporting. Although verbal communication is time consuming, claimants will gain a better understanding of exactly what is happening with their claims and therefore feel less threatened. It is beneficial to develop a relationship with claimants from the outset because it provides an avenue in which to have productive and sometimes difficult conversations. Additionally, prompt reporting of new information will likely keep the claimant content and calm throughout the claims-handling process. Studies show that the more contacts there are with a claimant, the better the outcome for the employer or insured.
There are a lot of different techniques and procedures that employers and insurance carriers can apply to the claims-handling process to ensure efficiencies are achieved. These practices and techniques are not meant to be an exhaustive list, but will hopefully provide some insight into claims-handling strategies that have proven effective.