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Claims Advocacy’s Biggest Opportunity

We know the single greatest roadblock to timely work injury recovery and controlling claim costs. And it’s not overpriced care, or doubtful medical provider quality or even litigation. It is the negative impact of personal expectations, behaviors and predicaments that can come with the injured worker or can grow out of work injury.

This suite of roadblocks is classified as “psychosocial” issues – issues that claims leaders now rank as the No. 1 barrier to successful claim outcomes, according to Rising Medical Solutions’ 2016 Workers’ Compensation Benchmarking Study survey.

Psychosocial roadblocks drive up claim costs far more than catastrophic claims, mostly due to delayed recovery, and claims executives told us they occur regardless of the nature of injury. In other words, one cannot predict from medical data the presence of a psychosocial issue; one has to listen to the injured worker with a fresh mind.

See also: Power of ‘Claims Advocacy’  

It’s likely no coincidence that, while the industry has progressively paid more attention to psychosocial issues this past decade, there’s also been a shift toward advocacy-based claims models over adversarial, compliance- and task-based processing styles. Simply put, advocacy models – which treat the worker as a whole person – are better equipped to control or eliminate psychosocial factors during recovery. According to the 2016 Benchmarking Study survey, claims advocacy and greater training in communication and soft skills, like empathy, are associated with higher-performing claims organizations.

Psychosocial – What It Is, What It Is Not

The Hartford’s medical director, Dr. Marcos Iglesias, says that the “psych” part does not mean psychiatric issues, such as schizophrenia, personality disorders or major depressive disorders. Instead, he points out, “We are talking about behavioral issues, the way we think, feel and act. An example is fear of physical movement, as it may worsen one’s impairment or cause pain, or fear of judgment by coworkers.”

The Hartford’s text mining has found the presence of “fear” in claim notes was predictive of poor outcomes. Similar findings were recently cited by both Lockton (“Leading with Empathy: How Data Analytics Uncovered Claimants’ Fears”) and the Workers’ Compensation Research Institute (“Predictors of Worker Outcomes”).

Emotional distress, such as catastrophic reaction to pain and activity avoidance, is predictive of poor outcomes. Other conditions, behaviors and predicaments include obesity, hard feelings about coworkers, troubled home life, the lack of temporary modified work assignments, limited English proficiency and – most commonly noted – poor coping skills. Additionally, being out of work can lead to increased rates of smoking, alcohol abuse, illicit drug use, risky sexual behavior and suicide.

When peeling back the psychosocial onion, one can see how adversarial, compliance- and task-driven claim styles are 1) ill-suited for addressing fears, beliefs, perceptions and poor coping skills and 2) less likely to effectively address these roadblocks due to the disruption they pose to workflows and task timelines.

Screening and the One Big Question

Albertsons, with more than 285,000 employees in retail food and related businesses, screens injured workers for psychosocial comorbidities. To ensure workers are comfortable and honest, the company enlists a third-party telephonic triage firm to perform screenings. “It’s voluntary and confidential in details, with only a summary score shared with claims adjusters and case managers,” says Denise Algire, the company’s director of risk initiatives and national medical director.

At The Hartford, Iglesias says claims adjusters ask one very important question of the injured worker, “Jim, when do you expect to return to work?” Any answer of less than 10 days indicates that the worker has good coping skills and that the risk of delayed recovery is low. That kind of answer is a positive flag for timely recovery. If the worker answers with a longer duration, the adjuster explores why the worker believes recovery will be more difficult. For example, the injured worker may identify a barrier of which the adjuster is unaware: His car may have been totaled in an accident. This lack of transportation, and not the injury, may be the return-to-work barrier.

It Takes a Village

Trecia Sigle, Nationwide Insurance’s new associate vice president of workers’ compensation claims, is building a specialized team to address psychosocial roadblocks. Nationwide’s intake process will consist of a combination of manual scoring and predictive modeling, and then adjusters will refer certain workers to specialists with the “right skill set.”

Albertsons invites screened injured workers to receive specialist intervention, usually performed by a network of psychologists who provide health coaching consistent with cognitive behavioral therapy (CBT) principles. This intervention method is short in duration and focuses on active problem-solving with the patient. The Hartford also transfers cases with important psychosocial issues to a specialist team, selected for their listening, empathy, communication skills and past claims experience.

Emotional Intelligence – Can It Be Learned?

Industry professionals are of mixed minds about how and if frontline claims adjusters can improve their interpersonal skills – sometimes called “emotional intelligence” – through training. These soft skills include customer service, communication, critical thinking, active listening and empathy. Experts interviewed agree that some claims adjusters have innately better soft skills. But they also concur that training and coaching can only enhance these skills among claims staff.

See also: The 2 Types of Claims Managers  

Pamela Highsmith-Johnson, national director of case management at CNA, says the insurer introduced a “trusted adviser” training program for all employees who come into contact with injured workers. Small groups use role-playing and share ideas. An online training component is also included.

Advocacy – The Missing Link to Recovery

Could it be that advocacy – treating the injured worker as a whole person and customer at the center of a claim – is the “missing link” for many existing claim practices to work, or work better? Whether for psychosocial issues or other barriers, organizations like The Hartford, Nationwide, CNA and Albertsons are paving the road to a more effective approach for overcoming pervasive barriers to recovery. Participants in the 2016 Workers’ Compensation Benchmarking Study confirm that higher-performing claims organizations are taking this road.

The coming 2017 study will continue to survey claims leaders on advocacy topics. A copy of that report may be pre-ordered here.

Power of ‘Claims Advocacy’

“Claims advocacy” is fast getting the attention of workers’ comp claims leaders as a powerful approach to better claims outcomes. The on-demand economy has created cultural and multi-generational expectations around service, speed and simplicity, and some claims leaders have already figured out how to deliver.

The workers’ compensation industry is in the throes of internal debate about mission and purpose.  Employee-centric claims models have become a large part of this debate. Some claims leaders say that payer organizations should move away from a compliance-oriented and, at times, adversarial style to an “advocacy” style of claims management.

Research, too, indicates that claims advocacy is top of mind for industry executives. The responses of 700 participants in Rising Medical Solutions’ Workers’ Compensation Benchmarking Study confirm that many claims leaders know the building blocks of advocacy and recognize its potential value. 

We recently interviewed claims leaders to better understand the practical meaning of the concept, as it applies to all claims operations, from self-administered employers to insurers handling claims for thousands of policyholders.

What Is Claims Advocacy?

We asked Noreen Olson, workers’ compensation manager with Starbucks, for a definition of advocacy.  (Starbucks employs 180,000 “partners” worldwide and has close to 12,000 outlets in the U.S.) Olson proposed this:

“In workers’ comp, advocacy is a process grounded by the values of dignity, respect and transparency that coordinates activities to assist the injured worker effectively and promote expectancy and engagement in recovery, efficiently restores (and often improves upon) health and well-being, and resolves the experience in mutual satisfaction.”

Others we spoke with endorsed this or a similar definition. They all have in mind not a checklist, nor a charm offensive, but a culture.  A claims culture that makes access to benefits simple and builds trust – and one that must be supported by executive buy-in, organizational values, technology and operating systems to be successful.

Access to benefits from the worker’s perspective includes ease of filing a claim, ease in obtaining prescribed medications, access to medical specialists and help in navigating the healthcare maze. Along the course of injury recovery, there are many opportunities that affect access and trust as perceived by the worker. The highly respected Workers’ Compensation Research Institute reports in its Predictors of Worker Outcomes Series that “trust” is a key driver of claims outcomes.

See also: How Should Workers’ Compensation Evolve?

Why Now?

Tom Stark, technical director of workers’ compensation at Nationwide Insurance, told us that advocacy has been around for a long time. He’s practiced advocacy since the 1980s Several forces converge to promote advocacy in claims today. Claims leaders are emphasizing, or perhaps “reemphasizing,” the importance of interpersonal relations. As claims handling has shifted from onsite home visits to lower contact models, the importance of emotional intelligence, soft skills and customer service skills is greater than ever to dispel uncertainty and engender trust.

Perhaps the biggest driver of customer service and transactional speed is the American retail sector. Its massive engagement in these areas has shaped everyone’s expectations – of all generations. Millennials, born in the 1980s and 1990s, in particular have grown up with this customer-focused approach and therefore bring to the claims environment high expectations for both delivering and receiving quality service. Slow, bureaucratic responses can shock injured workers. Darrell Brown, chief claims officer at Sedgwick, says, “We are now an on-demand economy. That is the way it is.”

Why Is Claims Advocacy Attractive?

Brown says that engaging the injured worker is key. Fast and helpful response to injury pays off in worker satisfaction and lower claims costs. “People file claims, but they don’t know what is going to happen. If you lose injured workers at the beginning of the claim, to anxiety and fear, they go to litigation.” Brown also says that when claims professionals engage more constructively with injured workers, their own experience is better. This leads to better morale and talent retention.

For employers, claims advocacy provides a special opportunity to directly align work injury response with their corporate brand, core values, employee communications and benefit delivery.

Walking the Walk

Albertsons Safeway, with more than a quarter million “associates” in 34 states, has crafted its claims approach to reinforce engagement and confidence for the injured workers. Director of Managed Care and Disability Denise Algire, who is also the principal researcher for the Workers’ Compensation Benchmarking Study, says that staff talks with injured employees on the day of injury. “We focus on education and reducing uncertainty,” she says.  They avoid potentially intimidating or antagonistic terms like “adjusting,” “examining” and “investigating.” They also start with the positive expectation that every employee wants to return to work. “Workers’ compensation has become adversarial because we manage the system based on the deceptive few versus the deserving many,” she says. “Our claims approach is based on the majority, not the minority.”

Brown talked to us about tangible actions. “If you can make a compensability determination in two days, even though the law gives you 14 days, imagine how much uncertainty and anxiety is removed,” he says. “The same applies to indemnity payments. The industry is often guided by regulatory requirements. If you can take action and make payments sooner, why make it later? You’ve got to walk the walk.” Starbucks, for example, direct deposits indemnity checks into employees’ accounts to increase speed.

Advocacy does not hinder organizations from being compliance-minded. Rather, it becomes one aspect of a holistic, customer-driven framework that aims higher than the bar often set by regulatory standards.

See Also: How to Win at Work Comp Claims

Barriers to Overcome

Stark sees lagging technology as getting in the way of engaging the injured worker. To him, claims tasks grew exponentially while support staff in claims offices were cut. Claims technology has often not kept up. He says, “Look at the work-arounds – count the number of sticky-notes on the adjuster’s screen. If technology is not there to support effective claims management, even in its most transactional form, you are really stressing the model. How are you going to be an advocate?”

Olson brought up two challenges that Starbucks has solved but still confront most employers. She believes that it is important to make it as easy as possible for a partner to report an injury. At Starbucks, they not only have web, mobile and call center options, they also allow partners to self-report their injuries versus going through their manager or HR.

Olson additionally stresses the importance of easily moving the partner to other benefit programs if the injury is not compensable and to avoid language like “your claim is denied.” She says that placing the award of benefits in the “right benefit bucket” needs to be done seamlessly so that the partner does not feel on the hook. In addition to the state mandated language in these instances, Starbucks includes its own letter that communicates that, while the claim isn’t eligible for workers’ comp, the partner may be eligible for other benefits to help with their injury/illness.

One barrier that Algire notes – simply “rebranding” claims adjusters as advocates is not enough. “A true cultural shift will require organizations to move beyond performance metrics that are based primarily in cost containment to those based on clinical quality, functional outcomes and patient satisfaction,” she says. This shift is critical to “walking the walk” and reinforcing the advocacy approach with claims staff.

Conclusion

The on-demand economy has created cultural and multi-generational expectations around service, speed and simplicity – giving workers’ compensation a blueprint for claims advocacy. Embracing consumer-driven models around injury recovery is emerging as a competitive advantage, both from a claims outcomes and a talent recruitment/retention perspective.

The 2016 Workers’ Compensation Benchmarking Study will be surveying claims leaders on advocacy, among other pressing topics, to better understand its current application and perceived viability.  A copy of the 2016 Study report may be ordered here.

Workers' Comp Benchmarking Study

Like most industries, the workers' compensation industry has hurdles that challenge growth and operational effectiveness. Many of these hurdles for workers' comp are commonly the focus of research, with numerous studies published about the state of cost drivers, claim trends, workforce demographics, jurisdictional comparisons and the like. However, less is reported about how peers compare in terms of operational challenges, priorities, concerns, skills gaps and budgets.

In response to this need, the 2013 Workers' Compensation Benchmarking Study was developed, and Rising Medical Solutions published it. The study stems from a 60-question survey distributed to claims leaders from varying disciplines nationwide. The questions were designed to generate data that would help claims executives pinpoint operational outliers, advocate for resources in areas that need more support and validate existing strategies. The study report has compiled confidential responses from 258 claims leaders to support workers' compensation leaders with meaningful information for their important role.

The study results indicate that workers’ compensation claims leaders are facing critical challenges that are limiting their talent pool, technology potential and performance abilities. 

1. Limited investment in current and future talent development.


Less than half of the survey participants provide training to senior-level claims staff, and a smaller percentage invest in training new hires.

2.Limited systems integration and use of technology to drive best practices.


A third of participants report that no integration exists between their core claims system and their ancillary systems (e.g. pharmacy benefit manager (PBM), utilization review (UR) and bill review), and many report a web-link or manual copy-paste of information as “integrated.” Study results also indicate room to advance the use of existing and emerging technologies to drive claims best practices.

3. Limited use of risk/reward strategies to propel top performance from internal staff, vendor partners and medical providers.

Just more than 50% of participants report using performance strategies with internal staff and considerably fewer use these strategies with medical providers and vendor partners. A significant competitive opportunity exists for claims organizations that implement risk/reward models, particularly with medical management vendors, given the prevalence of outsourcing these functions.

Study Context and Focus Areas

Compared with other lines of business, workers' compensation presents a number of unique operational challenges for claims organizations, including: complex compliance requirements, the long-tail nature
 of workers’ compensation claims and conditions leading to higher rates of fraud. These challenges have contributed to increasing loss adjustment expenses (LAE) and poor underwriting results, with loss costs in excess of premiums collected.

To better understand the daily experience of claims leaders operating in this environment, the study explores how the industry is advancing best practices, investing in talent, using technology and affecting medical outcomes. The study report provides an in-depth view of these four focus areas:

To request a free copy of the full study, click here