Tag Archives: workers compensation benchmarking study

The Best Workers’ Comp Claims Teams

Workers’ comp claims teams vary in their performance. Yet there has been no way to clearly identify what superior performance means and what superior performers do. Now we have the summary results of a five-year, 1,700-participant survey project to provide answers.

The annual Workers’ Compensation Benchmarking Study, founded in 2013 and published by Rising Medical Solutions, pinpoints what separates the top quarter of claims organizations from the rest.

To date, five Study reports have racked up more than 500 pages of text, tables and graphs. In a new white paper – How to Close the Claims Performance Gap – this multi-year data is whittled into the “top three” practices claims that organizations should adopt to join their more successful peers. Here we discuss one of them:

Best performers focus more on what’s most important

Workers’ compensation claims entail managing a wide array of competencies encompassing legal, medical, workplace, regulatory and psychosocial factors that affect recovery and claims closure rates. Therefore, a first step in comparing performance is to find out what and how claims teams focus on “core competencies.”

See also: The State of Workers’ Compensation  

Since the Study’s onset, claims executives have been asked to rank in order of importance the 10 core competencies most vital to successful claims outcomes. Survey participants – the majority of whom work for insurers, third-party administrators and self-administered employers – have consistently ranked medical management, disability/return-to-work (RTW) management and compensability investigations as the top three capabilities most critical to claim outcomes.

Not that other items on the list, including litigation management and claims reserving, are not important competencies. But survey participants ranked them as having a less significant impact on achieving the best claims outcome – with survey participants defining an employee’s return to the same or better pre-injury functional capabilities as the #1 classification of a “good claims outcome.”

This definition of an optimal outcome reflects a shift away from a reactive culture more focused on legal compliance, toward a more proactive, service-oriented approach. The 1,700-plus survey respondents clearly say that this is the business they are in, with upward of one million compensable, new lost-time claims occuring each year.

However, there are striking stratifications in this “business” with higher-performing claims organizations outpacing lower performers by factors of five six, and 10 respectively when it comes to measuring their performance within core competencies, measuring claim outcomes based on evidence-based treatment guidelines and measuring claim outcomes based on evidence-based disability duration guidelines. The primary reasons that lower performers cite for not measuring performance within core competencies are: data/system limitations, unsure how to operationalize and, startlingly, it’s not a business priority.

The study was able to separate high performers from lower performers by ranking respondents by their claims closure ratio. A closure ratio of 75% means that for every three claims closed, four are opened. Organizations with a closure ratio of 100% run a tight ship, closing claims at the same pace they are opening new ones. Claims experts agree that a claims ratio of 101% or higher is a reliable sign that the organization is managing claims outcomes effectively.

For claims executives and system designers, the message is clear: Focus on and measure key core competencies more to succeed.

See also: States of Confusion: Workers Comp Extraterritorial Issues 

In addition to core competencies, we have identified two more critical practices that claims organizations should implement to join the elite ranks. With only 24% of industry payers achieving top-performer status, this means the remaining 76% need to take action or risk falling further behind.

To learn about these two critical practices, as well as viable implementation strategies, read our entire white paper, freely available here.

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.