A look at how the COVID-19 pandemic may impact workers’ compensation claims administration.
There is no shortage of questions when it comes to the effects of the COVID-19 pandemic on workers’ compensation claims, for instance:
- How will workers’ comp regulations evolve on a state-by-state basis as researchers and medical professionals continue to learn more about the virus’s behavior and options for treatment?
- What will the economic downtown mean for the volume of COVID-19-related workers’ comp claims?
- How will courts rule when it comes to claims compensability?
- How can businesses and other organizations that administer claims reduce potential claims losses, especially as states begin to reopen?
The impact of the COVID-19 pandemic on workers’ compensation claims administration will, of course, be determined by the answers to these questions and others like them. As states and businesses begin to open up, what is clear is that we’re only at the beginning of what will be a lengthy process of ongoing developments that will require insurers and organizations that administer claims to be prepared to adapt.
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In March 2020, Origami hosted a webinar “Transforming Your Workers’ Compensation Claims Organization with Digital Engagement.” Led by Scott Plummer, Head of Strategy, Core Solutions, and Chris Bennett, President, Core Solutions, the presentation highlighted how claims departments can leverage new digital pathways to drive customer engagement.
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Until a few weeks ago, the percentage of U.S. workers who performed their jobs from home had steadily risen, year after year, for more than a decade. Then, suddenly, the efforts to contain the spread and impact of the COVID-19 virus led many employers, in industries where it is possible to do so, to require that their employees work from home. It may be some time before precise numbers are available for just how many Americans worked from home during stay-at-home/shelter-in-place orders. However, in How Many Jobs Can be Done at Home? a National Bureau Of Economic Research working paper published on April 6th, Jonathan Dingel and Brent Neiman present findings that show “37 percent of U.S. jobs can plausibly be performed at home.”
“The coronavirus outbreak has triggered an anxious trial run for remote work at a grand scale,” writes Derek Thompson in The Atlantic. “What we learn in the next few months could help shape a future of work that might have been inevitable, with or without a once-in-a-century public-health crisis.”
That future would most certainly have a bearing on the unique workers’ compensation-related issues related to a remote, at-home workforce. Insureds and the organizations that handle Workers’ Compensation claims will need to be ready. … read more
When does maintaining an up-to-date library of workers’ compensation state forms become too great of a bureaucratic burden for your claims adjusters or administrative staff? The most straightforward response is this: The more states in which your organization handles workers’ comp claims, the greater the challenge of staying on top of form revisions and additions.
Time and resources could certainly be allocated to more important activities. In the International Risk Management Institute, Inc. (IRMI) article Workers Compensation Bureaucracy Drives Costs, Mark Walls and Kimberly George cite training and education as two such examples:
One of the goals of workers compensation regulations is to ensure that injured workers are paid benefits in a timely manner at the correct rate and that they have access to appropriate medical treatment,” write Walls and George. “There was a time when payers had offices located in most states with adjusters handling only that state. Now, with most payers utilizing multistate adjusters, payers must be constantly training and educating their adjusters to ensure that they understand all of the nuisances of the different states that they handle.
For organizations looking to reduce the bureaucratic burdens their adjusters face, Origami Compliance offers a secure, API-based solution that integrates with any claims management system to provide immediate access to a single-source, up-to-date library of state and federal workers’ comp claim forms. Without leaving the claims system, an adjuster can quickly find the right form based on state or category. And when that form is selected, form fields automatically populate with claim data and a PDF version is generated.
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Greater efficiency in handling workers’ compensation claims can contribute to a reduction in claim costs and improved claim outcomes. These gains are quickly undone when errors result in penalties for the violation of state-specific workers’ compensation laws.
According to the article Avoid Workers’ Comp Penalties and Other Pitfalls, two of the five most common errors that result in penalties occur when filing First Report of Injury (FROI) and making mandated benefits payments to claimants. The use of workers’ compensation technology solutions can reduce the likelihood of making these errors, in addition to streamlining the claims process.
1. Simplify the process of completing First Report of Injury (FROI) forms
As mentioned in Improving adjuster efficiency and accuracy with an integrated forms solution, the process of locating a workers’ comp form and then keying claim details into form fields for every claim can be tremendously inefficient. This administrative burden reduces the time available for staff to engage in other activities that can have a positive effect on claim outcomes. This approach to populating forms also has the potential to add costs, including fines for late filing, errors, or the need to correct and resubmit forms.
The article states: “A reliance on manual data entry increases the likelihood of error and exposes the organization to the costs of bad data. In most cases, the work is also duplicative, with claimant and accident details having already been keyed into the claim system.”
The submission of inaccurate or incomplete claim details in the FROI can have consequences beyond the potential for incurring penalties. In the article First Report of Injury Accuracy Critical for Workers Comp Success, Rebecca Shafer, an expert in the field of workers’ compensation, points out that multiple parties typically use the information in the FROI when setting up their workers’ compensation files. As a result, even minor errors on the reports can be copied, creating complications down the road. And while these errors can be fixed by re-submitting a corrected form, Shafer writes that doing so “is a waste of time for all the parties involved. Plus, when the First Report of Injury is inaccurate or incomplete, it can often be exploited by the employee’s attorney.”
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Workers’ compensation programs consist of a complex web of claims, numbers, analyses, and communications that require an inordinate amount of time and focus from claims adjusters and claimants alike. And with 2.8 million nonfatal workplace injuries and illnesses reported by private industry employers in 2017 alone, according to the U.S. Bureau of Labor Statistics, this complicated process is widespread.
Furthermore, claims themselves are growing more complex. A survey conducted at the 2018 NWCDC & Expo by Risk & Insurance revealed an increase in complex claims as among the top 10 workers’ comp challenges for 2019. Dr. Robert Goldberg, chief medical officer for Healthesystems, told Risk & Insurance, “Many complex claims develop due to the psychological aspects of the injured worker that either pre-date the injury or are caused directly or indirectly by the injury. Early identification and intervention are required to short-circuit the development of such claims.”
With the right technology in place, companies and their employees can simplify and streamline the workers’ comp process. This reduces claim complexity, protects injured workers, and returns business to usual more quickly.
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This post was originally published on Risk Management Monitor.
Regardless of whether or not their organizations operate in states where the use of Official Disability Guidelines (ODG) has been adopted/mandated, risk managers can often leverage ODG data and the claim data from their risk management information systems (RMIS) to benchmark the medical and lost-time components of their workers compensation costs against national averages.
With its origins dating to 1995, ODG (www.mcg.com/odg) provides “unbiased, evidence-based guidelines” and analytical tools designed to “improve and benchmark return-to-work performance, facilitate quality care while limiting inappropriate utilization, assess claim risk for interventional triage, and set reserves based on industry data.”
The following are some ways risk managers can use ODG data in conjunction with their existing risk information tools to drive improvements in their workers compensation case management and achieve greater precision in loss reserve practices.
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“A workers’ compensation adjuster is not a paper pusher.” That’s one of “60 Tips for Superior Claims Handling” issued as part of a panel discussion held at a past National Workers’ Compensation & Disability Conference. “Work comp claims are more difficult than general liability claims. If you think of them as a paper pusher, that’s the output you’ll receive.”
Numerous articles make clear the impact of adjusters’ experience, skills, and judgment on claims outcomes (For example, see “Good Adjusters Know When to Settle Your Workers Comp Claims.”) Nonetheless, as indicated by the fact that panelists felt it necessary to make the point that adjusters are far more than back-office clerks, the misperception persists.
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Searching for a critical email, multiple browser windows open, bills to review, reports to write, lawyer and medical professional consultations, voice messages that came in while on other calls. It’s all part of the daily routine for claims adjusters. Add outdated claims management software, disparate systems, and manual or paper-based processes to the mix and productivity can suffer. The work backs up. In some cases, the potential for burnout is all too real.
“Adjusters normally deal with a high volume of cases, and each case can be emotionally draining,” writes Katie Dwyer in the January 2018 Risk & Insurance article Improving the Claims Experience. “The customer on the other side is, after all, dealing with a loss and struggling to return to business as usual.”
“At some TPAs,” adds Dwyer, “adjuster turnover can exceed 25%.”
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A good workers’ comp claim adjuster is a master of coordination. Managing 100-125 open claims certainly stands as proof. Yet, caseloads alone hardly tell the complete story.
For newly assigned claims, information must be collected from the employee, employer, and medical provider. Reserves must be established and reviewed for accuracy. There’s regular follow up with claimants, nurse case managers, attorneys, and other stakeholders. Compensability reviews. Evaluation of settlement opportunities. Mediations to attend. And that only begins to scratch the surface.
Yet according to the Accenture white paper “Claims at a Crossroads,” claims professionals can “spend nearly half their day on activities that do not impact the outcome of the claim.” While those administrative activities may be necessary components of the process, that time is better spent engaged in activities—such as those cited above—that fully leverage the adjuster’s talent and experience, keep claims moving on the path toward successful resolution, and increase the likelihood of outcomes that benefit both employee and employer.
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