SHzoom’s Monthly Minute
Risk Managers Discuss Their Strategies in Producing Quality Claims Outcomes
Nov 1, 2022 | This article was originally published on Safety National
What are the most important focuses for workers’ compensation programs that lead to quality claims outcomes and what are the claims strategies and initiatives that best drive results? At the 2021 Workers’ Compensation Institute Conference in Orlando, a a panel of risk managers share what has worked well for them, and how they drive those focuses to produce better outcomes and results for their companies.
- David Stills – Senior VP, Carrier and Risk Practice, Sedgwick
- Tara Acton – Director, Claims & Counsel, Lumen Technologies
- Teresa Gunter – Manager Sr. Claims, The Adecco Group NA
- Marc Salm – VP Risk Management, Publix Super Markets, Inc.
Quarterly Claims Audits
Perform quarterly audits on claims team focusing on medical management and claims handling. These audits are not looking to check a box and instead focus on looking at the actual quality of the tasks being performed and how they contributed to moving claims toward resolution.
Frequency and Severity Focus
Review the top 15 clients driving claims costs and try to focus on addressing the causes of the accidents. The goal is to try and prevent injures with a focus on better ergonomics. Focus on the closing rate for claims knowing that the faster claims resolve the lower they ultimately cost.
Focus on Key Metrics
Focus on the metrics that are most impactful to your workers’ compensation program, including total case reserves, open loss time claims, average total case reserves and actuarial projections for ultimate exposure. Review this data monthly as you may find it is a leading indicator that triggers a deeper dive into causes.
Are there issues with your staffing that are impacting your claims outcomes? Are your training programs sufficient? Do you have adequate staffing in your risk management and claims program? Are the people you have performing to their full potential? Also, is there a top down push to support your risk management goals? When things go well you need to give credit and when things do not you need ask why.
High litigation rates lead to higher claims costs. If your litigation rates are high you need to figure out why. One speaker hired a full-time advocate for injured workers focused on improving the experience of these workers with a goal of reducing the litigation rate. This advocate worked for the employer, not the TPA or carrier. The results of this program were a dramatically reduced litigation rate.
Be Mindful of Denials
Denied claims usually end up in litigation and often end up being accepted or awarded. Look for reasons to pay claims, not for reasons to deny claims. If you have to deny the claim, help the injured worker to understand the other benefits they have available to treat the injury such as group health and short-term disability.
Return to Work
Getting people back to work as quickly as possible is important to the recovery of the injured worker. Be creative in developing modified work programs. One employer noted the challenge of providing modified work, so they partner with nonprofits to get their people back to work doing something productive.
Coordination of Medical Care
Getting the best care for injured workers can be a challenge. Some physicians will not treat workers’ compensation patients and some providers provide poor outcomes for injured workers. The focus needs to be on identifying medical providers who provide the best outcomes for injured workers. If your focus is only on fee-for-service, too often you get what you pay for. Be willing to pay more per service for better outcomes which will ultimately save you money.
Allocations and Actuarial
Your operations teams needs to be financially accountable for their losses. If they do not have skin in the game, they have little incentive to focus on safety and claim reduction. The actuarial process is very important to your overall risk management program as this determines how much money needs to be set aside for current losses and your budget for future claims. As a risk manager, you need to develop an understanding of the factors that have the biggest impact on actuarial development. You also need to educate the actuaries on any changers you are making to your program that will impact the results in the short term and long term.
Claim Closure Rates
Strive to close 70% of current year claims, 90% of claims after 24 months, and to see the claims beyond 24 months decreasing. By keeping the claim closure rates high, you can make sure the adjusters are focusing on a smaller group of claims going forward.
Defense Attorney Scorecard
Pay attention to the outcomes being produced by your defense attorneys and whether they align with your goals. You may need to spend more money on the front end to get claims closed more quickly. If you have attorneys where claims consistently take longer to close perhaps it is time to remove them from your panel. It is also important that the claims adjuster stays in control of the claim rather than just letting the attorney take charge of things.
The communication between injured workers, their managers and the claims team is critical. The managers need to keep the injured worker engaged with the workplace so they feel part of the team and want to come back to work. The claims team also needs to engage regularly with the injured workers. The focus of communication needs to be the ability of the injured worker versus their disability. What can they do? This company gets their claims adjusters out in the field to meet with the managers in the stores to understand what is driving injuries.
Your peer network can provide tremendous value and expertise to you. We all learn from others and their experiences. Engage with others in the industry including your carriers, brokers and other employers.