How employers can overcome common pitfalls in the claims process

For the eighth year, Rising Medical Solutions LLC has released a Workers Compensation Benchmarking Study, which reports findings from an annual survey of claims professionals. While the report, 2020 Report Examining Organizational Resiliency, COVID-19 Impact on Claims Operations, reflects the views of frontline claim professionals and claims leaders, it provides important insights for employers about the strengths and weaknesses of the claims process.

In the 2019 study, frontline claims professionals identified the lack of return-to-work (RTW) options, litigation, and psychosocial issues and/or other co-morbidities as the top three greatest obstacles to achieving desired claim outcomes, consistent with prior study research. The 2020 study looks at the differentiators that successfully deal with these issues.

A top differentiator is promoting advocacy-based, employee-centric claims models as a core operational strategy. The model "focuses on employee engagement during the injury recovery process. Such models remove adversarial obstacles, make access to benefits simple, build trust, and hold the organization accountable to metrics that go beyond cost containment." Key to success is communication with the injured worker.

Somewhat surprisingly, forty-three percent of workers' compensation claims management organizations in 2020 reported "no implementation of tools to improve injured worker communication," at a time when there were universal calls to improve communications with workers during the pandemic. Just over one-third of organizations are leveraging text messaging, which is preferred by many workers, while some claims systems incorporate text messaging through third-party applications. In addition to text messaging, only 27 percent of organizations have implemented a website or injured worker portal, and 26 percent are using mobile apps to communicate with injured workers.

Part of the problem is that it is difficult and costly to integrate these technologies with older, legacy claims systems. For example, any communications with an injured worker must be "captured" by an insurer's or administrator's system, which might not have the capability to incorporate texts or communications from apps.

This clearly shows that employers need to take responsibility for the process immediately following a work-related injury. Easily accessible platforms to report injuries should be available to all employees and every work injury needs to be reported within 24 hours. How quickly the company, preferably the supervisor, contacts the injured worker with an empathic message sets the tone for the company's commitment to the worker and the direction of the claim. Regardless of whom they encounter in the system, injured workers need to know that the employer cares and is involved.

The report says that compensability investigations remain rooted in traditional claims processes and were notably complicated by the COVID-19 pandemic and the varying laws and executive orders involving presumption. Making changes in this area that reflect the advocacy-based claims model is "challenging and slow-moving." Some performance metrics such as time to decision or speed to benefit delivery are considered important, but few organizations leverage these.

Recognizing that most claims are compensable, employers who proactively provide information regarding the compensability of the claim can reduce the likelihood of frustrating the injured worker with delays, or alternatively, accelerate the investigation of fraud. This is particularly important for unwitnessed injuries. Gathering information regarding personal activities the employee was involved in before and after the injury, previous claims, and possible red flags of fraud can improve efficiency.

RTW programs are key to managing claims, which present the greatest opportunity for employers to reduce workers' compensation costs. However, the study notes there is a disconnect between the metrics used and the goals of RTW programs. Frontline claim professionals identified the two most important claims outcomes for RTW as the percentage of claims where RTW was at or below industry benchmarks and the percentage of claims that return to the same or better pre-injury functional capabilities. Yet, claim costs are the dominant metric used to measure claims management effectiveness.

Employers with strong RTW programs are in the best position to impact the outcome of the claim. They can provide job descriptions and videos of work, advocate RTW ability on the day of claim intake and throughout the claim lifecycle, ensure employees and their supervisors are engaged in the RTW process and be alert to problems in medical treatment delays.

In some cases, the pandemic has limited the options for modified duty. Proactive employers worked with non-for-profit return-to-work programs to keep employees in a routine and engaged in their recovery while making a meaningful contribution to their community.

When implemented well, the advocacy-based, employee-centric approach curtails litigation. Employees are more likely to seek legal representation when there is poor communication or lack of trust with the employer and/or claims administrator. Communication obstacles, delayed claim decisions, and slow benefit delivery and medical treatment authorizations are common reasons for litigation. Employers can help by staying connected to the injured worker, making sure they receive the care and support they need.

Of concern, 33 percent of the organizations surveyed reported no initiatives to address comorbidity issues, such as diabetes, hypertension, and obesity, which are known to complicate and delay recovery, if not managed properly. Even fewer are addressing psychosocial issues - a frequently misunderstood driver of poor claim outcomes.

Traditionally, workers' comp has carved people up into body parts - the "back patient" - treating the physical injury, but not addressing any negative psychological and socioeconomic factors that could potentially put a worker at risk of delayed recovery. While the need to have a holistic approach has gained some traction for complex claims or claims that drag on, employers can best identify red flags of depression and changing attitudes following a workplace injury.

Injured workers may assume that things are going to get worse, have a fear of reinjury, low self-efficacy, and signs of depression and anxiety. Fears of adding the cost of a "psych claim," discomfort about mental health, and state compensability laws can limit treatment in this area.

However, these could be episodic barriers to recovery, not necessarily prolonged issues. Many behavioral therapies have a finite beginning and end. Employers can help identify psychosocial factors early in the process. With sufficient knowledge, care providers can develop better treatment plans for injured workers that will hasten return-to-work, which will ultimately reduce claims costs.

According to the report, the American Hospital Association (AHA), has found socioeconomic factors are responsible for approximately 40 percent of a patient's health, while 20 percent is attributable to medical care. Yet only 25 percent of the survey participants are equipping claims professionals to identify social determinants of health. Employers can communicate any known negative effects of the worker's socioeconomic situation or support network.

The report also noted that less than 30 percent of the organizations use evidence-based medicine or health status and function as metrics. Many workers' compensation organizations do not leverage provider networks effectively, lacking sufficient data and/or expertise to adequately assess provider performance. Positively, most organizations, 96 percent, leverage nurse case management resources. However, 50 percent are still using an antiquated referral method prone to delays and human error. Timing is key; studies have shown that nurse case management is most effective when leveraged within seven (7) days of injury.

While advances are being made, the workers' comp claim process is affected by a host of industry issues that lead to errors and delays, including a talent crisis, daunting technological integration, regulatory and legislative changes, and increasing claim complexity. With a deeper understanding of the pitfalls in the process, employers can influence the claim's outcome. As trained Certified WorkComp Advisors (CWCA), we are skilled in the claims management process and are here to help.