Resolution of WC Claims - Faster is Better
The following is a letter from the National Council of Self-Insurers to its membership, quoting information from Business Insurance. It has been the experience of Midland Claims Service, Inc and Industrial Injury Claims®, servicing over 20,000 WC claims over the past decade, that aggressive, appropriate medical care following contact with the injured party and consideration of their needs as well as those of the employer leads directly to workers' compensation claims which achieve full resolution much more quickly that those where 'best practices' are followed as the lowest common denominator. Industry data appears to validate our direct experience.
While it’s well known that costs mount, the longer a workers compensation claim stays open, data from insurers, self-insurers and third-party administrators show that the increases are dramatic.
For example, claims that close within 30 days incur an average cost of just $287. Ninety percent of such claims are medical-only cases, or cases in which no work time is lost.
But the costs increase to $722 when workers comp claims remain open for 31 to 90 days and when 81% are medical-only cases.
The rapid rise in costs continues, reaching $6,875 when such cases stay open 181 days to one year. The percentage of medical-only claims drops to a minority of all claims when they are unresolved during this period.
When comp claims close between one and two years, the average cost jumps to $19,888.Only 21% of these claims are medical only.When claims close between two and three years, they incur an average cost of $36,792, when the medical-only proportion drops to 13%.
The above data is from Sedgwick Management Claims Services, Inc.
Several factors contribute to delays resolving workers’ comp claims, according to Scott Rogers, Executive VP of Casualty Operations for Sedgwick. They include an aging worker population, legislative changes and compliance with Medicare Set-Aside regulations.
But treating claims as simple medical-only cases when they actually need aggressive attention and resources early on also is a significant factor.
A large part of the medical spending associated with claims that continue results from pharmacy costs, Mr, Rogers said. Consequently, workers comp payers are seeking more data to help manage drug expenses.
The above is from an article in Business Insurance, written by Roberto Ceniceros, Senior Editor.