By Healthesystems
Forty-five percent of workers’ comp stakeholders cite increasingly complex claims as one of the greatest challenges facing the workers’ comp industry, according to a 2024 Healthesystems survey. And for claims professionals specifically, this was reported as the #3 industry challenge.
While most workers’ compensation claims are straightforward, a small contingent of claims become complex and end up driving the biggest proportion of claim costs in workers’ comp. Claims complexities include everything from clinical and social complexity to patient and provider behaviors. These factors can lead to delayed recovery, increased claims duration, and ultimately, higher costs.
Perhaps it’s not that claims are becoming more complex, but that we as an industry are getting better at addressing patients holistically and identifying the complexities that were there all along. Let’s look at six common complexities in workers’ comp claims – and how a combination of technology, data, and people can help address them.
#1. Clinical Complexity
Clinical complexity alone can be broken down into its own laundry list of components – encompassing everything from injuries that have poor or more unpredictable outcomes, such as low back injuries, to the presence of chronic or comorbid conditions that complicate recovery, and even mental health factors. Fifty percent of workers’ comp stakeholders cite type of injury as the most concerning claim complexity.
Therapeutic complexity is also a significant factor here, as a patient’s therapies or drug regimen can create – as well as be key indicators for – risk. In some cases, as with opioid prescriptions and prescriptions for other high-risk drugs such as benzodiazepines, this risk is well established. However, other factors such as polypharmacy and drug-drug interactions may require more sophisticated solutions to identify and mitigate risk.
#2. Social Complexity
Social determinants of health (SDoH) – the conditions in the places where people live, learn, work, and play that affect a wide range of health and quality-of-life risks and outcomes – certainly affect workers’ comp claims. In fact, it is often cited that while medical care accounts for only approximately 10-20 percent of the modifiable contributors to healthy outcomes, SDoH comprise the other 80-90 percent. Examples of SDoH intersecting with workers’ comp include food insecurity, language barriers, social isolation, substance abuse, transportation barriers, and more.
#3. Patient and Prescriber Behaviors
Patient behaviors such as nonadherence to a medication regimen or physical therapy can have a determinantal effect on recovery and workers’ comp claims. And other behaviors may be indicative of underlying concerns – as a pattern of early refills for a controlled substance or the behavior of “doctor shopping” may indicate a dependence or addiction concern. Even lack of patient engagement can be a barrier to recovery – whereas conversely, engaged patients report higher quality of care and more positive views of their healthcare systems versus their non-engaged counterparts.
Prescriber behaviors such as physician dispensing also come into play. According to claim outcomes for five specific jurisdictions where physician dispensing is most prominent, the average days of lost time per claim was 73 percent higher for physician dispensing claims than for non-physician dispensing claims.
#4. Attorney Involvement
An injured worker having legal representation is one of the greatest indicators of long claim durations and high costs. In fact, Milliman data shows that claims with attorney representation take 2.1 times longer to close and cost 2.3 times more than claims without an attorney. While there are many reasons an injured worker might elect the path of litigation, it often comes down to one basic driver: they are unhappy with or uncertain about how their recovery or claim is progressing.
#5. Economic Complexity
High-cost therapies directly increase the cost of workers’ comp claims – but often they can also signify additional complexity or risk. Examples include costly specialty medications, which require higher-touch management for concerns such as patient adherence, side effects, and potential differences in dispensing and site of care compared with more traditional drug therapies. Additionally, certain high-cost dermatologicals such as compounds and physician-dispensed private-label topicals are not only very costly but are not FDA approved, presenting patient safety considerations.
Just as confounding can be high-cost, clinically unproven devices and therapies occurring within the fulfillment of ancillary medical services such as durable medical equipment. All of this underscores the need for comprehensive visibility into the various economic drivers of workers’ compensation medical claims.
#6. Claims Adjuster Turnover
According to a LinkedIn employee data study, professional services – which includes insurance and adjusting companies – is the industry with the highest rate of employee turnover, with an average turnover rate of 13.4 percent. And 50 percent of workers’ comp stakeholders see workforce, recruiting, retention, and succession as a major challenge. Claims adjuster turnover places stress on claims staff as workloads increase, delaying claims processing and potentially essential decisions. In fact, 51 percent of claims professionals say too many claims to manage and lack of support is their greatest obstacle to facilitating medical care for injured workers.
Multi-Faceted Strategies for Complex Claims
Complex claims are a complex problem, and that problem requires multi-faceted solutions. The components of these solutions include:
- Early identification: Most claims are not immediately complex from the beginning – they become complex over time. Therefore, the most important step in avoiding complex claims is early identification. This is an area where today’s advanced technologies become increasingly crucial. Using machine learning tools and artificial intelligence (AI) allows for the extraction of key data elements that provide insight and context to clinical and claims complexities.
- Automation and workflow integration: Of course, it’s just as important to complement insights with the right strategies and workflow integration to address complexities. Workers’ comp stakeholders agree – they cite claims process automation as the #1 most important technological advance in the next 3-5 years. Implementing low-touch or even no-touch automated solutions can reduce the burden on overtaxed claims adjusters and result in faster identification and escalation of complex problems that require greater focus and resources.
- Intervention and engagement: Once an at-risk claim is identified, interventions can keep the claim on the right track. Common clinical interventions include provider outreach to request additional information about treatment, express patient safety concerns, or provide education regarding evidence-based guidelines. Direct engagement with patients is also key to keeping claims on a good trajectory. Studies have shown that patient engagement can reduce medical costs and improve health outcomes. And because it results in a better experience early on, clear and timely communication with injured workers may reduce the likelihood that they hire an attorney.
These three components can manifest in very actionable ways to address claims complexity in its many forms – and ultimately help manage the utilization, cost, and appropriateness of medical therapies and services on a claim. Imagine:
- A predictive model identifies claims where overutilization of therapies or services is likely, triggering a referral process for an intervention to help address injured worker behavior and reduce overreliance.
- The application of AI into a clinical review process helps the clinician quickly uncover key insights in the medical record that inform therapeutic recommendations, such as a comorbid diagnosis that presents risk for drug-disease interaction.
- Concerning prescribing activity, such as physician dispensing, triggers the delivery of right-time educational content to the injured worker to empower them in their own advocacy and decision-making.
The best part? We don’t have to imagine. These are just a few examples of very real ways in which technology, data, and people can work together to pave a smoother road to recovery and claims resolution.
This article originally appeared on WorkCompWire.
