Over the past 20 years, the workers’ compensation industry has worked to combat rising medical and claims costs through strategies such as early intervention and early engagement (24/7 nurse triage) and the advancement and acceptance of case management.

Now, we’re at an inflection point. Medical costs continue to rise, and complex cases, such as those involving mental health claims in addition to physical claims, are contributing to higher overall costs. Let’s take a step back from the individual injury or claim and examine cases from a program perspective. It becomes clear that outside factors are influencing the severity and complexity of claims today. These factors are the social determinants of health (SDOH).

The Centers for Disease Control and Prevention defines SDOH as the nonmedical factors that influence health outcomes. They are the conditions in which people are born, grow, work, live, worship, and age. SDOH often include factors like income, education, housing, and access to nutritious food and safe environments. In workers’ compensation, these factors may include an individual’s residence, access to healthcare, their home support system, and financial situation.

SDOH aren’t new, but they’re the next most obvious factor contributing to higher costs and impacting the care, recovery, and return-to-work of injured workers. There’s an opportunity for the industry to reduce the overall cost of claims by first understanding how social factors influence recovery. Then it becomes a process: flag the more severe or complex claims, identify the social determinants at play, and manage them through a claim-centric and holistic approach.

Understand Social Determinants to Guide Recovery

Sarah Scott, Executive Vice President of Product & Corporate Services, CorVel Corporation

When a worker gets hurt, their recovery depends on more than medical treatment. Rural workers may face longer drives to specialists than their urban counterparts. Workers without family support may struggle with their daily tasks during recovery that would otherwise be taken care of. Financial stress adds another layer that could impact healing and recovery if workers are worried about bills piling up.

“Think of it this way,” says Sarah Scott, EVP of Product & Corporate Services at CorVel. “Two workers suffer the same back injury at a manufacturing plant. One lives near a physical therapy clinic and has strong family support. The other lives in a healthcare desert with little support at home. Even with identical treatment plans, their outcomes can look very different because of these external factors.”

In fact, a recent WCRI study of more than 930,000 workers’ compensation claims across 32 states found that degenerative and comorbid conditions consistently correlated with higher costs and longer durations of temporary disability. These findings underscore how non-medical or complicating factors can dramatically shape recovery trajectories.

These longer recoveries and more complex cases account for a small portion of the overall claims, but they’re increasingly responsible for a growing share of the total costs.

Detect High-Risk Cases Early to Reduce Complexity

“The earlier we identify social and environmental barriers, the more likely we are to keep a claim on track,” says Scott. “Early recognition gives us time to act before small challenges become costly delays.” That’s why leading organizations are training intake nurses to look beyond symptoms and capture broader context about the injured worker’s living situation, support network, and potential barriers.

At CorVel, structured nurse triage protocols document not only the injury itself but also cues related to psychosocial and environmental risk. These details are codified into the claim file and automatically feed into CorVel’s system, Care^MC, where predictive workflows can flag cases for additional support.

For claims that may become complex, the first month is pivotal. High-touch involvement during this window, through outreach with providers, injured workers, and employers, can dramatically improve the likelihood of a timely recovery. During this period, CorVel deploys registered nurse Care Advocates to establish evidence-based treatment plans, coordinate optimal care, and initiate return-to-work planning. This proactive, early focus helps reduce costly delays, mitigate litigation risk, and improve closure rates.

Scenario: An injured worker reports a knee injury at the time of intake. During the triage conversation, the nurse notes the individual lives far from the nearest clinic, is the primary caregiver for a parent, and is anxious about lost wages and transportation challenges. Because these factors were documented early, the claim was flagged for additional support. A nurse case manager collaborates with providers to develop a treatment plan and consults with the employer on modified duty options. Transportation and virtual behavioral health check-ins are arranged to reduce barriers, while predictive modeling monitors recovery and flags risks. By addressing these concerns up front, the claim stays on track and avoids costly delays or disputes.

These conversations and early interventions capture details that automated systems miss. People are often more inclined to reveal information about themselves in conversation than on a form. By blending structured protocols with human interaction, CorVel is able to identify risks earlier and align interventions accordingly.

Apply Data and Technology to Optimize Claims Management

Human involvement is undeniably essential to the recovery and return-to-work of injured workers; however, technology and automation also play a significant role in this process. Modern claims platforms don’t just process injury codes; they analyze dozens of data points, including age, location, past medical history, and environmental risks. Advanced systems utilize these insights to flag claims that require special attention, triggering targeted interventions before costly complications arise.

“Technology can’t replace human judgment, but it can sharpen it,” says Scott. “By combining predictive analytics with the insights of experienced claims professionals, we can spot risks earlier, act faster, and keep recoveries on track in ways that wouldn’t be possible with either alone.”

CorVel’s predictive modeling tools continuously recalculate dynamic risk scores using medical, historical, and psychosocial data points. This enables claims teams to respond in real-time as new information is added, whether that involves initiating a behavioral health escalation, aligning with an evidence-based treatment benchmark, or coordinating transportation services.

For example, if a high pain score combines with a lack of transportation access, Care^MC Edge generates real-time alerts for adjusters and case managers. Diagnosis Profile tools then project lost workdays based on diagnosis, physical job demands, and comorbidities, ensuring recovery plans stay realistic and measurable.

When humans and technology work together, social determinants become manageable factors instead of invisible barriers.

Commit to a Path Forward to Manage Costs

As the cost of care and wages continue to rise, 2025 brings outsized risk for both insurers and employers. More complex and severe claims require a holistic, data-driven approach that considers the whole person rather than just the injury. Legislative shifts, such as those related to mental health coverage, fee schedule updates, and pharmacy controls, add yet another layer of complexity.

The next frontier of SDOH integration across the industry will likely involve AI and machine learning. These tools can analyze unstructured data, such as case notes or provider communications, and enrich risk models with external datasets, including housing or transportation indexes. CorVel is actively evaluating how these innovations can enhance our integrated approach, with the goal of identifying risks earlier and responding more effectively to support improved outcomes.

“When it comes to addressing social determinants of health in workers’ compensation, the evidence is clear,” says Scott. “Programs that blend technology, early human interaction, and targeted resources not only improve worker well-being, but also help organizations manage costs more predictably, reduce litigation exposure, and meet compliance requirements.”

To learn more, visit: https://www.corvel.com/.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with CorVel. The editorial staff of Risk & Insurance had no role in its preparation.