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How Re-evaluating the Claims Handling Process Can Improve Outcomes

ESIS is leading the charge in leveraging data analytics and adjuster experience to change the workers compensation claim management paradigm and drive improvements in outcomes and help client reduce their total cost of risk.
By: | April 7, 2020

Risk managers, under continual pressure to reduce costs and improve outcomes, have an opportunity to move away from incremental improvements and drive significant change by embracing a new approach to managing workers compensation claims. That’s the message from Keith Higdon, president of third-party administrator ESIS. Across the industry, there has been a push for patient-centered care and advocacy. Workers compensation programs are investing in practices that promote positive outcomes for those injured on the job, which in turn has positively impacted the bottom line for employers and carriers alike.

“Workers compensation programs are far more mature today than they were 15 or even 10 years ago,” said Keith Higdon. “However, a lot of the cost containment intervention offerings coming into play these last 10 or 15 years have occurred around the edges of the claims process. Now is the time for TPAs to question the legacy processes and accepted best practices at the heart of managing claims,” he said. “This is the first step in changing the workers compensation paradigm and in continuing to move it forward.”

According to Higdon and his team at ESIS, changing the core claim management processes and approach is the best way to deliver meaningful improvements in service and outcomes for injured workers, risk managers, and workers compensation programs overall.

“Traditionally, claims are managed through three categories: medical only, managed medical only, and lost time. The processes developed around each have determined the caseload an adjuster is given,” he explained.

“We want to turn that on its head and say, ‘This isn’t about pricing and caseloads; this is about getting our clients and their injured workers better outcomes.’”

For ESIS, that starts with rethinking what category each claim falls into and what best practices should be in place to handle each type.

Utilizing a Deeper Understanding of the Complexity of Claims

Keith Higdon, President of Third- Party Administrator, ESIS

Higdon said the goal of a TPA should be to help its clients focus on the initiatives that will bring the most impact to their companies: “It’s about getting to the heart of what risk managers are tasked with from a cost containment perspective.

“We’ve seen that clients have a lot of pressure to improve their company’s risk management program and results with fewer resources on their end,” he explained. “We recognize that. It’s a key area where TPA involvement can help.”

As a key partner in the claims handling process, the TPA is in a unique position to cut down client expenditure by making the claim management process more efficient and effective while also increasing positive outcomes for injured workers.

“Because it’s bigger than just cost containment; it’s also about promoting a healthier workforce,” Higdon said.

One way that ESIS is leading the charge is through evaluating claims on their complexity and not just the claims type.

“In order to comply with process-driven audits, whether they come from clients, carriers or consultants, TPAs are required to follow the same processes for the claims they handle regardless of complexity,” Higdon said.

For example, one lost time claim might cost $1,000 while another costs $500,000. But because both are considered lost time claims, there are audited processes that say both claims must be handled the same way.

“We want to go deeper than that,” said Higdon. “We have to start defining the subtypes of claims based on their complexity and their cost exposure for the client.”

Then, based on the complexities, each subtype must have its own approach in handling in order to include the right resources for the claim from day one.

“That drives outcome and not just process,” said Higdon.

Building a Discussion Based in Fact

Creating a process that dives into the different subtypes of a claim, however, does not happen overnight. It requires insights based on analysis of claims data and the quantification of adjuster experience.

“The caseloads adjusters handle, in the traditional sense, are arbitrary. No definitive source has ever said ‘This is what a caseload should look like and this is how claims should fit into that caseload.’

“As a result, caseloads have often been based on what is required for a competitive RFP response, or guidance from industry experts including consultants, brokers, employers, and claims administrators,” Higdon said. “We are all guilty of making an educated guess.” Going forward, he added, ESIS wants to make it a discussion based in fact and data.

For ESIS, analytics plays a major role in defining the different subtypes of a claim. By capturing the different treatments and outcomes for similar cases, ESIS is able to get an idea as to what might happen in a new claim with overlapping elements.

But, “no set of analytics is going to have every variable,” said Higdon. “Just like not every adjuster is going to have seen every claim.”

Analytics gives adjusters a set of tools to help determine the complexity of a claim and what is driving the potential severity. In the best approach, adjusters marry that insight with their experience to make the right decisions and manage the claim effectively.

“At ESIS, analytics is used to enhance experience,” said Higdon, “not replace it. Analytics creates the foundation for the conversation. In our new model, it’s also what helps accurately identify those different claim subtypes at intake and guides both who handles them and how.”

Finding the Right Partner with the Right Experience

Changing processes can be difficult, especially ones that are industry accepted.

But the team at ESIS believes the workers compensation industry is ripe for a paradigm shift.

ESIS has already embedded analytics into its claim process in order to enhance the experience of its adjusters. Now they’re diving deeper into the data and asking questions based on what all their workers compensation claim data is telling them about the entire claim management process, not just individual claims.

“That means we’re looking at claims handling overall, and we’re questioning the standard classifications of claims, as well as the industry standards as it relates to concepts around caseloads and best practices,” said Higdon. “When you ask questions based on what your data is telling you rather than what has been the presumed best practice, you see that some things need to change.”

For ESIS, managing workers compensation has always been about making sure people have the right care, that they’re in a process that expedites that care and expedites their return to work, and that costs are managed effectively. Now, noted Higdon, “With our clients’ help, we’re crafting a new approach and a significantly better way to drive better outcomes and results.”

For more information, visit http://www2.esis.com/esis-en/.



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

ESIS is a third-party administrator and wholly owned subsidiary of Chubb Inc. They provide innovative best-in-class service and products that are an integral part of their clients’ risk management programs. Their suite of offerings are available on a bundled or unbundled basis.

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