Claims Handling

Reposition Role of Claims Adjusters to Maximize Outcomes

Facing a continued increase in complex claims, organizations need to change the way their adjusters manage claims to achieve the best outcomes.
By: | November 23, 2015

There’s been a significant shift in the types of workers’ comp claims over the past couple of decades. Because of that, organizations need to change the way their adjusters manage claims to achieve the best outcomes.

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That’s one of the key takeaways from a new claims benchmarking study. Where the majority of claims in past years were high frequency/low complexity, there are now fewer but much more complex claims that require a shift to be resolved successfully.

“Executives really emphasized that where we want to focus our attention is repositioning the claims adjuster as the role of an advocate,” said Denise Gillen-Algire, director of managed care and disability for corporate risk management at Albertson’s Safeway Inc. and the author of the report. “If you think about what claims examiners do, they really are facilitating benefits and affecting millions of people.”

The Workers’ Compensation Benchmarking Study is the third annual report sponsored by Rising Medical Solutions that delves into the challenges facing claims managers. However, this year’s report goes a step further and includes insights from industry practitioners on ways to address the challenges.

“The study report is based on the qualitative research conducted through focus groups and interviews with 40 industry executives, including directors, vice presidents and executive-level leadership from every major type of workers’ compensation payer organization,” the report explains. “The focus groups yielded in-depth qualitative research data on experiences, perspectives, insights and opinions as well as potential solutions related to claims operational challenges. The use of focus groups increases candor, probe, and the thinking behind participants’ opinions, and can generate data that would be inaccessible without the interaction of group participants.”

Outcomes Management

Where many organizations talk about outcomes management, in reality they focus more on cost containment. The change requires a commitment throughout the entire organization.

“The point is, if we say we want to focus on outcomes then it’s important that our internal metrics — key performance indicators — and how we measure performance also supports focusing on outcomes,” Gillen-Algire said. “The messaging we give to claims staff through internal performance metrics and how they prioritize their time must be focused on outcomes.”

A consistent theme echoed by the industry executives was the need to focus on claims examiners as creators of value through outcomes management and as holding positions of power. That means that in addition to process compliance, claims adjusters must also focus on outcomes management.

“Adjusters today are required to make various key decisions throughout the life of the claim,” said Srivatsan Sridharan, senior vice president for workers’ compensation product management at Gallagher Bassett. “The quality of these decisions has a significant impact on the results — from employee health, to the claim cost, to how long these claims remain open.”

Sridharan and Gillen-Algire were among the participants in a recent webinar produced by Risk & Insurance® Magazine.

The key to driving ultimate claim outcomes is to tie performance measures to core competencies. The outcomes, the webinar panel explained, rely on the successful execution of interdependent core competencies.

“Taking the discussion from measuring core competencies to how we drive those measures to deliver outcomes is really the question here,” Gillen-Algire said. “For example, a common outcomes measure is claims resolution.”

Most companies want a ratio of more than 100 percent, so more claims are closed than open. To ensure that goal is achieved, companies must look at the core competencies that actually drive that.

“For example, if you don’t execute the initial investigation appropriately, downstream it will affect the outcome,” Gillen-Algire said. “Another example is looking at the execution of return-to-work activities. If you don’t execute them appropriately, than claims resolution will be affected.”

Reverse Engineering

Starting with the desired outcome of a claim can lead to a better result, the report indicated. It’s what is called reverse engineering.

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“It’s thinking about the outcome we want to achieve and then about each step that gets us there,” Gillen-Algire said. “Looking at the steps most likely to have the greatest impact, then putting the most resources on those core competences that will drive ultimate outcomes.”

Several core competencies can affect a claim’s outcome such as the compensability investigation, disability and return-to-work management, and litigation management.

“So it’s important to pay close attention to all the factors that truly influence outcomes such as psychosocial issues, retirement claims, comorbidities and how those impact the ultimate claim outcomes, which is really driven by successful execution of core competencies,” Gillen-Algire said.

Companies that invest in claim outcomes measures and use reverse engineering over the next couple of years will see the greatest impact on outcomes, Gillen-Algire suggested.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]