CAMBRIDGE INTEGRATED SERVICES
January 31, 2008 — A new year is here, and with it comes fresh speculation on what workers’ compensation claim professionals can expect over the next 12 months. In order to separate wheat from chaff, Claims’ Eric Gilkey spoke with Kevin Turner, executive vice president for Cambridge Integrated Services — a company that minimizes claim and loss costs — to find out what will shape the workers’ compensation industry in the near future.
What’s on the horizon for property/casualty claim professionals in 2008?
Clients are looking for innovation and technology from their third-party administrators
and seek differentiators that provide options and reduce overall
risk. There is great focus on seeking a change to the workers’ compensation
intake model with the belief that the first point of contact — oftentimes a call
to an intake center — can be better utilized. Other areas of concern remain
in medical expenses, which continue to increase and are outpacing indemnity
costs in most programs.
Using technology and skilled resources is key to controlling these costs.
This is not a revelation to anyone in the industry, however. The traditional
approach adopted by many administrators and insurers often involves the
reporting of a claim electronically or telephonically. And while there are
aggressive procedures in place thereafter to quickly manage the medical and
indemnity aspects of a claim, often the injured person has already been sent
for medical treatment, received prescriptions, or even undergone diagnostic
testing. The period between the actual incident and the time the claim is
reported is controlled by local personnel who often do not have the skill set to
direct the situation and, in many instances, clients do not want to put managers
and supervisors in a medical decision-making position.
The paradigm shift is to move towards telephonic reporting that places the
injured worker in direct contact with a triage nurse. The triage nurse is able
to assess the extent of the injury, collect basic information, and refer the
individual to appropriate in-network medical providers. In some instances,
professional medical treatment can even be avoided. It’s a “one and done”
approach that removes the rote intake process, puts first-response medical
decisions in the hands of a professional, and triggers claim investigations at
the earliest possible time.
What role do you see predictive analytics
playing for adjusters and claim managers?
The industry has utilized the concept of red flags
as its non-scientific means of alerting claim
professionals to future problems and in essence
is a form of predicting the future. The Monday
morning injury report is a good example of the
industry’s use of a red flag, with the underlying
belief that there is a greater chance of fraudulent
reporting of an alleged work-related injury just
after the injured worker returns from the weekend.
True predictive modeling and the vast amount of data required to formulate
outcomes based on a set of facts known early in a claim, however, may tell us
that it’s the Thursday morning injury that is most likely to have a higher exposure.
It may also tell us that an injured worker’s marital status, sex, distance
from work, county in which he lives, and a host of other items not typically
considered in the adjusting process are relevant in determining the course of
action and resources applied to a claim.
Applying predictive modeling in the industry requires certain practices and processes
to undergo radical change. There can be no distinction between medicalonly
and lost-time claims in the initial handling of a claim. All claims must be
subject to the model as the model itself tells us the lag between the injury date and
the first day of disability is an extremely strong indicator of increased exposure.
Continuing to treat medical-only claims with limited attention until traditional
red flags are evident defeats the underlying premises supporting predictive
modeling. But predictive modeling is a major investment for insurers
and third-party administrators. Insurers who embrace predictive modeling
must also be willing to pay for the service and move away from traditional
medical-only and lost-time claim pricing. We are in the infancy of applying the
model to the world of claims and the model, like any other, will be scrutinized
accordingly. Those providers of claim services who are able to articulate the
value proposition and implement staffing changes, quickly will reap the benefits
of reduced loss costs and differentiate themselves in the marketplace.
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