There are still a large number of workers' comp providers that struggle with the process of pinpointing characteristics of claims.At the heart of the matter is the fact that producing a clear picture of a workers' comp claim "is similar to a cube where one side of the cube is viewable but the other sides are dark," says Kelly Stephen, vice president product development, healthcare and insurance, at San Rafael, Calif.-based Fair Isaac Corp. "With a workers' comp claim, the objective is to establish views from all sides of the cube so that all the parties involved in claims processing can come forth with decisions based on expertise and knowledge."
For Travelers Property Casualty Corp. "viewing the entire cube" of workers' comp claims didn't occur overnight. About a decade ago, the Hartford, Conn.-based carrier's objective was centered on eliminating paper, so that when a claim was reported, "audits could be done electronically, customers could see their claims, filing and retrieval efforts were minimized, and letters and forms were automated," says Vincent Armentano, vice president of workers' compensation for Travelers.
In 1997, the provider reached phase two of the mission, which involved scanning all medical bills internally, eliminating manual keying, improving data input accuracy and turnaround time, Armentano says. "This provided instant access by adjusters and nurse case managers to medical notes online. Internet use also increased at this time. Then, we embraced predictive modeling," he states.
With a concept known as LPE (Loss Prevention and Engineering), Travelers replaced the manual review of "red flags." The concept then enabled Travelers to establish a nurse triage concept-using more than 40 data points to determine if a claim would benefit by the utilization of nurses. "Previously, we had a nurse review every major claim manually to determine if intervention was beneficial, and prior to that left it up to each claim professional," Armentano says.
In its quest to detect fraud in workers' comp claims, Travelers deploys more than 35 data points to determine if a claim should be investigated more intensively. "Previously, the referrals were left up to claim professionals with the assistance of 'red flags,' which were linear, single data-point identifications," Armentano explains.
All of these various investments are perceived as the means to one compelling end. That is, the ensurance of better claims outcomes triggered by quick intervention.
"The University of California (at Berkeley), which established a pool for workers' compensation claims, has been able to reduce loss-time on claims by 40% due to early intervention and putting people back to work quicker," says Randy Wheeler, CEO for Valley Oak Systems, San Ramon, Calif. "The university saved a quarter of a million dollars by getting nurse case managers involved at the outset."
