Processing workers' compensation insurance involves participation and input from many parties, the majority of whom operate from multiple and disparate operating systems.As a result, the emergence of Web-based, real-time data exchange solutions has become imperative. In some ways, workers' comp is not unlike the processing required for an auto claim, which involves data exchange efficiencies between adjusters, auto repair shops, car rental agencies and more.

"Web services is the key to better workers' compensation processing," says Randy Wheeler, CEO and founder of Valley Oak Systems, a San Ramon, Calif.-based provider of claims management software. "With workers' comp, there are lots of parties operating from disparate systems. There are time lags in processing that undermine the process. This also works against the whole mission of workers' comp in the first place-to get people back to work more quickly."

Accessing data from a unified system with multiple front-end access points, a physician might log on to input a diagnosis, Wheeler says. And, return-to-work coordinators might activate the system to log progress of a person's rehabilitation, and provide an updated timetable for return to work. Oftentimes, returning to work more quickly can occur if the insured is able to perform other less stressful duties, he adds.

Loss-control experts and risk managers who compile reports that readjust a company's risk exposure based on frequency of claims activity should also be included in the claims-cycle loop.

"The whole goal is to reduce paper processing significantly through seamless transmission of data to all parties," explains Wheeler. "It's essential to have one system that can distribute data on a claim as it comes in, and provide better bill review capabilities. Bills can be scanned and integrated into a database. With one unified system, there are no dual-system challenges-there's a transparency attached to it. The claim is all part of a master file."

Insurers are getting the message about shoring up data exchange. "After investing in paperless processing solutions and then predictive modeling for workers' comp, the third generation of our workers' comp technology investment was designed to engage all participants in the workers' comp system," says Vincent Armentano, vice president, workers' compensation, for Travelers Property Casualty Corp., Hartford, Conn. "Many of our efforts over the past eight years have been centered on these objectives."

To drive the administration of its workers' comp program, Denver-based Pinnacol Assurance, which provides about 50% of all workers' comp policies sold in Colorado, developed an intranet site called Centerpoint that enables all internal parties to access medical records and review claims status. "We are now able to better evaluate a claim early in the cycle," says Rob Norris, CIO for Pinnacol Assurance. "Some claims are self-managing while others are more complex. Where electronic solutions have really made a difference is in the ability to put important data in the hands of examiners much more quickly than was possible through manual processing."

The advent of claims hubs and Web portals are helping drive efficiencies with workers' comp claims processing. "Insurers want solutions that can really make a difference in cost containment with workers' comp bill review," says Tara Ambrose, vice president product management at San Rafael, Calif.-based Fair Isaac Corp.

"Electronic billing hubs are just now starting to take shape. Being able to provide an easy and accessible Web portal has also become a priority, providing the ability to access data anywhere and anytime, with customized reporting capabilities."

Fair Isaac offers a portal solution that enables all affiliates in the claims processing loop to establish individualized user rights and access points-all from one integrated system. Within the portal, bills can be reviewed by multiple parties, all having various levels of access, to determine benefits schedules. While individualized access is a key driver, another key is the establishment of business rules to capture workers' comp bills into a system and then characterize those claims based on type. Fair Isaac's Capstone solution supports business-rules development for the purpose of claims decision-making procedures.

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