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Study Verifies Workers’ Comp Best Practices

Posted by Danny Sanchez, PT, CEAS on December 16, 2016


Results of the 2016 Workers’ Compensation Benchmarking Study were released in October. That now gives us four years’ worth of cumulative data. With that, we can see what makes a top-performing claims organization successful. And why others are lagging behind. We have hard evidence.

Up till now, some people have said that “best practices” were nothing more than opinions. Now we know better. This latest study clearly shows that certain claims management practices lead to better outcomes.

The annual Workers’ Compensation Benchmarking Study is conducted by Rising Medical Solutions. Rising is a national consulting firm. They focus on medical cost containment and care management in workers’ comp and other insurance fields. They surveyed 492 claims leaders this year. Over the four years, there have been nearly 1200 participants. 


What makes superior claims organizations so different? 

They use key performance indicators (KPIs) to measure workers’ comp results

Gathering consistent statistics allows them to see what’s working. And where they are not meeting their goals. Claims management is far more complex than it was a decade or two ago. Today, you have to consider more legal and behavioral issues as well as medical issues. So successful organizations are focusing on outcomes, rather than the claims process. KPIs allow you to track progress of specific desired outcomes.

But here’s something interesting: survey respondents say one of their primary benchmarks is “employee functional recovery.” However, only a quarter of them actually measure it. 

They use technology to gather and analyze data

They’re using tools such as workflow automation, predictive modeling, and advanced analytics. And they’re pulling in data from multiple sources. This data supports evidence-based KPIs. These systems also help predict claims severity and prevent fraud. 

They have switched to an advocacy-based claims model

Workers’ comp claims are no longer an adversarial process. With this model, injured workers become an integral part of their own recovery process. Focusing on the employee improves communication and engagement. It boosts motivation and compliance. Employers say this positive model also helps with talent retention.

They are “early adopter”

Successful claims organizations are always on the lookout for ways to improve. They are leading the way, by trying and proving new strategies. 

Rachel Fikes is Vice President and Study Program Director at Rising Medical Solutions. She says the annual study is a collaborative effort. “We’ve heard from the claims community about difficulties identifying which best practices actually move the needle. She says the problem has been insufficient industry data. Therefore the goal of this year’s study was to provide “quantitative, primary data to substantiate various methods in claims management.”

Researchers chose claims closure ratio as the fundamental industry benchmark. This metric applies equally to all sizes and types of payers, which made results comparisons easier. Principal study researcher Denise Zoe Algire notes, “With so many competing priorities and complexities in claims management, the 2016 study provides a roadmap identifying where organizations should allocate resources to drive better outcomes.”


The US Department of Labor also released a report in October – their Workers’ Compensation System Report. This lengthy document poses the question: Does the Workers’ Compensation System Fulfill Its Obligation to Injured Workers? 

Industry watchers say no. They point to state-by-state policies and requirements that fragment the system. Key concerns include:

  • Individual states reducing benefits available to injured workers
  • Questionable quality of medical care for workers’ comp patients
  • Prevalence and causes of secondary disability
  • A labor environment vastly different from the past, yet a workers’ comp system that hasn’t kept pace

Among these, two issues take center stage. One is the lack of consistency from one state to another. This has led some to suggest that workers’ comp outcomes depend on geography as much as anything else. There are increasing calls for federal oversight of the workers’ comp system. As of now, the DOL has no authority to regulate this area. Changing that could generate uniform treatment guidelines. It would also allow uniform reporting of worker’s comp incidents and outcomes. Currently, statistics don’t even match. National Academy of Social Insurance stats say employers are paying more. Bureau of Labor stats suggests employer costs have not risen.

The other key issue is payment. There are widespread indications that workers’ comp costs are shifting away from employers and insurers. Instead, employees themselves and social safety net programs -- especially Social Security -- are picking up the tab. The Social Security Administration has expressed official concern. They say rising costs for Social Security Disability Insurance have a serious impact on the entire agency. 

Shifting costs aren’t the only challenge that needs to be addressed. Shifting costs are not even the root problem. Many in the industry say the problem is that too many injured workers wind up becoming “disabled.” And they blame poor quality medical care that emphasizes opioids.

Workers are essentially replacing workplace injuries with drug addiction. They can’t work, so they become “disabled.” The workers’ comp system is not helping them recover. It is making them dependent -- long-term or even permanently. This is a primary reason for escalating costs.


The state’s Department of Labor & Industries noted that 32 workers’ comp patients had actually died from opioids. The drugs were prescribed for low back sprains. Many others who didn’t die remained on long-term disability. Dr. Gary Franklin is Medical Director of the Washington State Workers’ Comp Fund. He says a “huge percentage of injured workers that are now on SSDI are on opioids, and that started with the workers’ comp system.” 

The state fought back, retargeting workers’ comp focus on preventing disability. They did that by:

  • Creating a set of validated methods, tools, and measurements to help doctors to identify at-risk patients
  • Focusing on evidence-based treatment methods and guidelines to prevent injuries from happening in the first place
  • Creating Centers for Occupational Health and Education to focus workers’ comp care delivery on the patient

This new approach mirrors the best practices identified in the 2016 WC Benchmark Survey. And it’s working. Washington State reports it has reduced preventable disability by more than a third.

We noted earlier that top-performing claims organizations are early adopters of better ideas. That includes switching to mobile physical therapy to boost claims outcomes and reduce costs. With mobile PT, injured workers don’t have to travel to an offsite clinic for therapy sessions. The physical therapist comes to their workplace. Scheduling and compliance are far more convenient.

Companies that have made this switch are seeing impressive results. For example, one national luxury hotel chain has seen a 30% drop in physical therapy costs for claims. At the same time, compliance is up. And they say switching to mobile PT was surprisingly simple! 

National Benchmark Survey - Onsite Physio


National Benchmark Survey - Onsite Physio

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