We often hear well-intentioned advice to “think outside of thebox.”

This sometimes overused phrase refers to the perceived needto develop extraordinary and innovative means or approaches thatare not part of the usual or accepted philosophies orprocesses.

Many companies or public entities say what theyreally need is to find someone who thinks “outsideof the box” to help overhaul their workers' compensation,liability, and property claims managementprograms. Unfortunately, many times organizations embarkupon this search prematurely, having failed to utilize what'salready “in the box” to improve their claims programs.

Companies will then focus on searching for innovationor theoretical solutions, having not yet used what is alreadypacked inside the box—that is, existing tools andstrategies. Has the company, for example, explored thefollowing?

• Created the environment, structure, and processes that havealready been identified in the claims industry as “bestpractices.”
• Developed effective personnel/staff management, timemanagement, and training to facilitate the execution of the bestpractices.
• Developed a discipline to properly examine, develop, implement,and continuously execute the processes that will help theirprograms.

The latter may have occurred for a variety of reasons,including:

1. They did not have the expertise within the organization toidentify the needed procedures and coordinate them properly withthe claims administrator.
2. They may have retained qualified claims administrators andother service specialists to manage their program, but may haveleft too much up to these administrators and specialists, anddeveloped a “hands off” management attitude that still resulted inoutcomes that did not meet their expectations.

Finally, some companies have developed and implemented a“program” to meet some of its needs, but like many corporateprograms, it lacks long-term commitment and is pushed aside whenanother “shiny object” appears that requires another “program.”

In several previous articles, we have covered different aspectsof claims management, including claims auditing, key metrics, andthe desired characteristics of a third party administrator (TPA).We have also identified some of the types of claims managementservices that are available in today's market, which includesnumerous niche players. Some of these players are importantpartners that can help you manage your program toward betterresults. Also, many of them have already been packedin the box for many years, and will work well with you andyour employees if they are properly implemented and executed.

Some of the services that various claims-related vendors providevary by line of insurance, while some are universal in theirapplication. Some of the services that vendors provide are shown inthe matrix below. By no means is this exhaustive of themany services and products offered.

The many services provided and the variety of providerssometimes makes it difficult to determine the services needed andthe specific vendor to use. Rather than focus, however, onthe many different types of vendors, we will focus on the primaryparties that are already “packed in the box.” The two thatimmediately follow are the most crucial to successful outcomes.

The Company

The most important party in claims administration is the companyor public entity. For purposes of this article, we will focuson workers' compensation claims, which require the greatest numberof different functions or responsibilities to achieve the desiredoutcomes, and which require the greatest input and contribution bythe company / employer.

Employers, whether insured or self-insured, self-administered orTPA-administered, have the highest level of responsibility, andtheir ability and willingness to become actively involved in thepersonnel management and claims management aspects of workers'compensation claims will have the greatest impact on theoutcomes. Employers must continue to manage the employees,whether they are at work or off work, continue to communicate withthe employees, and prepare them for return to work. This meansthat they must develop an assertive program prior to thefirst claim, if possible, so that it runs as smoothly as possibleonce an injury occurs.

One of the most important aspects is the development of a stayat work / return to work program that works across all businessunits or departments. If an employee fails to properly managetheir employees, both before and after an injury, and refuses totake them back to work, then the most effective claimsadministrators will be working with one hand tied behind theirbacks. It also conveys a message to the employees that theyare not important to the company.

The employer must also avoid using workers' compensation as ameans to rid itself of employees that it no longer wants. Intoo many cases, a supervisor or employer has refused to allowemployees to return to modified duty because the supervisor has notdealt with personnel issues that should have already beenaddressed. Poor-performing employees, who should have beencounseled, disciplined, or terminated previously for poorperformance, become costly workers' compensation claims.

Claims Administration

The claims administrator, whether it is an insurance companyclaims department or a third party administrator (TPA), should betreated as an extension of the employ / company. Claimsadministrators have been packed “in the box” for manyyears, but are still often misunderstood and misused by thecompanies that hire them. As we discussed in the priorparagraph, claims administrators are sometimes handicapped byemployers' actions, and sometimes are blamed for results that werebeyond their control.

In some cases, however, the claims administrator may not performas well as expected, and this often can be avoided or mitigated byclarifying the roles, responsibilities, and expectations at thebeginning of the company/claims administratorrelationship. This is the point where the employer confirmsits responsibilities in continuing to manage the injured employeesand providing return to work opportunities, while the claimsadministrator confirms its responsibilities in properly managingthe claim to achieve the optimal outcome in accordance with theapplicable workers' compensation laws.

It is vital in this initial agreement that the company and theclaims administrator also understand how their responsibilities andcommunications are intertwined. They must develop strongcommunication channels between the company and its supervisory andmanagement personnel, the claims administrator and its adjustersand supervisors, the medical providers in the area served, andother service providers that might be a part of the program.

In many cases the claims administrator also has an ongoingprocess for the mandatory Medicare reporting that is required forworkers' compensation claims. This process, whether performedby the claims administrator or by a vendor with which it hascontracted, is often seamless to the employer.

Note that these first two parties—the company/public entity andthe claims administrator—have been “packed in the box”since workers' comp began approximately 100 years ago. Thelack of clarity, coordination, and communication has led to some ofthe poor outcomes that we have seen. The proper cooperationbetween just these two parties will go miles toward creating betterresults.

Other Claims Services

As illustrated in the earlier matrix, other specialized servicesmay be needed. Some of these may be offered by the insurer ofTPA as part of its “bundled” services, or they may be “unbundled”to provide specialized services, as the risk manager or claimsmanager desires. There are also some niche players that offerservices that are required less often. Mostof these services have been “packed in the box” for manyyears, and must also be part of the service coordination processthat we discussed above regarding claims administrators. From aworkers' compensation standpoint, some of the already “packedin the box” services are:

• Medical bill review/re-pricing. Many stateshave fee schedules, and in those do not, usual and customary rates(UCRs) are applied to re-price the medical bills in compliance withthese schedules. This service, which requires frequentupdates to remain in compliance with changing fee schedules andUCRs, may be part of a larger Managed Care Organization (MCO)service, and may incorporate preferred providers, pharmacy benefitmanagement, and other service offerings.
• Medical case management. The need for thisservice varies to a great extent upon the amount of communicationand coordination developed between the company and its claimsadministrator. If the company is continuing contact with theemployee, treats him/her as an important contributor to thecompany, and providers light duty if it is needed, then the needfor case managers diminishes, except in cases of complex or severe/ catastrophic injuries. Nurse case managers and othermedical specialists can be very helpful in providing the necessaryexpertise to help with difficult return to work issues or severeinjuries

There are myriad other services that may be provided on an adhoc basis. Their many functions and responsibilities arebeyond the scope of this article, but play important parts atvarious points in a claim's life cycle.

Before a company spends a lot of time and money searching for an“outside the box” solution, the employer must develop a claimsprogram using “what is already in thebox.” There is no substitute for a disciplined,assertive, organized and well-communicated program with a few keyplayers.

Once that goal is successful, the employer may then look forother services that are already “in the box,” but areneeded less frequently. This will avoid the search for thoseservices, products, and programs that will not provide long-termsuccess in the absence of a disciplinedapproach.