Manage Claims To Cut WC Costs, Marsh Says

Focusing on the outcome of claims and examining measurable metrics relating to them can help companies better manage their workers' compensation costs, industry experts said in a conference call on Wednesday.

Speaking during an audio conference hosted by Marsh, Charles Martin, leader of the company's Workers' Compensation Claim Practice, noted that "the number of workplace injuries has been declining since 1991." He added, however, that this decline is simultaneous with an increase in the costs of a claim.

Focusing on the outcome and how this can be effective is important, said Pamela Hobbs, Workers' Compensation Practice innovation leader at Marsh.

"We want to see more focus and emphasis on the outcome," she said, noting that Marsh strives to help its clients see their claims costs in terms of an end result, and that finding a lower rate in one area, such as medical bill reprising service, does not necessarily translate to a lower cost over the long term.

At the heart of a claim, according to Todd Mattiello, vice president of workers' comp claims at Travelers, is the decision as to whether a claim is even compensable under the workers' comp system. "It's one of the single most important decisions we make in the life of that claim," he said.

The objective for employers, he noted, should be to quickly move claims that are compensable through the workers' comp system while filtering out those that should be challenged. A key factor is encouraging employers to report claims more swiftly. "Timely reporting is critical," he said.

Mr. Mattielo noted, however, that acting in a timely fashion is different than acting as quickly as possible. If a company tries to decide on a claim too quickly, for example, it may be basing a decision on an inaccurate or incomplete understanding of what occurred.

Another important area for employers and their insurers is working to make sure that claims are closed.

Karen Stankevitz, a senior consultant for Marsh's Workers' Compensation Specialty Consulting, said employers should monitor the number of open claims they are carrying--which can be affected by changes within the company's internal claims structure, changes in the company's claims administrator, or the insurer. To help their clients, she said Marsh has developed a "claims inventory workout" that "brings a focus" to closing claims.

Part of this focus is ensuring that old claims don't get lost in the shuffle and remain as a cost for employers. Oftentimes, she noted, claims personnel are naturally driven to work on new claims rather than following up on older files. "Those are the ones that are squeaking," she said of the new claims. "And we all know the squeaky wheel gets the grease."