Claims Advocacy, Future of Claims Resolution
In our last article, Reducing WC Admin Costs, TCOR, & One Day Settlements we talked about the expensive, inefficient, and time consuming process in the Workers’ compensation arena. In this archaic system, we have created an environment that encourages a breakdown in trust and communication between the claimant and all other parties. This not only includes the carrier, but extends to claims managers, adjusters, and even to attorneys and medical examiners. The fear and anxiety that develops, as a result, often clouds the judgment of the claimant. To prepare for this, insurance companies set forth a strategy using statistics, probabilities, and arbitrarily “standard” values. The system is user friendly and automatic. While utilizing this model may, at times, seem cold and even adversarial, the logic is that these formulas minimize administrative costs, save time, and reduce the number of claimants looking to game the system or commit outright fraud. The belief has been that this strategy saves insurance companies money. Again, as we discussed in our last article, the reality tells a different story. When factoring in the total cost of risk (TCOR), these impersonal “numbers games” are actually failing quite miserably for the carrier.
When a party is injured on the job, he/she is often unfamiliar with the process to come, and unsure about his/her future financial stability and earning potential. This uncertainty alone is terrifying, not to mention whatever physical injuries or illness the person has endured.
Upon the opening of a new claim, the carrier’s claims manager, and/or a claim-assigned adjuster, contacts the claimant to manage expectations and direct the focus on the likelihood of a return to work. Though some claims managers and adjusters may try to empathize with the claimant, often in spite of their training, a sustainable trust-based connection is highly unlikely. The claimant’s life has been substantially uprooted, which may make them eager to seek out such guidance. However, any trust that develops here is short-lived. The following example shows why this breakdown is inevitable.
When the claimant has an issue or complaint about a recommended treatment plan ordered by the current carrier’s physician, the carrier often condemns this behavior as being “non-compliant” or “defiant” with treatment. This may be a calculated reaction from the carrier’s perspective. From the claimant’s view, however, it is a purely adversarial response. The act communicates that the very people who initially seemed helpful, are now taking away any and all control. To make matters worse, following such responses, a carrier often discontinues all indemnity payments and medical treatment. This response is the single largest catalyst in motivating the claimant to pursue litigation.
Let’s now amend this typical scenario with an independent advocacy approach. During communication with the claimant, an independent advocate would request and obtain direct feedback from the claimant. This type of discussion is enabled by a trust factor that has not yet been sabotaged. The advocate then addresses these concerns productively, rather than adversarially, by informing the claimant of his/her options to a second opinion. Claimants are entitled to review additional and more conservative treatment options, in accordance with their comfort level. Informing them of this fact only builds the trust and the integrity of dialogue.
Communication style is only one factor here. Time is an equal contributor. The longer a claim takes to resolve, the greater the potential is for mistrust. Eventually, the claimant sees the dispute as a never ending cycle of resistance and bureaucracy. Impatience and emotional investment contribute to what becomes a highly toxic and unproductive relationship between the claimant and carrier. Once the claimant feels this isolated, they have no choice left but to pursue litigation. Given these scenarios, it is no surprise that the growing trend in the Workers’ Compensation arena has carriers directing their focus toward the injured party by using an advocacy approach. This new strategy creates an environment that allows the claimant to feel heard. Addressing the needs and concerns of the injured worker builds and nurtures trust from the very beginning of a claim. This level of customer service lowers the rising costs of litigation, prevents the common breakdown in communication between the claimant and carrier, and ultimately leads to a faster and more cost effective resolution.
While this is certainly a growing trend, a common question is, “Why isn’t everyone doing this already?” One major difference in the advocacy model is that there is no one size fits all standard approach. An advocacy service must be custom tailored to your company’s specific needs, as each claim is unique. This makes it difficult for untrained in-house claims managers to implement. A qualified advocate will solidify the trust in a new claimant relationship within the first few days of injury. Utilizing the nations only outside advocacy service with a previous claimant to new claimant model creates a unique bond that can’t be matched by any other service. No one can understand what a current claimant is going through, unless they have been in their shoes. The trust factor that develops here is one that no adjuster, advocate, or counsel can emulate, unless they have had direct experience navigating their own workers’ compensation claim.
The goal of claims advocacy is to achieve greater satisfaction for the injured worker. To ensure success, the advocate must maintain an open dialogue with carriers, third party administrators, and/or employers. Part of this open dialogue includes providing them with valuable feedback that emphasizes strategies for reducing cost expenditures on claims. The direct impact is a decrease in future claim and litigation costs that vastly improves the carrier’s bottom line while helping claimants return to work faster and get on with their lives.