Reducing WC Administrative Costs, Early Intervention, Claim Advocacy, TCOR, and Settlements.
The workers’ compensation industry is plagued by an expensive, inefficient, and time-consuming process. This outdated system persists not because it works, but because it’s the default—despite being widely disliked by all stakeholders.
Insurance carriers, employers, and TPAs routinely overspend while resolving disputed claims, relying on processes that have remained largely unchanged for decades. What’s worse, these costly practices are often prioritized over a basic analysis of the Total Cost of Risk (TCOR). That oversight alone has long term serious financial consequences.
Strategic claim management—especially for long-term or complex disputes—can significantly reduce administrative costs. Yet the current model doesn’t allow for tailored strategy. Instead, insurers, employers, and TPAs tend to take the same rigid course of action once litigation begins, rarely deviating from it.
This inefficient model—marked by the overuse of Independent Medical Exams (IMEs), surveillance, physician evaluations, and mounting legal fees—leads to excessive administrative costs. It also needlessly inflates the employer’s Self-Insured Retention (SIR) deductible.
When aiming to settle a claim at a particular reserve mark, TPAs often lose sight of the bigger financial picture. Many of these claims could be settled earlier and at a fraction of the cost—if early intervention and risk-managed claims advocacy were in place.
Let’s Look at an All-Too-Common Scenario:
A claim has been open for nearly three years. The claimant reached Maximum Medical Improvement (MMI) early on, and the reserve is set at $30,000. The claimant’s attorney offers to settle for $50,000 or, in some cases, simply to close out medical rights via an MSA (Medicare Set-Aside). The TPA refuses, sticking to the original reserve.
By the time this dispute resolves—maybe after two or three years—the TPA might technically “win” by settling at or near the $30,000 reserve or paying slightly more. But that so-called win comes with $75,000 or more in administrative costs, depending on the jurisdiction.
So, What Was Actually Accomplished?
The TPA hits their reserve target. Great. But in doing so, they’ve burned through tens of thousands of dollars in SIR capital and exposed the employer to unnecessary long-term liability. With every year that passes, these costs grow exponentially. This isn’t just inefficient—it’s reckless.
A Better Path: Strategic Settlements and Early Advocacy
When an insurance carrier, employer, or TPA makes a low early settlement offer that’s rejected, administrative costs begin to balloon. Eventually, the employer or TPA increases their offer just to end the exposure. This higher upfront cost may seem painful—but in the long run, it reduces total spend and improves TCOR outcomes.
Had that higher offer been made earlier, overall costs would have dropped significantly. Unfortunately, early resolution isn’t prioritized in the current model.
Beyond the Dollars: The Real Breakdown is in Trust
As claims drag on, strategic failures aren’t the only issue. Trust begins to erode—between claimant and adjuster, between claimant and employer, and sometimes even between claimant and their own attorney. The longer a claim remains in dispute, the deeper this mistrust grows. And when trust breaks down, so does communication. This leads to even more delays and costs, creating a self-perpetuating cycle where no one wins.
So How Do We Break Free?
No attorney or adjuster can fully understand a claimant’s experience unless they’ve been through the system themselves. That’s why we need neutral third-party oversight—someone with deep risk management knowledge and a claims advocacy mindset who can empathize with the claimant and guide the process toward resolution.
A Modern, Efficient Model: Risk-Advocacy-Based Private Mediation
There is a better way. It’s not just possible—it’s already working.
By introducing an independent, third-party mediator—not an adjuster, not a lawyer—who can serve as a bridge between stakeholders, we create an environment where trust is rebuilt. Settlements become not only faster but also far more cost-effective.
This additional oversight is proactive—not reactive. It doesn’t admit additional liability for the employer, but it does allow claimants to feel heard and respected. In turn, this enables swift, fair settlements that reduce both administrative costs and long-term risk exposure.
The Result?
The claim is resolved. The claimant exits the system and moves forward with their life. The employer removes the claim from their balance sheet and avoids further risk exposure. Administrative costs stop accumulating. A legacy claim never forms. Everyone wins.
Paul Gold
Founder & CEO
PG Resolutions Group