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Help Wanted: Old Time Claims Guy

Now you can have the gnarly, arms crossed, scowling claim adjuster all your own...with all the knowledge they possess but without the attitude!  Fair Issac has rolled out a product called, MIRA Claims Advisor that captures 10-years of carrier specific data and allows for more accurate setting of reserves.  All the actions of the past, good or bad, will be portrayed in a new reserve model.

It captures all cost drivers, including unique claims characteristics, and considers complex relationships between multiple claim characteristics.

The most important aspect is that it analyzes, using a neural network approach, COMPANY SPECIFIC data.  So far, they found a 20% to 30% in adjuster productivity alone.  A major marketing drawback is convincing carriers claims personnel that aggregate data from bureaus will adequately reflect their exposure base.  Now their history will predict their future, but will they become more comfortable with the mystery of neural networks?

Streaming Data

Streaming data allows for near instantaneous decision making for claims management.  In a previous post entitled, "It's Getting Closer...effective mining of Workers' Compensation Claims", it was pointed out that more data was needed to accurately forecast claim severity.  One key element cited was Evidence Based Medicine from the treating physician. 

HM OnLine, a medical bill ASP processor, has developed a solution to this problem.  They have the ability to read 100% of both paper-based bills(HCFA 1500 & UB92) using OCR scanning technologies and of course, digital bills.  But the key to their success is the ability to accurately convert the characters into actual pieces of data that can be assigned to a claim file or through business rules, assigned to a medical case manager, for instance.

Processing patient record information between medical professionals and health care management organization requires timely tenuous phone conversations, photocopying and documentation. The HMonline Electronic Referral and Precertification Management programs establish a portal for streamlining the exchange of information on a real-time basis - 24/7/365. This reduces overhead and enhances efficiency.

The HMonline Electronic Report Submission program allows medical professionals to submit clinical notes associated with the care provided and linked to requests for reimbursement. These documents are connected within the HMonline database and made available to third parties. There is no need for resubmission, additional copying, mailing or distractive phone conversations with third party management organizations. Likewise, management organizations have easy access to vital information without the need for contacting point of service provider offices and can easily communicate this information with legal counsel, case managers, IME vendors and employers.

This streaming data is collected by the physician, at time of treatment, and sent forward to the insurer.  And. the best part...the data is collected and provided for free.  So, perhaps one more piece of the puzzle is solved.

Now all that remains....can you assess the emotional state of an injured worker?

It's Getting Closer...effective mining of Workers' Compensation Claims

More and more consulting groups and insurance carriers are working on a predictive modeling scenario to identify the severity and length of particular claims.  An October 2002 study by PWC (PriceWaterhouseCoopers) found 83 variables that could be considered potential predictors. Their attempt was to build a model using existing carrier data that would classify claims as "likely" or "not likely" to become serious.  Additionally, data was analyzed using a CART( Decison-tree) model and a logistic regression model.  Their outcomes showed 31% of claims as potentially serious.  However, of that 31%, 2/3rds were false positives. The models also failed to classify 4% of the known serious claims.

So, we still have not found answers to the prediction issues.  Their study points out that additional information such as quantifying the existence of emotional trauma or Evidence Based Medicine from the treating physician could vastly improve the outcomes.

More often than not, injured employees stay out of work longer due to the work environment, the immediate responses of both employer and carrier as well as their internal belief systems.  While each of those variables can be globally controlled, quantifying and capturing these data elements will vastly improve the success of a predictive model.  To further complicate the data collection, how can it be collected in a streaming mode...to allow for immediate triage?

Boy, do I need help!

That will be the mantra of the insurance industry for the next few years as they cope with the strategic deployment of IT services for customer interface and internal legacy conversion.   The Customer Respect Center concluded in its Summer 2004 Online Customer Respect Study that over 50% of  74 Fortune 1000 insurance firms studied did not respond at all to web initiated requests.  In addition, there was a significant increase in data sharing between subsidiaries and business partners. (You can review the Insurance Industry report as well as many others.) 

Here is a sampling of their performance on handling your Personal Data:

93% of the companies make mention of how they use personal data

Of these:

• 17% only use it for the purpose it was provided
• 2% do not collect or use data
• 9% use it for internal marketing purposes
• 9% share data with affiliates or subsidiaries
• 24% need to be more explicit about personal data usage
• 36% share the data with business partners, without first getting permission

When compared to other industries, overall the Insurance Group scored a meager 5.7 on a scale of 10. 

In addition, the industry will be relying upon outside help in legacy data migration, backroom development and/or outsourcing, selection of new software platforms, internal training and a much better understanding of using web-based applications for customer interactions.

Study shows technology improves Loss Costs

It is widely known that what one measures, tends to improve. Yet, as this study illustrates, most insurers measure metrics that produce limited results. However, simple measurements of return to work data show dramatic results.

The Katie School study identifies common points of pain and the advantages that technology brings to carriers, risk managers and TPAs.

'The findings indicated that risk managers, carriers, and TPAs were most concerned with finding technology solutions to address the following top five problems:

1. Controlling Medical costs
2. Managing Return to work
3. Lack of data standards
4. Reserving
5. Performance Measurement

Managing Workers' Compensation

Managing Workers' Compensation

Handbook of Occupational Safety & Health, 2nd Edition presents an accessible "how-to" format; even those professionals inexperienced in occupational safety issues can rapidly gain a practical knowledge of the particular concerns of their industry.

This weblog author wrote Chapter 26, Managing Worker's Compensation, a tool-box of advice and counsel on implementing return-to-work programs and measuring their results.