KEY TAKEAWAY:
--From the insurer’s perspective, AI technology can be used to quickly score claims and provide a detailed explanation of a claim’s severity from its initial report. AI can assign that claim to an adjuster with the appropriate level of experience. It can also triage the case to professionals who have worked with these types of claimants and patients before.
--For risk managers, AI provides a secondary, 24-hour set of eyes on claims constantly looking for patterns enabling managers to put resources and ancillary services to work where they can make the most difference. In many cases, these AI tools inform you if, when and how you need to prepare for litigation. Additionally, you can use AI for reserving to help predict the cost of certain claims and determine how that cost affects employer deductibles and deductible programs. These AI risk management capabilities help risk managers curb costs, reduce liability and shorten the claim duration on the employer side.
----------
Workers' compensation claims pose challenges for all involved, especially risk managers who handle multiple claims simultaneously, set expectations and serve as the crucial point of contact among all parties. While they juggle the legal details, state-specific regulations and other data-driven aspects of the workers’ comp lifecycle, it becomes increasingly challenging for risk managers to effectively manage the people side of the equation. This can lead to claimants feeling underserved and underappreciated and more likely to sue the organization.
Fortunately, emerging technologies such as artificial intelligence (AI) are beginning to address this risk management challenge, making it possible to optimize claim processing and triage at scale and in real time. AI can improve claims management while alleviating some of the burdens faced by risk managers. However, it’s essential to recognize that AI is not the sole solution. The key lies in integrating people-focused strategies with AI advancements.
By leveraging AI to streamline certain processes, risk managers can free up valuable time and resources. This newfound bandwidth allows them to prioritize an important aspect of their role: developing a comprehensive return-to-work program. This program, when combined with thoughtful consideration of the injured worker's needs and the requirements of employers, ensures both efficiency and empathy in managing workers' compensation claims.
Challenges Faced by Employers and Risk Managers
In my career, I’ve developed multiple perspectives on workers’ compensation by working as a claims adjuster, supervisor and risk manager. I was lucky to have supportive supervisors and mentors along the way who guided me from the most simplistic claims in the very beginning of my career to tackling the very complex as the years went on. I later shifted to the role of risk manager, which presented me with many new challenges:
- Limited File-Level Control: Risk managers often have little to no control over claimant files and how they are adjusted, yet they are the stand-between and the main communicator for both the adjuster and the company.
- Regulatory Compliance Requirements: Maintaining strict adherence to rules and regulations is essential to avoid unnecessary claims. If companies have frequent or large claims, their workers’ compensation insurance premiums can increase.
- Stakeholder Management: Risk managers must constantly keep up with, listen to and deal with the demands of all important stakeholders, including finance, operations, legal counsel, state workers’ comp boards, employee advocates and unions.
- Data Challenges: Handling a large volume of claims can be daunting. A risk manager might request a file review of around 200 files and give the adjuster 30 days to prepare for that task. However, as the process unfolds, these files may change significantly, for better or worse. It’s difficult to manage a large number of claims without accurate, real-time data.
See also: Why to Self-Fund Workers' Comp
While working through these challenges, I found myself in a tug of war with the multiple demands of my stakeholders, third-party administrator (TPA) and injured workers. Although the job was demanding, it was important to make room for the personal touch, which can make a significant difference when working with injured workers.
The Risk Manager’s Role in Return to Work and Employee Experience
It’s stressful to be an injured worker, especially if your job is changed or limited during your claim. While risk managers can't totally eliminate that stress and uncertainty, there are certain steps they can take and tools they can use to clarify return-to-work expectations, keep claimants engaged and feeling part of the team and build a healthier workers’ comp culture.
For improved return-to-work results, fewer legal issues and a happier workforce, risk managers should follow these three key steps:
- Ensure accessible care is available to all claimants. Provide direct care options when your state allows it, but if that’s not possible, diligently provide claimants with as much care information as possible. Advocate for more doctors and clinics in your workers’ residential areas so they have accessible care options.
- Develop a triage or advocacy program. Implement programs or employee applications that set clear expectations for claimants and show empathy for their situation in the earliest days of their claim. Armed from the beginning with more information about their particular situation and how it affects their employment, claimants are more likely to feel cared for and remain with the company.
- Circle back post-claim. After claims are processed and employees return to work, follow up with them to get their feedback through surveys or apps that provide informal touch points. The focus of this survey is limited to compensable claims. A claim that was denied would not be eligible for the survey. If they are unhappy with the outcome of their case, you’ll be able to identify and address any issues quickly to avoid litigation.
Leveraging AI Technology to Optimize Workers’ Comp Workflows
Most risk managers do not have much time or the tools they need. However, a number of new AI solutions and risk management platforms are filling the gap, enabling risk managers to maneuver the workers’ comp workflow more intelligently.
From the insurer’s perspective, AI technology can be used to support better claim identification, classification, predictive analysis and automated claim assignments. For example, several AI tools now support a first report of injury model, quickly scoring claims and providing a detailed explanation of a claim’s severity from its initial report. From there, AI can segment that claim and assign it to an adjuster with the appropriate level of experience. It can also triage the case to professionals who have worked with these types of claimants and patients before. Using AI gives the insurance company or TPA more data and real-time knowledge from the outset, enabling it to process claims more quickly, with more context and at greater scale.
For risk managers, AI provides a secondary, 24-hour set of eyes on claims constantly looking for patterns enabling managers to put resources and ancillary services to work where they can make the most difference. In many cases, these AI tools inform you if, when and how you need to prepare for litigation, indicating which cases have certain levels of risk or fit patterns from past legal cases. Additionally, you can use AI for reserving to help predict the cost of certain claims and determine how that cost affects employer deductibles and deductible programs. These AI risk management capabilities help risk managers curb costs, reduce liability and shorten the claim duration on the employer side.
See also: Impact of PTSD on Workers' Comp Costs
Balancing AI Advancements With a Personal Touch
As the insurance industry grows increasingly complex, the demands for better and more accurate claims management have increased. Traditionally, risk managers have not had the resources or time to support the insurer in their work, but with recent AI-powered claims management solutions and the detailed, real-time information they provide, risk managers can reduce the need for frequent file reviews while automating and streamlining data and compliance management responsibilities.
More importantly, AI allows risk managers to devote more time to the human aspect of workers’ compensation. By prioritizing employee care and experience, which is really the most important piece of the risk management puzzle, organizations can mitigate the likelihood of legal action and employee turnover. When employees feel genuinely supported and valued, they aren’t likely to sue their employers or leave the company.
