How to Find Patterns in Workers' Comp Claims

Workers’ compensation claims cost employers, their insurers and government agencies billions of dollars every year. While employee safety should be every employer’s first priority, the desire to reduce the costs of compensation claims can add to that emphasis.

So, how can you reduce the cost of workplace accidents?

One of the most effective and efficient ways is to look for patterns in workers' comp claims. By identifying their patterns, employers can address the workplace issues that most frequently lead to the most expensive claims.

Using Patterns to Identify Workplace Risks

Spotting a pattern to workers’ compensation claims starts with identifying the factors that contribute to accidents in your business. The list may be longer than you think. Consider the following:

• Company morale
• Employee experience and training
• Employee physical and mental health
• Employee socioeconomic status
• Facility architecture, age and repair
• Geographic location
• Quality, age and repair of equipment, machinery and tools
• Weather patterns
• Workplace conditions

While not all of these will be relevant to all employers, they are still all factors that can affect the likelihood of a workplace injury. More importantly, they are factors that employers can address  to mitigate both injury risk and the cost of valid claims.

Of course, the most effective way to reduce the cost of workers’ compensation claims is to avoid them in the first place. While going 100% claim-free may be unrealistic, there are certain measures that can be taken to reduce the likelihood and frequency of injuries on the job.

Reducing risk starts with the hiring process. Careful, targeted pre-employment screening and interviews can help employers identify high-risk individuals. Here, “high-risk” can mean a number of different things: inexperienced, lacking proper training, suffering from problems with drugs or alcohol or even a history of worker’s compensation claims. For existing employees, employers can re-assess records from the hiring process to identify patterns among injured workers. This information can then be fed in to the new-hire process.

Pattern evaluation can be used to identify other areas for improvement, as well. Are injuries more common at a specific location? At a specific time of day? Is a recurring mistake the cause of frequent injuries?

Once identified, these are all issues that can be addressed to reduce the risk of future injuries.

Reducing the Cost of Valid Claims

Pattern analysis can also aid employers and their insurers in avoiding overpayment on valid claims. Understanding what questions to ask and what to look for during the investigation allows companies to pinpoint the relevant issues and tailor the adjustment process accordingly. The more data you have at your disposal, the better able you will be to thoroughly and accurately assess workers’ compensation claims as they arise.

Using Patterns to Spot Fraudulent Claims

Finally, looking for patterns is an effective measure for combating the rising cost of fraudulent claims. Fraud can occur at both the employee and health-care provider levels and, by some measures, accounts for anywhere from 5% to 20% of all compensated claims. While clearly not conclusive, the following are examples of factors that may indicate a fraudulent claim:

• Refusal to submit to diagnostic testing
• Inability to provide details about the accident
• Delayed submission of the injury report (all injuries should be reported immediately)
• Lack of witnesses to corroborate the claimant’s story
• Healthcare costs that far exceed what would be expected for the alleged workplace injury

Harness the Power of Data to Manage Your Workers’ Compensation Costs

Understanding the factors that contribute to workers’ compensation claims is the first step toward mitigating the costs of workplace injuries. By identifying patterns before, during and after the claim process, employers and their insurers can improve workplace safety while also benefiting the bottom line.