Lack Of Technology – E-Mods and X-Mods
All E-Mods and X-Mods are affected directly by technology. In my last post, one of the statistics that jumped off the page caused me to write this blog separately as there is a study that finally relates the lack of technology by Workers Comp carriers and higher Emods (Xmods in CA).
The exact quote from the article is:
While 92% of the claims executives we surveyed said they could reduce loss costs by increasing consistency in claims handling, most of them are not in a position to do so because their core claims systems are either too old or not adapted
I found this quote startling on its own merits. The other area of concern is the high level of agreement at 92%. I was never able to correlate outdated Workers Comp claims systems with the likelihood that loss costs (therefore Mods). After reviewing a large number of claims on different systems, I can understand why this number was so high.
Over the past few years, I have posted very often on why having online access to all claims data is so important. If your company or organization does not have online access to your data, it may be a prime time to investigate if you have access privileges. The responsibility to have accurate claims data often rests with the employer.
Your E-Mods and X-Mods are tied directly to the claims data. The claims data (Total Incurred) is what is reported to the NCCI, WCIRB, or State Rating Bureau to calculate your Mod. Consistency is claims handling and the resulting data is becoming ever important as employers look to cut workers comp costs in this tough economy.
Investment company clients along with our employer clients always ask me the #1 concern I have for the Workers Comp market in the future. One of my main concerns that I always address is the lag time for Workers Comp claim system updates. How can an adjuster that is accessing five different claims systems actually be that consistent with claims handling?
As I pointed out in the last post, there are some adjusters that have to access eight claims systems to process a claim. That is an enormous burden. The adjusters’ time could be better used elsewhere – plain and simple.
Why am I so concerned about this one area? I used to be a systems engineer for two different computer companies. There are better claims systems out there even if the migration from one system to another is seen as a large barrier.
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