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Workers Comp Claim Analytics – Looking For Miracles Under Every Rock

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Workers Comp Claim Analytics – Hot Subject Leaves Me Cold

Most workers comp claim analytics posts I have written was in search of a good claim analytics package.   Unfortunately,  my search ended up like my search for workers comp apps – disappointed with still a hope for the future.

picture of man swimming workers comp claim analytics
Wikimedia- Oleg Dubyna

Company names have been left off my critiques.  My basic point is for the claim analytics field for workers comp in total.

My review started with a claims analytics package in the 1990s.  Yes, a few rehabilitation companies offered workers comp claims analytics software which was very limited in what it could produce for a claims or risk management department.

My review of these packages now involves consulting for a few carriers, TPA’s, and mainly self-insured/ large deductible employers.   In the 1990’s I ran a very large governmental based TPA operation.   The software used had a few modules that actually had a few good variables.

The variables had to be extrapolated a few times.   However, the results were a very basic “yellow flag” on overcharges for certain pharmaceutical concerns.   The PBM (Pharmaceutical Benefit Management) software covers that well.  This, to me, was not real claim analytics.  With an actuarial and statistical background, I hungered for more.  I knew it was only a matter of time.

Now – 20 years later – the search for true workers comp claim analytics still leaves me wanting.   The data is there, but one fault remains.

The psychological component and healing factors post-injury cannot be drawn on a graph or forecasted for any group of claims.   Why? – No two people are alike with the butterfly effect driving the statistics.

I still today challenge any company that has claim analytics to please let me log in or send me a disc for offline software where I could at least have a few good red flags.  If you see this article and have workers comp claim analytics software – please no beta versions.   If your software creates results which are helpful to a claims or risk management department, I will laud your software.

I have sampled a ton of claims “processing” software with analytics as a backdrop at the NWCDC Conferences over the years.   The claims processing end of most TPA/employer claims packages were beyond excellent.

The Best Analytics Right Now

The best analytics package right now sits at their desk adjusting claims for years.   An experienced and talented claims adjuster usually can predict how a claim turns out long before claims development (5 – 7 years experience).

Why? – At five years – an adjuster has seen most claims situations.  The adjuster has a claims load of familiar employers.   At seven years in the claims business, most, not all,  claims adjusters become “claims whisperers.”  They have developed a gut instinct superior to any software of any type of claims reviewer.

One caveat – the adjuster must have performed a full (no loose ends) investigation into the claim within 48 hours after the injury.   If this does not occur, the results will degrade from the start.

Secret/But Not So Secret Software

Hold on, one work comp claim analytics software does exist.  I use it all the time.  The software remains very reliable to date.  The 1990’s claims processing package used this software successfully for data analytics.   The answer is: (hold it, think about it)

Excel(R)  or Open Office (R) <<Open Office is free for non-commercial operations.   Yes, Excel (R) – thanks Bill Gates- remains one of the best workers comp claim analytics packages today.   Why? – Because I can search and sort the data any way that I want to find those data outliers or trends.

I have used it as an Expert Witness on claims lawsuits.  Make sure you have the statistics package downloaded into the software.   I use Office 365 – so the statistics package is automatically included for my use.   What statistics should you use?   The most powerful one that I use the most is Regression for forecasts and Custom Sort.  Custom Sort can be found in the main Excel ribbon.

Over the weekend, I will be sampling an online workers comp claims analytics package.  Wish me luck!

 

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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