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Workers Comp Legacy Systems – Or Is It The Whole System?


Workers Comp Legacy Systems  = Systemic?

I received a recent email from Rachel @ Rising Medical.  Rachel is a great person that understands claims department mechanics better than most ancillary providers.  See her adjuster Friday video here.  She said that when I pointed out workers comp legacy systems in their annual report the term jumped off the screen.(check out the link to the annual report here),

As always, her message was very complimentary to my article.   If you have not downloaded and read Rising Medical’s report, you are missing out on great information.

pic workers comp legacy system computer
Public Use Wiki – Bukvoed

Legacy System – Definition

With my IT background, legacy systems was a nice term for severely out of date.

Let us look at the original definition by IBM, the original legacy system upgraders – from tabulating machines to mainframes.

From the IBM community pages -(Philip Mann -Macro 4)

If you do reuse legacy applications, then you need to make sure they’re going to be fit for the job, and that’s often an application-performance issue. A component of your application that experienced low usage rates in the past under internal use can suddenly see a 10-fold, 100-fold, or 1,000-fold increase by being reused as part of an external customer-facing system. This sort of thing does happen.

Workers Comp Legacy Systems and Pareto’s Rule

Thanks, Philip, I could not have said it better myself.  Workers Comp legacy systems are the same.  It is not the hardware or the server, it is the actual workers comp claims or other systems software that usually is the problem.

When we perform claim reviews for clients, one of the huge concerns is – will the system give us what we need to do a loss run review.  Processing claims and documenting are parts of all claims systems.

Pareto’s 80/20 rule applies here.  From what I have seen in many online systems (80%) process claims very well.  Approximately 20% have problems – hardware or server.   Then, when we try to run certain reports that no one really uses that often (see the definition above), those may not work that well. (20% do, 80% usually not).

For context, Pareto’s rule came from 20% of an Italian town’s citizens having paid 80% of the total taxes.

Are Legacy Systems Systemic?

Not all Workers Comp systems should be profiled as a legacy, but are they working within an overall legacy system?

When I advise investor groups looking to invest in the WC space, I always say that WC is the same as health insurance systems – just subtract 10 years.

Are Workers Comp legacy systems part of a larger problem?  The software for the systems, whether homegrown or rented, reflects the way that claims are handled at this point in time.

What changes can be implemented to change the whole system?  Not much has changed in the last 20 years in the way that Workers Comp claims have been handled.  Are Workers Comp legacy systems just a mirror image of the industry as a whole?  I will leave that to each person’s own opinion – please comment if you want to register your opinion.




James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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