New v. Legacy Comp Claims: Where is our Attention?

Monday, August 15, 2011 | 0

I've been working on a project for a client that involves, among lots of other things, determining the volume of new and legacy claims in each state. Its been rather eye-opening.

For example, Ohio which has pretty good reporting, as one might expect form a monopolistic state had just over 100,000 new claims in 2010.

And over 800,000 total open claims in 2010.

Think about that eight times more open claims than new claims. I'm sure there's lots of good and bad reasons for this, some due to Ohio's unique workers comp system. But this disparity, if one can call it that, isn't limited to Ohio.

Missouri had almost four times as many open claims as new claims, and of the (very) few states that report their open claims volume, most are in the 3x range (open to new).

Perhaps this shouldn't have come as a surprise, and maybe it's more of a reminder than a surprise, a reminder that legacy claims are a very, very important part of work comp.

Maybe the most important part.

It seems we spend a lot of time working on new claims reporting the claim, getting the claimant into network, figuring out reserves, determining cause, etc. All of these are important and valuable, necessary steps in the workers' comp process. I'm wondering if we spent the same amount of time/effort/focus on old claims we do on newer ones what we'd get. Maybe not much, maybe a little better results, maybe a few more claims closed a bit faster.

From talking with adjusters and case managers, most view these claims as just bumping along. They're buried in the day to day stuff, the work that's 'urgent', that has to be done to hit those targets for 'good claim handling'. Sometimes a strong focus on the 'urgent' leads to a lack of focus on the 'important'.

I can already hear it "no, we're all over these; just looked at them; not us, we've got our act together." That may well be so but are you sure? After all, it's likely that you've got something like three times as many claims on your books as you'll get reported this year. And those older claims are where the money is.

Joe Paduda is owner of Health Strategy Associates, a Connecticut employer consulting firm, and co-owner of CompPharma, a consortium of pharmacy benefit managers. This column was reprinted with his permission from his Managed Care Matters blog, at http://www.joepaduda.com