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While many employers have initiated aggressive programs to prevent workplace accidents and control costs, wage replacement and medical costs continue to rise. According to the National Council on Compensation Insurance, the medical share of total losses has grown dramatically over the last 20 years, from just over 40 percent in the early 1980s to almost 60 percent today.

When it comes to managing workers' comp claims, the need to attack this medical piece is critical to reducing costs and getting employees back to work in a timely manner.

"We're constantly adding new tools, technology and resources to achieve continuous improvement in our claims handling," says Mark Sidney, senior vice president and general claims manager at Liberty Mutual National Market. "We provide the medical management tools and expertise to help clients understand and control the medical aspects of their claims."

Injured workers are directed to a comprehensive network of providers designed to treat occupational injuries and deliver proven outcomes. Field investigations are initiated on the same day as a claim referral and registered nurses will contact the claimant immediately, upon the referral criteria being met. In addition, Liberty Mutual employs 10 full-time regional medical directors, who are employees, not contract physicians. They help design and promulgate proprietary clinical protocols for use on individual claims as well as providing direct doctor-to-doctor consultations and peer reviews.

"It is a great resource to have a doctor sitting in every claims office. In fact, all of our claims professionals and medical management staff are employees of Liberty Mutual," stresses Sidney. "We invest heavily in training throughout our claims professionals' careers, including a 5-year, medically focused training curriculum for both claims case handlers and nurses."

Registered nurses are located in each branch office for field or telephonic support and work directly with Liberty Mutual's claims case managers and regional medical directors. A proprietary intranet computer system allows nurses and claims professionals to e-mail questions to regional medical directors for case consults, and serves as an ongoing resource for future claims.

Liberty Mutual is also committed to leveraging data analytics to identify and address cost drivers, leverage state workers' comp reforms, evaluate internal and external managed care resources and programs, and develop customer specific programs to improve outcomes. Data analytics are also used to build superior physician and hospital networks as well as building niche networks for physical medicine, pharmacy, radiology and disease management.

"Our proprietary database allows us to look at detailed bill review data and marry it to claim data. We can then benchmark the performance of individual providers and identify problem claims early on," says Sidney.

Liberty Mutual works closely with medical providers who have been identified and proven to achieve better outcomes for injured workers. "Some treatment plans may be more costly, but if they facilitate an earlier return to work and an overall better claim outcome, then they can be worth the additional medical expense," he stresses.

In addition, Liberty Mutual uses predictive modeling technology to identify claims that might have red flags or are heading in the wrong direction. "Claims often look the same when they come in," says Sidney. "Typically, 85 percent of claims resolve quickly, in line with the initial medical assessment and case management plan; 10 percent resolve with some additional assistance; and 5 percent may develop into long-term, chronic claims. We need to identify those 5 percent of potentially problematic claims that drive the largest portion of medical costs early, in order to get better overall results."

Once a claim has been identified as scoring high on Liberty Mutual's high-cost claim predictor, the appropriate clinical resources can be marshaled to aggressively manage the claim to make sure any issues are addressed early on to get it on the right track.

Liberty Mutual's focus on the clinical aspects of workers' comp claims has resulted in positive outcomes for clients. One major retailer reported that its average cost of comp claims has dropped more than 10 percent in the past 18 months, compared to the experience with its previous claims service provider. "That's a big impact on their bottom line when you're looking at workers' comp losses in the multiple millions of dollars," stresses Sidney.

"Our goal is help our clients reduce their losses and bring employees back to work, while controlling the overall cost of their workers' comp program. By focusing more keenly on the medical aspects of workers' comp claims as well as the indemnity portion, we are helping clients achieve optimal outcomes."

For more information on Liberty Mutual's workers' comp claims capabilities, e-mail libertymutual_nationalmarket@libertymutual.com

September 21, 2009

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