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Hey, who's your telecommunications provider? That's a simple enough question for some customers. But for the past two years, many have found it difficult to keep the players straight without an illustrated diagram.

In late 2005, SBC Communications Inc. merged with AT&T and elected to adopt the AT&T name. A second merger in 2006 pulled BellSouth under the AT&T umbrella, as well as Cingular, which had been jointly owned by BellSouth and AT&T.

To its credit, however, AT&T has made it look (almost) easy. With Risk Management Director Michael Weiss and a talented team of dedicated professionals to navigate through the process, AT&T has not only survived, it has thrived, and its workers' comp programs have posted consistently outstanding results. That's why it's fitting that the company has been named winner of the 2007 Theodore Roosevelt Workers' Compensation and Disability Management Award in the for-profit category.

Since 2003, AT&T has reduced its claims frequency by 39 percent, with a parallel reduction in lost-time per claim. For the same time period, the company's total incurred cost per claim has plummeted by 28 percent.

From 2005 to 2006 alone, the company realized a savings of $5 million in total incurred costs. Despite a workforce increase of 11 percent, the company celebrated an additional 7 percent decline in frequency and a 9 percent drop in temporary total disability days.

And don't forget--this is all while in the throes of two large-scale mergers. No small feat.

START WITH PREVENTION

The driver behind all of this success is a sweeping overhaul of the company's programs, begun in 2003. AT&T, then SBC, took a long, hard look at its numbers and didn't like what it found--an upward trend in frequency and severity in workers' comp and disability claims.

In response, it formed an interdepartmental core team representing risk management, safety and human resources. With shared data, resources and goals, the team took on the task of drawing a roadmap for a new way forward.

The team agreed to move first into areas where the largest impact could be made. One goal set early on was to enhance the utilization of environmental, health and safety resources.

The organization began using its existing data to identify the highest risk locations and activities for targeted training and intervention. In 2004, 21 work groups were targeted for improvement, expanded to 52 work groups in 2005 and 87 in 2006. The efforts have netted a year-over-year reduction in incident rate of 30 percent or better.

One critical piece of the safety puzzle is the company's Work-Safe Observation program, a process of demonstration, explanation, observation and feedback. The observations are conducted in every facet of the organization, from climbing poles to driving trucks to desk work.

Hundreds of thousands of observations are recorded annually and added to a database. The system has multiple functions. It helps ensure accountability, and it also helps the safety organization and the core team track progress as well as further target needed improvement.

IT TAKES A VILLAGE

Leveraging the company's partnership with third-party administrator Sedgwick CMS, one of the areas where AT&T has made tremendous strides has been its transitional work program. Bearing an uncanny resemblance to an "it takes a village" philosophy, each return-to-work case is guided by a Sedgwick job accommodation specialist, who serves as expert and liaison for the employee, as well as for claims examiners, telephonic case managers, AT&T supervisors, union representatives and medical professionals.

If for some reason the employee's supervisor does not return him to work according to the plan outlined by the claims team, an escalation process routes the case to management for further action.

One of the most noteworthy aspects of AT&T's return-to-work program is the full-time dedication of an associate director of human resources, Carla Putnam, to the transitional work program.

Putnam's impact cannot be understated, says Weiss, particularly in her capacity to advance the program's overall goals.

For example, he explains, a lingering obstacle to RTW has been the resistance of managers to the presence of an employee unable to work at full capacity. Knowing that the situation could affect the productivity measures that their own bonuses are calculated from, managers balk at transitional placements. In response, Putnam has been actively working to get those productivity measures revised in order to remove the obstacle.

Explains Kimberly George, Sedgwick managed-care practice lead, "One of the reasons the organization took what Carla was doing and made it a formal role is because we were able to show all of the missed opportunity days that (the company) was experiencing and the dollars associated, literally down to their location level.

"Knowing those missed opportunities, that's a financial miss for a company that's not willing to take that hard data and do something with it."

FOURTH LEG OF THE STOOL

Among the most significant moves the core team made early on was the decision to migrate to a single-TPA model with Sedgwick CMS, to handle its workers' comp and disability claims. In effect, says Weiss, this turned the three-legged stool of the core team into an even stronger four-legged stool, drawing upon Sedgwick's data and systems to help distribute clinical resources for maximum impact.

Thanks to the single-TPA model, AT&T has been able to dramatically improve consistency and performance throughout the organization.

AT&T enjoys a largely symbiotic relationship with Sedgwick, in that Sedgwick's role has long since surpassed the point of merely handling claims. Weiss is in near-constant contact with Sedgwick program manager Charles French and his team.

"Charles and I talk daily ... more than daily," says Weiss. "I consider Charles and his team to be part of our inner circle, if you will."

AT&T has found a variety of ways to leverage the resources of Sedgwick personnel and resources, as well as its claims system. To streamline the return-to-work process, for example, Sedgwick and AT&T embedded disability duration guidelines into its claims system in order to minimize the potential for missed RTW opportunities.

In another example, AT&T made a revision to the claims instruction so that every cumulative-trauma case filed automatically triggers an ergonomic evaluation request sent to the safety organization.

All three divisions of AT&T's core team rely heavily on the contributions of the Sedgwick team, not only to efficiently meet day-to-day objectives, but also to help identify ways to continually move the ball down the field in program improvements, both short-term and long-term.

"This program is like the Queen Mary," quips Weiss. "You're not going to turn it on a dime." Even so, he explains, "We do have the ability, because of the resources available to us, with Sedgwick and my team, to make changes pretty quickly."

POWER OF INTEGRATION

The overall effect of the single-TPA model is made all the more dramatic because AT&T is an integrated disability management practitioner. The company's IDM program encompasses claims services for workers' comp, short-term and long-term disability, and accident disability claims--a legacy benefit provided in units of certain acquired companies.

AT&T's IDM program was established in 2001, in order to achieve a greater level of consistency and to make the overall claims process less cumbersome.

"Pre-IDM," says Weiss, "the consistency just wasn't there."

All principals agree that the IDM program has been a striking success for AT&T. Weiss says he's currently looking into converting the few remaining business units that are not currently integrated.

The process is simplicity itself: Calls come into one of AT&T's two dedicated claims centers. Customer service reps have all of the necessary data at their fingertips, linked to each employee's Social Security number. With a few clicks, the rep understands which benefits the employee is eligible for and what needs to be done to set up the claim appropriately and route it to a single Sedgwick claims examiner.

Says Sedgwick's George, "The goal with IDM is that, the moment the claim comes through the door, you absolutely--through the triage process--are able to identify and educate the employee on the services for which they are eligible. So from the very start, you end up with an employee and a supervisor who understand what is expected of them and expected of Sedgwick as the TPA. That ability to touch the employee and the supervisor as early as we do--that improves efficiency across the entire program."

Another way that the integrated call center improves overall efficiency, explains Weiss, is that it allows service reps to run interference for claims examiners, reducing the amount of excess pressure on examiners' workloads. If an employee needs a simple answer or a clarification, for example, the service rep can take care of it. That way, 100 percent of the claims examiners' time can be spent dealing with the most complex issues.

To further improve the process, AT&T added a claims-status Web site in 2004, as well as a 24/7 self-service interactive voice response telephonic system in 2005.

The single-TPA model, combined with the IDM program, makes for an overall process that's extremely clean and efficient. Common technologies and resources minimize redundancy in infrastructure and in training. Payment overlaps are virtually eliminated. And employees benefit from fast, accurate service and reduced anxiety.

NO MAGIC BULLETS

With each of these elements in place at the time of the mergers, AT&T and Sedgwick were able to transition each of the acquired companies into the fold with relative ease, with a great deal of sensitivity toward each company's existing programs and their employees' needs. All in all, says Weiss, there have only been a few bumps in the road, even though the size of the company doubled overnight with the acquisition of BellSouth and Cingular.

That's because the program and systems that AT&T has created are dynamic enough to adapt and grow along with the company while netting continuous improvements and costs savings.

Is there a secret to AT&T's success? No pat answers here. Weiss and French credit the company's longstanding top-down commitment to both safety and risk management.

George adds that the company's thirst for data and willingness to put that data to work sets AT&T apart.

But it's Sedgwick senior vice president and communications director, Frank Huffman, who draws one fine point on what makes AT&T's program so special: the drive and the persistence of the people behind it.

"It's not that somebody thought of something that nobody had thought of before," he explains. "It's just that the team responsible for this has kept after it and it didn't go away, and the boss didn't forget about it after the big meeting. They're all just working their plan."

MICHELLE KERR lives in Pennsylvania.

November 1, 2007

Copyright 2007© LRP Publications