Claim lag in workers’ compensation

Ajira Software

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Originally released 1/17/2023, revised 2/2/2024.  

Carriers, state funds, pools and self-insureds have a common goal in minimizing the cost of workers’ compensation claims.  Prompt reporting of accidents and injuries should always be stressed and with good reason.  Claim lag is one of the uncontrolled factors that results in higher workers’ compensation claim costs.  While most workers’ compensation claims departments leverage trained adjusters, well-defined processes and technology once a claim is received, typically not much has been done to reduce the gap between injury occurrence and a first report of injury (FROI) or a first notice of loss (FNOL).  Loss prevention organizations spend significant effort on policyholder education/processes but have yet to leverage the latest technology to close this gap. Claim lag is defined as the number of days between the date an incident or injury occurs and the date the insurer receives a FROI or first report of injury.

The most serious injuries are usually reported promptly and are addressed accordingly with urgency.  However, it’s the incidents and injuries that are initially perceived as less severe that are most associated with reporting delays.  For example, sprains, strains, fractures, contusions and lacerations are the most common types of workplace injuries.  These are of significant concern, because these types of injuries makeup more than 70% of lost-time claims according to NCCI.  These injuries also tend to become worse over time.  It is proven that the length of time taken to report an injury is directly associated with higher overall claim costs.  Studies by NCCI and Hartford Financial Services show that injuries reported after 30 days of occurrence cost 45% more and are 44% more likely to be litigated.

Current methods of injury and incident reporting further contribute to reporting delays. Requiring forms to be emailed or faxed in is still commonplace.  Call centers are also used to collect details, but information is often keyed in manually.  These methods were not designed for speed and efficiency.  They are also prone to errors and inaccuracies prompting additional clarification cycles.  This can prolong the injury treatment process due to no fault of the employer and frustrate the injured party.  Telemedicine and nurse triage are also being used for injury and incident reporting.  However, these methods lead to higher administrative costs since only a limited number of injuries benefit from them.  The remainder of less severe injuries are tended to by the same highly compensated resources driving administrative costs up.

An incident management method that is easy to use without training and is designed specifically to improve the customer experience is highly desirable.  Timely and efficient collection of incident or injury details combined with artificial intelligence algorithms can offer significant benefits.  AI algorithms may be used to ensure the accuracy of information and assess the incident or injury in order to route the report to the appropriate person based on severity.  First report of injury and first notice of loss automation can provide a 24/7 reporting process leveraging technology, specifically mobile apps and portals.  This eliminates delays and optimizes the injury reporting workflow.

IntelliFROI was specifically designed to address these needs.  The mobile and web portal solution provides a simple, intuitive and superior user experience that requires no training.  The very simple registration process ensures that the system is policyholder, agent or claimant aware. This eliminates users from having to remember or lookup information that typically delays injury reporting.  Our FROI app and cloud-based web portal are enabled by artificial intelligence algorithms creating unparalleled efficiencies in injury reporting. Injury reporting workflows between the injured person and a carrier’s claim department is an area where significant gains may be made in addressing claim lag.  There aren’t a significant number of technology solutions in this space. IntelliFROI fills this gap by speeding up the first report of injury and provides significant value to carriers, agencies, insureds and their employees.

Brian Bogel
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