December 2016 – STD Claims

As I go around the industry, meeting many talented and experienced people who are involved in managing disability claims operations discussing the introduction of claim segmentation, the biggest issue is the ‘change’ in the process. How to do this without causing an issue?

The rational for claim segmentation is clear, as soon as we suspect that an STD claim is heading for the long term, we should treat it like an LTD claim, and do everything we can, as soon as we can, to help that employee get back to work before the claim gets complex.

Whether you use a predictive model to select the STD claims that are likely to transition to LTD or if you use ‘experience’, these claims should be pulled out on a separate track.

Here are some of the comments we often get from claim managers:

•         “We get too many claims”
•         “STD is transactional”
•         “We have no time to think” (reference an article by Mark Taylor)

Clearly we have to help the STD team make time to think.

We need to define criteria for STD Claim Segmentation, with the use of a fast lane for low risk claims, saving time to spend on the complex claims, the ones that could become really expensive for everyone!

The fast lane is for maternity claims (in the US at least), injury claims, hernias, digestive system issues, and other diagnoses with quick resolution (I can give you the list). These are claims that typically have durations inside 70 days, and have a very low likelihood of transitioning. So we should pay-&-close these claims or an auto-adjudicate them if you can, but get them away from the Claim Managers. These claims can amount to 25%-30% in volume, so claim managers will save a significant amount of time by not working on these claims.

This will make it possible to spend more time on the complex claims. Some of these are easy to identify, and others may need the help of analytics to identify more subtle drivers of duration.  It is on these claims that claim managers should spend their time, and spend their rehab budget, before it’s too late.

The resistance to change comes from the fact that everyone is working ‘flat-out’ already, with resources trimmed down tightly, but well implemented claim segmentation with an experienced partner will create a streamlined process, without risking that ‘landslide’.

The Claim Lab can help you work through these challenges and help you to ‘Climb the mountain and look around’! Contact us at  info@claimlab.org