How Outdated Technology is Hindering State Workers’ Compensation Systems

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We’re a technology-driven society, and as such have become accustomed to the personalized and on-demand benefits it provides. However, despite how ubiquitous technology advancements are, many government agencies are still saddled with outdated systems.
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In 2018, analysis by the Center for Digital Government determined approximately one-third of major IT systems that state governments use today are “legacy” systems, which they defined as “business-critical systems implemented prior to October 25, 2001, and are currently unable to meet user demands.”

Many workers’ compensation agencies are still using these legacy systems and processes created decades ago that no longer meet the needs of the modern workplace or constituent demands.

The problem is, for both internal and external users, improved service offerings have become a core metric of performance in addition to key metrics around regulations and statutes. Just as with so many consumer avenues, people expect fast, efficient, and personalized approaches to products and services. The same is true when dealing with public sector agencies, especially with something as personal and critical as workers’ compensation claims and benefits. But the fact is, outdated technology is hindering the efficiency and accuracy by which agencies operate and how citizens are serviced.

From siloed data to limited self-service capabilities, here’s a look at several ways outdated technology is limiting state workers’ compensation agencies from operating at optimal capacity.

Creating data silos

Workers’ compensation claims processing and adjudication involves a wide range of departments and work groups, including claims, administrative law judges (ALJ), special insurance fund, compliance, labor, wage, ombudsman groups and more depending on each state’s model. Additionally, external users including workers or claimants, attorneys, employer representatives, carrier representatives and adjusters, and third-party administrator representatives/adjusters are usually involved in the process. 

With so many groups and individuals contributing to workers’ compensation claims, and often working in disparate systems, it’s easy to see why data silos have historically been one of the greatest challenges in claims processing.

The problem for many agencies is legacy systems often don’t have the capabilities to integrate data across the wide range of stakeholders involved in the process. This tends to result in staff in different departments having access to different data. And on top of that, as the industry has evolved and regulations have been implemented, 3rd party data sources such as carrier coverage flat files and unique medical communities have been added, furthering the data range game.

These disparate, siloed sources are causing inconsistent and inaccurate data, confusion on reporting methods, and claims getting stuck in limbo.

Lengthening processing times

The unfortunate reality is, siloed data and the significant number of parties involved in the workers’ compensation process ultimately leads to lengthy processing times. Using outdated technology often means agencies are required to complete multiple manual, time-consuming steps to process a single document.

In fact, one study found that 61% of the claim time was spent on unnecessary administration and paperwork. This included time spent communicating the status of the claim, and time spent waiting or looking for paper files and documents.

For example, First Report of Injury submissions are commonly done by downloading and printing paper forms that are then sent via fax, mail, or hand delivered. Naturally, this process leads to increased steps and touchpoints in document management and tends to result in significantly longer processing times and increased administrative work.

Additionally, as it pertains to risk and compliance, many primarily paper-based processes are much more susceptible to interpretation errors of hand-written forms, resulting in incorrect data entry. These delays and errors are critical when claims processing is required within a certain timeframe. 

Limiting constituent self-service capabilities

In an age of customer-focused service models, outdated systems lack many of the features necessary to meet constituent needs, such as the ability to electronically submit, view, or manage claims, upload documents, view and manage documents, request files, and much more — critical features particularly in a very personal, time-sensitive sector such as workers’ compensation management.

Without a cloud-based portal, constituents have very limited access to critical information when they need it most. Legacy systems and manual processes also don’t often provide the resources constituents need to fully understand the intricacies of the claims processes. This can lead to inconsistencies when employees fill out forms, which can add to processing times and increase the workload of agency staff.

Limiting constituent interactions

Any time manual processes are involved, it limits the amount of human capital to work directly with customers and constituents. Instead, teams are pulled into administrative tasks, which is particularly prevalent in agencies where outdated technology is still being used to manage the complexities and intricacies of the workers’ compensation process.

No two claims are ever the same, and in a situation as personal, sensitive, and serious as an on-the-job injury claim, agency personnel must have the bandwidth to personally address the issues that require a human touch. The only way to begin to achieve that, at scale, is to have the right technology in place to automate and streamline the redundant steps, freeing the staff to focus on bigger issues like the stakeholder experience.

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