Closing long-tail claims greatly reduces immediate costs, decreases reserve requirements and diminishes collateral needs, however, not all of these claims are ripe for closing. Mitigating the impact of long-tail claims requires sound strategies for uncovering opportunities to close them when possible and properly managing them when case facts do not support their closure. In this session at the 2018 National Workers’ Compensation & Disability Conference, employers shared their strategies for managing and, when possible, closing claims that have stubbornly resisted resolution.
- Kevin Confetti, Deputy Chief Risk Officer, University of California
- Jennifer Saddy, Managing Director, Absence Management, American Airlines
- Mark Walls, Vice President Communications & Strategic Analysis, Safety National
The first step in managing long-tail claims is to evaluate what you have. Typically, this is a very manual process, but it is necessary. The challenge is often that these claims have not been anyone’s priority for quite some time. It is important to review each file top-to-bottom and determine the big-picture issues.
While reviewing, identify what barriers are present that are keeping the claim open. Cultures change over the years and often you might find that claims were not resolved due to old processes and rules that no longer align with current organizational goals. It can help to use an “ignore all barriers” approach to help think differently as you approach these cases for settlement. Get creative. If you do not change your approach, you are not going to change claims closure outcomes.
Change is difficult and challenges exist. Often this requires changing the entire safety culture of your team. This included everyone from risk managers to defense attorneys. You have to change the mindset of all stakeholders from that of “maintenance” to “settlement”. That drive to make the claimant an offer requires team members to apply a dollar amount to the claim by evaluating it based on demand. You may be surprised how many claims settle based on simply by making an educated offer.
It is important to note that settlement offers do not always mean throwing more money at the problem. You need to know what motivates your employees to determine a compelling offer. Sometimes this requires having an empathetic conversation with the employee to uncover these factors.
If those in the organization are hesitant to settle, take a look at the costs related to these open claims over their long life. You may be surprised to find that the costs are astronomical. This will help prove that settling is more cost effective than often initially perceived.
Once you do close some of these claims, you will be left with the remaining straggling claims. This is when it makes sense to invest in IMEs, UR and surveillance. Remember, it is not about making the injured worker uncomfortable or ready for a long fight. Resolution requires uncovering employees’ motivations to resist settlement.
Switching adjusters might help as well. See if the new adjuster has the ability to build a rapport with the employee and can help to change the employee’s perception of the situation. Breaking down the confusion might help as well. Brochures that plainly explain the settlement jargon and process can help to increase understanding.
Finally, communicate to the employee that your approach is not to simply win. It is business, not personal, and closing the file is the only win for the employer. Remove the “I have to win” mentality and consider what is necessary to move the claim closer to the finish line.