Legacy claims systems hamper take up of communications tech

The workers compensation industry’s older claims management systems are holding back widespread adoption of newer technologies designed to improve communication with injured workers, experts say.

According to a survey of 337 industry leaders released Aug. 18, 43% of workers compensation claims management organizations in 2020 reported “no implementation of tools to improve injured worker communication.” This is despite past calls by claims handlers to improve communications with injured workers, according to the annual survey conducted by Chicago-based Rising Medical Solutions, which relies on an advisory board of 18 workers comp industry professionals to develop its annual studies.

Meanwhile, for the 2019 survey, 90% of 1,800 frontline claims handlers surveyed said they needed more tools to effectively do their jobs; and 34% said they need better tools to communicate with injured workers and other claims stakeholders.

Given the COVID-19 pandemic, “with multiple communication impediments, a more flexible customer experience strategy is needed to effectively communicate with stakeholders,” according to Rising’s 2020 report. The 2020 survey showed a lag in utilization of tools: only 36% of organizations are leveraging text messaging; 27% of organizations have implemented a website or injured worker portal; and 26% are using mobile apps to communicate with injured workers.

With “some of these innovations out there I think the problem is the pace of technology change has been incredibly fast; it has outpaced the carrier’s ability to modernize their legacy systems,” said Jeanette Ward, Austin-based chief operating officer for Texas Mutual Insurance Co., which three years ago launched an app for injured workers to access their information.

Ms. Ward said that insurers have an opportunity to make better use of technology but “it is more difficult and costly to integrate these technologies with our older systems.” 

Rising CEO and president Jason Beans wrote in an email that investing in technology has been hampered by several factors, including “ever-increasing regulatory and internal compliance requirements.”

“The lack of technology investment was exacerbated by the pandemic – when a lot of organizations had to shift their technology resources into basic survival,” he wrote.

Mr. Beans said old technology is often difficult to update or change.

“Investing in newer technology often involves a step backward to move forward. Existing features and efficiency need to be recreated,” he said, adding that companies often avoid or delay the “inevitable pain” of upgrades or conversions.

While the industry has been keen to adopt new strategies, changing a claims system is a significant undertaking, said Denise Algire, Pleasanton, California-based director of risk initiatives for grocery chain Albertsons Cos. LLC, who is on Rising’s advisory council for the series of surveys.

For example, any communications with an injured worker must be “captured” by an insurer’s or administrator’s system, which might not have the capability to incorporate advanced communications methods, such as texts or communications via an app, Ms. Algire said.

“Some of the limitations are primarily driven by the lack of legacy claims systems to have this capability,” she said, adding that the development and availability of third-party apps are making the task easier for claims handlers.