Automation Makes Managing Diverse State Workers’ Comp Reporting Requirements Easier

Insurance carriers, third-party administrators and self-insured employers are striving to keep up with state workers’ compensation reporting requirements. They face aggressive timelines, multiple versions of reporting standards and increasing demands for data, draining their resources and limiting staff productivity.

Although states follow reporting standards developed by the International Association of Industrial Accident Boards & Commissions (IAIABC), keeping up with three current iterations of these standards can be difficult. Most states use Release 1 of the IAIABC standards, but a growing number of states are adopting Release 3. The Release 3 standards may enable some states to perform data analytics that will help them better track industry trends and outcomes. However, the expanded data requirements can place a greater burden on the submitter.

“The goal of the standards is to bring uniformity to the reporting process, but at present, states are using different versions of the standards,” confirmed Catherine Dominguez, director of EDI services at Ingenix. “And a few states, like Minnesota and South Carolina, accept both Release 1 and Release 3 at this point, which can add to the confusion.”

The variation among the releases is not minor. “Reasons to file a subsequent report of injury have increased substantially between Release 1 and Release 3,” Dominguez explained. “So has the number of data fields.” Further, she noted the flexibility within the Release 3 standard itself. As a result, reporting requirements can vary even across states currently implementing Release 3, including Florida, Georgia, Maine, Minnesota, New Hampshire, South Carolina, Virginia and West Virginia.

“Companies responding to these disparate requirements have to maintain complex systems and processes that can monitor and meet a wide range of needs, which can demand significant programming and a great deal of manpower. The reporting requirements are a lot more complicated than they were just five years ago,” Dominguez said.

Release 3 is testing the limits of manual systems

Working successfully with the states to meet their reporting requirements involves knowing what data each state wants, keeping code up to date, being able to connect to each state, and analyzing whether interactions with the states are effective. Insurers relying on manual processes driven by individual adjusters are struggling with both the release variables and the work load. In response, carriers can choose either to invest in technology or to staff up.

Dominguez warned that manual solutions can carry a high price tag with imperfect results. “When individuals have to know all of the electronic data interchange (EDI) reporting requirements by state in their heads, that’s really an impossible situation,” she said. “Ingenix believes that technology should drive EDI compliance. By automating the process, the system can sort through what needs to be filed, and how and when to file, and then send the appropriate data out. Human beings should only have to touch those files if there is a problem, which greatly improves productivity.”

To help companies move toward automation, Ingenix is launching a new product called EDI Auto Triggers. This solution works with Ingenix WorkComp.NET to automate a company’s EDI reporting processes. It enables one file format to be used for processing data, determines the proper document Maintenance Type Code (MTC) and edits and sequences the report. EDI Auto Triggers is designed to lower costs by eliminating manual decisions about what data to send and when, and automating the processes required to follow through.

Automation produces positive results

Providence Property & Casualty Insurance Co. is partnering with Ingenix during the beta testing of EDI Auto Triggers in an effort to decrease manual processing and data entry, reduce claims reporting costs, meet state EDI reporting requirements and increase the accuracy of claims and reporting. Providence reports that Ingenix will deliver the following results:

• A 30 percent reduction in the amount of staff time required to complete mandatory state transactions;
• An EDI compliance rate improvement between 20 percent to 30 percent over the former process; and
• A cumulative, projected five-year net benefit of $374,511 from productivity improvements.

“Every day, Providence creates an extract file and gives Ingenix any claims data that’s new or changed,” explained Jason Motes, systems coordinator at Providence. “Ingenix determines whether or not a filing is required, what data needs to be included, and in which format. EDI Auto Triggers makes sure that all of the edits are correctly applied and that the filings are in the proper sequence.” He added, “We’re not just reducing manual work, but also avoiding errors and the re-work they involve.”

More standards refinements inevitable

Dominguez pointed out that just as Release 1 gave way to Releases 2 and 3, further refinement of standards is highly likely.  She predicted that changes will “not necessarily entail a Release 4, but perhaps result in Releases 3.1 and 3.2.” Future updates will mean more iterations to monitor. Dominguez noted that “Ingenix is very involved with the standards organizations, and make sure that we have the best software and services to ease transitions as the states move forward.”

According to Dominguez, attempting to soldier on without automation could be costly to carriers because the price for noncompliance with state reporting requirements is high. “Some states compile a report card on EDI compliance levels for insurance carriers. States may also fine companies for misfiled, inaccurate or late filings.”

Automated solutions like Ingenix EDI Auto Triggers can let adjusters concentrate on adjusting, while knowing that their EDI filings are appropriate, accurate and in compliance. “We enable companies like Providence Property & Casualty to concentrate on their core business instead of on back-end reporting,” Dominguez said. “We do what we do best, so they can do what they do best.”

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