Harnessing Technology Simplifies Worker’s Comp Claims

With roughly 4.4 of every 100 workers experiencing nonfatal workplace injuries and illnesses each year, any tool that can help companies file worker’s compensation claims correctly and in a timely manner is a primary goal of electronic data interchange (EDI) and represents a significant advantage.¹

Combining EDI with e-commerce technology strategies takes that advantage a step further by providing an end-to-end, billing-to-payment solution that is in compliance with individual state mandates, according to Shawn Maloney, president of Red Oak E-Commerce Solutions Inc., which was recently acquired by Ingenix.

“If I am a payer, I need staff monitoring state mandates, interpreting regulations, translating the regulatory requirements to specs, developing technology applications, transferring data back and forth to states, and monitoring for performance, Maloney said.  By using an integrated EDI/E-commerce vendor, companies can free themselves of many of those steps." 

Ingenix offers one-stop shopping for worker’s comp needs

“We can provide an end-to-end solution because the combined strengths of ROES and Ingenix allow us to deliver EDI transactions from medical provider to payer and from payer to claim adjudication,” explained Brandon Miller, vice president, product development, at Ingenix. “If an insurer is using various vendors for these functions, they will lose time, which can equate to a greater likelihood of penalties.”

Ingenix handles all aspects of a worker’s compensation claim, from submitting the first report of injury (FROI) and the second report of injury (SROI) to doing e-billing, bill adjudication and electronic payment, and ensuring that state reporting requirements are met. 

Today’s worker’s compensation EDI requirements consist of multiple documents, Miller continued. “The Ingenix purchase of ROES allows all EDI requirements to be accomplished through a single contract.”

Tracking state requirements is labor-intensive

Monitoring EDI and e-billing requirements in 50 states is a time-consuming and often difficult task for property and casualty insurers, third-party administrators, bill review organizations and networks, according to Maloney.

“Monitoring state activity – which includes tracking not only what states require right now, but also what they will require in the near future – is tricky and often frustrating, because it’s a moving target,” Maloney said. “Each state has its own set of rules and regulations, which can make compliance difficult to manage.”

States use a version of standards developed by the International Association of Industrial Accident Boards and Commissions (IAIABC). IAIABC EDI standards cover the transmission of claims, proof of coverage, and medical bill payment information through electronic reporting. The standards are developed and maintained through a consensus process that brings together representatives from jurisdictions, claim administrators, vendors and others interested in participating.

Although smaller worker’s compensation vendors may have to track only a few states’ requirements, national companies have to stay on top of all 50 states. Releases 1 and 2 of the standards are the most prevalent, but Release 3 currently is being utilized by Florida, Maine, Minnesota and West Virginia. Alaska, Georgia, Virginia and Texas are in varying stages of Release 3 exploration and implementation, according to the IAIABC, so any company dealing with those states has to be well-versed in Release 3 as well.

Calling EDI the worker’s compensation community’s “greatest hope for paperwork reduction and efficiency in meeting state reporting requirements,” the IAIABC believes that Release 3 is a “robust electronic standard,” and that “it is essential that those who handle workers’ compensation claims in states adopting or migrating to Release 3 become knowledgeable about this product.”²

With last year's acquisition of ENS, a leading clearinghouse, Ingenix significantly expanded its provider-to-payer capabilities.

“We are bringing together the best-in-class state reporting company with the best-in-class provider-to-payer solution,” Miller said, which “results in a universal EDI capability through a single solution.”

Solve problems using flexible solutions

Keeping ahead of what the state requirements are and when and where they will be implemented may be best handled externally, because experts are analyzing the situation and often can do that for less money due to economies of scale. “If you track externally you can take those two employees you may be using to monitor state activity and put them to use on your core business,” Maloney said.

To build the best strategy for your operation, he added, “it is imperative that you review both your short-term and long-term goals, answer the right questions and formulate a plan that will support today’s activities while still planning for the future. Bringing reliable and cost-effective EDI to your operation is an ongoing process that can’t be ignored – Ingenix will make sure that any issues affecting your decision-making are identified and will help you make the right choices.”

Solutions that have built-in flexibility are vital to this process, according to Miller, because companies have multiple platforms, legacy programs and use different vendors that use different processes. “Whatever your situation is, we can help you,” he said.

“We don’t just try to fit one solution on to your process,” Maloney explained. “We know that in this marketplace, it is very important that a vendor adapt to the client’s needs and help that client solve their problem in its own way.”

Health care technology paves way for future improvements

Many current vendors simply collect the data and ship it off where it needs to go, but Ingenix adds value to the EDI stream by looking outside of the box for ways to use that data in a more productive and innovative manner.

“What we do depends on what the customer’s pain points are,” Miller said. “We can help them identify problems, such as abusive claims patterns, for example, without submitting the data to different vendors.”

Using advanced data analytics, Ingenix is looking for new ways to expand EDI from a transactional tool to a strategic one in the worker’s comp market. Existing data can be utilized to better understand and analyze fraud, segregation and recovery identification, benchmarking, data reporting, detailed claims information and underwriting.

“We understand that our clients need to reduce transactions costs, improve processes and manage their vendors efficiently,” Miller added. “The great service, support and flexibility Ingenix provides can help get them to those targets.”

1. The Occupational Safety and Health Administration reported Oct. 16 that nonfatal workplace injuries and illnesses reported by private industry employers was 4.4 cases per 100 workers in 2006.

2. IAIABC Web site, “WC Claims Reporting Standard, IAIABC EDI Release 3, Gaining Acceptance Across the United States” (Aug. 2, 2007).

Be sure to sign up for future issues of Ingenix Innovations, and visit the archive for recent issues.