Defense attorneys have traditionally focused on individual claims management in workers’ compensation, primarily centered around injury, compensability, permanent disability, and future medical care. However, with artificial intelligence and data analytics, there is an opportunity to refocus defense attorneys’ role to address broader systemic issues and achieve improved claims outcomes, including injury prevention.
Artificial Intelligence and Data Analytics
Artificial intelligence and data analytics offer new opportunities to gather insights from deposition narratives and other sources of information. By aggregating and analyzing data collected from defense attorneys, claims operations can better identify trends, friction points, and opportunities for improvement in the workers’ compensation system.
Refocusing Defense Attorneys
While defense attorneys cannot directly reduce litigation, they are crucial in facilitating communication and resolution during depositions and conferences with injured workers and their attorneys. Defense attorneys can significantly reduce lost time and improve claims outcomes by expanding their focus beyond traditional legal aspects, including identifying problems such as barriers for the injured worker to return to work and the employer-employee relationship, assessing the risk of delayed recovery, and recognizing co-morbidities. This process begins with understanding the top cost drivers and what information is needed to mitigate these cost drivers.
Top Cost Drivers in Workers’ Compensation
- Litigation: Legal battles drive up costs and prolong claims processing. Delays in reporting and compensability determination exacerbate litigation rates and increase claims costs.
- Injuries in the first year of employment: Studies show a significantly higher frequency of claims for employees new to their jobs.
- Lost time: Productivity losses due to employee absences contribute significantly to expenses.
- Employer/employee relationship: Conflict or misunderstandings between employers and employees can cause litigation and escalate costs.
- At-risk for delayed recovery claimants: Certain individuals may be predisposed to prolonged recovery, necessitating specialized interventions.
- Opioid use: Substance abuse, particularly opioids, can complicate recovery and increase costs.
- Co-morbidities: Underlying health conditions like obesity, hypertension, diabetes, and smoking can exacerbate injuries and recovery challenges.
- Age: Older workers may face longer recovery times and higher medical costs.
Training and Education
Claims management should provide ongoing training and education to defense attorneys on the system cost drivers and what information is needed to identify and mitigate these trends. This training can include seminars, webinars, and workshops focused on understanding the impact of various factors as listed above.
Data Collection and Analysis
Claims operations then need to collect the depositions and file notes from the defense attorneys and combine this information using a large language model to identify trends by claims office, employer, and jurisdiction. The claims operations should develop standardized protocols for data collection to ensure consistency and accuracy in the information gathered.
Collaboration with Stakeholders
Claims management then needs to foster collaboration between defense attorneys, employers, claims administrators, medical providers, and other stakeholders to develop and implement comprehensive strategies for injury prevention.
Incentivize Performance
If the defense attorneys engage with this process and it is successful, they should be properly paid for their additional efforts. Establishing performance metrics and incentives for defense attorneys based on their contributions to injury prevention and claims cost reduction is useful.
Continuous Improvement
All processes should include a culture of continuous improvement. This includes encouraging feedback, sharing best practices, and implementing lessons learned from successful injury prevention and other cost-saving initiatives. Continuous improvement also includes regularly reviewing and evaluating the effectiveness of strategies and adjusting approaches as needed to achieve desired outcomes.
Conclusion: The new role of defense attorneys in workers’ compensation should extend beyond individual claims management. By leveraging their access to strategic information and expertise, utilizing artificial intelligence, and refocusing their efforts on injury prevention, defense attorneys can play a pivotal role in driving positive outcomes for employers and employees in the workers’ compensation system. Moreover, involving attorneys in the process can help maintain legal confidentiality surrounding employer actions that may have led to the injury, thereby protecting the employer from potential lawsuits.
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