Why Claim Resolution Often Goes Off Track

Obtaining a resolution for a compensable injury is the ultimate goal of every workers’ compensation professional. However, the path to closure is rarely a straight line. Between clinical hurdles, occupational rehabilitation issues, and administrative friction, the process is often bogged down by “tangential factors” that distract from the primary objective.

A key component of this process is establishing a return-to-work (RTW) plan in a manner that is as safe and efficient as possible. Effective work restrictions must balance three critical elements:

1. The safety of the injured individual.
2. The physical ability to complete assigned tasks.
3. Objectified clinical standards that ensure the employee’s long-term health is never compromised.

The Problem: The “Vague Language” Trap

I recently reviewed a file with poorly communicated work restrictions that created a domino effect of issues. It muddled the claim process, compromised the treatment plan, and delayed compliance from both the employee and the employer.

The breakdown usually happens because of a lack of a standard format. We often see providers use non-specific terminology like “light duty,” which is virtually meaningless to an employer. There is a massive functional difference between “no lifting over 25 pounds” and the vague suggestion of “taking it easy.”

The Provider as the Gatekeeper

The foundation of any effective work restriction is a clear understanding of specific job standards. The treating provider acts as the gatekeeper. To do this job effectively, they must:

• Request Functional Language: Move away from “light duty” and toward precise functional capacity (e.g., “cannot reach above shoulder height with the right arm”).
• Review Job Descriptions: A provider cannot accurately restrict a worker if they do not know what the worker actually does. If a worker sorts eggs from a seated position, a “no prolonged standing” restriction is irrelevant.
• Validate Correlation: Does the restriction actually match the injury? (For example, restricting upper extremity use for a stubbed toe is a red flag).

The Employer’s Role: Preparation and Clarity

Employers often miss opportunities for early RTW because they have not done the groundwork. An employer’s obligation is to ensure that restrictions are accurately and rapidly applied. This requires:

• Comprehensive Job Descriptions: Including specific physical tests or requirements.
• Modified Duty Blueprints: Having a plan for “meaningful work” before the injury even happens.
• Direct Communication: If a restriction is unclear, the employer should feel empowered to call the provider (or the adjuster) for clarification rather than simply saying, “We can’t accommodate that.”

The Claims Professional: The Connective Tissue

As the claims handler, you are the link between the employer and the injured employee. You must be proactive rather than reactive.

• Get the Job Description Early: Do not wait for a permanent impairment rating to ask what the worker does for a living. Have the job description in the file from Day 1.
• Identify Mismatches: If the restrictions do not match the injury or the job description, pick up the phone. A quick call to the provider can often resolve a dispute before it turns into a litigated mess.
• Utilize Case Management: If the gap between the provider’s intent and the employer’s capability is too wide, involve a Nurse Case Manager to act as a clinical conduit.

The Bottom Line: Standards for work restrictions are not just more “bureaucracy.”

They are a protection for everyone involved. When we use precise language and objective standards, we protect the employee from re-injury and the employer from administrative burden.

By fostering forward-looking communication and educating the injured employee on the why behind their restrictions, we improve outcomes and reduce the likelihood of litigation. It is more than just paperwork, it is a demonstration of professionalism and a commitment to the recovery of the human being at the center of the claim.

How Spinal Fusion Can Create New Complications

The words “spinal fusion” can represent a significant problem in addressing workers compensation cases. With the assumption that the need for a lumbar fusion has been adjudicated, and the perceived need is a function of the compensable event, one must realize that in an effort to address these pain complaints, a solidly healed spinal fusion may ameliorate the symptomology (or relieve the symptoms noted). What needs to be incorporated into the mindset of the claims professionals is that with this fusion, normal spinal anatomy is compromised, and the stressors normally encouraged at the level(s) involved is translated either above or below.

Red Flags for Adjacent Segment Diseases

Therefore, one of the long-term unfortunate consequences of a spinal fusion is a disease process known as adjacent segment disease. Clearly, if there is adjacent segment disease identified at the time of injury, this is a clear indicator of a long-standing, pre-existing, and unrelated comorbidity. However, if this particular pathology is identified months or years after the noted fusion, this represents a significant complication. The clinical literature notes that between 5% and 30% of the patients will develop this process after spinal fusion.

This is not a new disease; however, this diagnosis represents an additional degenerative change in the region of the spine compromised by the surgical fusion. One must be clear that the pathology is not limited to x-ray findings alone; the noted findings must be combined with appropriate clinical examination demonstrating objectified symptomology (or clinically confirmed symptoms) at the proximal or distal level. To be clear, this complication can occur months or years after the surgical intervention.

In Texas, the clinical standard is that all care reasonably required to address the sequelae of the compensable event must be treated. The original injury must be a “producing cause” of the current pathology.

Therefore, a successful lumbar fusion, one that has noted to have reached maximum medical improvement, has been assigned an impairment rating, and the claim has been closed; this individual can return seeking an additional surgical intervention to address this pathology. And if adjacent segment disease has been objectified, you as the claim file handler must engage this diagnosis and provide appropriate treatment.

Questions That Must Be Resolved

If such a scenario lands on your desk, a careful analysis of all cogent facts must be completed to ascertain that this is clearly adjacent segment disease that has been objectified both from a physical examination perspective, and a diagnostic perspective, and is clearly a function of the compensable injury sustained. One must confirm the original injury, confirm that surgical intervention with a solid fusion had occurred, that the pain complaints are at a different level than the original injury, and the identified degeneration of an adjacent level was not previously symptomatic. While not ruling out this diagnosis, a careful clinical assessment needs to be obtained to ascertain if this particular finding is in fact related or a sequela of the compensable event.

One must ensure that the detailed clinical history provided includes several factors. These would include a clinical analysis of degeneration at adjacent level before the fusion, are the current symptoms anatomically consistent with the adjacent segment (note the nerve root function and corresponding findings), is there a cogent clinical argument explaining and linking the previous fusion to the current newer pathology. An additional consideration is whether there are noted comorbidities such as age, obesity, tobacco consumption, multiple level fusions or other risk factors. One must note if all non-operative options been fully explored.

As soon as this file lands on your desk, initiate a comprehensive, evidence-based medicine review so that the appropriate determination of adjacent segment disease can be established as opposed to a coincidental degenerative pathology.

The Bottom Line on Adjacent Segment Disease

Bottom line, adjacent segment disease is very real. However, it is not an automatic or inevitable sequela of lumbar fusion surgery. Your investigation has to include a careful analysis of the anatomy involved, the biomechanics, the clinical presentation, and timing of the symptomology. If you, as the adjuster, fully understand adjacent segment disease, and ask the appropriate questions, you will be in a better position to assign medically defensible claims decisions.

Every CFO eventually asks the same question about the training line item: what did we get for it? The answer that usually comes back is attendance numbers and a satisfaction score. Neither number survives a budget review, and neither should.

There is a better answer, and it has existed for decades. Jack Phillips built a five-level evaluation model that most learning and development departments already know by name: reaction, learning, application, business results, and financial ROI. The trouble is that almost nobody finishes the climb. Training Industry’s own review of the Phillips ROI Methodology notes that only 5 to 10% of corporate training programs are ever evaluated at that fifth level, the level that turns training into a dollar figure a CFO can compare against anything else competing for the same budget. In terms of workers’ compensation, where the training line item competes against the technology spend, headcount, and reserves, that gap is expensive. It means most claims organizations are running a training program and hoping it works, without ever finding out the utility or efficacy.

Timing makes the gap harder to ignore. WCRI’s CompScope Benchmarks, 2026 Edition, shows total claim costs rising at 6% a year across the median of its 18 study states from 2022 through 2025. That is not a one-year spike. It is a multi-year trend across medical payments, indemnity, and benefit delivery expense. A training program that cannot demonstrate its effect on that trend is not neutral. It is a cost sitting next to a rising cost, unaccounted for either way.

Start the model with a realistic number for what the training itself costs. ATD’s 2026 State of the Industry report put direct training expenditure at $846 per employee in 2025, down sharply from $1,254 the year before, even as formal learning hours rose from 13.7 to 16.7 per employee. A one-year swing that large in the dollar figure is more likely a reporting change than a true shift in spending, so treat the number as a starting anchor rather than gospel. The more reliable signal is the second half of that sentence. Organizations are trying to teach more on a tighter budget, which is exactly the discipline a 12-month ROI model is built to support.

The model itself follows Phillips’ levels in calendar order, because claims data develops slowly and the levels happen to unfold in roughly the same order the data becomes available.

Months 1 and 2 establish the baseline. Before a single adjuster sits through a session, pull the claims scorecard by cohort: average claim duration, reopen rate, litigation rate, reserve accuracy, and medical cost trend. This step gets skipped more often than any other, and skipping it is what turns a training program into an anecdote instead of a measurement.

Months 3 and 4 are delivery and comprehension, Phillips’ levels one and two. Test what adjusters actually retained, not how they felt about the room or the instructor. A satisfaction score of 4.8 out of 5 does not appear on anyone’s income statement.

Months 5 and 6 move to level three, behavior on the file. Audit a sample of claims handled by trained adjusters. Is mechanism of injury documented before advanced imaging is ordered? Is peer review referred earlier when a diagnosis outruns the objective findings? This is where most programs stop measuring, and it is also where most of the eventual financial value is still invisible on a P&L.

Months 7 through 9 are level four, business results starting to surface. Rerun the same scorecard from months 1 and 2. Reopen rate and reserve accuracy tend to move first because they reflect decisions made close to the point of training. Litigation rate and claim duration lag behind, because those outcomes depend on how a claim was handled months earlier.

Months 10 through 12 are level five, the financial calculation itself. Compare the trained cohort’s scorecard to its own baseline, and if the organization is large enough to support it, to an untrained comparison cohort managing a similar mix of claims. Multiply the measured movement by claim volume and by a defensible average cost per claim.

A worked example keeps the model honest. Take a mid-size TPA with 50 adjusters handling 6,000 claims a year. Training investment at the ATD-anchored figure runs 50 times $846, or $42,300 for the year. The National Safety Council’s Injury Facts data, sourced from NCCI’s Workers Compensation Statistical Plan, puts the average cost across all claims at $47,316. Multiply that by 6,000 claims and the book represents roughly $284 million in claims exposure for the year. Against that base, the entire training line-item breaks even at a movement of about 0.015% in average claim cost across the book. That is not a bet on a large effect. It is a very small ask of the data; smaller than the quarter-to-quarter noise most claims organizations already see in their own numbers.

That does not mean every improvement in the scorecard belongs to the training program. Reserve philosophy changes, panel changes, litigation posture, and the same macro severity trend from WCRI all move at the same time. A rigorous 12-month model accounts for that by comparing trained and untrained cohorts side by side, or by staggering the rollout so some offices train in month three and others in month nine, giving the model an internal control group instead of a single before-and-after snapshot.

This does not require perfect attribution to be useful. It requires a documented baseline, a known training cost, a known claim volume, and a scorecard rerun at regular intervals rather than reviewed once. Built this way, the 12-month model answers the CFO’s question in the CFO’s own language: dollars measured against a number the CFO already follows.

For claims professionals who want to build fluency in the clinical side of that scorecard, particularly how mechanism of injury and objective findings should drive documentation and cost, WorkCompCollege.com offers certification coursework built for exactly that gap.

Sources

• Phillips ROI Methodology, Training Industry glossary, trainingindustry.com/glossary/phillips-roi-methodology.
• Workers Compensation Research Institute, CompScope Benchmarks, 2026 Edition, wcrinet.org.
• Association for Talent Development, 2026 State of the Industry Report, td.org.
• National Safety Council, Injury Facts, Workers’ Compensation Costs, sourced from NCCI Workers Compensation Statistical Plan database, injuryfacts.nsc.org.

Most claims organizations treat attorney involvement as a symptom. The worker hired a lawyer, the reasoning goes, because the injury was serious enough to justify one. That explanation feels reasonable. It is also, according to two of the more rigorous datasets in workers compensation research, only part of the story. A meaningful share of litigation is not driven by injury severity alone. It is driven by how the claim was handled in the first days and weeks after it was reported.

What the reporting-lag data shows

In 2015, NCCI actuary Thomas Sheppard published a study of workers compensation claims across 44 states, examining what happened as the gap widened between the date of injury and the date the claim was reported to the insurer. The pattern held across sprains, strains, fractures, contusions, and lacerations. Claims reported the same day carried attorney representation 13% of the time. Claims reported more than four weeks later carried it 32% of the time, nearly a two-and-a-half-fold increase. The same late-reported claims also showed a lower closure rate at eighteen months, a lower paid-to-incurred ratio, and a much heavier reliance on lump-sum settlements, which made up 59% of total cost for the latest-reported claims versus 31% for same-day claims.

Sheppard and his co-authors were careful to note that this is a correlation, not a proven cause. I hold clinical evidence to the same standard, and I will not overstate this one. But a pattern of this consistent, across injury types and waiting-period structures, is not something a claims organization can afford to treat as background noise.

What the claim-complexity data adds

In 2024, the Workers Compensation Research Institute analyzed roughly 950,000 claims with more than seven days of lost time to isolate the effect of attorney representation on indemnity payments. Overall, 34% of these workers had an attorney. Representation raised total indemnity payments by an estimated $7,700 to $12,400 per claim. But the involvement rate was far from uniform.

Claims resolved with temporary disability payments only, the simplest and most cleanly compensable category, carried attorney involvement of just 14%. Claims that combined permanent partial disability with a lump-sum settlement, the most complex and contested category, carried it at 79%. By diagnosis, spine sprains and strains sat at 36% attorney involvement. Neurological pain diagnoses, which are harder to explain, harder to resolve on a clean timeline, and more prone to disputed causation, sat at 61%.

Read together, the two studies point to the same mechanism from different angles. Attorney involvement tracks ambiguity and delay, not just the severity of the underlying injury. A worker who receives a prompt, clear explanation of what is compensable, what happens next, and why, has less reason to seek outside representation than a worker whose claim sits unacknowledged, whose diagnosis is inconsistent with the mechanism of injury on file, or whose communication comes only after a dispute has already formed.

The equation

This is where training stops being a soft-skills conversation and becomes a loss ratio conversation. An adjuster who can recognize mechanism of injury, correctly match diagnosis to clinical presentation, and communicate a compensability decision within the first few days is not eliminating litigation. Some claims will always need an attorney, and some should have one. But that adjuster is narrowing the population of claims that drift into the high-representation categories by default, simply because no one closed the information gap early.

Run the numbers conservatively. A mid-size TPA handling 5,000 lost-time claims a year, at WCRI’s baseline 34% attorney involvement rate, has roughly 1,700 represented claims annually.

Reducing that rate by even three percentage points, through faster reporting discipline and more accurate first-notice communication, removes about 150 claims from the represented population.

Applying only the low end of WCRI’s indemnity differential, $7,700 per claim, which is approximately $1.16 million in avoided incremental indemnity spend in a single year. That number does not require a change in fee schedule, a renegotiated network contract, or a shift in reserve philosophy. It requires adjusters and supervisors who understand what drives a claim toward representation and who are trained to act in it in week one, not week six.

What does this means by role

For a CFO, this is a loss ratio lever that does not touch the fee schedule or the provider network. It lives entirely inside claim handling discipline in the first thirty days. For a VP of claims, this is as much a defensibility question as a cost question. A file that closes an information gap early, before an attorney does it instead, holds up better under audit and reads more consistently across adjusters. For a risk manager tracking total cost of risk, legal and administrative expense is one of the more controllable pieces of that total, and it responds directly to how well the front line is trained to recognize claims heading toward complexity before they get there.

None of this argues that legal representation is bad for the worker or the system. Represented claims often exist for good reason, and a fair claim handled fairly does not need to be an adversarial one. The point is narrower and more useful than that. A measurable share of litigation is a downstream effect of claim handling quality in the first days after injury, and claim handling quality in the first days after injury is a trained skill, not a fixed trait. That makes it one of the few levers in this business that a training investment can move directly.

If you want to see how we teach adjusters and supervisors to recognize these early signals and act on them before a claim drifts toward representation, WorkCompCollege.com has course tracks built specifically around first-notice clinical triage and mechanism-based decision making.

Medical costs per claim are rising again. The Workers Compensation Research Institute reported in October 2025 that after several years of relative stability, medical payments per claim increased 5% in California, 6% a year in Wisconsin, 7% a year in Delaware, and 14% in a single year in Pennsylvania. Utilization, medical prices, and fee schedule updates are all pushing in the same direction. When the C-suite sees that trend line, the question is not whether to respond. The question is where the response comes from.

Training is usually not the first-place people look. This line item sits next to travel and software as a discretionary line, and discretionary lines tend to get cut first. That is a mistake, because the decision that determines whether a claim’s medical spend stays reasonable or drifts upward is made by an adjuster and their support system, not by a fee schedule. Fee schedules control price. They do not control whether the treatment plan submitted for approval matches what the evidence says should happen next. That judgment call is trained into that user, or it is not.

The mechanism: guideline-concordant care changes the outcome, not just the cost

A 2021 study published in PLOS ONE examined nearly 60,000 acute low back pain claims in the California workers’ compensation system between 2009 and 2018. The researchers compared lost workdays for workers who received only guideline-recommended interventions against workers who received only non-recommended interventions. After adjusting for other factors, workers who received guideline-concordant care had 11.5 fewer lost workdays than those who did not, a difference the study found statistically significant at well beyond conventional thresholds (Gaspar et al., PLOS ONE, 2021). Workers who were prescribed an opioid, a treatment protocol that guidelines generally do not recommend as a first-line intervention for acute low back pain, were out of work a median of four days longer than workers who were not.

A separate study in the Journal of Occupational and Environmental Medicine quantified the same relationship in dollars. It found a statistically significant trend between adherence to ACOEM guidelines for initial management of low back pain and lower claim costs, with medical and total costs trending down by roughly 353 dollars and 586 dollars respectively for each unit of improvement in the guideline compliance score. No outlier high-cost claims appeared in the groups with the best guideline compliance.

Put those two findings together and the plan to pursue is clear. The relationship to be followed is not that guideline adherence is not limited as a nice quality marker. It is that a treatment plan drifting away from the evidence-based medicine protocols tends to run longer and cost more, and this is easily identified in a way that is visible early, before the claim becomes an outlier. That fully trained and educated individual has to be able to see that drift when the request for authorization crosses their desk. That is a teachable skill. It is not a personality trait, and it is not something a fee schedule update can substitute for.

Where the judgment call actually happens

A skilled claim file handler who cannot distinguish a guideline-concordant treatment plan from one that has quietly expanded past what the mechanism of injury supports will approve what is in front of them, because the alternative is guessing without a framework. That is not a criticism of the adjuster. It is a description of what happens when clinical judgment is expected without clinical training to support it. The fix is not to make adjusters into clinicians. It is to give them enough grounding in how evidence-based treatment guidelines work, and enough comfort recognizing when a request for authorization needs a second look, that the decision in front of them gets made with the right frame of reference.

This is where the initial and ongoing education spend stops being a benefit and starts being a control. A trained claim file handler catches guideline drift in week two. An untrained handler catches it, if at all, when the claim is already six months old and the file has become expensive to unwind. The 11.5-day gap in the California study and the per-unit cost trend in the JOEM study are not abstractions. They describe the difference between those two claims.

Measure the outcome, not the seat time

Most training programs report attendance and satisfaction scores. Neither number notes the ROI of this aspect. If the much-needed education spend is going to survive the next budget cycle, it needs a scorecard built from the numbers that the finance section already tracks:

• Average claim duration and lost workdays by injury type
• Reopen rate
• Share of treatment requests approved that match evidence-based guideline recommendations
• Reserve accuracy at 90 and 180 days
• Medical cost trend per claim, tracked against the WCRI benchmark for your state

Set a baseline before a training initiative, then track the same five numbers afterward, tied to the training calendar so movement can be traced to specific content. This is the same discipline a technology purchase is held to. A tool spend deck usually measures activity, logins, tickets closed, time saved. A competent spend deck should measure outcomes because that is where its value actually shows up. Against a medical cost trend running 5 to 14% a year, even a modest improvement in decision quality pays the program back several times over.

The practical takeaway

If education is up for review in next year’s budget, do not defend it as a benefit. Hold it to the same standard as any other cost-control investment. Ask what specific claims outcome each training dollar is meant to move, set a baseline, and measure the result against it. A program that cannot answer that question deserves the scrutiny it gets. A program that can answer it belongs in the same conversation as any other lever you pull to manage total cost of risk.

We spend a fair amount of time at WorkCompCollege.com on exactly this question, how to connect professional education to the claims outcomes that finance is already tracking. If you are building the case for a training budget and want a framework for measuring impact rather than attendance, that is the kind of thing the resources there are built to help with.

A question I put to CFOs and VPs of Claims: what does it cost your organization when an adjuster handles a claim without the clinical and procedural grounding to do it well?

Most cannot answer with a number. They can describe the symptoms. Reserves that drift. Claims that stay open longer than they should. Files that escalate to litigation for reasons nobody can quite explain after the fact. What they usually cannot do is connect that symptom to a dollar figure they would defend in front of a board.

That gap matters more this year than it did just a few years ago. And the reason is demographic, not theoretical. The insurance sector is projected to lose roughly 400,000 professionals to retirement between 2021 and 2026, a wave that falls heavily on senior claims staff. This issue served as one of the founding plank for the creation of WorkCompCollege.com. Every organization I work with is backfilling experienced adjusters with newer ones faster than usual. The industry is not just managing a training problem. It is managing a training problem on a compressed timeline, with less institutional knowledge left to lean on while it happens.

Separate the symptom from the finding

The symptom is a feeling: “our newer adjusters just need more time.” The objective finding is different. It shows up in claim duration, reopen rates, and litigation frequency, and it is measurable well before an adjuster’s third or fourth year on the job.

A published case study from a self-insured workers’ compensation fund tracked what happened when a third-party administrator restructured its adjuster caseloads and reinforced early-file discipline over a three-year period. As caseloads dropped and structured file review improved, the accident-year closure rate rose from 28% to 49%, a 75% improvement; and the fund realized more than $1,400 in savings per closed claim compared to the prior cost baseline. Scaled across 100 files, which is over $140,000 in avoided cost, without a single change to benefit levels or medical fee schedules (Kern, “The Effects of Adjuster Case Load Size on File Closure Rates, Cost per Closed Claim and Ultimate Claim Cost,” Workers’ Comp News, 1997).

That study is not about training curricula. It is about what happens when adjusters are given the structure, time, and grounding to do the job correctly from day one. Training is how you build that discipline into a newer adjuster’s file handling before caseload pressure erodes it.

Where the mechanism actually works

An undertrained adjuster does not cost money because of one dramatic error. The cost accumulates through three quieter mechanisms; each tied to a specific point in the claim lifecycle.

The first is timing. Research from the Workers Compensation Research Institute found that claims receiving resource-intensive medical care after the first twelve months are 35 times more likely to become high-cost claims, compared to 5.7 times more likely when that same care is delivered within the first four months. An adjuster who cannot recognize the clinical markers that call for early intervention will not act early. The claim drifts into the high-cost tier by default, not by necessity.

The second is duration. NCCI’s most recent annual review put average lost workdays at 80, up more than seven days over five years, with medical and indemnity severity each rising 6 percent in 2024. Duration control is a trained skill: knowing when a claim should be closing and recognizing when it is not.

The third is scope. An adjuster untrained in mechanism-based clinical reasoning tends to accept whatever diagnosis arrives on the desk, whether or not it is supported by the mechanism of injury or objective findings. Degenerative findings get treated as compensable. Unsupported diagnoses go unchallenged. Scope creeps outward, and every dollar of that creep sits on your loss run permanently.

A number your CFO can defend

You do not need a single peer-reviewed study proving “trained adjusters save $X.” No such study exists, and any consultant who hands you one should be questioned. What you can build, defensibly, is a chain of components your own data will support.

Start with your average cost per closed claim at a given closure benchmark, the point in the claim’s life where roughly half your open claims are closed. Compare that figure for claims handled by adjusters with under two years of experience against claims handled by your most tenured staff. The gap between those two numbers, multiplied by your annual volume of new lost-time claims, is your exposure. It will not be a footnote. In organizations I have worked with, it is usually the single largest correctable line item in the claims budget that nobody has calculated.

What does this mean for your training calendar?

If the retirement cliff is filling your claims floor with newer adjusters faster than your prior training cadence assumed, your training calendar needs to move at the same speed. Waiting for a new adjuster’s second or third year to close the competency gap is waiting through the exact window where the highest-cost claims are being set in motion.

The fix is not more hours of training. It is training that targets the three mechanisms above: clinical timing recognition, duration benchmarks, and mechanism-based scope discipline, delivered early enough in an adjuster’s tenure to change file handling before habits set.

If you want to see how organizations are building that calendar around measurable claims outcomes rather than attendance sheets, WorkCompCollege.com has resources built specifically for claims leaders working through this exact math.

Sources

• Bureau of Labor Statistics retirement projections, cited via The James Allen Companies, “2026 Insurance Hiring Forecast” (2025): https://jamesallenco.com/2026-insurance-hiring-forecast/
• Gary W. Kern, ARM, “The Effects of Adjuster Case Load Size on File Closure Rates, Cost per Closed Claim and Ultimate Claim Cost,” Workers’ Comp News, Vol. 2, Issue 4, Sept/Oct 1997, republished by RiskSavers, LLC: http://risksavers.com/claims-handling/adjuster-case-load-management-a-new-approach/
• Workers Compensation Research Institute, “Key Factors Associated with High-Cost Claims”: https://www.wcrinet.org/news/news_info/wcri-study-identifies-key-factors-associated-with-high-cost-claims-in-workers-compensation
• NCCI, “2025 in Sight, 2024 in Review”: https://www.ncci.com/Articles/Pages/Insights-2025-in-Sight-2024-in-Review.aspx

Every training budget review starts with the same question. What did we get for the money?

Most learning and development teams answer it with the wrong data. They report how just many adjusters attended, how they rated the session/training provided, and a completion percentage pulled from the learning management system. None of that tells the CFO whether the training changed anything that eventually shows up on a loss run.

This is not a criticism of the people running the training programs. It is a description of how corporate training measures have worked for the better part of seven decades, and why that habit is now colliding with tighter budgets.

The numbers on measurement are not encouraging. The Association for Talent Development’s 2026 State of the Industry report, based on 2025 data from 340 organizations, found that less than a quarter of respondents actually measure whether their training programs achieved the organizational goals for which they were built. A smaller share still measures return on investment.

Meanwhile, average direct learning spends per employee fell from roughly $1,254 in 2024 to $846 in 2025, a drop of about a third, even as the average employee logged more training hours than the year before, 16.7 hours versus 13.7 (Association for Talent Development, 2026 State of the Industry Report). Organizations are spending less and asking employees to sit through more of it, without much evidence of what any of it produces.

For a workers’ compensation claims organization, that gap is not just an L&D problem. It is a claims cost problem. If a training investment cannot be tied to claim duration, litigation rate, or reserve accuracy, the finance committee has no defensible reason to protect it the next time the budget gets cut.

Symptoms Versus Findings

The perception that training is overhead is a symptom. It shows up as skepticism at budget time and as the first line item cut when premium volume softens. The objective finding, when anyone bothers to look for it, is usually different. Training tied to measurable claim behavior tends to survive budget reviews. Training measured only by attendance does not, because nobody in the room can defend it with a number.

A Framework, Not a Slogan

Donald Kirkpatrick published his four-level model for training evaluation in 1959, and it remains the standard reference point in the field (Kirkpatrick Partners, “The Kirkpatrick Model”). It is worth restating, because most organizations use only the first two levels without realizing the third and fourth exist.

Level one is reaction. Did the adjusters find the session useful and well delivered? This is what a post-training survey captures, and it is the easiest data to collect, which is exactly why most organizations stop here.

Level two is learning. Did the adjuster actually absorb the material, measured with a pre- and post-test or a scored case exercise, not a show of hands?

Level three is behavior. Is the adjuster applying what was taught on an actual file three or six months later? This requires a supervisor, or a file audit, to observe and document a change in practice.

Here at WorkCompCollege.com, we have direct antidotal data demonstrating that the certifications obtained went directly to a change in professional behavior and resulted in significant improvement in claims outcomes.

Level four is results. Did the organization’s numbers move? Claim duration, litigation rate, reopen rate, medical cost trend, reserve accuracy.

Jack Phillips later added a fifth level, converting the level four results into a financial return: program benefit minus program cost, divided by program cost (Training Industry, “Phillips ROI Methodology”). The useful part of the Phillips method is not the formula. It is the requirement to isolate training’s effect from everything else moving at the same time, such as a shift in claim mix, adjuster tenure, or a state fee schedule change. Phillips’s answer is a control group where practical, or a documented trend comparison where it is not. Either way, the estimate has to be conservative and written down, not asserted.

What a Claims Scorecard Looks Like

Applying this to adjuster education does not require new software. It requires picking numbers the organization already tracks and connecting them to the training calendar before the training happens, not after someone asks for a budget justification.

1. Claim duration by adjuster cohort, trained versus untrained, or before versus after a specific course.
2. Litigation rate on claims handled by adjusters who completed a defined training module within the prior twelve months.
3. Reopen rate, which often reflects premature closure driven by thin documentation rather than genuine medical resolution.
4. Reserve accuracy, comparing initial reserve to final paid on a rolling basis.
5. Medical cost trends on comparable injury types, segmented by whether the handling adjuster completed relevant clinical education.

None of these requires a new system. Most claims organizations already have this data in their reporting stack. What is usually missing is the discipline to tag which adjusters received which training and when, so the numbers can be split and compared later.

The Measurement Gap Is the Opportunity

Because so few organizations measure past level one, a claims leader who builds even a basic level three or four scorecard has an advantage that has nothing to do with clinical sophistication.

It is better to do bookkeeping. When the budget conversation comes, that leader has a defensible answer instead of an attendance sheet.

This is not an argument for measuring everything. Specific training, particularly compliance refreshers, will always live at level one or two, and that is fine. The scorecard belongs to the training that is supposed to change claim outcomes, which describes most clinical and causation education.

WorkCompCollege.com builds its curriculum around the claims outcomes adjusters and supervisors are actually accountable for. If your organization wants help mapping a training calendar to a measurement framework like the one above, that conversation is worth having before the next budget cycle, not during it.

Sources: Association for Talent Development, 2026 State of the Industry Report (td.org). Kirkpatrick Partners, “The Kirkpatrick Model” (kirkpatrickpartners.com). Training Industry, “Phillips ROI Methodology” (trainingindustry.com).

Ask a CFO what a claim costs and you will get a number pulled from the reserve system. Ask what a claim costs when it is reported three weeks late instead of the same day, and most CFOs cannot answer. That gap is worth closing, because the answer is large, measurable, and directly tied to something the organization controls: how well the front-line supervisor is trained.

The data on reporting lag is not new, but it is, in my experience, underused. NCCI’s 2015 study of claim report lag, drawn from a large multistate sample, found that claims reported more than four weeks after the injury cost roughly 51% more than claims reported within 1 – 2 weeks. Attorney involvement follows the same curve. Claims reported immediately involve an attorney about 13% of the time. Claims reported after four weeks involve an attorney closer to 32% of the time. The delay itself, independent of injury severity, is predictive of both cost and litigation.

The clinical explanation is straightforward. A worker with an untreated soft tissue injury does not heal while waiting to be believed. Inflammation persists, compensatory movement patterns set in, and by the time a claim finally reaches a clinician, the presentation is more complicated than the original mechanism would suggest. At the same time, the human explanation matters just as much. A worker who reports an injury and is met with confusion, delay, or skepticism starts building a narrative of being unsupported. By the time an attorney enters the picture, the adjuster is not managing a soft tissue strain. The adjuster is managing distrust.

Who controls how fast a claim gets reported? Not the adjuster. The adjuster does not learn about the injury until someone tells them. The person who controls that first ninety minutes is the front-line supervisor, the person the injured worker actually talks to. Whether that supervisor knows what a reportable incident is, how to document it without making promises they cannot keep, and who to notify immediately determines whether a claim starts on time or starts late.

This is where training stops being a line item and starts being a lever. A case study frequently cited in claims literature, conducted in a food-processing environment, found that after supervisors completed a four-hour training on communication and injury response, new workers’ compensation claims dropped approximately 47% and active lost-time claims fell about 18% over the following seven months. That is not a claims department result. That is a supervisor-training result, and it shows up on the same loss run the claims department gets credit or blame for.

Here is where the symptoms and the findings need to be kept separate, because most organizations confuse them. The symptom is a widespread perception that supervisor training is a soft skill, something HR schedules once a year and nobody remembers by March. The objective finding is different. Reporting speed is measurable. Attorney involvement is measurable. Claim cost by report-lag bucket is measurable. None of those numbers depend on how anyone feels about the training. They depend on whether the training happened and whether it changed behavior in the first ninety minutes after an injury.

For a risk manager building a case for training spend, this is a cleaner argument than most. It does not require faith in culture change. It requires pulling report-lag data out of the claims system, sorting claims by time-to-report, and comparing cost and litigation rate across those buckets. If the pattern in your own book matches the NCCI pattern, and in most books it does, the business case writes itself. Reserve accuracy improves when claims start on time, because the initial reserve is set on better information. Total cost of risk improves because fewer claims escalate into the cost and duration profile that late reporting predicts.

As I have written on many occasions, training as cost containment tool is not a new idea in this space. However, reporting speed is one of the cleaner places to prove it. As noted previously, the causal chain is short. An untrained supervisor leads to a delayed report. Delayed report leads to higher costs and higher litigation rate. Trained supervisor leads to a faster report. Faster reporting leads to a claim that behaves the way the evidence-medicine predicts it should, instead of the way distrust and delay predict it will.

Sources: NCCI, “The Relationship Between Accident Report Lag and Claim Cost in Workers Compensation Insurance,” 2015. Amaxx Workers’ Comp Blog, “How Supervisor Actions Shape Workers’ Comp Costs and Recovery,” 2026.

Every claims organization I work with has a technology budget line and a training budget line. In most budget meetings, the technology line wins the argument almost by default. New software has a demo. It has a dashboard. It photographs well in a board presentation. Training does not have any of that, so it gets treated as overhead and trimmed first.

I want to walk through why that instinct, reasonable as it feels, gets the cost equation backwards.

The claim is often lost before the software ever sees it

Claims technology speeds up what happens after a claim is reported. It routes the file, flags reserve reviews, and generates correspondence. All useful. None of it touches the biggest single driver of claim cost, which is how fast the injury got reported in the first place.

The data on this is not close. A Hartford study of more than 50,000 claims found that claims reported after two weeks cost 18 percent more than claims reported within one week. Past three weeks, cost climbed 29 percent. Past five weeks, claims cost 45 percent more than early-reported files. Separately, the National Council on Compensation Insurance found that attorney involvement rises in step with reporting delay: about 13 percent of claims reported the same day end up litigated, compared to nearly 32 percent of claims reported four or more weeks out.

That gap does not open up in the claims department. It opens up on the shop floor, in the moment a supervisor decides whether an injury is worth reporting today or worth waiting to see how the employee feels tomorrow. No claims system, however well built, can intervene in a decision that happens before the system ever receives a file. That decision is a training outcome, not a technology outcome.

Tool spend measures activity. Competence spend measures results.

This is the distinction CFOs should be pushing their own teams to make. Technology ROI decks tend to report activity: system uptime, forms submitted electronically, average handling time inside the platform. These are legitimate operational metrics, but they describe whether the tool is being used, not whether the organization is getting better outcomes.

Training investment should be held to a different standard. The training evaluation literature, going back to the Kirkpatrick model used across corporate learning functions, makes the same point in a different language: attendance and satisfaction scores prove people showed up, not that anything changed. The level that matters to a CFO is the last one, the one tied to actual business results. For a claims organization, that means duration, litigation rate, reopen rate, and reserve accuracy. Those are the numbers that move the loss ratio, and they are the numbers a trained workforce, from front-line supervisor through senior adjuster, actually controls.

Build one scorecard, not two conversations

The practical fix is not complicated. Stop evaluating technology spending and training spend as separate conversations with separate metrics. Put them on one scorecard, measured against the same outcomes: claim duration, litigation rate, reopen rate, and reserve accuracy. If a technology investment improved those numbers, the data will show it. If a training investment improved those numbers, the data will show that too. Either way, the organization stops rewarding activity and starts receiving rewarding results.

For most claims’ organizations, the honest finding is that both investments matter, but the smaller and more overlooked one is the training line, particularly training aimed at the people closest to the point of injury. A well-configured system routed to an untrained supervisor still produces a late report. A well-trained supervisor with a mediocre system still reports fast, because the judgment that drives early reporting was never the software’s job to begin with.

Compensable does not mean unsympathetic, and cost control does not mean cutting corners on care. It means making sure the dollars spent, on tools and on people, are actually buying the outcomes the organization is measuring itself against.

If you want a closer look at how training investment connects to claim duration, litigation exposure, and reserve accuracy in your own book of business, WorkCompCollege.com has education resources built specifically for adjusters, supervisors, and claims leadership working through exactly this question.

Sources

• The Hartford, claim reporting lag cost analysis (cited via Amaxx Workers Comp Blog, “How Lag Time Sabotages Claims, And What You Can Do About It,” May 2025): https://blog.reduceyourworkerscomp.com/2025/05/how-lag-time-sabotages-claims-and-what-you-can-do-about-it/
• National Council on Compensation Insurance (NCCI), reporting lag and attorney involvement data (cited via Arrowhead Insurance, “How faster workers comp claim reporting reduces costs”): https://www.arrowheadgrp.com/blog/how-faster-workers-comp-claim-reporting-reduces-costs/
• Kirkpatrick Model of Training Evaluation, four-level framework distinguishing attendance and satisfaction from business results: https://www.devlinpeck.com/content/kirkpatrick-model-evaluation

Every claim organization has run this math at some point. A senior adjuster leaves. The open requisition sits for weeks. A new hire finally starts, spends the first six months learning the file types, the jurisdictional rules, and the carrier’s own claims philosophy. Somewhere in that gap, claim drifts. Reserves get set late. Litigation rates creep up. The organization pays for all of it twice, once in recruiting cost and again in claim outcome expenses.

The numbers on turnover are not new, but they are worth repeating because most budget conversations still treat training as a discretionary expense rather than a cost containment tool. SHRM has long estimated that replacing an employee costs between half and twice that employee’s annual salary once you account for recruiting, onboarding, and lost productivity.

If a claims organization loses five experienced adjusters annually with an average replacement cost of $75,000, turnover can easily exceed $375,000 per year before considering claim leakage. A training program costing $50,000 (or less) that reduces turnover by only one employee has paid for itself.

The Work Institute’s Retention Report puts the annual cost of voluntary turnover to U.S. employers above one trillion dollars. And none of those accounts for the specific cost of losing claims expertise, which is harder to price but easier to see. The relationship between professional development and retention has been examined repeatedly in the literature. A 2023 systematic review of 271 studies found that continuing professional development was associated with increased intent to remain employed and decreased intent to leave a current employer.

An adjuster who understands the mechanism of injury, knows when imaging findings do not match the clinical picture, and can question an unsupported diagnosis before it becomes a compensable condition is worth more than a job description. This adjuster may recognize that imaging findings are degenerative rather than injury-related, identify when treatment exceeds guideline recommendations, or recognize when objective findings do not support a diagnosis. Those decisions affect reserves, medical spend, litigation exposure, and claim duration. That judgment takes time to build and does not transfer with a resume.

This is where training earns its keep. A structured training investment, one that builds claims logic rather than just software proficiency, does two things at once. It shortens the runway for new adjusters to reach competent, defensible decision making. And it gives experienced adjusters a reason to stay, because most people do not leave jobs where they feel like they are getting better at something that matters.

Compare these two-line items honestly. Recruitment spend buys you a name on a start date. Training spend buys you a workforce that closes files correctly the first time, avoids claim creep, and holds up under utilization review or attorney scrutiny. One of those is a sunk cost. The other compounds.

None of this is an argument against hiring. Organizations need to hire. The argument is against treating recruitment as the default lever every time a performance or capacity gap shows up, when the underlying problem is often that the people already in the seats were never given the training to do the job with confidence.

Employees rarely leave because they were taught too much. More often, they leave because they feel unsupported, overwhelmed, or uncertain in their decision making. Effective training builds competence, confidence, and professional growth at the same time.

Modern online education makes that far more practical. Training can be delivered without pulling adjusters away from meaningful desk time, which, in claims, is usually where the day starts misbehaving. These programs can also be built as bite-sized, jurisdiction-specific modules that speak directly to workflow, decision quality, and claim performance.

Organizations rarely struggle to calculate the cost of hiring. They often struggle to calculate the cost of failing to develop the people already on staff. One appears on a budget report. The other appears in reserve development, litigation rates, and prolonged claim duration. Both are expensive. Only one is routinely ignored.

If you are building next year’s budget, the question is not whether you can afford a training line. It is whether you can afford another year of turnover eating the difference. Retention is not a soft metric. It is a claims outcome, a reserve accuracy metric, and a litigation avoidance strategy, all wearing a human resources hat. If training improves retention, and retention improves claim outcomes, then training is not merely an employee benefit. It is a claims management strategy. The organizations that recognize that connection will retain expertise longer, make better claim decisions, and spend less replacing institutional knowledge that should never have walked out the door in the first place.

1 Shiri R, et al. (2023)”The Role of Continuing Professional Training or Development in Maintaining Current Employment: A Systematic Review.” Healthcare. 2023;11(21):2900.