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Winning the Claims Game (Part Three of a Three-Part Series)


By focusing on how workers’ compensation claims are treated and processed, it’s possible to achieve significant savings and positive patient outcomes.

The challenge is formidable: Workers’ compensation medical costs are rising, and now account for about 60% of total workers’ comp benefits.

But as we learned in part two of this series, there are ways to diagnose and fix the problem. Insurers are honing in on medical claims and a metric known as “claims leakage,” which essentially measures the difference between claims payments and what an organization should pay, according to industry best practices. At the same time, they’re taking a fresh look at the claims process from end-to-end, repairing the vulnerable areas.

Driving Down Costs by Tightening the Claims Review Process

Companies are achieving fast and dramatic results. In months — not years — they’re cutting claims leakage significantly and often saving millions. They’re also implementing process improvements that deliver long-term benefits for the organization.

Recently, a major workers’ compensation carrier that we work with found it had claims leakage of about 7%. This prompted a full review of its claims management approach. It analyzed every data source available, looking for ways to drive down the leakage rate and improve claims outcomes. Soon, the carrier found the primary culprit — payments for unnecessary and unrelated medical charges. In fact, the company found that up to 22% of the charges it had processed were for medically unnecessary treatments.

The company also took a close look at its treatment planning and found it had no framework for integrating clinical guidelines and medical necessity reviews across its claims population.

In addition, the company could see it wasn’t providing treatment plans for everyone in its system, which meant some patients would take longer than usual to recover and return to work. Plus, the company was getting by with manually processing most claims. There was plenty of opportunity for automation.

The company took action, implementing a rigorous medical necessity review process for all claims. It added evidence-based treatment planning for all cases, hiring about 100 registered nurses to help manage the plans. Plus, it automated most of its medical bill approval decisions. The additions and upgrades have paid off quickly, saving the company time and at least $50 million so far.

Figure 1

Better Outcomes & Savings

When it comes to workers’ compensation medical claims, the best solution is often a holistic approach that addresses and improves the entire claims management process.

  • Start by measuring your organization’s claims leakage. Next, make sure your team is reviewing all claims to ensure they are medically necessary. Many are not.

  • Make sure you have a treatment plan for every claimant. You’ll get better outcomes for patients and save money by following evidence-based treatment guidelines. 

  • Finally, consider reviewing your organization’s entire claims process from beginning to end. Very often, you’ll find opportunities to improve and streamline it. 

In the end, your organization can generate significant savings without negatively affecting patient outcomes. Solving the claims game is good for everyone.

To learn more visit Cognizant’s Optima MedWise site, or contact us at

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Winning the Claims Game (Part Three of a Three-Part Series)