Mandating Timely Claims Conclusion

Workers’ compensation is known in insurance parlance as a “long-tail” benefits system, in part because most states do not require the claim to be legally concluded within a reasonable span of time.

One of the worst elements of workers’ compensation is the extreme interval between the injury date and the claim’s conclusion. Keeping injured workers unnecessarily and artificially tethered to the workers’ compensation system makes them think of themselves as “an injured worker” rather than productive members of society.

According to the Workers Compensation Insurance Rating Bureau of California (WCIRB), 44% of workers’ compensation benefits nationwide are paid 36 months or more after the date of injury. California has the dubious distinction of paying 66% of that total.

Delays in concluding claims can result in reduced benefits to legitimately injured workers. Systems work better when there are common goals that everyone knows and works toward. Designating timelines for all participants (including the injured workers) usually results in improved benefit provision and better outcomes for the injured workers.

In most states, workers’ compensation systems have legislation and regulations mandating benefit delivery timelines, including compensability decisions, provision of benefit notices, authorization of medical care, and indemnity payments. These timelines were put in place to ensure prompt and accurate communication and the provision of benefits to legitimately injured workers.

However, most states do not have any requirements to bring the claim to a legal conclusion. The lack of focus on claims settlement has resulted in regulations and administrative processes that increase administrative costs for employers and delay the conclusion of the cases.

Medical and indemnity payments may still be associated with the claim, but the legal process should be concluded within the legislative timelines. This missive is not intended to prevent or mitigate the provision of future medical care that may be needed or to eliminate lifetime partial disability or total disability benefits when awarded. It is focused on the issue of bringing claims to a timely legal decision concerning the nature of the injury and the need for any type of future medical care that should be provided.

Each state has its own built-in legislative and regulatory delays to claims conclusion. For instance, some jurisdictions cause administrative delays by requiring the use of a court reporter for all proceedings instead of allowing electronic recording. In California, once a trial is started, it only continues once the trial is finished. If another day is required, it is scheduled for the next available open date on the calendar – which can be six months in some jurisdictions. I have had some trials take years to conclude because of this process.

In contrast, Florida has legislated that all claims be concluded within 200 days after the injured worker has achieved maximum medical improvement. They believe that there is enough time for both sides to get appropriate medical information concerning the need for future medical care and the extent of permanent disability. Because of their mandate, the administrative processes and regulations have been aligned to ensure prompt decisions.

A nationwide goal for all states should legally finalize all claims within 200 days of maximum medical improvement (MMI). Achieving this goal will improve benefit provision, reduce administration expenses in some jurisdictions, and, most importantly, allow injured workers to get on with their lives.