During the last two years, I have had the opportunity to be a part of several integrated disability management development and implementation programs. The programs are varied in size and scope and have distinct components that differentiate them in the marketplace. They all, however, label their product as integrated disability management or “IDM.” There seems to be consensus within the industry that IDM does not fall neatly into a single definition, nor into a single product offering.
In the last several years, the employer market has spent considerable time reviewing insurance carrier offerings around IDM to find that the perfect product fit was not available. Most concur they had to build consensus within their organization to create a consistent management strategy for all lost time cases that supported return to work and fostered sound approaches to claim resolution, before heading to the market to find a partner for their program. The industry, now far more sophisticated in its knowledge and buying practices around IDM, has made great strides in better understanding its unique needs as they relate to the current or past practice of segregated disability management. Now, with several years of experience under their belts, employers are finding their IDM programs to be beneficial to improved management of disability claims and favorable to bottom line savings.
The bottom line effect of disability
Year after year, we continue to see statistics confirming that 20%-30% of payroll is attributed to disability costs. The Social Security Administration has reported the number of disability claims more than doubled from 1986-1996. Total cost of disability has been rising 8% per year and Census Bureau predictions show that costs associated with disability will exceed $340 billion by year end. This long-term trend has forced employers to evaluate and quantify the negative impact such costs have brought to their bottom line performance. Most employers agree they now have a better understanding of the financial impact of lost productivity and have earnestly sought to develop comprehensive and multi-dimensional return-to-work programs for many of the job categories within their businesses. Integrated disability management programs have proven to be an effective means to control increasing disability costs, or the price tag associated with any lost time from work.
Employers making it work
In my dealings with various employers seeking to design and implement integrated disability management programs, I have seen varied approaches to finding the solution. While some of the employers felt it critical to buy an integrated policy with coverage encompassing both workers' compensation and short term disabilities (STD)/longterm disability (LTD), most opted to re-engineer internally, maintaining their current and separate workers' compensation and STD/LTD carriers and third party administrators. The outcome and success of their programs remain highly dependent on the ability of all parties to partner effectively. Employer groups have spent considerable time planning and developing IDM models that would be accepted and supported by senior management. Having senior management acknowledge and understand the potential cost savings related to increased productivity through return to work efforts is a key factor in bringing any of the models to fruition. With senior management buy-in, the supporters of IDM were able to bring managers from each working group together to establish a team that would ensure cross-functional knowledge and support in the development of the final IDM program.
The majority of employers felt it critical to develop ongoing communication channels for the employer and employees to clearly define changes to current employer practices. The commitment to a “return-to-work” philosophy and the development of alternate or modified duty jobs, have. been paramount to the success of the implementation of the programs. While the onset and rules for managing workers' compensation and STD/LTD claims differ, it is understood that all lost time claims optimally resolve with the employee returning to productive work. Employers who did not embrace such practices had a harder time of not only agreeing on a program but developing a mechanism to control and measure costs associated with the loss of productivity.
The corporate commitment
A corporate commitment to the development of return-to-work programs has proven beneficial to not only the employer, by maintaining consistency around productivity issues, but also to the employee who is able to maintain connection to work whether it be through modified duty or reduced and flexible hours.
Many employers have already completed the process of developing communication between internal risk managers and employee benefits divisions with the sole purpose of instilling unity around consistent return to work strategies. This effort alone has helped to create solid plans surrounding the best way to incorporate IDM strategies for a particular business. As the management team develops corporate acceptance toward return to work, they it better able to delineate the plan for an IDM approach that will meet its needs. In many cases the employer partnered with the insurance carrier during the process to assist it with the development of the plan. This approach has allowed the partners to create solutions that are unique to the needs of the employer group. I have found it fascinating to meet with several different employer groups as they struggle to identify the integrated approach that will work best within their company environment. When detailing the plan for integration they almost always immediately and unanimously agree upon the need for common claims intake.
The common intake and triage approach to management of claims
Common intake for both occupational and non-occupational claims is the critical front-end component of an integrated program. This has been achieved by offering one toll-free telephone number for the intake of claims data which, in most cases, is linked to eligibility data to quickly and efficiently accept and triage claims to the proper system. All claimant data is captured in one system for ease in reporting. With access to integrated data information the insurer is able to offer complete outcome and trend analysis directly related to cost savings. This has clearly been a key factor in the willingness of employers to try such an approach. The barriers which exist between the employee benefits and risk management organizations have been positively impacted by the change to an integrated intake approach. Managers from both sides of the equation have found this to be a consistent strategy in the alignment of the integration process and a first step in the development of long-range planning and solutions for internal IDM.
After common intake, companies agree that triage to an appropriate case management source is critical to the early intervention and positive impact on the claim. They concur that common case management for occupational and non-occupational claims is ideal, but may differ in their approach as how to accomplish this task. The triage, itself, varies in that some employers send all cases to a management team for review while others triage at the point of intake, systematically, by type of disability or injury and its expected duration. One of the most effective triage components I have seen is within a carrier that has significant industry experience in the disability arena, and has had the foresight to partner with a workers' compensation carrier of equal expertise. Their common intake directs cases, after triage, which is based on specific illness/injury codes, to a common clinical case management component.
The clinical case manager, positioned as the single point of entry, communicates with both external providers and internal management. This approach facilitates dialog between risk, employee benefits and human resources managers and helps to set realistic expectations surrounding return-to-work dates.
Professional clinical staff, cross-trained in both occupational and non-occupational disability case management, are able to immediately assess the diagnosis, treatment plan, restrictions and limitations, and set a duration for return to work. In many cases the clinical intermediary is able to speak directly with the treating physician to objectify the diagnosis, potential job accommodations and shorten the standard duration. This practice, instituted within just two or three days of receiving the claim offers early data that will significantly impact the duration and direction of the claim. Significant improvement, through early intervention and early claim resolution, has been shown since the implementation of the front end clinical approach.
By now, most employers have completed the daunting task of reviewing their internal systems and processes related to the management of disability claims. They have evaluated and now understand the impact of the dollars associated with their disability claims from both occupational and non-occupational losses. Significant time and resource have been spent with their disability partners to develop a program consistent with their business and bottom line aspirations. While many of the employer programs remain in the developmental stages, several have found immediate and significant savings through the coordination of efforts surrounding the management of all disability incidences. Going forward, it is clear that the trend will remain toward integrating the management and outcomes of disability. Clearly understanding their unique situation, employers are now better able to align themselves with progressive and innovative insurers and service providers to find the best solutions for their integrated disability management programs.