Lag Times Cost Money, Report Shows

San Francisco, CA (WorkersCompensation.com) - Employers/payers spend an extra $50.47 on medical-only claims for each day an injury is not reported to the employer. That finding is one of many from the Integrated Benefit Institute’s recent report on lag times.

The organization looked at workers’ compensation claims from 2010 to 2017 to see if delays in reporting occupational injuries and opening claims had an impact on costs. Both medical-only and indemnity claims were included. Here are some of the other findings:

• Each additional day that elapsed between the date of injury and the reporting date was associated with a $98.25 increase in total payments for indemnity claims.
• Each additional day that elapsed between the reporting date and the date the claim was opened was associated with a $96.86 increase in total payments for indemnity claims.
• The losses incurred for medical only claims between the date of injury and the date it is reported to the employee begins to decline after 67 days have elapsed.
• Lag times between the reporting date and the date a claim was opened) were not statistically associated with payments for medical only claims.

The study included 2.25 million claims from IBI’s benchmarking system. The organization compiles information from 15 major U.S. disability insurers and absence management firms with more than 6 million short-term disability, long-term disability, worker’s compensation, and federal Family and Medical Leave Act claims from more than 65,000 employers' disability and leave management policies.

“This analysis emphasizes the importance of immediate workplace injury reporting as a cost control strategy for both medical-only and indemnity claims,” the authors wrote. “It also underscores the need for a well-articulated claims process for the most serious injuries (i.e., those incurring lost work time) as delays in opening indemnity claims are also associated with increased costs. Understanding the factors that contribute to delays in reporting injuries and processing claims will help employers develop strategies for avoiding unnecessary workers’ compensation costs.”

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