In the world of Short-Term Disability (STD) claims management, leveraging the right resources efficiently and effectively is the name of the game. Given the unique nature of STD claims, insurers must exercise a thoughtful approach to allocating resources to best meet customer service obligations and manage claim outcomes.
One time-tested way of improving claim adjudication is by employing an STD segmentation strategy that aligns claim complexity with case manager proficiency. In speaking with our clients, we learned that organizations that leveraged some form of STD segmentation pre-pandemic seemed to have fared better than those that did not.
Kickstarting your segmentation strategy
The development of a segmentation strategy requires a few fundamental building blocks. First and foremost, success will depend on the organization’s ability to leverage predictive analytics to refine the universe of STD claims and organize them according to common characteristics, or segments.
Choosing the right segments into which the claims will be placed is critical. While the total number may vary, three essential segments should always be considered:
Routine: Sometimes referred to as the “auto-adjudicated” segment, routine claims include both acute and severe conditions and may benefit the most when leveraging technology. Less experienced but highly productive case managers will typically manage routine claims.
Managed: Traditionally, a high percentage of STD claims are managed independently by moderately experienced case managers with tools and resources available to support them.
Complex: Complex claims are most likely to transition to LTD. More seasoned case managers should be assigned to complex claims to leverage their experience, specialized resources, and investigative tools to manage them.
Best practices for a segmentation framework
There are a few aspects to focus on when building a segmentation framework to meet best practices. An ideal and effective segmentation strategy should include four main components:
- Predictive Modeling Tools: Implementing a scoring protocol on an STD block will provide front-end guidance on the likelihood of each new STD claim duration exceeding the maximum duration.
- Intervention Protocols: Establishing formal protocols or interventions, such as clinical, vocational, or leadership, on complex claims ensures a multi-disciplinary perspective early in the life of the claim.
- Specialized Resources: Utilizing specialized claims teams allows certain commonly diagnosed or complex claims with other similar claim characteristics, such as a Behavioral Health diagnosis, to be managed exclusively by a group of case managers.
- STD Accountability: An STD claim team that continues to assess and document the claimant’s functional capacity throughout the time it owns the claim can provide crucial information needed to end a claim through maximum duration, return-to-work, or a transition to LTD benefits.
Moving forward with claim segmentation
Once an organization has developed and implemented a segmentation strategy, it will be important to assess the other key components of the claim operation to ensure each remains aligned with the new segmentation model. This assessment may include reflecting on whether:
- Your organization will need to provide specific new hire training or if the current curriculum adequately introduces and reinforces the new strategy.
- Case manager expectations need to be changed to account for new segmentation accountabilities.
- The quality program properly assesses the extent to which the desired segmentation behaviors are being exhibited.
In the absence of this alignment, the full power of a segmentation strategy may not be realized.
Brown & Brown Absence Services Group is seeing several carriers succeed with an STD segmentation strategy in place. We’re committed to helping our clients determine the ideal approach for integrating a best practice model that will improve both claim outcomes and the customer experience.