Insurers Need to Plan for the Future of Workers’ Compensation Data Reporting

Statistical Reporting Models for Workers Comp

The world of workers’ compensation statistical data reporting is constantly evolving. Rating bureaus are continually updating regulatory requirements and increasing the number of reportable data elements.  The past few years have seen multiple rating bureaus roll out brand new data collection and reporting tools, introduce a new Indemnity data call, and increase the number of relational validations between Unit Statistical data and Financial Call data. The need for developing and maintaining adaptable reporting solutions has never been more important than it is today.

Expansion of Reporting and Testing Requirements

A substantial effort has been made by state independent rating bureaus to establish their own internal Policy and Unit Statistical Reporting applications. Historically, paper submissions were an option for Proof of Coverage Reporting. This is no longer the case. Electronic submission uploads or manual data entry are now required by all bureaus. For smaller insurers, manual data entry may be an option, but due to the amount of human intervention, is subject to a sizeable degree of error. Automated electronic data submissions are key to reducing costs associated with error resolution and manual entry.

For a carrier to be approved for electronic reporting by a rating bureau for all required reports, a thorough testing process is required. For WCPOLS, this involves comparing converted text files in bureau formats to hard copy policies to validate the accuracy and completeness of the data reported. DCI, Medical Data Calls, and Indemnity Data Calls all require stringent data validation checks and reconciliation to Unit Statistical Reports. State independent bureaus are increasing the complexity of their required test cases to account for multiple complex policy scenarios. This can be seen most recently with California’s Star systems and Pennsylvania’s expansion of testing requirements. The accuracy of data capture is essential for insurers to avoid fines and remediation.

On top of increased testing requirements, we are seeing the rating bureaus expand data requirements.  The National Council on Compensation Insurance (“NCCI”) and several state independent bureaus implemented the new Indemnity Data Call on 9/30/2020 to collect detailed claims data on indemnity losses. Financial data call relational data validations are expanding on an annual basis and comparisons to other reporting requirements such as Unit Statistical are becoming more prevalent. Data sources need to not only pass initial data validations but must also meet actuarial reasonability standards with increased accuracy. This is especially true for regulator-level premium calculations related to financial calls.

The Importance of Automated Error Correction

Reporting of workers’ compensation statistical data allows very little, if any, room for error. As data elements continue to expand and edit packages become more robust, data scrubbing and error correction will become more time consuming. Companies will be required to spend more money on resources to either improve data capture or invest more in additional resources and people to resolve data quality errors. Alternatively, working with an experienced reporting vendors’ data validation packages will make the reporting process more streamlined, allowing companies to identify data quality errors and make corrections in groups, rather than searching out errors one at a time. Implementation of automated bulk updates will result in a significant number of hours saved on an annual basis.

Single Source Solutions

Over the last few years, rating bureaus have expanded their systems to allow for direct reporting and error correction to be completed through internal web-based applications. In addition, NCCI has expanded their system to allow for the reporting of multiple state independent bureaus. This has improved the overall reporting process by reducing the number of websites utilized for data reporting, but there is still room for improvement. While the Compensation Data Exchange allows for the loading and reporting for both Policy and Unit Statistical data for all states, the application still does not capture all edits for all bureaus.  In the future, insurance companies will be looking for a single platform where data for all bureaus can be loaded, validated, and corrected. Carriers will seek a more simplistic solution – one that limits their employee’s effort and number of clicks required to search multiple websites to ensure they comply with Policy and Unit Statistical reporting requirements.

Summary

As reporting requirements expand and data validations become more robust, staying current on reporting changes is a must in the digitization of data compliance. Being prepared for changes in statistical data reporting is the only true way to avoid countless hours of additional work staying compliant. Perr&Knight continuously works on anticipating trends in data reporting and regulatory compliance. Additionally, Perr&Knight continues to develop new data collection, data validation and error correction applications. Utilizing Perr&Knight will expedite data reporting processes, improve error resolution procedures and offer rapid data comparisons, allowing our clients to focus more of their time on profitability rather than compliance issues.

Stop worrying about missed deadlines and steep fines. Save time, save money and eliminate the hassle of accurate, on-time statistical reporting. Use Perr&Knight’s cutting-edge Statistical Reporting Solution to keep control of all of your statistical reporting needs.