“I don't know of a policy management system that could replace a full-featured claims system, or vice-versa,” said Steve Schmutz, president of MountainView Software. “If your software isn't workers' comp-specific, you can't have compliance with all 50 states.”

“It takes a lot of attention to detail to guarantee compliance,” said HNC Software president Sean Downs. As states change their fee schedules, HNC keeps customers current by sending out monthly updates to its products by CD-ROM or over the Web. “We want to ensure that our customers get the right claims to the right resources at the right time, and foster a more efficient environment for routine claims,” he said.

HNC's new ally, ISO, got in the game “for a more complete solution for reporting needs,” according to Richard Della Rocca, ISO's assistant vice president for marketing. ISO deals with the statistical-data reporting side of workers' comp-an aspect Carole Banfield, executive vice president of government relations and data management, admits is not usually involved with basic business practices.

But Banfield is willing to give her two cents: “Consolidation of services should provide cost efficiency to the customer. There's much more standardization in workers' comp, which lends itself to economy of scale.”
Consider the size of your business when shopping around. Chances are, if you operate a small shop, you can use the all-in-one policy manager already in place and update your system to meet state expectations as they change. But larger companies might benefit more from specific solutions that offer automated updates and file exports, as these features are becoming increasingly popular.

Trends

Smaller businesses tend to respond more positively to workers' comp technology that operates over the Internet or as an ASP model, according to Bruce Coates, vice president of marketing and R&D at Westport Insurance. A wholly-owned subsidiary of Employers Reinsurance, Westport recently acquired and reactivated CyberComp, an online system that quotes and binds workers' comp policies.

Coates said the small business segment works best with the Internet version of CyberComp because of its ease of use; small businesses are spared the sometimes expensive and time-consuming task of installing, configuring, customizing, and maintaining client-hosted solutions. In the online model, CyberComp handles all of these aspects. “The more we can digitize the process, the better,” he said.

Along similar lines, MountainView Software's Worker's Companion has 95 percent of its functionality mirrored in its ASP model. (Missing are financial tracking and the ability to create ad-hoc reports.) Instead of paying a flat fee for software licensing, customers instead pay per transaction.

Schmutz said trends in workers' comp solutions are leaning toward using the Internet as a collection tool. At the MountainView Software-related Web site ifroi.com (“Internet First Report of Injury,” of course), users can enter specifics from claims, after which the Net-based application will take the customer information and automatically send it to the appropriate place based on the types of information gathered-similar to ZIP codes with four-digit sorting numbers.

As technology and customer satisfaction make leaps and bounds, Downs hopes for overall cost control. He said there's increasing pressure to lower costs of administering claims in the workers' comp industry. And he's noticed a balancing act between keeping losses low and administrative spending. “Companies are looking to reduce administrative burdens of handling workers' comp claims without losing the effectiveness of maintaining costs,” he said.

HNC Software focuses on e-reporting with its AC-Web and SC-Web products (Admin Connect Web and State Connect Web). By making the entire workers' comp process electronic-and keeping it that way-Downs thinks collectible info becomes more plentiful, and data are expanded and analyzed more effectively. “More states are adopting e-reporting, and they're upgrading their systems to handle this,” he said. “With the enablement of e-reporting, more valuable data can be added.” (For perspective, 17 states use HNC solutions for e-reporting.)

While trends such as ASPs haven't hit the statistical data reporting side of workers' comp, ISO feels confident it'll stay competitive because it's an outsourcing solution. “Our workers' comp data reporting service could be an ASP,” said Della Rocca, “but instead of software for sale, this is an entire process. The ASP concept fluctuates with the NASDAQ.”

But, ISO's service is alive and kicking. After all, Banfield said, ISO's genesis is statistics and data handling. ISO claims its data reporting capabilities fulfill much sought after reductions in operating costs, time spent updating systems to meet changing data requirements, and processing burdens. “We pick up data already on the books. We track information on a policy once it's been issued,” Banfield said. “That's a value-add.”

Features and Functionality

MountainView's Worker's Companion helps companies complete and file the first report of injury, OSHA 200 reports, and features automated e-mail functions and EDI.

If your injury report is OSHA-worthy, Worker's Companion can automatically create log reports. “Before software, people kept this type of information on paper,” Schmutz said. “Recalculating loss time for OSHA logs often took three weeks per report. Now, as you enter data [into Worker's Companion] an OSHA log is built at the same time.”

But unlike your spouse or auto mechanic, Worker's Companion will not make decisions for you. You alone must judge whether or not the case should be reported to OSHA. If it is, Worker's Companion can produce a compliant report.

Schmutz said the software follows the IAIABC (International Association of Industrial Accident Boards and Commissions-it develops standards for e-reporting) format for EDI, and it can be modified for any organization's needs. “IAIABC is the most requested format,” he explained. “Ninety percent of all other EDI formats are offshoots of IAIABC's. Other requested functions are usually add-ons to IAIABC standards.”

With its built in graph and chart feature, companies can use Worker's Companion to display workers' comp-related data in seven categories-from type of injury to time of day. Along with graphics production, the software can produce other types of reports, such as loss/run, audits, and claims filed by category.

Bruce Coates said by digitizing the traditional workflow, CyberComp ended up with a streamlined system designed around risk-based questions presented to agents. The paperless process involves agents' ability to enter information and get answers immediately, instead of waiting for word from the underwriters.
Following the concept 'do a lot in a little time,' CyberComp's recently launched Internet version allows 10-minute processing and immediate quoting, according to Coates. “Hit the Bind button and everything is in motion-from issuance to billing, and more,” he said.

According to Coates, CyberComp is looking into expanding its digitized process by introducing electronic signature technology. He said the company has a team of specialists working on e-sign-based solutions.
Industry professionals who want to work with CyberComp fill out an electronic application, which is automatically forwarded to the proper territory marketing rep. On approval, the applicant gets an ID and password for access to the second level of the application process. If the application is approved again, a regional marketing director will make the final decision.

CyberComp-appointed agents can conduct business entirely online, including submitting applications for workers' comp insurance, receiving quotes, editing new business quotes, updating renewal quotes, and binding insurance coverage.

With HNC's AC-Web and SC-Web, carriers can send workers' comp injury reports over the Internet. Downs said there's plenty of money to be saved when carriers can use resources online instead of installing and maintaining in-house EDI reporting systems.

Meanwhile, HNC's Trans-Connect product-a modular tool kit for EDI developers-allows organizations to integrate the EDI process into a transparent application. This enables real-time system access to EDI rules and data.

AC-Web, according to Downs, is both the “pitcher and catcher,” because it allows users to submit e-reports to state organizations and accept e-transactions from employers and electronic medical bills. AC-Web formulates EDI transactions based on state regulations, which, according to Downs, is time and cost efficient. AC-Web's ASP model features 100 percent of the client-hosted version's functionality. SC-Web, a “catcher,” is purchased by state organizations to receive e-transactions, allow e-reporting, and integrate data into legacy systems.
And you can hang on to some of your legacy systems, according to ISO. The company believes its data reporting outsourcing solution can help prevent insurance companies from purchasing additional work-specific equipment or paying for software updating and customization.

Labor-intensive statistical reporting jobs are sent to ISO, which will do the worrying about compliance with changing regulatory requirements. ISO handles data from what it describes as 'a highly regulated and highly political line of insurance' by using front-end editing capabilities to detect errors early in the game. It then gathers necessary regulatory reports to quench the thirst of workers' comp-bureau data quality requirements, and in the end, extracts information from the data so companies can perform detailed analyses of their workers' comp business.

As Della Rocca put it, “Because there are lots of standards within each state, there are differences between bureaus, captive state funds, and more.”

As a result of these differences, ISO provides its clients with the Workers' Compensation Transactional Reporting Plan, which includes updates and documentation to further guarantee continued compliance.

Workers' comp regulations, policies, and practices change from state to state, month to month. It's a volatile line of insurance with no sign of easing, according to ISO. As such, you should shop for dynamic solutions that are easy to use, simple to upgrade and update, flexible to change with the regulations, and that can communicate over the Internet.