Executive Summary
Workers' Compensation in Washington |
L&I manages workers' compensation claims paid by the state industrial insurance fund. There are two major types of claims:
|
A 2016 JLARC report found that the Department of Labor and Industries (L&I) was not following some best practices for workers' compensation processes that can help improve workers' prompt and safe return to work. The Legislative Auditor recommended that L&I improve return to work outcomes by instituting standards for early phone contact and consistent case file documentation, and integrating predictive analytics into the claim management process. L&I concurred with the 2016 report's recommendations (Appendix A).
L&I partially implemented the recommendations
In 2019, the Joint Legislative Audit and Review Committee (JLARC) directed its staff to provide an update on L&I’s implementation of recommendations intended to improve the effectiveness of L&I's workers' compensation claim management processes. While L&I has made efforts to address the recommendations, they have not been fully implemented.
L&I adopted new standards and technology for early phone contact and claim documentation. However, few injured workers and employers receive a call within two business days.
Recommended Action | Completed by L&I | Not Completed |
---|---|---|
Make phone contact with the injured worker and employer within 2 business days after receiving a time loss claim. | ✔ L&I added staff, set standards, updated technology and provided training for early phone contact. | ✘ 4% of workers and 22% of employers were contacted within 2 business
days of time loss claim assignment. ✘ L&I has not established routine data collection or reporting to determine if its standard is met. |
Institute claim management planning and standardize claim file documentation. | ✔ L&I updated its software and templates to standardize its claim documentation and planning. | ✘ L&I has not measured whether claim planning and documentation improved across the claims management division. |
L&I does not plan to incorporate predictive analytics into claim management processes pending updates to its computer system
Predictive analytics |
Predictive analytics refers to mathematical models used to inform or improve claim management. |
The Legislative Auditor also recommended in 2016 that L&I expand its use of predictive analytics to identify claims that may have a long duration and high cost. L&I could use the analytics to help prioritize its claims management resources for those cases. L&I continues to use the analytics that were in place in 2016. The agency is implementing a long-term project to replace its legacy system and stated that it plans to wait until the new computer system is further developed before revisiting this recommendation. It is currently unknown if or when L&I will incorporate these uses into the new system.
Some return to work measures have improved from 2014 through 2019
L&I established return to work goals in its strategic plans. It reports performance measures and other indicators, including those shown in the graphic below, to the Workers' Compensation Advisory CommitteeCreated in RCW 51.04.110..
JLARC staff found that measures for return to work and long-term disability have improved. The third indicator, durable employment, showed varied results based on when a worker returned to work. Determining the cause of return to work outcomes is complicated and can be influenced by L&I, employers, employees, and the general economy. As a result, it is unclear how L&I’s efforts to implement the 2016 recommendations alone may have affected workers' outcomes.
Hover over a card to see a graph with additional detail
Measure: Return to work
|
Measure: Durable employment for one year
|
||||
Measure: Long-term disability rate
|
Source: L&I data presented to the Workers' Compensation Advisory Committee.
Early data indicates that L&I's vocational services program increased return to work outcomes for participants
When an injured worker expresses concerns about returning to work or if there are indications of barriers to returning to work, L&I may refer the worker to a private vocational recovery counselor. The counselor helps the injured worker, medical provider, and employer explore options for returning to work. Outcome data for vocational services shows that the percentage of workers who return to work following a vocational service referral increased from 11% in 2014 to 32% in 2019. This improvement occurred despite the fact that overall return to work figures increased by 2% during this time.
No new Legislative Auditor recommendations
This is the last year of planned recommendation follow-up by JLARC staff. The Legislative Auditor asserts that the 2016 recommendations remain valid for helping to improve return to work outcomes.
Agency responses: L&I and OFM.
View the Legislative Auditor's response to agency comments.
Committee Addendum
The Committee notes that the Legislative Auditor’s 2016 recommendation to make phone contact with injured workers and employers within two days continues to be an industry best practice. As noted by industry experts in the 2016 report, this early contact can improve return to work outcomes.
The Department of Labor and Industries agreed with the recommendation in 2016 and has adopted two-day call standards and supporting technology. However, while L&I has undertaken these improvements, it is not regularly monitoring how often it meets this specific best practice standard. The Committee recognizes that meeting this standard is an aspirational goal that is challenging to accomplish for all cases but is nonetheless an important standard to monitor. The JLARC staff demonstrated that data exists in L&I’s systems to track and report on performance against this standard.
Consequently, the Committee requests that L&I regularly measure the percentage of employers and workers successfully contacted by phone within two days of claim assignment on time loss claims. L&I should report this information to the Workers’ Compensation Advisory Committee in addition to other measures of early contact it deems important.
Committee addendum available on the Recommendations & Responses Tab.
Committee Action to Distribute Report
On June 15, 2021 this report was approved for distribution by the Joint Legislative Audit and Review Committee. Action to distribute this report does not imply the Committee agrees or disagrees with Legislative Auditor recommendations.