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Group LTD vocational rehab: Get it back to work

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Brokers and agents need to know something important about how U.S. group long-term disability (LTD) claims management has changed: Over the past two decades, the responsibilities of the vocational rehabilitation specialist (VRS) in LTD claims have contracted considerably.

In the 1990s, VRS professionals had a central role in claims management, maximizing the ability of U.S. claim management teams to meet the needs of both employers and disabled employees.

These experts worked closely with medical and claims experts as part of a multidisciplinary team. Their role combined medical and vocational case management and was actively focused on claim duration management, claimant functional capacity, vocational assessment and optimizing claimant recovery and return-to-work outcomes.

The VRS role now is far more narrow and much less active and collaborative. Medical case management is no longer part of the role – indeed, at several U.S. companies, VRS professionals now report to the medical team. VRS departments are now also far smaller, and often the staffers are no longer directly involved in initial claims assessments. Their primary claim assessment role now is mostly technical: performing the occupational analyses and transferrable skills assessments that enable claims assessors to make benefit eligibility determinations. At many companies, the VRS is not able to, or is not even tasked to, conduct vocational assessments until claimants reach medical stability. Precious time is lost.

Why this contraction occurred is not completely clear, but root causes include: corporate shifts in claim management philosophy; moves to improve efficient use of claims department resources; and a lack of understanding of the value vocational rehabilitation, and the specialists who provide it, can bring to the management of LTD claims.

Where the challenges lie

Disability insurance is really all about the capacity to work as a function of the occupation definition.  Vocational specialists are the experts here.

Brokers, agents and insurers need these subject matter experts to help analyze jobs, occupations and tasks as they relate to the various definitions of disability, including the disabled worker’s own job and his/her own occupation or own specialty. They can provide guides to allow agents, brokers and claims examiners to successfully explain policy language during the sale process. They can also analyze post-claim data for the benefit of all.

Today’s claims management model does not even begin to scratch the surface of realizing the potential benefits from this undervalued and underutilized resource. Several challenges, however, exist around U.S. insurers developing fuller VRS utilization – challenges related to definitions of occupations within group policies; employability assessments to determine viability for work; and having resources to pursue positive return-to-work (RTW) outcomes for claimants.

  • Most U.S. group disability claim operations today use a medical model. Nurses and physicians dominate, claims examiners mostly gather medical records, and vocational rehabilitation needs are essentially absent from initial assessments. The collaborative value of consistent use of an interactive multidisciplinary team of claim, medical and vocational experts has been lost.
  • Most claims examiners do not understand the differences between a claimant’s actual job duties and the ”own occupation” as defined by the group LTD policy. (That the definitions in the U.S. Department of Labor’s Dictionary of Occupations Titles have not been revised in about 50 years definitely does not help.) This disconnect can significantly affect assessments of a claimant’s eligibility as well as the return-to-work outcome.
  • Smaller VRS departments mean less likelihood that claimants will receive vocational rehabilitation services.
  • The VRS must wait for claimants to achieve medical stability before providing their services. Earlier incorporation of VRS professionals into the process would address claimant functional capacity earlier, matching worker and job function to enable speedier disability recovery and generate stronger return-to-work outcomes.
  • A return-to-work focus is significantly absent.

Improvements are emerging

Over the past few years, the vocational component of Canada’s claims management model has been evolving, with more resources being devoted to this specialty. Canadian VRS staffers have medical and mental health case management responsibilities and often meet face-to-face with claimants to assess and develop rehabilitation plans.

Recent RGA group disability claims department research incorporating VRS use in the United States and Canada found that Canadian VRS caseloads are 70 percent that of their U.S. counterparts, and that Canadian claims department have one VRS professional for every 3.2 claims examiners (versus 14.3 examiners per VRS in the United States).

The RGA research also found that the recoveries (work capacity realized as well as RTW outcomes) in Canada, were substantially stronger than in the U.S. In Canada, 54.8 percent of all claim closures in 2013 were for return-to-work (RTW) and/or medical recovery that would allow RTW. U.S. insurers, however, saw only 26.3 percent of claim closures for RTW and/or medical recovery that permitted RTW.

Interestingly, most Canada-based VRS professionals do not have master’s degrees in vocational rehabilitation, as is now almost universally required by U.S. insurers.

Some U.S. group disability providers have already been evolving their claims management models to enhance the VRS role. Recent RGA research determined that over the past three years, several insurers changed VRS task assignments to include technical and case management duties. Some claims departments now field two VRS groups: one focused on technical needs and one on work readiness and RTW services. Some companies have shifted the vocational rehabilitation program’s reporting line from medical to claims, and others that had used an external vendor for RTW services transitioned the assistance program in-house. However, some also shifted the initial claim triage process to assess RTW to claims examiners.

Making it happen

While this research does suggests positive trends are afoot, it is clear that optimizing the use of the vocational rehabilitation specialist in ways that can strengthen claimant recovery and RTW outcomes, will require more climate change in the U.S.’s current claims management operations philosophy. This will be challenging, but ultimately, outcomes on several levels will be positive. Some ways this can happen:

  • Hire more VRS professionals, and consider softening the master’s degree requirement
  • Embed VRSs into claim examiner teams to improve collaboration and outcomes.
  • Integrate targeted medical management roles into the customary VRS duties to improve claim duration management and improve RTW outcomes.
  • Promote and institutionalize an RTW focus in claims departments and with primary stakeholders – employees, employers, and treatment providers.
  • Realign the claims model to focus more on functional capacity (ability to work) than on the diagnosis. A diagnosis alone does not provide sufficient data to judge a claimant’s functional capacity.
  • Move the technical portions of the vocational expert’s role (occupational analysis, transferrable skills assessment, labor market surveys) to external vendors. This will allow on-staff vocational rehabilitation specialists to focus on helping claimants achieve maximal functional capacity and improving RTW outcomes.
  • Measure outcomes, cost-benefit and claim durations, while making claim, vocational and medical staff members equally accountable for return-to-work outcomes.
  • Integrate an operational RTW philosophy with vocational rehabilitation expertise that aligns with the key case management competencies of information-gathering, communication, assessment and use of resources.

A fundamental goal of disability insurance is the replacement of lost wages as a result of severe impairment. Vocational rehabilitation is a second and equally important goal and value, from both forensic and return-to-work perspectives, and is an important selling point for brokers, agents and sales representatives. Stronger, more effective integration of vocational rehabilitation specialists into a claim operation will improve claim assessments and services to both policyholders and disabled workers. 

Mark Taylor is executive director of claims-consulting, for life and disability, in the U.S. group reinsurance unit at RGA Reinsurance Company.


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