Technology’s transformative role in workers’ compensation litigation

The landscape of workers’ compensation litigation is rapidly evolving, driven by the integration of advanced technology, data analytics and artificial intelligence. As Chief Claims Officer, I have seen firsthand how these innovations are reshaping the way claims are managed, litigated and resolved.

Litigation: a small but costly slice

Litigation represents a small fraction of workers’ compensation claims — typically less than 4 percent overall, and approximately 14.4% for indemnity claims — but the financial impact is significant. Litigated claims cost over three and-a-half times more than their non-litigated counterparts. Workers’ compensation is designed to be an administrative process, ideally free from litigation. Yet when disputes arise, the stakes are high, and the need for effective management is paramount.

Why claims go to litigation

There are three primary drivers behind litigation in workers’ compensation:

1. Adversarial relationships: Employees may seek legal representation out of frustration or anger toward their employer or the claims administrator.
2. Complexity and confusion: The process can be convoluted, prompting workers to turn to attorneys for guidance and advocacy.
3. Perceived necessity: Some individuals believe hiring an attorney is simply part of the process, especially when claims are denied or situations are particularly complex.

To counteract these drivers, our team employs an advocacy-based approach, focusing on empathy, clear communication and simplification of the claims process. By addressing concerns early and transparently, we aim to prevent litigation before it begins.

Predictive modeling: preventing litigation before it starts

One of the most powerful tools in the fight against unnecessary litigation is predictive modeling. By leveraging data and technology, claims administrators can identify cases with a high propensity for litigation early in the process. These flagged claims receive enhanced attention, including tailored workflows and additional resources, to address issues proactively and reduce the likelihood of legal escalation.

Litigation prevention models have been in place for several years, allowing us to intervene early and optimize outcomes for both injured workers and clients. This approach not only minimizes litigation rates but also improves the overall claims experience.

Technology in the litigation process

The use of technology in workers’ compensation litigation is expanding rapidly, particularly on the claimant’s side. Attorneys are increasingly utilizing artificial intelligence and data analytics to pinpoint issues, evaluate exposure and develop litigation strategies. Advertisements for technology solutions targeting claimant attorneys are becoming more common, highlighting the competitive edge these tools provide.

On the defense side, technology is equally transformative. One of the most significant advancements is the use of AI-driven medical summarization. By analyzing medical records and generating concise, relevant summaries, AI enables examiners and defense counsel to focus on the most critical aspects of a case. This not only saves time but also ensures that attention is directed where it matters most: improving the efficiency and effectiveness of the litigation process.

Our adoption of AI for medical summarization began roughly 12 to 15 months ago, with notable benefits for both examiners and attorneys. The technology helps surface discrepancies in medical records and streamlines the review process, making it easier to identify key issues and build stronger cases.

Attorney selection and performance evaluation

Choosing the right attorney is crucial to achieving favorable outcomes in workers’ compensation litigation. Technology plays a vital role in this process through performance scoring and outcome evaluation. By analyzing data on case outcomes costs and litigation expenses, claims administrators can identify which attorneys consistently deliver the best results.

This data-driven approach has been in place for about four years and is highly valued by clients seeking to fine-tune their attorney panels or expand into new jurisdictions. By coupling outcome data with insights from legal bill review platforms like Bill ReviewIQ, administrators gain a comprehensive view of attorney performance, including the tactics and tasks employed during litigation.

The integration of legal bill review data with outcome metrics represents an exciting frontier in attorney evaluation. It enables organizations to enhance their scoring processes and ensure that only the most effective attorneys are selected for future cases.

The future: harnessing unstructured data

Looking ahead, I envision even greater use of technology to analyze unstructured data such as lawsuit information, pleadings, emails and medical records. By applying advanced AI and data modeling techniques, claims administrators will be able to fine-tune their predictive models and further improve litigation prevention and management.

While some of these innovations are still on the horizon, the direction is clear. Technology will continue to play an increasingly central role in workers’ compensation litigation, driving better outcomes for injured workers, employers and insurers alike.

Conclusion

The impact of technology on workers’ compensation litigation is profound and multifaceted. From predictive modeling and AI-driven medical summarization to data-based attorney selection and performance evaluation, these tools are transforming the way claims are managed and resolved. As the industry continues to embrace innovation, the potential for improved efficiency, reduced costs and better outcomes grows ever stronger.