New Study Illuminates What Drives High-Cost Workers’ Comp Claims — And What Employers Should Watch

A recent WCRI analysis of more than 720,000 workers’ compensation claims sheds light on critical factors that push certain claims into the top 5% in cost — offering employers and insurers insight into how to spot risks early.

The report, titled “Factors Associated with High-Cost Claims,” examined claims from 32 states, all involving injuries with more than seven days of lost time, and tracked outcomes for 36 months post-injury.

 

Key Takeaways: What Tends to Drive High Costs

• Late, resource-intensive care: Claims that require intensive medical interventions after the acute phase are especially prone to ballooning costs.
• Comorbidities and complex health status: Workers with underlying health conditions or multiple diagnoses are more likely to see cost escalation.
• Delays in treatment or diagnosis: Timing matters — delays in care pathways correlate with increased expense and prolonged recovery.
• High variability across states: Differences in statutes, fee schedules, access to care, and system structure influence how expensive claims become.
• Potential for intervention: The authors emphasize that identifying modifiable risk factors early — such as treatment pathways or provider selection — offers an opportunity to contain costs.

 

What Employers & Insurers Should Do Next

1. Flag high-risk claims early
   Monitor claims for signs of complexity (multiple conditions, delayed care) and intervene early with case management.
2. Strengthen return-to-work and phased rehab plans
   Keeping employees engaged in light duty can reduce downstream medical costs and disability duration.
3. Partner with medical providers
   Ensure providers follow evidence-based guidelines and coordinate care to avoid duplicative or unnecessary high-cost interventions.
4. Benchmark against states
   Recognize that cost patterns differ across states. Use regional benchmarks to inform reserve levels, medical fee schedules, and provider contracting.
5. Use data to refine models
   Incorporate claims data, health status, and timeline metrics into predictive models to better triage which cases need the highest touch.

Looking Ahead

While a small portion of claims drive a disproportionate share of cost, they also offer the greatest opportunity for cost control. 

When you can detect risk early — and intervene strategically — you can shift outcomes, reduce surprises, and improve both financial and health results.

Related reading: Are Your Workers’ Comp Claims Being Aggressively Managed? | 3 Red Flags That May Indicate Workers’ Compensation Fraud