WCIS eNews No. 51

WCIS reporting problems

The purpose of this eNews is to inform DWC's trading partners about data reporting problems in connection with DWC's Workers' Compensation Information System, and to elicit suggestions and support for rectifying these problems.

DWC's WCIS has been collecting FROI and SROI claims data from California claims administrators using national reporting standards developed by the IAIABC since 2000. Currently, WCIS has FROI reports for more than 4.6 million claims. Meanwhile, DWC has some SROI information for about 850,000 claims, or only half of the expected number of indemnity claims.

DWC staff has been monitoring and analyzing trading partner compliance with WCIS reporting requirements since the inception of the system. In 2002, a thorough comparative analysis of reported claim information to the WCIS and DWC's Audit Unit (via its Annual Report of Inventory) was performed. Unfortunately, that analysis supported accumulating anecdotal information and conclusions drawn from prior examinations of data submitted to the WCIS, which indicated that there was a serious compliance problem with TP data reporting.

On the basis of the 2002 analysis, the EDI Unit contacted about two-dozen major companies/entities that were not reporting FROI and/or SROI information to the WCIS on a timely, complete and accurate basis. The objective was to work with these trading partners to get them "on track".

Currently, DWC is completing a similar analysis to that performed in 2002, as well as making a systematic comparison of the reporting compliance among trading partners' submissions of annual (AN) and final (FN) data transactions to the WCIS.

Here are the major conclusions from DWC's recent analyses of trading partners' WCIS data reporting performance:

There are some TPs who are doing an outstanding job with respect to reporting data accurately and on a timely and complete basis

The small list of fully complying TPs includes both claims administrators with a large number of annual claims handled and those with only a few.

A significant majority of reporters are not reporting SROI data, in particular, according to DWC's standards as stated in the California Implementation Guide for FROI and SROI Reporting.

Naturally, the question arises--why is the reporting problem so significant, particularly for incomplete and inaccurate reporting of SROI data? There are several candidate hypotheses and reasons for discrepancies:

FROI reporting is relatively simple compared to SROI reporting

Prior to WCIS, TPs were required to submit FROI in paper form, and could simply and inexpensively use a vendor to report electronically when electronic reporting became mandatory

For SROI data, TPs have had to invest in computer systems and claim administrator training to submit data that are subject to sequencing rules, generating significant additional costs for complying with reporting requirements (An overwhelmingly high cost of compliance appears, however, not to be the major factor since both small and large companies comply/do not comply, and there appear to be a variety of vendors offering a menu of service choices at competitive prices.)

A lack of knowledge about what to send and actually having the information to send even though (a) the information required to be sent to the WCIS is part of the claim file, (b) the WCIS data program requirements have been in place since 2000, and (c) a significant amount of training has been offered

A Cost-to-Benefit determination as TPs see little or no benefit from complying with reporting regulations, and there is no cost (such as a penalty) for not complying

High turnover of claim administrators and clerical reporting support, and little or no training and support to replacement personnel to enable them to provide the required data on a timely, complete and accurate basis

Lack of sense of urgency since there are no deadlines or penalties

Some TP's stop sending data because they are in the middle of switching or upgrading their systems

Scope of Authority Issues-ability of line level staff to improve reporting practices or obtain needed resources

Given the above list of candidate reasons for under-reporting, or not reporting accurately or at all to the WCIS, what are some potential ways of addressing these issues to improve reporting performance? The following is a list of suggested ways to improve TP reporting compliance:

Training--offer additional training and educational programs to TPs on California-specific data submission protocols

Best Practices--obtain system profiles from the exemplary organizations, and share that information with other TPs as "system templates of what works"

Penalties--increase the cost of TP non-compliance with statutory penalties

Survey of TPs--find out why various TPs are out of compliance with WC regulations, and solicit/implement TP suggestions for solving observed problems

User Groups--create electronic forums to address TP and DWC concerns and to share solutions to problems

Address the cost issue--simplify the WCIS and have DWC offer a host FTP option to lower the cost of data transmissions

All of the solutions listed above are intermediate or long-term solutions. Meanwhile, given the strong likelihood that some TPs will not be able to send accurate AN transmissions in January, DWC is considering the temporary use of the UR MTC. However, this option needs to be carefully planned and implemented so as to avoid abuse.
In order to address the concerns listed in this eNews, as well as others that TPs may have in mind, DWC earnestly requests that the TP community respond to this email by sending feedback and ideas for making improvements to the system to the EDI liaison team. Thank you in advance for your participation.

If you have any questions or comments, please contact your Trading Partner contact, listed below.

Damon Chen
email: dcchen@dir.ca.gov
phone: 510-286-6753
fax: 510-286-6862
Trading Partner Letters C, G, H, M, P-R

Elisema Cantu
email: ecantu@dir.ca.gov
phone: 510-286-6763
fax: 510-286-6862
Trading Partner Letters B, D-F, N, O, W-Y

Johnny Lee
email:jblee@dir.ca.gov
phone: 510-286-6772
fax: 510-286-6862
Trading Partner Letters A, I-L, S-V, Z

Contents of this bulletin do not change existing regulatory requirements; they provide additional or revised detail about the technical implementation of those requirements. All technical changes will subsequently be reflected in other WCIS documentation. Any bulletin can be forwarded as needed, but should be forwarded in its entirety and without modification. If you have received a forwarded copy of this bulletin and are concerned about its authenticity, you can view this and previous bulletins on our WCIS web site: http://www.dir.ca.gov/dwc/wcis.htm.

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