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Data/Tech 4: WORKERS’ COMPENSATION DATA QUALITY ISSUES. CAS Ratemaking Seminar March 10-11, 2005. Discussion Topics. The importance of data quality The impact of poor quality on the WC system - PowerPoint PPT Presentation
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Data/Tech 4: WORKERS’ COMPENSATION DATA
QUALITY ISSUES
CAS Ratemaking Seminar
March 10-11, 2005
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Discussion Topics
The importance of data quality The impact of poor quality on the WC
system The need for all parties involved to
understand the importance of good data quality and the issues impacting the quality of data
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Discussion Topics (cont.)
The state of data quality in the industry Data quality successes and challenges Underlying processes and procedures used
by insurers and their trading partners that can negatively or positively impact data quality
Industry best practices around the collection and reporting of data
Potential improvements and next steps
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Panelists
Art Cadorine, Principal WC Services, ISO Pete Marotta, Principal Data Management
Consulting, ISO Ia Hauck, Director & Actuary, Actuarial &
Economic Services, NCCI Bruce Tollefson, President MN WCIA Tim Wisecarver, President, PA & DE CRB
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Data Quality Best Practices
Guiding Principles:
Data is a corporate asset Data should be fit for the use intended Data should flow from underlying
business processes Data quality should be managed as close
to the source as possible
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Key Characteristics of Data Quality
Accuracy Validity Timeliness
& Timing Completeness/
Entirety
Reasonableness Avoid Redundancy Accessibility &
Availability Privacy
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Workers Compensation Insurance Organizations (WCIO) A voluntary association of statutorily
authorized or licensed rating, advisory, or data service organizations that collect workers compensation insurance information
Provides a forum for exchange of information about workers compensation insurance
Develops standards for the electronic transmission of information between insurers and rating/advisory organizations
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Setting the Stage 2003 direct premiums written $50 billion (A.M. Best) Over 4 million policies a year Statutory coverage Auditable line Long tail line Data reporting unique to WC
Aggregate financial data Unit Statistical Reports (USR) Detailed claim data Injury (FROI/SROI) and proof of coverage
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Types of Workers’ Compensation Data Collected Financial Data
Annual Cycle, Little or No Classification, Policy or Claim Detail
Policy Information Coverage, Exposure & Pricing Analysis, Triggers Unit
Statistical Reports Unit Statistical Reports
Policy and Claim Level Detail, Experience Rating, Classification Pricing
Individual Case Reports Quality Edits on Large Losses
Special Calls
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State of Data QualityChecks and Balances
Workers Compensation “Check and Balances”—All stakeholders have an interest in the completeness, accuracy, and timely reporting of data:
Insurance Companies—Loss Costs/Rate Filings Employers—Affordable and Available Coverage Workers—Safe Workplace, Benefits and Medical Coverage Data Collection Organizations—Credible and Reliable Estimates,
Forecasts and Analyses Agents—Timely/Accurate Experience Ratings State Regulators—Rate Adequacy, Employer Coverage
These individual interests contribute to the overall health and quality of the data that fuels the WC system
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State of Data QualityControl Measures
The Workers Compensation data reporting system provides an extensive complement of control measures that contribute to the overall level of quality Data Reporting Standards, Rules and Training Timeliness Control Programs Online Reporting Tools Editing Processes Follow-Up Programs for Timeliness and Quality Issues Data Quality Monitoring and Validation Tests Incentive Programs Test Audit Programs NAIC Model Regulations State Regulatory Audits of DCOs and Carriers
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State of Data QualityIndustry Standards, Tools and Training
Workers Compensation Organizations promote Data Standards, Tools and Training that lead to Data Quality
Standards WCIO Data Specifications Manual Statistical Plans User’s Guides Rating Plans
Provide… Business Rules Common Data Definitions Standardized Reporting Formats Common Codes Editing Processes
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State of Data QualityIndustry Standards, Tools and Training
Reporting Tools Web-based Reporting Applications Editing Packages
Provide… Streamlined Reporting Processes Pre-edit Capabilities
Training IDMA Data Management Courses WCIO Data Reporting Handbook DCO Sponsored Training and Workshops Industry Communications (Bulletins/Circulars)
Provide… Professionalism and Certifications Continuing Education Tailored Curriculums—New Staff, New Tools, Industry Developments, etc.
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State of Data QualityResults
State examinations of DCO’s confirm the overall accuracy of Workers Compensation data, the effectiveness of data quality programs, and:
All stakeholders involved in the “checks and balances” positively influence the timeliness and quality of our data
Established control measures contribute to the overall level of quality
Industry Standards, Tools and Training must continue to promote and reinforce the importance of data quality
The Future—We need to continue to build on this data quality commitment, always looking to raise our collective expectations
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Many Data Hand Offs Employers Agents/brokers TPAs Insurers State Funds Reinsurers Data Collection
Organizations (DCOs) Accident Boards Federal regulators
Other 3rd party vendors Policy admin. vendors Auditors Medical service providers Case mgmt. services Law firms Medical bill reviewers Others
Mergers and acquisitions Transfers of books of
business Transfers of books of claims
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Areas of Concern for Data Quality The Vast Majority of Required Data is Reported
Timely and Without Consequential Data Quality Issues
Where Problems Do Occur, They Reside in the Following General Areas: Unreported Data Late Reported Data Invalid Data Incorrect Data Questionable Data
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Unreported Data
Carrier Insolvencies
Unrecoverable Loss of Carrier Records
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Late Reported Data
Carrier System IssuesMerger/AcquisitionOther
Risk or Unit Specific Issues
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Invalid Data
Codes (Classification, Injury Description, etc.)
Exposure Reported for Code Not Allowing Exposure
Invalid Classification Combination(s) Unaudited or estimated payrolls
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Incorrect Data
Rating Value Errors Incorrect Premium Calculations for
Statistical Codes Anniversary Rating Date Errors Accident Date Outside Policy Term
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Questionable Data
Allocations of Exposures and/or Losses by Classification
Large Units with Zero Reported Losses Claims with High Medical Losses, but
No Indemnity
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DISCUSSIONS, CONCLUSIONS &
QUESTIONS