Every healthcare CFO I talk to is focused on achieving their 2025 financial goals—cutting costs, improving margins, and driving better outcomes. Yet most health systems overlook a major blind spot that’s costing them millions: Workers’ Compensation claims.

Workers’ Compensation claims are among the most complex and least understood financial classes. While they may represent a small percentage of overall revenue, they are often the worst-performing by a wide margin. The good news? Fixing Workers’ Compensation claim management is one of the easiest and fastest ways to improve cash flow and reduce financial risk.

In this guide, we’ll explore how CFOs can maximize their ROI on claims by addressing performance gaps, improving cash flow, and enhancing operational efficiency.

The Problem: A Hidden Financial Gap in Workers’ Compensation Claims Management

Many healthcare executives don’t realize just how significant their claim performance gap is. Why? Because it often flies under the radar.

Here’s the reality:

• Workers’ Compensation denial rates can range from 15% to 30%, much higher than other financial classes.
• Days in Accounts Receivable for claims are often 45+ days, significantly extending cash flow cycles.
• Administrative costs for employers managing claims are higher due to manual processes and payer-specific rules.

For most organizations, Workers’ Compensation is the worst-performing financial class. Yet it’s rarely prioritized for improvement.

Why Workers’ Compensation Is a High-Impact Opportunity

Fixing claim management isn’t just about avoiding denials—it’s about unlocking cash flow, improving margins, and restoring the overall health of the business. According to a recent survey of revenue cycle management leaders, over 70% of healthcare organizations plan to outsource complex claims in 2025. Why? Because outsourcing claims is a fast, low-risk way to achieve financial goals. Effective claims management can also save significant amounts of money by preventing unnecessary costs and delays.

Here’s why it’s a high-impact opportunity:

• Denial Reduction: Workers’ Compensation denial rates can be reduced from 15% to under 2% with proactive claim management.
• Faster Payments: By improving first-pass rates, organizations can reduce their Days in Accounts Receivable to 33 days or less.
• Lower Administrative Costs: Automating the claims processes can significantly reduce the need for manual intervention.

Key Strategies for Maximizing Workers’ Compensation ROI

Prioritize Day 1 Revenue Cycle Management Services

One of the quickest ways to improve Workers’ Compensation claim performance is to implement Day 1 RCM services. These services ensure that claims are accurate and complete from the start, reducing denials and speeding up payments.

What You Gain:

• Reduced Denial Rates: From 15% to under 2%.
• Faster Reimbursements: Average Days in AR reduced to 33 days.
• Improved Cash Flow: Increased collections by millions annually.

Leverage Technology to Automate Manual Processes

Manual processes are a major source of delays and errors in WC claims management. By leveraging technology, providers can streamline workflows and improve accuracy.

Technology Solutions Include:

• Electronic Data Interchange (EDI): Automates claim submissions and reduces errors.
• Robotic Process Automation (RPA): Automates repetitive tasks like eligibility verification and document collection.
• Analytics Tools: Identify trends and areas for improvement.

Focus on Denial Prevention and Appeals Management

Denial prevention is critical to maximizing ROI. Proactive denial management reduces revenue loss and administrative costs.

Best Practices:

• Eligibility Verification: Confirm payer and employer details at registration.
• Prior Authorization Management: Ensure that required authorizations are obtained before services are rendered.
• Payer Communication: Maintain open lines of communication with payers to resolve issues quickly.

Real-World Impact: UHS Case Study

A Midwest health system partnered with Unified Health Services (UHS) to address their WC claim performance gap. The results were transformative:

• Denial Rate Reduction: From 15% to under 2%.
• Cash Flow Increase: Collections increased from $6.9 million to $10.9 million annually.
• Days in AR: Reduced to 37 days, improving financial predictability.

These improvements had a direct impact on the health system’s financial performance, helping them hit their budget targets faster.

Why Partner With Unified Health Services?

Unified Health Services specializes in managing complex claims as a trusted partner, providing healthcare organizations with:

• Expertise in State-Specific Regulations: Ensuring compliance with complex WC rules.
• Advanced Technology Solutions: Streamlining workflows and improving claim accuracy. A comprehensive claims solution is essential for enhancing efficiency, reducing costs, and meeting the specific needs of clients in risk management.
• Proactive Denial Management: Preventing revenue loss before it happens.

Key Results From UHS Partnerships:

• Denial Rate Reduction: From 15% to under 2%.
• Cash Flow Increase: Millions of dollars in additional annual collections.
• Administrative Cost Savings: Reduced manual intervention and rework.

If your goal is to hit your 2025 financial targets, addressing your Workers’ Compensation performance gap should be a top priority. By focusing on proactive claim management, leveraging technology, and partnering with a specialized RCM provider like Unified Health Services, you can unlock significant financial gains with minimal risk.

Want to see how much your WC claim performance gap is costing you? Let Unified Health Services provide a quick analysis and show you how to achieve better financial results in 2025.

Contact us today for a free claims assessment.