Delayed provider payments and late indemnity checks aren't just part of an inefficient claims process; they're a risk that threatens everything from provider networks to the bottom line. Every payment delay or inaccuracy increases the risk of provider attrition, greater compliance exposure, missed regulatory deadlines, slower return-to-work outcomes, and dissatisfied claimants and employer groups.
The cost of poor payment processes goes beyond any single claim. In 2023 alone, the total cost of work injuries in the U.S. topped $176.5 billion, including $36.8 billion in medical expenses, $53.1 billion in lost wages and productivity, and $59.5 billion in administrative costs. Even a routine medical claim averages $43,000 when all costs are factored in.
When fragmented core systems, disconnected solutions, and fee schedules — spanning multiple vendors, paper checks, and manual handoffs — meet rising claim severity, inefficiency and complexity compounds.
This growing strain underscores how much of the complexity in workers’ comp is operational. Carriers and TPAs can’t control premium rates or claim severity, but they can control how payments are processed. This makes accurate, timely payments one of the most powerful levers available to keep providers, claimants, and employer groups satisfied.
Fragmentation doesn’t just slow payments; it amplifies pressure across the entire workers’ comp ecosystem, with multiple consequences.
A 2025 report found that nonhospital medical payments have diverged sharply across states in recent years; evidence that differences in payment processes and fee schedules are magnifying cost and complexity. Between 2021 and 2023, total costs per claim increased 2–14% annually across 18 states, driven partly by inefficiencies layered on top of rising severity.
Texas offers a clear picture of how these pressures play out. It's the country's fourth-largest workers' comp market, but it's facing a serious provider problem.
While the number of actively practicing providers in Texas grew 2.6% annually from 2017 to 2022, the number participating in workers' comp stayed flat at around 17,659. This means the participation rate is declining, with retention slipping from 79% in 2017 to 76% in 2022.
The pool of workers' comp-treating providers isn't keeping pace with overall growth, signaling real network stress. When providers exit or pull back, injured workers wait longer for care, costs rise, and satisfaction lowers across the board.
For carriers, margins are shrinking. Premiums continue to decline in every National Council on Compensation Insurance (NCCI) state. At the same time, both medical and indemnity severity have risen roughly 6% year-over-year.
To reduce complexity, the focus needs to turn to the operational areas within reach.
While claim severity and premium rates are fixed realities, payment processes are not. A full-service payment solution consolidates medical and non-medical payments into a single workflow to:
With a single source of payment data, every payment is trackable, auditable, and easier to manage. Meaning no more status checks across disconnected systems or guesswork.
Simplified payments create value at every level of an organization.
Workers’ comp leaders can’t change external market pressures, but they can simplify the payment processes that drive cost, complexity, and risk. In an industry where efficiency and trust are everything, simplicity is the edge.
Merging disparate payment workflows into a single system reduces complexity while enabling visibility across the entire payment lifecycle. This consolidation cuts redundant processes, minimizes manual work, and creates automation opportunities that drive both efficiency and accuracy.
ECHO for Property & Casualty delivers this with a full-service payment solution built to simplify the entire claim payment process for workers’ comp and improve outcomes for claimants, payers, providers, and other vendors.