From Fragmented to Simple: The Future of Workers’ Comp Payments

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. 

The Cost of Fragmentation 

Fragmentation doesn’t just slow payments; it amplifies pressure across the entire workers’ comp ecosystem, with multiple consequences.  

• Operational inefficiencies: Claims teams spend their time on manual payment tasks, slowing resolution, and adding to backlogs. 
• Provider Attrition: When payments are slow or delayed, providers have little incentive to accept workers’ compensation insurance and treat those patients. 
• Compliance Risk: Manual processes, disconnected systems, and paper checks make it harder to meet state-level timelines, increasing exposure to costly penalties and interest.
• Claimant Impact: Delays in indemnity and medical reimbursements frustrate injured workers, slow recovery, and prolong their return-to-work. 

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: A Case Study in Network Stress 

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.  

What Carriers Can’t Control 

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.

What Carriers Can Control: Simplifying Payments 

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:  

• Shorten Payment Timelines: Automation can cut processing time down, helping keep providers and beneficiaries paid promptly and reducing friction. 

• Reduce overhead: Consolidating every payment (medical and non-medical) into one workflow eliminates redundant vendors, integration costs, and manual tasks. 

• Ensure compliance: Built-in automation delivers EORs, 835s, and state-required documents on time, avoiding penalties. 

• Improve visibility: Finance and claims teams gain a clear audit trail across all payments.  

 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. 

 The Strategic Payoff 

Simplified payments create value at every level of an organization. 

• Executives protect margins in a shrinking premium environment.  
• Claims teams reallocate time to more meaningful work 
• Providers get paid on time, which helps keep them in-network and reduces leakage. 
• Claimants receive faster reimbursements and indemnity payments, supporting recovery and return-to-work. 
  
  

Simplicity Is the Edge  

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.  

 The ECHO Advantage: Payments Simplified 

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.  

• Every Payment, One Workflow: Medical bills, indemnity, reimbursements, and vendor payments all managed in a single, full-service solution. 

• Network reach: 1.6M+ providers, DMEs, attorneys, and other payees. 

• Effortless Integration: Pre-built connections with nearly every bill review platform, 120+ clearinghouses, and core systems. 

• Automation at Scale: Post-approval payments are delivered in days, not weeks. 

• Built-In Compliance: Automated delivery of EORs, 835s, and state-specific timelines with a complete audit trail. 

• Eliminate 1099 risk and liability: Unmatched accuracy in TIN/name validation means we go beyond matching and reporting to assume liability for mismatch penalties, removing risk from your organization.