(DCI) is sunsetting and the (IDC) will take over

March 31, 2023 / 12 min read

With 2023 well underway, we begin the final year of a data reporting requirement that has been a staple of the workers’ compensation industry for decades: the National Council on Compensation Insurance’s (NCCI) Detailed Claim Information (DCI). The DCI is now scheduled to sunset at the end of December 2023 and is being replaced by the Indemnity Data Call (IDC). With DCI’s sunset, the IDC, which has been in production since Q2 2020, will become the main source for legislative pricing effective January 1, 2024.

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By way of brief background, NCCI has used DCI reporting, in main part, to assist with claims analysis and identify industry trends. In general, the DCI reporting requirements apply to those data reporters who meet certain participation eligibility thresholds established by NCCI, and the DCI’s upcoming sunset will impact those insurers who meet these eligibility reporting thresholds.^[1] In operation, DCI is broken down into five categories: (1) state law pricing; (2) state insurance department reporting; (3) state advisory forums; (4) research studies; and (5) information on NCCI.com.^[2] In order for NCCI to perform the necessary analysis into these five categories they utilize all death claims, permanent total disability claims, and a random sampling of all other indemnity claims provided by the data reporters.^[3]

To help assess the important development, in this article the author outlines information regarding DCI’s sunset, key points about the IDC, and how Verisk can help navigate these changes as follows:

DCI sunset - background

NCCI set the stage for the DCI’s sunset on June 25, 2019, when it released a circular announcing the timeline for the DCI sunset and details what carriers needed to know to begin taking the necessary measures to prepare for this change.^[4] This circular outlined several important dates related to DCI’s sunset. For example, the first date was March 2020, which represented the final DCI 18-month valuations and the last Reported to Insurer Dates (March 2020). In conjunction with the March 2020 Reported to Insurer Date, the reporting of the final DCI 18 – month Valuation was to be done in December 2021. No further 18-month valuation activity should have taken place post December 2021. This brings us to December 2023 - which will be the FINAL reporting of all DCI valuation levels for all states, except for one, as discussed in the next section.

DCI sunset- timelines and exceptions

Effective January 1, 2024, reporting of claims for DCI will no longer be required, except for Texas. Regarding Texas, DCI reporting will still be required for all carriers who write in that state and have claims subject to the DCI reporting requirements.^[5] Carriers will still be allowed to submit claims for states other than Texas, however, they will not be included in any review or analysis. It is important to note that when Texas adopted the DCI program in July 2010 (with initial reporting in June 2011) they specifically indicated that there were no minimum participation thresholds.^[6] This still holds true today as there has been no amendment to the eligibility requirements. As per the NCCI, “Reporting of Texas DCI to NCCI will continue to be required pursuant to the Texas Detailed Claim Information Statistical Plan.”^[7]

Data visibility – will this change?

Since Texas claims are still required to be reported through DCI, the DCI tool at NCCI will still be available for insurers to access in the event they need to review past and current DCI records. As such, carriers will still be able to review DCI reports that have been submitted prior to December 2023 along with the current reports that will be submitted for Texas.

Looking beyond DCI – IDC’s role and further industry analysis

DCI served a key function by allowing the NCCI to perform analysis over the years with the data they received. With that said, legislative pricing is one of the highest priorities of the NCCI and one of their significant functions.^[8] On this point, NCCI states, in pertinent part: “Legislative pricing is a core responsibility of NCCI, and our ability to fulfill that role is compromised by the lack of sufficient indemnity claims data. To properly support legislative pricing activities focused on indemnity benefits, NCCI requires more current, comprehensive, and transactional indemnity data. The data currently utilized for indemnity legislative pricing is not sufficiently robust to effectively measure the impacts of all proposed changes. As a result, NCCI is unable to price certain components of legislative proposals, and, at times, entire bills are not quantified. The new Indemnity Data Call is intended to provide the source data that would primarily be used for legislative pricings related to indemnity benefits.”^[9] Accordingly, the NCCI rolled out the Indemnity Data Call (IDC) to the workers’ compensation industry to provide the NCCI with more robust data regarding indemnity benefits.^[10]

Regarding the IDC, NCCI released a circular to the industry on February 8, 2018 establishing its new data call.^[11] It is important to note that all Data Collection Organizations (DCO) have also adopted the IDC, highlighting the fact this is not a call solely required by the NCCI. In general, the IDC is a reporting requirement that expands upon the data elements originally used for DCI reporting and will give NCCI and independent DCOs additional data needed to perform their legislative analysis. For example, the IDC includes 47 data elements, with 32 elements currently reported in the Detailed Claim Information and/or Unit Statistical, and the remainder being new elements.^[12]

In terms of operation, the IDC officially went live in production beginning with second quarter 2020 indemnity data with a due date of September 30, 2020.^[13] Participation in the call is based on affiliate groups that have at least 1% market share in any one applicable NCCI state over the most recent three years.^[14] If a carrier hits eligibility in any one NCCI state they are required to report for all NCCI states in which they write.^[15]

In addition, it is important to note that the IDC call is being collected by NCCI on behalf of the following three independent DCOs: Minnesota, North Carolina, and Wisconsin. Regarding eligibility participation in the remaining independent DCOs, the following states are at .5% market share over the most recent three years: Delaware, California, Massachusetts, and Pennsylvania; while New Jersey and Michigan align with the NCCI at a 1% market share.^[16] In a recent development, New York announced that it is expanding its IDC and MDC data call requirements to all member carrier groups regardless of premium market share. As outlined more fully in our recent article (link above), beginning January 1, 2024, any carrier who reports IDC to other jurisdictions will be required to report to New York regardless of their market share percentage. For those carriers who do not report IDC to any jurisdiction, participation in New York will begin as of January 1, 2025. ^[17]

DCI vs. IDC reporting – what are the key differences?

The key differences between IDC and DCI reporting can be broken down into two components: (1) The frequency of data submissions and (2) the amount of data being collected. Detailed Claim Information is reported to the NCCI on an annual basis and as of a certain evaluation date. In contrast, the Indemnity Data Call is required to be reported quarterly and will contain all activity that occurred in that specific quarter.^[18]

To view IDC reporting more graphically, insurers may wish to review NCCI’s “Transactional Record Reporting Table” and “Quarterly Record Reporting Table” which outline key quarters, transaction dates, claim valuation dates, and due dates. This information is contained as part of the NCCI Manual Library Indemnity Data Call Reporting Guidebook – Part 2 – General Rules, Section D – Reporting Time Frames.

As noted, the IDC uses data elements from both Detailed Claim Information (DCI) and Unit Statistical Reporting (USR), as well as introducing an array of new data elements to the call. All data elements can be found within the Indemnity Data Call Reporting Guidebook at the NCCI.^[19] There are two distinct records that are required in the Indemnity Data Call which provide the NCCI, as well as the Independent DCOs on which the robust data is reliant.

The transactional record contains details of each indemnity payment transaction on a specific claim and consists of eighteen total data elements.^[20] Although the due date for all transactional records is the last day of the following quarter, carriers are allowed to submit transactional records at any point in time up until the due date.^[21]The quarterly record contains the inception-to-date aggregated details of each indemnity claim and consists of thirty-seven data elements.^[22] Similar to the transactional record, the quarterly record can be submitted any time after it has been generated up until the due date which is the last day of the following quarter.^[23]

With the IDC in operation for nearly three years now, from the author’s view, this time period has allowed the NCCI to receive enough data to now allow DCI sunset. Overall, as noted above, the IDC is providing the NCCI with the root data it needs to support the necessary legislative pricing regarding indemnity benefits.^[24]

Additional Resource – DCI Sunset “One-Pager”

As a supplementary resource to this article, the author has prepared a DCI Sunset “One-Pager” for you to refer to in relation to this important change.

Questions?

Of course, please feel free to contact the author if you have any questions regarding the above information or would like to set-up a call to discuss how our services can help you stay compliant! I can be reached at Nicholas.Guarda@verisk.com or 732-887-7556.

How can Verisk help?

As Electronic Data Interchange (EDI) reporting continues to rapidly change, Verisk offers the Workers’ Compensation industry a variety of solutions that can assist you! For example, wcPrism is a complete suite of Workers’ Compensation EDI compliant reporting products for insurers that leverage a true transaction-based approach. Through our suite of services, we can help you stay compliant, reduce penalties/assessments, and navigate through the ever-changing reporting requirements. Please contact the author if you would like to learn more about these services.

[1] A detailed analysis of the DCI eligibility thresholds, which is beyond the scope if this article, can be found in the NCCI Manual Library – DCI Reporting Guidebook 2009 Edition – Part 2 General Rules Section D1 Participation Eligibility.

[2] NCCI Manual Library DCI Reporting Guidebook 2009 Edition – Part 2 General Rules Section A (Purpose of Detailed Claim Information).

[3] NCCI Manual Library DCI Reporting Guidebook 2009 Edition – Part 4 Claims Selection and Sampling.

[4] NCCI Circular, Detailed Claim Information – Announcing Future Detailed Claim Information Sunset Plan, June 25, 2019 (DCI-2019-01) P.1.

[5] See e.g., NCCI Circular – Detailed Claim Information – Texas – Texas Adopts New Detailed Claim Information (DCI) Program – Initial reporting in 2011 – DCI-2010-02 stating, in part, “[a]ll Texas writers of workers compensation are required to report Texas DCI because there are no minimum participation thresholds.”

[6] NCCI Circular, Detailed Claim Information – Texas – Texas Adopts New Detailed Claim Information (DCI) Program – Initial Reporting in 2011.

[7] NCCI Circular, Detailed Claim Information – Texas Detailed Claim Information Update P.1.

[8] By way of example, on this point NCCI recently stated: “Legislative pricing is a core responsibility of NCCI, and our ability to fulfill that role is compromised by the lack of sufficient indemnity claims data. To properly support legislative pricing activities focused on indemnity benefits, NCCI requires more current, comprehensive, and transactional indemnity data. The data currently utilized for indemnity legislative pricing is not sufficiently robust to effectively measure the impacts of all proposed changes. As a result, NCCI is unable to price certain components of legislative proposals, and, at times, entire bills are not quantified.” NCCI Circular, Indemnity Data Call – New Indemnity Data Call Effective Second Quarter 2020 (IND-2018-01) P.1 – Background.

[9]NCCI Circular, Indemnity Data Call – New Indemnity Data Call Effective Second Quarter 2020 (IND-2018-01) P.1.

[10] NCCI Circular, Indemnity Data Call – New Indemnity Data Call Effective Second Quarter 2020 (IND-2018-01) P.1.

[11] NCCI Circular, Indemnity Data Call – New Indemnity Data Call Effective Second Quarter 2020 (IND-2018-01).

[12] NCCI Circular, Indemnity Data Call Effective Second Quarter 2020, February 8, 2018 (IND-2018-01), Attachment A.

[13] NCCI Circular, Indemnity Data Call – Reporting Begins Second Quarter 2020 (FYI-IND-2020-01).

[14] NCCI Manual Library – Indemnity Data Call Reporting Guidebook – Part 2 – General Rules, Section C – Participation/Eligibility.

[15] NCCI Manual Library – Indemnity Data Call Reporting Guidebook – Part 2 – General Rules, Section C – Participation/Eligibility.

[16] This information was obtained from the following resources:

Delaware Compensation Rating Bureau (DCRB) - Circular, Changes To The Medical Data Call and Indemnity Data Call Eligibility Requirements (Circular No. 1009 – Nov 5, 2021).

Pennsylvania Compensation Rating Bureau (PCRB) – Circular, Changes To The Medical Data Call and Indemnity Data Call Eligibility Requirements (Circular No. 1772 – Nov 5, 2021).

Workers Compensation Rating and Inspection Bureau of Massachusetts (WCRIBMA) – Circular, Massachusetts Indemnity Data and Medical Data Call Eligibility (Circular No. 2408 – October 10, 2022).

Workers Compensation Insurance Rating Bureau of California (WCIRB) – Reporting Guidebook – Section 2 – General Rules – Participation/Eligibility.

New Jersey Compensation Rating and Inspection Bureau (NJCRIB) – Indemnity Data Call Implementation Guide – Section 2 General Rules – Participation/Eligibility.

Regarding Michigan, information concerning the eligibility threshold as noted above was obtained from the author’s contact with the Compensation Advisory Organization of Michigan (CAOM) on February 24, 2023.

[17] New York Bulletin, Expansion of the New York Medical and Indemnity Data Calls P. 1, 2.

[18] NCCI Circular, Indemnity Data Call – Frequently Asked Questions (FYI-IND-2019-02), P.1, FAQ #1, FAQ #3, FAQ #4, FAQ #5.

[19] NCCI Manual Library Indemnity Data Call Reporting Guidebook – Part 6 – Data Dictionary.

[20] NCCI Circular, Indemnity Data Call – New Indemnity Data Call Effective Second Quarter 2020 (IND-2018-01) – Attachment B.

[21] NCCI Circular, Indemnity Data Call – Frequently Asked Questions (FYI-IND-2019-02), P,2, FAQ #6.

[22] NCCI Circular, Indemnity Data Call – New Indemnity Data Call Effective Second Quarter 2020 (IND-2018-01) – Attachment B.

[23] NCCI Circular, Indemnity Data Call – Frequently Asked Questions (FYI-IND-2019-02), P,2, FAQ #7.

[24] See e.g, n.9 above.