Often one of the first reactions when workers’ compensation costs spike is to look at changing the insurance carrier. Sometimes this is appropriate, but before you pull the trigger, consider the following: The insurer may not be meeting expectations because neither the client nor the broker clearly communicated expectations.
The answer can often lie in improved Account Servicing Instructions (ASI). Every insurer and third-party administrator distributes its standard account servicing instructions to its field offices and adjusters. The ASI governs settlement authority, selection of attorneys, reporting, reserves, subrogation, investigation and virtually all aspects of claim handling.
15 Point Checklist for Your Account Service Instructions
- Settlement Authority
- Who has settlement authority? The company or the insurer?
- Selection of Counsel
- Do you select your own legal counsel?
- What type of legal counsel does your company utilize?
- How often do you receive status reports for open claims from your insurer? Over 30, 60 or 90 days?
- Does the insurer provide a written explanation each time reserves are raised over $10,000 or more?
- Do reserves set take into consideration the company’s aggressive return-to work program, probably resulting in lower wage loss?
- Dedicated Adjuster
- How many adjusters are dedicated to processing company files in each office?
- Payment/Review of Legal Bills
- Do you receive bills for legal services?
- How do you request investigations?
- Structured Settlements
- Do you consider structured settlements for all cases over $20,000?
- Are all cases reviewed for subrogation potential?
- Who closes a file and waives subrogation recovery?
- Do you want to be consulted before a lien is waived or compromised?
- Workers’ Compensation
- Do you receive copies of payments being made on each open file?
- Do you review checks or a list all payments made for accuracy?
- Referral to Physician Consultant
- How are outside vendor services activated and coordinated?
- Are all medical records sent to the physician consultant before an independent medical examination is conducted?
- Medical Bill Review
- Who audits medical bills for your open claims?
- How and when are medical bills audited
- Who will audit the hospital bills? What level of hospital bills are audited?
- Do you decide if medical case management is warranted?
- ls there immediate and automatic referral of complex lost-time cases to medical case management
- Utilization Review
- How do you decide which bills and services will be reviewed?
- Who have you retained to provide this service?
- Referral to Vocational Rehabilitation
- Who decides if vocational rehabilitation is warranted?
- Do you automatically refer complex lost-time cases to vocational rehabilitation?
- Will reports be sent to your company?
- Alternative Dispute Resolution/Mediation
- Is alternative dispute resolution considered on all claims for all lines?
Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: firstname.lastname@example.org.
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