Five Factors to Review in Your Workers’ Comp Claim Files

While every workers’ compensation claim is unique, every claim contains certain key events and documents. The best practices established either by the insurer or the third party administrator creates a certain amount of uniformity in the claims.

 

When you review the workers’ comp claims of your employees, you will see established criteria in the handling of the claims. Each claim will contain information on:

 

  • Coverage
  • Contacts
  • Investigation
  • File Documents
  • Evaluation and Settlement

 

 

Coverage: 

 

The very first step the adjuster takes when handling a claim is the verification that there is coverage. This includes checking the policy number to be sure it is accurate; the policy dates to be sure the injury occurred during the time frame covered by the policy; the state(s) covered by the policy; and, any endorsements to the policy or any exclusions of coverage. If any aspect of the coverage verification is missing, the wise adjuster stops any further activity on the file until there is proof insurance covers the claim.

 

 

Contacts: 

 

Once the workers’ comp adjuster verifies there is insurance coverage in effect for the named insured, on the date of the injury, and in a location covered by the policy, the adjuster contacts all involved parties. Whether the adjuster contacts the injured employee first or the employer first depends on the nature and extent of the injury and the time frame of known events. The adjuster also contacts the medical provider’s office to obtain the initial medical treatment information, to provide information to the medical provider on billing for their services, and to provide the medical provider with information on the return to work policy of the employer. Any other parties who may impact the claim are also contacted; for example — witnesses on questionable or severe claims.

 

 

Investigation: 

 

Contact with all parties involved is the start of the claim investigation, but a proper investigation contains many other actions impacting the future outcome of the claim. Some of the investigation steps include:

 

  • A comparison of the details of the accident as provided by the employer, the employee, the medical provider, and any witnesses. Any deviation in the information obtained from the various parties needs to be analyzed by the adjuster.
  • The filing of the Insurance Service Office inquiry to determine if the employee has made prior insurance claims, and if so, do they impact the present workers comp claim. For instance, the employee, who suffered a lower back strained in your claim, also had a lower back injury workers comp claim with a previous employer.
  • A determination if there is a third party responsible for the employee’s injury, and if so, the documentation needed to pursue a subrogation claim.
  • An analysis of the nature and extent of the employee’s injury, the medical treatment plan, and the prognosis for the employee’s recovery.
  • An analysis of the employee’s job duties, equipment used, the return to work restrictions from the medical provider and the modified duty information obtained from the employer to determine if a modified duty job is an option.
  • A determination as to the future course of action needed on the file, also known as an Action Plan.

 

 

File Documents: 

 

Every claim file has basic claim documents to support the claim and the activity taken on the claim. Depending on the extent of the injury, the file may have additional documentation that might not be found in a simple injury claim. The documents you may see in the claim file include:

 

  • The Employer’s First Report of Injury (FROI).

 

  • The recorded statement summary of the employee and possibly the recorded statement summary of the employee’s supervisor and/or witnesses.

 

  • The required state forms filed with the governmental office enforcing the workers’ compensation statutes of the state.

 

  • The wage statement is showing the employee’s earnings during the required calculation period.

 

  • The Insurance Service Office report.

 

  • The medical records.

 

  • Vocational and/or rehabilitation reports.

 

  • Subrogation documentation.

 

  • Correspondence to and from defense counsel, correspondence to and from the employee’s attorney, and correspondence between defense counsel and the employee’s attorney.

 

  • Reserve worksheets used to calculate the cost of the claim.

 

  • File notes (a log of activities undertaken) making a record of every telephone call, piece of mail, e-mail, fax or other communication on the claim.

 

 

Evaluation and Settlement:

 

When the claim file has progressed to the point where the adjuster can start the evaluation process (usually when the employee has reached maximum medical improvement); there will either be a reserve worksheet or an evaluation worksheet establishing the financial exposure of the claim. The evaluation of the claim includes the compensability, the disability rating, the jurisdictional law, and any legal questions that need to be resolved. The file notes should describe the adjuster’s settlement discussions when they have taken place.

 

An essential part of risk management is to know as much as possible about the exposures your company faces. We recommend obtaining electronic access (on a read-only basis) to the insurer’s or third party administrator’s claim file. By knowing what is in your claim file, you can contribute any additional information benefiting the adjuster in bringing your employee’s workers’ comp claim to a satisfactory conclusion.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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 & lead trainer of Amaxx Workers’ Comp Training Center .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

6 Ways to Make Workers’ Comp Claims Audits/Reviews Impactful

6 Ways to Make Workers' Comp Claims Audits/Reviews ImpactfulLooking to reduce your workers’ compensation costs, improve outcomes, lower your ex-mod? Plan and prep for your next claims audit/review. This is a tremendous opportunity to ramp up your workers’ compensation program and make it best-in-class.

 

Even though the vast majority of employers engage in these sessions the results are fairly dismal; instead of being a synergistic way to improve an injury management program, they often end up as a finger pointing session and lead to the production of a report that sits on a dusty shelf and is forgotten. But with proper planning, execution, and follow-up, you could potentially see your ex-mod cut in half in just a couple of years.

 

 

Building Relationships

 

A claims audit/review brings together the parties involved in the claims handling process; the employer, carrier/TPA, broker, medical experts and any others who might lend some insight. These sessions can benefit an employer in two ways:

 

  • To get a big picture view of how claims are being handled and areas that could be improved
  • To look at specific claims and figure out how to move them forward to closure

 

 

Planning

 

The goal of a claims audit/review is to develop a team mentality, where each party understands what the others are doing in working toward a common goal. This requires everyone involved to be open to listening to one another and begin to forge bonds. Follow several specific strategies:

 

  1. Stop the blame game. Too often employers and others see the claims audit/review as a chance to point out what they perceive as failures by the other parties.

 

  • The carrier or TPA is not doing its job
  • The adjuster isn’t doing a proper investigation
  • The medical providers are not getting people back to work
  • The employer doesn’t take responsibility for its role in the process

 

A session based on finger pointing is a negative waste of time for everyone involved.

 

  1. Set expectations. Each party in the claims audit/review should understand what he is expected to do to help claims progress. The activities of each are dependent on the actions of the others.

 

For example, the adjuster cannot make 3-point contact within 24 hours of the injury if the employer doesn’t report the claim for several days or longer. The employer must understand his responsibility for timely claims reporting, while the adjuster needs to be committed to making early contact.

 

  1. Keep communication channels open. The audit/review should be seen as the beginning of a relationship, not a one and done event. Employers and adjusters should maintain contact with one another after the session.

 

  1. Select the right claims. For small organizations with just a few claims, it’s appropriate to review every claim. Companies with hundreds of claims must be selective. Ideally, there should be a number of ‘typical’ claims, as well as some that may raise red flags. There are several ways to identify claims to be reviewed, examples include:

 

  • Claims with large reserves, especially if they have been open for more than a year, and medical-only claims that have been open for at least six months.
  • Large medical-only claims. An injury that does not render the worker unable to work but includes significant expenses may have something unusual about it that needs to be examined.

 

The claims selected should not include any personal information about the injured worker.

 

Execution

 

  1. Review specific aspects. There are a multitude of aspects to every claim that could be discussed and analyzed. But instead of nitpicking, select the areas that are most telling about the claim. For example

 

  • Was the claim reported promptly?
  • 3-point contact. Were the employee, employer, and physician contacted within 24 hours of the injury?
  • Was a recorded statement taken of the injured worker and witnesses?
  • Treating physician. Was medical control established?
  • Post-appointment contact. Was there follow-up with the injured worker after the first appointment with a medical provider?
  • Were checks issued to the injured worker promptly?
  • Did someone contact the injured worker and explain timelines and other aspects of the workers’ compensation process?
  • Were state forms filed timely?
  • Were they put up properly and timely? And were reserves reviewed for reduction or closure timely?

 

  1. Follow-up. To make the claims audit/review truly meaningful requires the parties to agree on ways to proceed. A designated person should issue a report following the meeting. But rather than it going up on a shelf collecting dust, it should include action steps for each participant which should be agreed upon during the meeting.

 

 

Conclusion

 

Claims audits/reviews allow all the parties to claims handling to come together, determine best practices and identify areas that can be improved. Companies that prepare and are actively engaged in this process reap significant benefits.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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 & lead trainer of Amaxx Workers’ Comp Training Center .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

Workers’ Comp File Review Checklist for Initial and Subsequent Adjuster Action Plans

When you go on-line to review the adjuster’s file notes on your company’s lost time work comp claims, do you know what you should see in the adjuster’s Action Plan? If you have not been a work comp claims adjuster, it would be easy for you to miss items overlooked or missed by the adjuster. The adjuster’s file notes should state what was accomplished and what needs to be accomplished to move the file forward.

 

 

Each of the items that need to be accomplished should be given a due date and placed on the adjuster’s diary (calendar) for completion. You should see at minimum the date due and the date completed for each of the items in the adjuster’s Action Plan.

 

 

 

Initial Claim Handling Completed Day Claim Received

 

 

If your adjuster is following the Best Practices set by most insurers and third party administrators, the initial claim handling was completed the day the claim was received in the claims office. You should see file notes reflecting coverage was verified for the claim, that the employer contact, employee contact and physician contact was completed and the initial reserves were placed on the file.

 

 

All of these items should have been completed before the adjuster does the initial Action Plan. If for any reason coverage has not been verified, contacts not completed or the reserving cannot be done, the adjuster’s Action Plan should reflect the item(s) that are outstanding from the initial handling and provide the due date for the follow up on those items to be completed.

 

 

Initial Action Plan Checklist

 

Assuming the first day’s claim handling was completed, the initial Action Plan for the work comp claim should contain:

  1.  A follow up date for further contact with the employee (ability to return to work).
  2.  A follow up date for further contact with the employer (availability of a modified duty position if the employee is unable to return to full duty).
  3.  A follow up date to verify the receipt of the initial medical report.
  4.  A follow up date to verify the receipt of the documentation of the average weekly wage (should be within 14 days or less depending on the jurisdiction—in order for the adjuster to issue the first TTD payment or issue a denial of claim).
  5.  A follow up date to complete any further investigation of the claim (should be within 14 days of the date the claim was received).
  6.  If subrogation is appropriate based on the investigation, a date to put the responsible party on notice of the subrogation claim.
  7.  A date to verify the claim is accepted for compensability or the date the claim will be denied.
  8.  A date for the TTD benefit payments to be calculated and the first TTD check issued, if applicable.
  9.  A date for the completion of the ISO filing (within 14 days of the receipt of the claim).
  10.  A follow up date to verify all state required forms have been filed with the state work comp board.
  11.  If the file is reportable to an insurer, excess carrier or any other party, the date the reporting will be completed.
  12. A date for the next Action Plan to be completed (usually 30 days after the first Action Plan but the time frame can be shorter or longer depending on the severity of the claim).

 

 

Second Action Plan Checklist

 

By the time the second Action Plan is due, most or all of the items outlined in the first Action Plan were completed. Any items not completed are carried over to the second Action Plan with a new due date for each carried over item. Activities you can expect to see on the second Action Plan include:

 

  1. A date for reevaluation of the file reserves (usually 60 days from the date the claim was received in the claims office).
  2. A date for evaluation of the need for a Nurse Case Manager on the claim, if the employee has not returned to work, and assignment of the Nurse Case Manager, if needed.
  3. A date for coordination of the return to work full duty or modified duty, if needed.
  4. A date for the obtainment and evaluation of the disability rating.
  5. If the file is reportable to an insurer, excess carrier or any other party, the date the second report will be completed.
  6. A date for the next Action Plan to be completed (usually 30 days after the second Action Plan but the time frame can be shorter or longer depending on the severity of the claim).

 

 

 

Third & Subsequent Action Plan(s) Checklist

 

The third and subsequent adjuster’s Action Plans will vary more in the items that will be included in the Action Plan. Some things to look for in the subsequent Action Plans including their due dates, are:

 

  1. Medical records being obtained and evaluated for all on-going treatment.
  2. Regular scheduled follow-ups with the employee, the employer and the medical providers.
  3. Regular scheduled contact with the Nurse Case Manager when there is one.
  4. The completion and filing of all state forms.
  5. The scheduling and obtaining of independent medical evaluation or a peer review.
  6. Offsets and deductions being calculated and applied.
  7. Second Injury Fund (in the jurisdictions that still have one) being placed on notice
  8. A settlement evaluation that is explained and properly justified, including both the strengths and weaknesses of the claim.
  9. A Litigation Plan and a Litigation Budget, if the claim is in suit or in a contested board review.
  10. All required waivers and/or releases obtaines.
  11. CMS notification if a MSA is considered or needed.
  12. A re-evaluation of the reserving accuracy.
  13. Subsequent filing of the claim with the ISO/Index Bureau.
  14. If the file is reportable to an insurer, excess carrier or any other party, the date the next report will be completed.
  15. A date for the next Action Plan to be completed (usually 60 or 90 days after the third Action Plan but the time frame can be shorter or longer depending on the severity of the claim).

 

 

As long as the work comp claim remains open, the adjuster continues to have an Action Plan outlining the steps to take to bring the claim to a conclusion. The final entry on the adjuster’s last Action Plan for the claim is actually the activity the adjuster looks forward to doing. The final Action Plan activity should read: “Close file.’’

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

20 Common Adjuster Mistakes And What To Do About It

One thing seldom heard from the either the insurance company or from the third party claims administrator (TPA) is “we / I made a mistake”. Mistakes happen. The difference between the excellent adjuster and the so-so adjuster is the number of mistakes made. Claims management , supervisors ,and managers also make errors in judgment, or unwittingly commit an oversight. There will not be a list of common claims handling mistakes on the insurance company’s website or TPA’s website. Therefore, we present what are common claims handling errors seen when the claims are audited by an independent claims auditor.

 

20 Common Adjuster Mistakes

 

  1. The failure to thoroughly investigate the claims including the establishment of the nature and extent of the injuries.

 

  1. The failureto properly document the average weekly wage and to properly establish the TTD rate.

 

  1. The failure to maintain the files on a diary (a regular scheduled file review by the adjuster to ensure all needed activity has been completed).

 

  1. The failureto recognize and document subrogation.

 

  1. The failureto have Action Plans.

 

  1. The failureto read medical reports.

 

  1. The failureto monitor and control medical treatment.

 

  1. The failureto conclude claims in a timely fashion when the opportunities were presented.

 

  1. The failureto know the workers compensation laws in their jurisdiction.

 

  1. The failureto file the appropriate state forms with the Industrial Commissions and Workers Compensation Boards.

 

  1. The failureto maintain contact and rapport with the claimants.

 

  1. The failureto record in the file notes the documentation received on the file.

 

  1. The failure to utilize Independent Medical Examinations when appropriate.

 

  1. The failureto utilize nurse case managers when appropriate.

 

  1. The failureto deny unrelated medical treatment or unrelated body parts when introduced into the claim.

 

  1. The failureto attempt to return injured employees to light duty work when the medical providers approved same.

 

  1. The failureto respond to important developments on the claims.

 

  1. The failure to provide proper litigation management on the litigated claims.

 

  1. The failureof management to provide supervision or guidance to the adjusters handling the claims.

 

  1. The failureof management to maintain continuity on the claims by changing the assigned adjuster on the claim during the course of the claim. (Occasionally it is necessary on a few files but not on a majority of the claim files).

 

What To Do About It

 

When mistakes occur in claims handling, the cost of the claim goes up. The insurance premium paid by employers is impacted by both the frequency and the severity of claims. While frequency of claims carries greater weight in calculating the insurance premium, the severity of the claims – what the claims cost – also impacts the insurance premium.

 

 

There are several things employers can do to limit the mistakes made on workers compensation claims, including:

 

  • Having a published set of Best Practices and insisting the claims office abide by them.’
  • Having a designated adjuster or dedicated adjuster(s) to handle all your claims.
  • Verifying the adjuster has reviewed the Employer’s First Report of Injury and has filed all appropriate forms on every claim.
  • Verifying the adjuster has obtained the proper wage/salary information for the calculation of indemnity benefits (calculate the indemnity benefit yourself and compare with what the adjuster is paying weekly or biweekly).
  • Providing to the adjuster any information you have or receive about the claim, whether it is medical documentation, the employee’s personnel file or even scuttlebutt heard around the office.
  • Establish a regular file review. (What get’s reviewed gets done).  If you do not have the time to review the adjuster(s) work yourself, hire an independent claim file auditor to review the files and identify the strong and weak points of the claims handling on your claims.

 

For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.

 

Author Michael Stack, Principal, 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Live Stream WC Training: http://workerscompclub.com/livestreamtraining

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Claim File Conferences Give Perspective On Moving Claims Forward

Claim offices frequently employ a technique known as individual file conferences where the adjuster and the supervisor set aside a specific time to discuss one or more large, serious and/or catastrophic claims. Frequently the workers’ compensation adjuster and supervisor will expand their claim file discussion to include the claims manager, other supervisors, other adjusters and the employer.

 

 

Employer Should Stay Involved On Claims

 

The employer should designate a representative, whether the workers’ compensation coordinator, or another person, to participate in the individual file conferences. This accomplishes two things. First, it allows the employer to be up to date on the status of their claims; particularly large, serious or catastrophic claims. Second, in the states where employer input is allowed, the employer can offer insights or recommendations on bringing the employee back to work.

 

The discussion coordinator, whether the adjuster or supervisor, designates or selects the particular workers’ compensation claim(s) to be reviewed. While the expected cost of a claim can be a reason for a claim to be selected for review, claim cost is not normally the basis for an individual file conference. The claim(s) chosen for discussion are selected based on the obstacles the adjuster has encountered in moving the claim forward. This can include issues of medical necessity, delayed return to work, narcotic addiction, hearing issues, etc. If more than one claim is included in the discussion, each file is discussed separately and independently of other claim(s).

 

The organizer of the individual file conference will set a date and time for the discussion. Prior to the electronic age, the group would sit around a conference room table to discuss the claim. Now days, the “group” may be in several separate locations and attend the conference by telephone, Skype, webinars or other electronic means.

 

 

Provides Additional Perspective On How To Handle Claim

 

The purpose of individual file conferences is to provide the claims handler with additional perspectives and thoughts on how to deal with an issue. Adjusters, like all other people, develop ways of doing things. Falling into a claim handling rut, where ever claim is handled similarly, can limit the adjuster’s field of vision on what to do on a particular claim.

 

The individual file conferences by providing other points of view improve the potential outcomes of the claim. The individual file conferences can be an extremely beneficial learning experience for the newer adjusters, but also provides “why didn’t I think of that” moments for even the seasoned old pros.

 

At each individual file conference, the adjuster keeps a list of the suggestions and recommendations made to move the workers’ compensation claim forward. The list of suggestions and recommendations can be incorporated into the adjuster’s diary of issues and activities that need to be addressed or completed on each file.

 

For individual file conferences to be productive and not a waste of time for the participants besides the adjuster, the adjuster on the claim file should be prepared to discuss each individual claim. This includes having an outline of the issues to be discussed that are preventing the claim from moving forward at the normal pace.

 

 

File Conferences Are About Moving The Claim Forward

 

Employer participation in individual file conferences is not an opportunity for the employer to learn about the history of a claim from day one. As an employer if you are going to participate in the individual file conferences, you need to have kept abreast of the claim throughout the history of the claim. The individual file conference is about moving the claim forward to the conclusion. It is not about educating the employer.

 

While the employer should not waste the other participants time getting up to date on the file, the employer should also insist the discussion remain focused on the particular claim issues at hand and not allow the discussion to drift off on to unrelated issues or other claims.

 

Individual file conferences should be scheduled as needed as only a truly bad claim would entail having an on-going schedule of dates to discuss it. This does not mean that individual file conferences cannot be set on a schedule (example: second Tuesday of the month, 2 p.m.).   If a preset schedule is used, the claims to be discussed each date should be changed, and the individual file conference cancelled if there is not a claim that needs the extra attention that the individual file conference provides.

 

 

Different Perspectives Can Be Invaluable to Resolving a Claim

 

Individual file conferences can result in the claim taking a turn the workers’ compensation adjuster did not foresee prior to the file conference. The perspectives provided by other participants can be invaluable to resolving the claim. However, if the same participants are in all the file conferences, the value of the input will decline over time as the adjusters learn what the other participants will suggest. For this reason, in large claim offices the participants beyond the adjuster, the supervisor and the employer should be changed constantly. In the small claim offices, the adjuster can invite a nurse case manager, defense counsel, work comp judges, plaintiff attorneys (not related to the claim) and others to participate in the discussion.

 

 

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: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Internal Auditing Is Not Just For The Self Insured

There is an understandable need for workers compensation internal audits for the self-insured employer or the high retention employer.  However, insured or low retention employers also need to consider internal auditing for policies, procedures, and monitoring of the claim management department or third party administrator.

 

Further, internal audits can serve as a verification, or factual documentation for challenges, to external audits that are conducted by insurance carriers, state bank examiners or other auditing organizations.

 

 

Policies and Procedures for Injury Management

 

The policy and procedure program requires constant monitoring to be sure it stays in compliance with the workers compensation statute, current medical practice, implementation and proper oversight.  A claim coordinator or injury team should be designated to develop, implement and perform duties at the time of injury. The coordinator needs to be workers compensation claim knowledgeable.

 

An injury team needs to be versatile with workers compensation claims. It should be made up from both labor and management.

 

Personnel directly involved in employer reporting investigating and documenting the injury, need training and proper instruction as to how they must perform their duties.  There needs to be complete reporting to management as often as dictated by the facts of losses or program developments.

 

Claim coordinators or injury teams need access to all necessary areas of the employers business to gather and disseminate their findings. They need to be compassionate yet in control of the loss.  They need to be able to deal with claim adjusters, medical providers, private investigators, attorneys as well as all other entities that are found in the claim process.

 

Internal investigation results, payroll data, authorities, medical needs and other findings must be gotten to the handling claim adjuster as fast as possible. It is necessary to monitor the claim adjuster to ascertain that the coordinator or company team information is properly used.  Conversely, when an adjuster requests information from the employer, the response must be as prompt as possible.

 

The coordinator or team must monitor claim adjusters, .Following adjuster activity for control of investigation payments, controlling expenses and keeping proper reserves on the claim file until final disposition.

 

The entire above item needs to be audited by a senior management officer who has knowledge and ability to see flaws in the program.  At the same time when flaws occur, this person must be able to promptly make corrective change.

 

 

 

Utilization for Future Loss Containment and Job Modification

 

The claim coordinator or injury team needs to audit and review all workers compensation losses for frequency, severity, causation, as well as equipment and employee failure. These studies will be a guide for management to institute measures for future limitation or prevention of such injuries.

 

Claim coordinators or injury teams can also use these causes to develop alternate, temporary, or transitional jobs within the functional capacities such studies will show. A close interface with independent medical providers will help ascertain that the projected job performance meets the function limitations. (This might also be dovetailed with adjusters, and or medical management personnel)

 

All claims need to be reviewed with an eye to recovery from subrogation, second injury funds, re-insurers, restitution on fraud situations.

 

 

Auditing Error Prevention

 

The claim coordinator or the most knowledgeable injury team member should be the main contact person for external auditors to work. When external audits are scheduled, this person needs to be available at all times during the actual audit.  Discussions during the audit as to findings or questions by the auditor need to be conducted at least once or twice a day. A wrap-up meeting is required as soon as the external adjuster completes their physical review. This can help in avoiding improper or erroneous conclusions by an auditor before a formal concluding report is presented. It is best to reach mutual agreement at the wrap-up.

 

 

Annual Claim Purging

 

Claim coordinators or injury teams should obtain workers compensation claim loss run from the insurance carrier or claim handling organization three months before renewal.  Every claim listed should be reviewed for closing, proper reserves, payment errors or duplicates, expected disposition, alternate duty potential, subrogation recovery potentials, and proper recovery from re-insurers.  Files that should have been closed need to be closed.  Settlements or final dispositions should be pushed for closing before renewal. Excess reserves are to be lowered and under reserved files should be increased.  A final loss run with all changes should be reviewed two weeks before the filings to ascertain that all agreed changes are complied with.

 

 

Summary

 

Internal audits and claim handling programs are not just for the larger employers.  All employers need to explore their need for a claim coordinator or injury team to keep a close control of claim cost.  If you do need assistance in implanting such a program, please contact us for a recommendation.

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. He is an expert in employer communication systems and helps employers reduce their workers comp costs by 20% to 50%. He resides in the Boston area and works as a Qualified Loss Management Program provider working with high experience modification factor companies in the Massachusetts State Risk Pool.  He is co-author of the #1 selling book on cost containment, Your Ultimate Guide To Mastering Workers Comp Costs www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

 

©2015 Amaxx LLC. All rights reserved under International Copyright Law.

 

SALES TO PAY FOR ACCIDENTS CALCULATOR:  http://reduceyourworkerscomp.com/sales-to-pay-for-accidents-calculator/

MODIFIED DUTY CALCULATOR:   http://reduceyourworkerscomp.com/transitional-duty-cost-calculators/

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

‘Tis The Season For Claim Reviews

As we start to approach the end of the year, it is a common time for adjusters to be bombarded with claim reviews from their various insured accounts.  Agents/Brokers crave the need to know what is going on with certain high exposure or potentially high exposure claims and their associated reserves.  Insured accounts want to know what lies ahead of them for the following calendar years.  Insurers are looking to see what will hit the radar in the months to come and want to be certain they are prepared and reserves are set.

 

It is also a time for renewals, and insurers want to shine.  They want to show said broker/agent how great they are, how prepared and dedicated their adjusters teams are, and they hope to gain a renewal in the process.  The insurer is also hungry for new business from this agency/broker and it is a good time to show off how well they have performed since the last claim review.

 

The reality is the adjusters are usually ready at any given time.  The reason why adjusters groan around this time of year is because the overall task of the claim review is daunting.  If you look at it from the adjuster point of view, they have to write up numerous reports on the claim, review reserves for the millionth time, and explain to those in the audience why they did what they did, and the rationale to support their plan of action.

 

So what can everyone do to make this process run like a well-oiled machine?

 

 

The adjuster has to remember to look at things from the perspective of someone that has no idea what is going on

 

Claim professionals know claims.  Chances are on high exposure claims they know a lot about the claim, especially if they have handled the claim from the start.  However, at times adjusters will cloud over the details and skip to the meat of the claim.  For example they will focus on where they want the claim to go within the next 4-6 months.  Can they set the claim up to be closed?  Is there a potential surgery out there that could have to be covered?  Do they have arguments to dispute ongoing treatment, and if so, why?  If a claim is denied or in litigation, what are the chances of a successful fight?  Should we mitigate this claim towards settlement and be done with it?  What are the pros and cons for each decision, and so on.

 

Instead of looking in the future and talking about just the prospective probable, the adjuster has to remember to put all of the pieces together for the claim review.  How it started off, why certain things were completed or denied, the supportive case law for each decision etc.  This way the audience gets the full picture of the claim.  The last thing the broker or claim manager wants to hear on the call is an unprepared adjuster.  A lot of questions will be thrown their way, and proper time has to be spent on the supporting details so everyone understands why the claim is where it is, and where it has to go, and why you need to support that stance going forward.

 

 

The claim or team manager has to review each file and be prepared to assist the adjuster when questions are asked

 

One irritating issue I hear on claim reviews will be questions brought up to the manager or team leader and they do not know the answer.  This shows that they are not paying attention to the claim, and overall that they are unprepared.  In this day of higher claim counts and less staff, everyone has to be ready to talk about every aspect of the claim.  Especially if the adjuster brings up any issues where the adjuster had one set of ideas about the future, and the manager had a different path, and the current path is not one the adjuster fully supports.  Showing conflict between the manager and the adjuster never bodes well in the end, so any issues need to be ironed out prior to the claim review.  Everyone has to be on the same page.

 

 

The employer has to be prepared, ready, and knowledgeable

 

If the employer on the claim review is one of those employers who only gets their info from the claim review itself, then this review will last for days.  Especially if you have to go over many files.  The adjuster wants to gloss over the minimal details, and spend their time projecting where it is going.  They do not want to spend an hour talking about the particulars of the claim that have no impact on the future. It is a waste of time for everyone.

 

If everyone does their homework, and everyone is prepared and ready, then a claim review is a great summary of what is going on.  But if any of these aspects break down and nobody is really truly ready, then the claim review will turn in to a claim review marathon.

 

 

 

Author Michael Stack, Principal of Amaxx Risk Solutions, Inc. He is an expert in employer communication systems and helps employers reduce their workers comp costs by 20% to 50%. He resides in the Boston area and works as a Qualified Loss Management Program provider working with high experience modification factor companies in the Massachusetts State Risk Pool.  As the senior editor of Amaxx’s publishing division, Michael is on the cutting edge of innovation and thought leadership in workers compensation cost containment. http://reduceyourworkerscomp.com/about/.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

SALES TO PAY FOR ACCIDENTS CALCULATOR:  http://reduceyourworkerscomp.com/sales-to-pay-for-accidents-calculator/

MODIFIED DUTY CALCULATOR:   http://reduceyourworkerscomp.com/transitional-duty-cost-calculators/

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

The Vital Need for Unit Stat Claim Reviews

All jurisdictions gather statistical data from workers compensation carriers, TPA’s, and self-insured employers in order to establish the annual experience modification codes. The new code developed is used to calculate the premium due for the renewal of the workers compensation policy.

 

This claim gathering of incurred values is known as the Unit Statistical Reporting program. These incurred loss values must be reported six months prior to the policy renewal date. States require data for policies over the past three years.  This means that a policy with a 2014 renewal date must also have data from 2013 an 2012.

 

 

Beginning Data:

 

If a policy has an expiration date of August 1, 2014 the unit stat reports must be filed February 1, 2014. Since states require a three year record of incurred claim values, it means incurred values on policies that expired 8/1/2013 and 8/1/2012 must also be included with the 8/1/14 policy reporting.

 

Changes of values since last reporting for prior policy years will again play apart in the experience modification calculation.

 

It is recommended that the claim review process begin at least two months prior to the mandated filing date.  In the example cited, that means a review date of 12/1/13 would be appropriate for a policy renewing 8/1/14.

 

Obtain a claim loss run as of 12/1/13 for all three policy years that will be used in the unit stat reporting.

 

 

Reviewing the Loss Runs:

 

The loss runs need to be studied for dates of loss, reserves, payments, expenses, description of losses, nature of injury, and proper classification for the loss.

 

Medical only claims need to be reviewed for payments, length of activity and treatment to determine if they are truly medical claims.

 

Generally, the average indemnity claim has an open status of 1 year to 18 months.  A medical only claim should be resolved in 8 to 10 months.

 

The reasons for listing the items to study are too numerous and lengthy for this memo alone.   One example for an item to study is the Date of Loss. First, it must fall within the proper policy year.  It must be determined when the loss was reported.  Did the date fall during the normal work week?  If it occurred on a holiday or weekend, was that employee properly scheduled to work?

 

Because the reasons are so complex, Claim reviews should always be conducted by experienced claim professionals or persons thoroughly knowledgeable in claim programs and best practice claim handling.  The claim professional will have the experience and knowledge to choose claims for full review.

 

If it is a herculean task to choose claims due to sheer numbers, a statistical sample of 10 to 15 percent may be enough.  If large issues develop from the sample reports, each adjuster should be asked to review all claims on their assignment that are causing the issues. The supervisor should review the adjuster’s reports and certify as to their propriety and accuracy.

 

 

Reviewing the Loss:

 

Once the claim is chosen to review, a claim report should be obtained from the adjuster handling the loss.  It must contain sufficient information to demonstrate proper investigation, handling and plans for disposition. Comment is necessary for re-insurance potential.  Retention levels and reporting requirements need to be covered.  Special handling needs and authorities need to be incorporated when applicable.

 

Financial information needs to be included.  This will determine proper reserving with documentation for the change.  The reviewer will look for stair-step reserving and proper reserve diary.

 

The payment coding needs to be proper, and a copy of the codes is necessary for this. Over payments, duplicate payments will all have to be taken out for the final report. (Some larger insurance carriers and TPA’s automatically provide claim review reports based on contractual agreements with the employers. These may be forwarded with the loss runs.  In some instances a claim reviewer does a physical file review in person. Some reviews are conducted by electronic access.  A few organizations still provide paper responses.)

 

 

Negotiating Corrections:

 

Everyone hates to be second guessed.  There is a natural tendency for those not handling the actual claim to have expectations that may not be possible.

 

Adjusters will naturally be defensive and resistive to suggestion. They may have attitude issues concerning the law and their limited power.

 

The claim reviewer needs to be aware of these tendencies, and preparation is the key to successful negotiation.  While it is a good idea for the reviewer to be aware of the jurisdictional idiosyncrasies in the law, it is unwise to be too well versed as poor handling may be excused. It is far better to have the adjuster use the law as an explanation as to why things may not have been done according to Claim Handling Best Practices.  The reviewer should review according to Best Practices at all times.

 

The reviewer should take “I am here to help you do your job better” attitude at all times. Use a friendly tone of voice when speaking to the adjuster.  Be very careful to use words that are non-inflammatory or that could be misinterpreted in both verbal and written contact. Always praise good work first.

 

When making suggestions or criticisms use comments like: “I am sure you thought of this.  Can you tell me why it did not work?  What do you think about trying this? I note that the claim record did not include comments on (whatever the subject) you may have had good reason can you tell what it was?  What obstacles are you encountering that are adversely impacting your job performance? Have you thought of? Will you be doing? What tools do you employ to overcome resistances to your handling needs?

 

If an adjuster hesitates to supply medical information due to confidentiality or privacy law, point out that it is well established that the employer has the right to know that the employee can physically do the job.  All information provided will only be shared with properly authorized individuals.

 

Most adjusters are used to claim reviews and will respond positively. Occasionally there may be one who is completely unresponsive or cooperative.  At that point managerial intervention may be required.  Such attitude also implies bad claim handling and claimant confrontation.  Serious consideration needs to be given to discipline or termination procedures

 

 

Approving and Testing Data for Unit Stat Reporting:

 

Once the review is completed and all negotiated changes are agreed to request the corrected loss runs.  The reviewer should recheck the accuracy of the new runs and certify them as correct for use in the stat reports.

 

The broker, agent, underwriter, actuary, certified rater, or risk manager should then do a test calculation of the experience modification before sending in the unit stat reports.  If the state’s calculation differs too much these are the same people who would have power to discuss differences with the state.

 

 

Summary:

 

Claim reviews are vital and necessary to be sure data supplied to the states on the unit statistical reports are correct.  They should be timely and done far enough in advance of reporting to allow for proper adjustments.  A test modification should be done prior to filing the unit stat reports.

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  http://reduceyourworkerscomp.com/about/.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

SALES TO PAY FOR ACCIDENTS CALCULATOR:  http://reduceyourworkerscomp.com/sales-to-pay-for-accidents-calculator/

MODIFIED DUTY CALCULATOR:   http://reduceyourworkerscomp.com/transitional-duty-cost-calculators/

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Give Your Workers Comp Claims A Check-Up

For the smart man or woman running a business, staying on top of your workers compensation claims is a critical component to success.

 

As all too many business owners have unfortunately discovered over time, letting your workers comp claims get out of control can lead to excessive expenses, sometimes putting the company budget in the red. In order to avoid this problem, make sure there is a physical review of each and every open and closed claim file. In doing so, this demonstrates the quality of file handling both now and in the past.

 

For business owners, it is important to choose newer claims along with the old ones; reviewing newer cases allows you a better chance to have an impact on how ultimately the claim will turn out. As an example, when a physician reviewer and experienced claim rep look at files, they can determine as to whether or not the medical care is in fact well-coordinated and ultimately good quality.

 

 

Are Strategies Being Implemented and Followed?

 

The review also provides information on if the strategies towards claims closure have been developed and actually followed. This leads to determining if the time missed from work is relevant to the degree of disability.

 

The goal at the end of the day for the reviewer is to properly determine whether or not the file handling is proactive or reactive, along with if it is correctly focused on providing a fast closure. Another area to look in on is whether medical bills are looked at for duplicates and compliance with fee schedules.

 

Leave a file review with a detailed plan of action for each claim. Be sure to assign responsibility and a targeted completion date for each follow-up item. While phone reviews can be done, an actual face-to-face review should always be the preferred method.

 

 

Medical Doctor’s Role is Crucial

 

It should not come as a surprise that the single party oftentimes most missing with a claim review is the MD. He or she is undoubtedly the best individual to address the validity of the injury, the length of time the employee must take off from work, and an approved form of therapy. The medical doctor also should go over whether nurse case management has in fact been properly utilized and ultimately effective.

 

Unfortunately, many times the NCM is used too late or too early, meaning protocol for usage of the NCM was not integrated with the companies’ post-injury plan. Keep in mind that there are a sizable number of well-qualified and available medical doctors, including those MD’s in the insurance industry.

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  http://reduceyourworkerscomp.com/about/.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

SALES TO PAY FOR ACCIDENTS CALCULATOR:  http://reduceyourworkerscomp.com/sales-to-pay-for-accidents-calculator/

MODIFIED DUTY CALCULATOR:   http://reduceyourworkerscomp.com/transitional-duty-cost-calculators/

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Breaking Down an Employer and TPA Disagreement

Although the goal is to oftentimes avoid disputes at all costs, the bottom line is they do happen.

 
With that said, what happens when a business owner and a third-party administrator do not see eye-to-eye on a matter. Is there room for it to be resolved or is it destined to become a long-running dispute. Oftentimes a review by a independent third party can give clarity to the situation.

 

 

Here is an example of one such case:

 
A big transportation business felt that its claims situation were not being handled in an aggressive enough fashion, hence the fact that adjusters were ultimately increasing their workers compensation expenses. As the unhappiness with the situation grew, the business was put out to bid, while they also switched TPAs.

 
With that scenario in front of them, a MD and a single senior claim analyst poured over more than a dozen claims (20 in all) in each of three offices (Texas, California and Massachusetts), discovering there was an issue when it came to the Massachusetts issue.

 

 

Lack of Experience and Disorganization

 
As it turned out, the adjuster in the Massachusetts claims did not have the necessary experience, not to mention was disorganized.

 
Among the administrative issues at hand were problems like not having the proper amount of supervisor oversight, insufficient investigation, untimely 3-point contact, no recorded statements to speak of, and claimants were being paid too much as a result of the “average weekly wage” being miscalculated.

 
It also turns out IME’s were overused and medical causality was not put in place before the claim payment. To boot, pre-existing conditions were not recognized by the adjusters or nurses that led to higher than necessary reserves. Lastly, nurse case management was being delivered too late to be effective. The client, however, felt the NCM was “too expensive” but the issue at the end of the day was that it needed to be brought in earlier.
With all this in mind, new triggers were put in place so when an employee does not return to work within two days a nurse case manager is immediately brought into the picture.

 
Also, the TPA enhanced their training program to ensure nurses were going over files for pre-existing conditions and completeness of medical records.

 
As part of the new process, the employer retained a part-time medical director to look at and analyze claims if an employee had not gone back to work within two weeks.
IME’s were not requested until the medical director had chance to review the file, insured complete medical records were obtained and crafted a custom letter seeking specific medical information.

 

 

 

More Monitoring and Management Needed

 
As the review moved on, it was found that the employer had insufficient staff to monitor or manage the TPA; there were 3,000 claims annually at more than 500 locations with just a single person, who was not an actual risk manager, assigned to workers comp.
It was suggested that the employer hire a risk manager and choose 11 people (one for each region) to serve as WC Managers (WCM) which was what in turn happened.

 
As part of the process, onsite training was undertaken for the new WCMs. The TPA took part in the training to meet the WCMs then did a “national rollout” offering new “panel cards” so employees could choose network physicians.

 
The TPA met with each locale to open communication channels. A meeting was set up with the client, TPA and broker on weekly conference calls for the next year until all suggestions had been put into motion.

 

 
To keep team members accountable, they were provided with an “Implementation Action Plan” to each participating member following the conference call.
When all was said and done, losses decreased some 25% for the past three years and continued.

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

WORK COMP CALCULATOR:   http://www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

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