Proper Compensability Investigation Stops Claim Before It Starts

Many rookie adjusters get ahead of themselves. This probably should not be seen as a surprise, because as a new claim examiner they feel pressure to not screw up. Messing up is usually viewed as missing some detail pertinent to the compensability of the claim. One of the worst mistakes you can make is accepting and paying on a claim that is not compensable to begin with.

 

A lot of this comes down to training. But when I was reading a recent poll, the top 3 core competencies were ranked as follows:

 

1. Disability/Return to work management

 

2. Medical Management

 

3. Compensability investigations

 

While I agree with the importance of the three items, I disagree with the ranking. I believe that these should be listed in the opposite order. Disability/return to work and Medical management need to only be addressed if the claim is actually compensable. How can compensability not be ranked first as the most important item in a claim?

 

It comes down to money. The medical aspects of claims can far outweigh the wage loss, especially in those chronic claims that are around for more than a year or two. Management and other executives focus on ways to save money on the medical end, by using aggressive management tactics to contain medical exposure. They assign certain vendors to their company, all in an attempt to curtail medical cost. They negotiate case costs, rates, assignments, and so on thinking that they are striking a deal and saving money on the back end of a claim instead of focusing on the front end.

 

 

Front End of The Claim Is Most Important

 

In my opinion, the front end of the claim is by far the most important. This is where the key investigation takes place as to if the claim is indeed compensable, or if any red flags are to be raised that can question compensability in general. Adjusters get lost in their routine of taking numerous statements and juggling their own pending claims that they forget that the first statement they take from the claimant is often the biggest key to the claim. All of their attention should be focused on looking for key indicators to compensability issues and not thinking 14 steps ahead as to which nurse case manager they will assign if/when this person has surgery 3 months from now.

 

These nasty habits begin early on in the career of said adjuster. It is very typical of an adjuster to establish a routine for their claims early on in their career, and rarely will they deviate from that routine unless they are forced to later on. Even when they are forced to change later on it is met with a ton of resistance, because you are changing the way they approach their claims from day one. Even with a forced change, they will slip back into old routines easily, unless you spend countless hours drilling them with reasons why they need to adapt to the new protocol for claim investigation starting at the time the file first hits their desk.

 

 

File Transferring Adds to Lack of Compensability Investigation

 

Another issue with the lack of compensability investigation comes from files transferring from adjuster to adjuster, either due to reserve increases or due to general adjuster turnover. Oftentimes the new adjuster will take the initial investigation as over and done with, and they pick up the claim where the prior adjuster left off. They should be using their experience in the industry to review the file in-depth, starting from day 1 of the claim, including listening to the recorded statement (If one was taken) and reviewing the notes that were input into the claim to see if anything strikes them as being odd or standing out as a potential red-flag issue. Compensability can always be addressed later on in the claim, but the chances you have to curtail what you may have to pay for can be restricted. If it were early on in the claim, the adjuster has several options to file to investigation extensions or to dispute questionable forms of medical treatment.

 

The reasons for these issues also come down to effective time management. It is not a recent news update that carriers are trying to do more with less staff, and these in-depth claim reviews and analysis just do not happen. The above mentioned poll shows flat out that compensability is not the first hot button issue on the minds of insurance executives. If the management is not pushing that issue, it is just not going to be done. Instead of stopping the claim due to prior adjuster error, examiners and management go in to damage control mode. They try to cap as much future exposure as possible, in order to stop the bleeding.

 

Maybe had they viewed initial investigation as being the most important step in a file they would not be in the mess they are trying to contain.

 

 

Author Michael B. Stack, CPA, Director of Operations, 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.

 

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

Self-Insured Employer Must Confirm TPA Has Customer Service Guide

Every self-insured employer should confirm their third party administrator (TPA) has a Customer Service Guide which includes the self-insured employer’s specific claims handling instructions. The Customer Service Guide should be designed to provide the adjusters, supervisor(s) and claims manager with information that is particular to the employer.

 

A Customer Service Guide differs from the TPA’s Best Practice guidelines, as it customizes the preferences of the self-insured employer into the claims handling. The Customer Service Guide should include details of how to make the interface between the self-insured employer and the TPA efficient.

 

 

Typically, the Customer Service Guide will include directions for the TPA’s personnel on:

 

• The self-insured employer’s name, and the name of all subsidiaries that will be a part of the insurance program

 

• The type of insurance program the self-insured employer has (high deductible, full self-insurance, etc.)

 

• If it is a deductible program, the dollar amount of the deductible, and who to report the claim to if it appears the deductible amount make be exceeded

 

• A list of all the self-insured employer’s locations covered by the claims handling contract

 

• The primary contact and secondary contacts at the self-insured employer, their phone numbers and addresses

 

• The identification of the light duty return to work coordinator the TPA adjusters are to contact whenever light duty work restrictions are provided

 

• Who to report to and who to copy with claim reports

 

• The philosophy of the self-insured employer toward how claims should be handled

 

• Pet peeves – issues the self-insured employer has experienced with the TPA (or with a prior TPA) that need to be given special attention

 

• The identification of the self-insured employer’s nurse triage provider and contact information

 

• Instructions on coordination between the nurse triage provider and the TPA adjuster

 

• The self-insured employer’s preferences for nurse case management (if not provided by the TPA)

 

• Instructions on coordination between the nurse case manager and the TPA adjuster

 

• The self-insured employer’s preferences for defense counsel in each locale where the employer has a facility

 

• The self-insured employer’s preferences for other vendors (surveillance companies, medical records companies, etc.)

 

• The self-insured employer’s requirements for the TPA first report on the claim, and the employer’s requirements for subsequent status reports

 

• The frequency of telephonic claim reviews

 

• The frequency of in-person reviews (if any)

 

• If the TPA does not have a claims office in the states requiring in-state adjusters (California, Oregon, Nevada, Idaho) information on who the in-state adjusters will be should be precisely stated

 

The financial controls of the claim handling instructions should also be incorporated into the Customer Service Guide, including:

 

o The check issuance procedure, the verification of checks issued, and the accounting for the checks issued

 

o The void check procedure

 

o The internal controls to prevent duplicate check issuance

 

o The matching of Explanation of Benefits on medical bills to the checks

 

o The signature process for checks over the pre-determined threshold ($1,000 or $5,000 or $10,000)

 

o The level (if any) at which the self-insured employer wants to issue checks or to co-sign checks

 

• The claim controls of the claim handling instructions should also be incorporated into the Customer Service Guide, including:

 

o Three point contact on all claims within 24 hours (or lesser time can be stated and agreed)

 

o Recorded statements on all musculoskeletal injuries and all claims with the potential for subrogation

 

o The frequency of Action Plans to move the claim forward

 

o On site investigations when subrogation is a possibility

 

o When nurse case managers will be used, with a subsection on what are the duties and responsibilities of the nurse case manager versus what should be completed by the adjuster

 

o When surveillance will be used

 

o When and how frequently Insurance Service Office inquires will be filed

 

o When prior work comp claim files will be obtained from the state’s work comp board or industrial commission

 

o When the claim should be referred to the Special Investigations Unit

 

o The use of Fraud Letters in the states that mandate their use

 

o The proper use of IMEs and Peer Reviews

 

• Reserve authority for initial reserves and the process for obtaining additional reserve authority

 

• The employer’s expectations on how subrogation will be pursued

 

While this is not a complete list of everything that the TPA should have in the Customer Service Guide for a self-insured employer’s claims, it is a checklist of the minimal information that should be included in the Customer Service Guide.

 

Author Michael B. Stack, CPA, Director of Operations, 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.

 

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

Deny That Claim! Workers Compensation Claims You Can (and Should) Deny

Employers frequently take the attitude that regardless of the facts surrounding a workers’ compensation claim, it is going to be paid. Fortunately, common sense sometimes (but not always) prevails with certain workers’ compensation claims being deniable. If you encounter any of the following circumstances in your workers’ compensation claims, consult immediately with your claims adjuster and/or defense counsel about whether or not the claim should be denied.

 

 

In the Course of Employment:

All states limit workers’ compensation coverage to work being performed for the benefit of the employer. The work comp statute will read something to the effect of “arising out of the employment” of “in the course of employment”. The intent is to require a connection between the injury and job. If there is no relationship to the job, the injury is not workers’ compensation. This is especially important when an employee asserts an occupational illness.

 

For the Benefit of the Employer:

The activity of the employee at the time of injury must be for the benefit of the employer. This does not restrict the location of the injury to the employer’s location. Traveling salespeople, delivery people, truck drivers and others who perform their work away from the employer’s location are covered by workers’ compensation if their injury occurs while they are performing an activity for the benefit of the employer.

 

Off the Clock:

Most jurisdictions do not cover work place accidents when the employee is not working. For example, it is not workers’ compensation when the employee has clocked out for lunch and went to the employee’s lunchroom to have lunch, trips, falls, and is injured. However, note that if the employer mandates the use of the lunch room facility, break room, or that work breaks must be taken at the work station, then the accident while the employee is still under the requirements of the employer will be covered.

 

Intoxication:

Employees who are injured while working under the influence of illegal drugs or alcohol are normally not covered for workers’ compensation if the intoxicant lowered their mental dexterity and was a factor in the accident causing their injury. This varies significantly among the states so the employer should know the rules in their own state. The best way to prove or disprove an employee under the influence of an intoxicant is to have a drug test administered at the time the employee goes in for medical treatment. If the employee wishes to delay medical treatment (frequently to avoid the drug test), the employer should still insist on the drug test be taken immediately even if the employee declines medical treatment.

 

Horseplay:

Most jurisdictions do not allow workers’ compensation coverage for an injury brought on by the employee’s improper behavior. Horseplay, roughhousing and practical jokes that backfire on the employee causing an injury are not considered workers’ compensation. Note that an employee who is not a willing participant and who is injured by the horseplay or roughhousing of another is covered for workers’ compensation.

 

Fights and Assaults:

When two or more employees get in a fight, and or one employee assaults another, there must be a correlation between the employment and the fight/assault for the injury to be covered by worker’s compensation. For example, if two men fight because they are both dating the same woman, the injuries even though they occur on the employee’s premise, are not workers’ compensation because the fight has no relationship to the work the employees are there to perform. On the other hand, if a woman hit’s her supervisor and breaks his nose because she got a poor performance evaluation, the supervisor has a workers’ compensation claim.

 

Travel To and From Work:

Employees who get injured traveling to work or from work (like in a car accident) are not covered by workers’ compensation unless the employer mandates the route the employee takes to work or mandates the mode of transportation to work. However, if the employer mixes work with the employee’s trip to or from work, then an injury would be covered. For example, if the boss asked the employee to stop at the office supply store and pick up some envelopes, and the employee gets hurt while in the office supply store, it would be considered workers’ compensation.

 

Non-sanctioned Activities:

After work activities involving groups of employees are tricky when it comes to determining whether or not an injury is covered by workers’ compensation. If the employees of the machine shop arrange a friendly volleyball game with the truck drivers, and an employee is injured blocking a volley, the question of workers’ compensation depends on who arranged the volleyball game. If the employer suggested this friendly competition as a morale booster, the injured employee would be covered for workers’ compensation. On the other hand, if the employees on their own without any involvement of the management arranged and scheduled the volleyball game, the injury would not be covered.

 

Psychological Injuries:

When an employee suffers an injury, and the injury creates psychological and/or emotional issues, the psychological treatment is covered by workers’ compensation in most states. However, psychological or emotional “injury” because the employee got demoted, was given a bad performance evaluation, has too much work to do, or just does not like the boss are not covered by workers’ compensation.

 

Fraud:

Fraud should never be tolerated. If the claim is fraudulent, the employer should take every possible measure to resist it. Also, by definition, if it is not a real injury, it is not workers’ compensation.

 

We encourage risk managers and workers’ compensation coordinators to discuss with their claims adjuster or defense counsel any situation where you are not sure if workers compensation applies or not. Discuss the above categories with your adjuster or attorney to see how your state applies the work comp statutes to each situation. Also ask if there are other categories of claims that are not covered by workers’ compensation in your state.

 

Author Michael B. Stack, CPA, Director of Operations, 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.

 

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

Details of the Third Party Administrator Service Agreement

Self-insured employers who utilize a third party administrator (TPA) to administer their workers’ compensation claims frequently feel they do not get everything they bargain for from their TPA in the handling of the employer’s claims. The issue is usually a difference of opinion between the self-insured employer and the TPA as to what is essential and what is unnecessary in the handling of the work comp claims.

 

Need to Define What is Essential In Claims Handling

 

The differences in opinion between the self-insured employer and the TPA can be (and should be) minimized by spelling out in the claim servicing agreement what the employer considers to be essential in the claims handling. When the claim servicing agreement has a vague phrase like “the TPA will provide quality claim handling”, the stage is set for unhappiness and disputes between the employer and the TPA.

 

The self-insured employer, regardless whether dealing with a small mom & pop TPA operation or with Crawford & Company’s Broadspire division, should insist the servicing agreement include, at the minimum, the following claim handling requirements:

 

• The servicing agreement should clarify whether the self-insured employer will confirm policy coverage prior to reporting the claim to the TPA, or whether the TPA needs to contact the employer following each assignment to verify coverage on a claim-by-claim basis.

 

• The TPA will assign all claims to the designated adjuster or dedicated adjuster(s).

 

• The TPA adjuster will contact every injured employee the same day the claim is reported to the TPA, with the exception that on any claim reported to the TPA after 3 p.m. local time, the injured employee will be contacted by noon of the next business day.

 

• The TPA adjuster will obtain a recorded statement from any injured employee when the accident causing the injury is not witnessed by another employee.

 

• The TPA adjuster will interview the employee’s supervisor on any injury claim that was not witnessed by co-worker or on any questionable injury claim.

 

• The TPA adjuster will obtain a recorded statement of the employee any time there is subrogation potential.

 

• The triage nurse or the TPA adjuster (spell out which one) will contact the medical provider within 24 hours of the claim being reported to the TPA and will make all necessary arrangements for medical records.

 

• The TPA adjuster will contact the employer within 24 hours of the claim being reported to review the claim and address any issues, and to request the wage records of any employee where payment of indemnity is probable.

 

• The TPA adjuster will complete all aspects of the investigation of the claim within 14 days of the claim assignment.

 

• The TPA adjuster will make a decision on compensability within 14 days and on any claim where the adjuster feels compensability should be denied, to advise the employer of the denial of compensability prior to issuing the denial to the employee.

 

• The TPA adjuster will maintain on-going contact with the injured employee and the medical provider, preferably after each doctor’s visit, but no less than every 30 days until the doctor visits are more than 30 days apart.

 

• The TPA adjuster will obtain the light-duty work restrictions from the medical provider and will contact the employer to arrange a transitional duty assignment until the employee is able to return to work full duty.

 

• The TPA adjuster will set the initial reserves on the file for medical, indemnity and expense within 3 business days.

 

• The servicing agreement should specify whether all workers’ compensation claims will be reported to the Insurance Services Office (ISO) or only indemnity claims will be reported to ISO.

 

• The TPA adjuster will review and adjust all reserves for accuracy after obtaining the initial medical report(s) and within 60 days of claim assignment.

 

• On severe claims, reserves for the ultimate value of the claim will be set within 6 months of the claim being reported.

 

• The TPA claims office will issue all medical bill payments and vendor expense payments within the statutory guidelines or 45 days, whichever is less.

 

• The servicing agreement should specify how often the adjuster(s) will complete an Action Plan on each claim.

 

• The servicing agreement should spell out whether the TPA adjuster or a medical management company will be responsible for medical management. This includes identifying who is responsible for:

 

o assignment of nurse case managers,

 

o utilization review,

 

o peer reviews,

 

o independent medical evaluations.

 

• The servicing agreement should specify who is responsible for the pursuit of subrogation and who is responsible for the pursuit of subsequent injury fund offsets or recoveries.

 

• The servicing agreement should specify that the TPA adjuster will document every file with a settlement evaluation before a settlement is completed.

 

• The selection and management of defense counsel should be spelled out in the servicing agreement.

 

• The litigation management guidelines should be incorporated into the servicing agreement.

 

• The TPA adjuster should be required to keep all files on diary and to complete all possible Action Plan follow up prior to each diary date.

 

• The servicing agreement should specify the frequency of supervisory reviews of the claim files by the TPA’s management staff.

 

• The servicing agreement should require that all actions taken by the TPA adjuster, clerical staff, management and medical management personnel (if a part of the service agreement) be documented in the file notes.

 

 

Annual Independent Claims Handling Audit

 

Lastly, and possibly the most important agreement in the servicing agreement is the right of the self-insured employer to have an independent claims handling audit completed, at least annually, to verify the compliance of the TPA with the above requirements incorporated into the servicing agreement.

 

By clearly delineating the claim handling expectations in the claim servicing agreement, the relationship between the self-insured employer and the TPA will be smoother and more satisfying to both parties.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, 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.

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

Workers Compensation Claim Handling Standards

Self-insured employers have more leeway in establishing and controlling the quality of claim handling than employers who cover their workers’ compensation claims through a work comp insurance policy.  But, both self-insured employers and employers who purchase their insurance from an insurer have the right to expect their claims to be handled in a professional manner and in compliance with the insurance industry’s Best Practices.

 

The definition of Best Practices may vary slightly from insurer to insurer and from self-insured employer to insurer.  The following Best Practices are designed to bring about in a timely manner the highest quality medical care for the injured employee while minimizing the cost of the injury.  Properly followed, the Best Practices will obtain a timely return to work for the injured employee and assist the employee to return to the employee’s pre-injury status.

 

 

The insurance industry Best Practices are:

 

Coverage Verification: The adjuster immediately on assignment of the claim should verify there is a valid policy of insurance and the accident occurred within the policy period.

 

Three Point Contact: The adjuster should contact the employer, the employee and the medical provider within 24 hours of the claim assignment (some insurers and self-insured employers have reduced the contact time to different, shorter time frames such as 2 hours, within 4 business hours or same day contact).  The purpose in making these contacts is to thoroughly investigate the circumstances of the claim and to determine the compensability of the claim.  The employee contact includes a recorded statement of the employee if there is any question as to the validity of the claim or if there is a possibility of subrogation.

 

Data Accuracy: The adjuster should verify all data associated with the claim within 72 hours of assignment.  This includes the proper employer location code, department codes, injury codes, accident description codes and employee data (date of birth, social security number, employee length of employment, etc.)

 

Compensability: Based on the investigation completed by the adjuster, a determination of compensability (whether the claim will be paid or denied) should be made and documented in the claim file within 14 days of the receipt of the claim.

 

 

Investigation: The adjuster should address all issues affecting coverage, verify the nature and extent of injury, determine benefits due, investigate the possibility of subrogation, and address any second injury fund possibilities within 14 days of the receipt of the claim.

 

Reserves: Upon completion of the three point contact, the adjuster should have adequate information to set the initial reserves for medical, indemnity and expenses.  Initial reserves are normally set within 72 hours.  Reserves are subject to change and are frequently updated at 60 or 90 days into the claim. The reserves also should be updated at any time the adjuster receives medical information or other documentation that impacts the overall value of the claim. Regular reviews of the reserves, at least every 6 months, should be completed to verify the reserves for future payments remain adequate.

 

Average Weekly Wage:         Most states have statute requirements as to when indemnity benefits must be paid.  To comply with these legal requirements, the adjuster should obtain from the employer documentation of the employee’s pre-injury compensation within 14 days of receipt of the claim.

 

Indemnity Benefits: The adjuster using the average weekly wage information obtained from the employer should calculate the employee’s indemnity benefit rate and arrange payment of the initial indemnity check within 14 days of receipt of the claim (less time if the state statute requires an earlier payment of indemnity benefits).

 

First Reports: Self-insured employers should expect their third party administrator (TPA) to provide a detailed report of the work done on the claim within 14 days of the claim being received by the TPA.  The detailed report should review each of the Best Practices categories discussed in this article.

 

Status Reports: The TPA should provide the self-insured employer with regular status updates on the developments of the claim.  Status reports can be at 30 or 60 day intervals, depending on the developments of the claim.

 

Plan of Action: The claim file should contain an outline of the steps the adjuster will take to either move the claim forward and/or to bring the claim to a conclusion.

 

Insurance Services Office: A filing with the Insurance Services Office to identify other insurance claims brought by the employee should be completed within 14 days of receipt of the claim.  This information will assist the adjuster in preventing the employee from claiming a pre-existing medical condition as a part of the employee’s new workers’ compensation claims.  A repeat filing with the Insurance Services Office should be repeated every 6 months far as long as the claim remains open.

 

Medical Management: Upon the initial contact with the medical provider’s office, the adjuster should confirm the date of the first office visit, the medical provider’s diagnosis, prognosis, treatment plan and the date of the next office visit.  If applicable, the adjuster should give the medical provider the contact information for pre-certification and utilization review, along with contact information for the medical bill review office.   The adjuster should also coordinate the involvement of the nurse case manager if the injury is serious enough and nurse case management is not automatically assigned to every loss time claim.

 

Return to Work: During the initial contact with the medical provider’s office, the adjuster should determine the employee’s Return to Work status.  The adjuster should provide the employer with the employee’s work restrictions and make the necessary arrangements for the employee to return to work on modified duty or full duty, if appropriate.

 

Subrogation: Based on the adjuster’s investigation, subrogation should be pursued against any third party responsible for the employee’s injury.

 

Settlement Evaluation:         The claim file should contain an evaluation completed by the adjuster of all exposures for benefits that are a part of any settlement.  The settlement evaluation should also include any offsets or credits due to the employer.

 

Litigation Management: All files referred to a defense attorney should contain a referral letter outlining the facts of the claim and providing the defense attorney with instructions on how the adjuster wants the attorney to proceed.  The referral letter should also request the defense attorney to provide an analysis of the strong and weak points in defending the claim, along with the attorney’s recommendations.  The attorney should be required to provide a litigation budget outlining the projected cost of defense.  All billings provided by the defense attorney should be reviewed by the adjuster for appropriateness of the charges.

 

Diary:  All future handling activity planned by the adjuster should be placed on a diary (calendar) for follow-up on a timely basis.  This includes all Plan of Action issues as well as routine file follow up.

 

Claim File Notes: All activities on the file should be documented in the claim file notes sections of the file.  This includes all telephone discussions, emails, letters, medical reports, state forms, and any other file developments.

 

 

If your insurer or TPA is not following the above industry Best Practices, it will have a negative impact on the outcome of your claim files.  If you know or suspect that the Best Practices are not being followed, you should arrange for an independent claims auditor to review your claims files. 

 

A claim file audit will provide you with the needed insight into your claims, allowing your company to take the necessary steps to improve the claim handling of your work comp claims, lowering your overall workers’ compensation cost.  For assistance in finding a claim files auditor, please contact us.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com

 
Editor Michael B. Stack, CPA, Director of Operations, 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

 

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

Try Not To Be So Optimistic When Reserving A Work Comp Claim

Contrary to popular belief, sometimes adjusters are optimistic when reviewing their open cases.  When you deal with injury claims day in and day out, you try to be proactive and hope for the best. 

 

The problem is that we should know better.  If you have a person that hasn’t worked in over a year and they are going in for their second surgical procedure, chances are they are going to end up costing you a ton.  But, as if we love to have false hope, we try to picture the best possible outcome, instead of the probable one.

 

In our minds, we think that once an injured worker nears MMI we will run them through a vocational program, and magically they will be placed either back at their original employer (At the same pre-injury wage of course) or at a comparable employer (again at the same pre-injury average weekly wage) and just like that we are done!! 

 

Alas, this is a crucial error.  Not only for the person handling the claim, but for the carrier/TPA in general.  This trend is increasing carriers/TPAs to mass under-reserving, which is the biggest error that an adjuster can make.  Here are a few things to keep in mind when reserving your claim for lifetime exposure and probable outcome:

 

  1. Don’t ignore increased medication costs—especially when future surgical procedures are being considered

 

One of the biggest problems in work comp today is opioid medication exposure.  Not only are these medications being used for every injury under the sun, but they are the most expensive.  Despite using a PBM or another medication watchdog service that may or may not include fee-reduction on pharmacy bills, the bottom line is that these meds are going to be a big part of ongoing treatment—sometimes for decades.  When you have a case where surgery failed, there is very little chance that your claimant will ever be medication free.  There are several vendors to help you with forecasting medication expense, so utilize them.  These can include a nurse case manager or Pharmacy Benefits Manager.  It is not feasible to think that meds will cost $1,000/year, times however many years your injured party has to life expectancy.

 

 

  1. Remember to include medical cost inflation

 

The cost of medical service is not the same as it was 10 years ago.  New advances in technology come with a price attached, and at times these prices can continue to go up, especially as demand for said services increases to be the “Next greatest thing in spinal treatment” or whatever the case may be.  To reserve for this unknown, adjusters usually implement a flat percentage increase for inflation, which varies anywhere from 2% to maybe 5% of total medical cost. It is best to err on the side of caution, and shoot for the higher end.  I always say it is better to over-reserve a bit than under-reserve by a lot.

 

 

  1. Don’t put all of your faith in a vocational program being 100% successful

 

It is great to think that your injured worker with permanent restrictions will return to gainful employment somewhere down the line.  This could be true, but if you have a high wage earner it is less likely that they will make a wage comparable to what they were making pre-injury.  Plan accordingly and be sure to include enough in your indemnity to cover a partial wage loss for the future.  Also, if state-run retraining is mandatory (or even an option) in your jurisdiction, some programs make the comp carrier pay for books, classes, mileage, meals, and so on.  All of these expenses can add up in a hurry, so be sure to not overlook them.  State websites usually have an overview of their retraining programs online, including class cost, book costs, tuition, etc.

 

 

 

  1. Be sure to allocate for expenses—both medical fee reduction costs and legal costs

 

Most all bills are run through some sort of cost-containment or fee reduction program.  It is important to remember that a fee is attached to the bills that fit the criteria, which is mostly a flat percentage.  Whatever vendor you may use, whether in-house or an outside vendor, fees are going to occur.  Most reserve analysis worksheets have a field to complete to account for this cost.  When you finally arrive at your final medical exposure figure, don’t forget to tack on whatever flat rate percentage that your company uses for these medical review fees.  This expense is another one that can creep up on you and suck the life out of your open reserve monies.

 

Legal fees also should not be forgotten.  Even if your case is not in litigation now, you can bet at some point down the road examiners are going to dispute something, and you can bet your injured worker will litigate over it.  In their eyes you have covered everything for years, so why would the carrier dispute things now?  On a lifetime claim the claimant often feels they have nothing to lose by litigating since their claim has already been accepted.

 

 

  1. The magic cure is yet to be found, so don’t forget complications from recovery

 

If you predict future invasive procedures during the life of this claim, be sure to allocate for complications.  In a perfect world, everyone has a surgery, and everyone heals within the timeframe outlined in the ODG book.  You must remember that the ODG is just a guideline, not a guarantee. 

 

This is where you have to pay attention to the risk factors that a person has to complicate recovery.  This could be obesity, diabetes, arthritis, other medical conditions, their lifestyle, and so on.  If you think this person is going to take forever to heal, then it is probably true. 

 

To counteract under-reserving, be sure to give yourself a TTD cushion.  If you owe wages on a long-term basis after a major surgical procedure, think about adding in at least 4-6 weeks extra, just in case a major setback were to occur.  Repaired rotator cuffs and ACLs always have the potential to re-tear.   The more severe the injury and complicated the surgery, the less likely the person is going to heal within the ODG guidelines.

 

 

Summary

 

This is just the tip of the iceberg of items to think about when reserving a major exposure injury claim.  The most important thing to completing a successful reserve is to take the proper time to look at the claim from all angles.  You have to make sure all of your bases are covered.  The only way this can be accomplished is to take the time needed to reflect on the ultimate claim exposure.  Reserving is an art form, and even the most seasoned claims adjusters have trouble reserving a lifetime claim.

 

 

Author Michael B. Stack, CPA, Director of Operations, 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.

 

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

Understanding and Defending Occupational Disease Claims

Understanding and Defending Occupational Disease Claims

 

Employers who are not in the mining industry or in the manufacturing of chemicals often think they have no exposure to occupational disease claims.  They are wrong.  Almost every employer has exposure to occupational disease claims as any ailment that develops as the result of the work done by an employee is an occupational disease, also known in some jurisdictions as occupational illness.  Occupational disease can be defined as any illness or injury that occurs in a group of workers at a higher rate than it does in the general population.

 

 

Every Employer Has Exposure to Occupational Disease

 

Physical activity, especially repetitive motion, frequently triggers the onset of an occupational disease.  Painters who use spray guns in a constant back and forth motion and clerical workers who type most of the day are both prone to developing carpal tunnel syndrome, an occupational disease.  Other physical activity like constant bending can trigger musculoskeletal problems even though no specific injury occurred.

 

The challenge with occupational disease claims is determining whether or not the employer is responsible for the employee’s medical condition.  As claims for cancer, asbestosis, black lung disease, carpal tunnel syndrome, etc., can be costly or even catastrophic, it is imperative that the claim be properly investigated and medically analyzed before a determination to accept or deny the claim is made.

 

 

Medical Proof First Step In Occupational Disease Claim

 

The first step in the handling of the occupational disease claim is medical proof.  Often the medical diagnosis of the employee’s doctor is based on the information provided by the employee.  Before the medical opinion of the doctor (normally hired by the employee’s attorney) is accepted, an independent medical evaluation by a defense doctor should be completed.  Often two different doctors can review the same medical information, diagnostic tests, and symptoms, and come to different conclusions as the cause of the employee’s medical issue. 

 

If both the employee’s doctor and the independent medical examiner agree on the employee’s medical condition, the determination of whether or not it is an occupational disease claim moves on to the next step, determining the cause. It is extremely important for the employee’s medical history and work history to be known and thoroughly reviewed. Frequently, the employee’s medical issue can be traced back to a non-employment related history.  For example: the hearing loss claim.   Is the hearing loss due to the constant humming of machinery where the employee works, or is the hearing loss due to the employee’s age and the years the employee spent in the military as a field artillery gunner? 

 

 

Exposure to Harmful Substance Must Be Proven

 

The employee’s exposure to a harmful substance or harmful activity must be proven. It is not enough for the employee to claim the workplace had excessive fumes or dust that caused his occupational disease.  The employee must specify the exact substance in the work environment that caused his medical condition.  For example:  The doctor diagnosed the employee with a pulmonary impairment and relates it to the dust at the employee’s workplace.  The doctor needs to go a step further and identify what chemical in the dust caused the pulmonary impairment and provide supporting medical documentation that the precise chemical named causes the employee’s exact medical condition. 

 

Once the doctor and the employee have identified the exact chemical substance they believe is causing the employee’s medical condition, an industrial hygienist can be brought in to test the work environment for the alleged cause of the occupational disease. The industrial hygienist can determine if the work place has a concentration of the harmful substance in a quantity that would cause the symptoms of the sick employee.  If a scientific link between the exposure to the substance and the employees medical condition cannot be established, then the occupational disease should be denied.

 

 

Need to Determine If Injury Cause Occurred At Any Other Time

 

If the industrial hygienist documents the harmful substance was in the workplace in a concentration that caused the employee’s medical condition, then the next step in the occupational disease claim is to determine if the employee incurred exposure to the harmful substance at any time other than while working for the employer. 

 

Often with pulmonary and hearing loss claims, the condition for which the employee now needs medical treatment has been accumulating over a long period of time.  An example of this:  The employee is diagnosed with black lung disease, but has not always worked in the employer’s coal mine.  During a 40 year career, the employee worked in five different coal mines for 5 different employers.  As the disease is cumulative, in most states the responsibility for the black lung disease would be apportioned by the amount of time the employee worked for each employer. (A few states do not allow apportionment and the current employer/insurer gets to pay for the claim in its entirety).

 

 

Detailed & Careful Claim Analysis Must Be Completed

 

Whenever an employer is presented with an occupational disease claim, it is imperative that a detailed and careful analysis of the claim be completed before a determination to accept or deny the claim is made.  By understanding the cause of the employee’s medical condition and the relationship of the medical condition to the employee’s work, a proper approach to the handling of occupational disease claims can be had.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com

 
Editor Michael B. Stack, CPA, Director of Operations, 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

 

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

How Many Claim is Too Many For Your Adjuster?

There has been considerable discussion lately in the insurance industry on how many workers’ compensation claims an adjuster should handle at one time.  There are various different opinions – all of which seemed to be influenced by the type of stakeholder, whether it is adjusters, insurers, third party administrators (TPA) or employers.  All the stakeholders talk in the framework of a precise number of claims an adjuster should have.

 

 

How Many Claims Is Not A One-Size Fits All Answer

 

The question of how many claims is too many claims for an adjuster does not have a one-size fits all answer.

 

Adjusters want a consistent claim volume that they can properly handle without always being in the role of a fireman putting out fires.  Insurers and third party administrators want to maximize the number of claims each adjuster has to minimize the dollar amount spent to compensate adjusters.  Employers want every claim to be handled in accordance to the established Best Practices to reduce the employer’s cost incurred from the workers’ compensation claims.

 

When adjusters have too many files, everything that needs to be done, does not get done.  If appropriate time is not spent working with each claimant, the claimant is more likely to obtain an attorney, driving up the cost of the claim unnecessarily.  Also, the claimant attorney’s involvement increases the amount of time needed to handle the claim, providing even less time for the adjuster to work on other claim files.  If the adjuster does not have the time to complete a proper investigation on each claim, claims that should not be paid are paid, or medical services not related to the injury get paid.

 

 

Overloaded Adjusters Make Mistakes & Increase Cost

 

When mistakes occur because the adjuster cannot get to everything, leakage almost always happens, increasing the overall cost of workers’ compensation to the employer.  Yet, insurers will never admit that the inadequate claim handling due to the adjuster having too many claims is the cause of the employer’s rising workers’ compensation premiums.

 

Even self-insured employers who administer their own claims have a difficult time determining what the proper claims load is for an adjuster.  When an effort is made to quantify a claims load with a number, the number will almost always be wrong as workers’ compensation claims do not come in a standard size or a set amount of complexity.   A lost time claim due to a finger fracture will normally take a lot less time than a lost time claim for an amputated foot, but both claims count as one claim when the number of claims is used to determine the proper case load for the adjusters.

 

 

Experience, Jurisdiction, & Ability Factors in Total Number

 

The experience level of the adjusters is not all the same either.  A thirty year veteran workers’ compensation adjuster can “juggle” more claims than a two year adjuster who is still learning the nuances of the workers’ compensation statute.

 

The jurisdiction where an adjuster works plays a major role in the number of claims the adjuster can handle.  Some jurisdictions have many forms the adjuster must complete and file on each claim while other jurisdictions require very few forms.  Some jurisdictions make it very difficult to get claimants back to work while other jurisdictions have rules and regulations that make it simple for the adjuster to stop disability payments when the employee reaches maximum medical improvement or the employer can accommodate the employee’s work restrictions.  Some jurisdictions are more prone to attorney involvement than other jurisdictions.

 

Another factor that impacts the size of an adjuster’s caseload is the adjuster’s ability.  Some adjusters are simply more knowledgeable and more efficient than others.  Whether this is matter of style, training, intelligence or desire, the ability of the adjusters varies just as the ability of the general populace varies.

 

A factor that is often overlooked in the calculation of how many claims the adjuster should handle is the industry where injured employees work.  Adjusters working with employers in industries that have a high frequency of low severity injuries can normally handle more claims than adjusters who work with employers in industries where high severity of injuries is more common.

Adjusters also learn how to game the numbers system of measuring workload.  When adjusters are overloaded, they know how to compensate.  Instead of settling and closing the workers’ compensation claims out, they delay closing the files to keep to keep their claim count higher, which delays their receiving additional claims to work on. 

 

 

Adjusters Should Be Measured On Performance, Not Hard Number

 

The reality is there is not a precise number of workers’ compensation claims an adjuster should handle at one time.  While a set number of claims creates an artificial marker for claims management to gauge workload, a much better approach for both the insurer/TPA is to have an involved supervisor(s) who review the work being performed by the adjusters to insure complete compliance with Best Practices while the adjusters fully utilize their time working on the claims. 

 

When adjusters are individually measured on their performance, and not the number of claims assigned to them, the number of mistakes they make are reduced significantly.  Investigations are completed properly.  Deadlines are met.  The number of litigated claims decreases. The amount of adjuster turn-over declines. Employees become more cooperative.  Employers have fewer complaints about the quality of the claim handling.  And most importantly, there is a lot less monetary leakage, reducing the future cost of workers’ compensation claims for the employer.

 

If you do not know whether or not the workers’ compensation adjusters on your claims are handling the right number of claims for each adjuster, an independent claim file audit can be completed.  The claims auditor will be able to accurately gauge whether or not your adjusters have too many claims or not.  The auditor can also measure both the compliance with Best Practices and the overall amount of financial leakage on your claims.  If you need assistance in identifying an independent claims auditor, please contact us.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com

 
Editor Michael B. Stack, CPA, Director of Operations, 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

 

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

How To Stop (or slow) Adjuster Turnover at Carrier/TPA

Back in the 1980s it seemed like adjusters settled down right when they were hired.  Most spent decades at one employer, maybe two tops and that was only because their initial employer was bought out or merged.

 

Today if you look at an adjuster with over 10 years of experience their resume reads like some sort of professional baseball player that spent time with every team under the sun.  Mr. Adjuster started off at one place, and then hopped to another after a few years, then another, and another, and so on.  Plus, most of the adjusters I know are always looking for another employer even when they are currently employed.

 

Human Resource experts say it takes a ton of time and investment to train new hires.  If it is indeed so expensive and time costly, then why are employers so quick to let these adjusters jump ship?  Why has this lack of loyalty happened?  It is hard to say.  Blame it on more involved management.  Blame it on the lack of adjuster autonomy within the claims handling experience.  Maybe blame it on increased technology and the fussiness of the adjuster in general.  Whatever the case may be, here are a few reasons for overall faded adjuster loyalty and perhaps a few ways to retain some great talent that could be sitting right under your roof.

 

 

1.   Lack of a new-hire mentoring program

 

If you start off at a new employer, chances are you are eager to please.  After all, the employer must have seen some sort of promise to hire you.  But, if you are not taught the correct way to handle claims under your new roof, it can be frustrating.  Especially if you think you are making progress at your new employer only to have done something incorrectly and you have to go back and fix all of your errors.

 

The implementation of a mentoring program has its benefits.  This way someone with the same job title as yourself can walk you through the process a few times, until you have the routine down on your own.  This idea sounds great on paper, until you are the person stuck training the new guy.  As if you were not busy enough, now you have to take up hours and hours of your day training someone while the emails and phone calls at your desk pile up taking you days upon days to catch up.

 

The creation of an effective mentoring program that involves several people is key.  This way no one person is stuck with the mentoring burden.  The more work that piles up on the trainer’s desk, the less time they are going to help the new worker. They probably won’t do a lackluster job if they know they only have to commit a few hours a few days per month helping out the new guy.

 

Another good key is to involve an upper-level manager to oversee the program as a whole.  This way the new worker gets to know their superior, and it also shows some initiative on the part of upper level management which should decrease the negative connotation from the other veteran adjuster peers grumbling about the fact that “Nobody else ever helps to train new employees, why do I get stuck doing it?”

 

 

2.   Give the new hire a flow sheet with people to answer questions in all aspects of their job

 

To reduce errors, the new hire needs to know who to turn to if they have a question.  Of course an adjuster has to wear a lot of different hats while working their desks, not only for claims investigation and compensability, but for billing reconsideration questions, legal questions, state form filing questions, IT technical support, and so on.  It is not fair that coworker, Sam Adjuster, has to get their day interrupted with every little question from the new person.  If you take the time to give the new people contacts in every department, the new worker can email whoever is on their chart with the appropriate question.

 

Once you get a good flow chart in place, it can probably be used for multiple departments, thereby helping the efficiency for everyone as a whole.  Who do I contact to stop-payment on a check?  Who is the attorney we use in Wisconsin?  Who do I contact if I have a state form filing question?  My reports are not printing, who is the IT person I can email?  The answer to all is to check the chart and email or call the people delegated to champion those questions and provide the proper answers so all work can be done correctly the first time.

 

 

 3.   Try to hire the person with the right personality for the desk

 

I know a lot of adjusters.  All of these adjusters have different personalities and different ways of arriving at their conclusions on claims.  Some adjusters, even though they have years of experience, always go to their supervisor for permission to do certain things on a file.  They probably know the right thing to do, but this type of adjuster likes to get something from their manager in the files notes just in case this file spirals out of control, or if a denial backfires into flames costing thousands and thousands of dollars.  This type of adjuster is employing a strategy called  CYA, or “Cover Your Butt.”  This way if upper level management wants to roundtable a file, this adjuster can point to their manager and say “Well we discussed this action plan and agreed this was the thing to do.”

 

As a manager, if you know that your company likes this sort of CYA protocol in a file, you should try and hire a person with this type of claims handling personality.  The last person you should hire in a scenario like this is some sort of rogue adjuster, who likes to do things their way and prefers to be left alone during the claims process.  If you do indeed hire this rogue, you know that they are not going to last in this sort of CYA claims environment.  They are going to be miserable going to their manager asking for the OK do to surveillance or to deny benefits, and probably as soon as you finish training this person they will be giving you their resignation.  So try to gauge the personality of the adjuster given the requirements of the desk to make a perfect match that will hopefully have the outcome of a longer-term employee.

 

 

 4. Are your claims managers really managers, or just control freaks?

 

Some managers probably have no business being a manager.  They do little to lead their team, and instead want to be involved in every claim decision on every file, no matter what the exposure.  This may be the way that certain carriers want their claim teams to be lead, but I disagree with the effectiveness of this type of claims program.  It is simply not efficient, and not effective.  When this type of management occurs, adjusters become little more than paper pushers, just answering calls and processing bills.  The manager is actually the adjuster in this scenario, with their claims team being little more than glorified, perhaps over paid, assistants.

 

Nothing will irritate an adjuster faster than the lack of autonomy of their claims.  They are the ones doing the investigation, talking to the involved parties, going over the medical, and so on.  It makes sense that they should be involved in the direction of the claim.  The manager should be there to field questions, help with compensability, and provide input and potential outcomes but not to make every single decision on every claim.  This is probably the biggest factor in adjusters polishing up their resumes on company time.  If adjusters are dissatisfied with their ability to govern a claim, they will be out the door as soon as possible.

 

 

Summary

 

I am positive there are a billion other reasons out there as to why adjusters are so quick to jump ship.  However, I think if you focus on these facts stated above, you can stop that revolving door, or at least slow it down.

 

Having adjuster turnover is a huge problem for carriers/TPAs since these new employees have to start the process over on all of your current claims.  This takes time, costs money, and provides for little customer satisfaction.  If you were the client of a carrier who has had 10 adjusters assigned to your claims, how happy could you really be with the service they are supposed to be providing you and your injured employees?

 

Author Michael B. Stack, CPA, Director of Operations, 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.

 

©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

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 Large 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 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 B. Stack, CPA, Director of Operations, 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.
 
©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

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