Four Critical Points About Questionable Workers Compensation Claims

How is a Questionable Workers Comp File Properly Disputed?
For the most part, workers compensation claims are generally compensable. The general public thinks the opposite, which is that all insurance companies want is to deny coverage for injuries. Not true.
In all actuality, probably 80-90% of claims are accepted in the beginning. But, claims can be denied later, down the road for various reasons. The question comes up as to how to properly dispute a claim where there is a question on the compensability, and we outline a few strategies below.
1 – If a reported claim is questionable, the adjuster needs to know right away so a proper dispute for investigational purposes can be filed.
Employers, at the time a claim is reported to their carrier, will know a lot more about the claim from the get go than the adjuster. Once a file is received by the adjuster, the claim has to be set up, then contacts to the employee and employer have to be made, medical records have to be reviewed, and after all of that an initial decision on a claim can be made.
But if the employer is calling it a questionable claim, it should be marked as questionable right off the bat, so the adjuster can file a dispute that the compensability of the claim is under investigation. Most jurisdictions have a time limit on how long the investigation of a claim can be , and if the adjuster fails to file for that extension within that time limit, the claim could have to be conceded as compensable, at least in the beginning. 
This leads to leakage, since claims dollars are being spent on a claim that may not be compensable. It takes time to take statements, get medical records, get past records, do background checks, etc. If an adjuster can file that extension right off the bat then they can take some time to really investigate the claim, and make the proper decision on the compensability.
Generally, questionable claims will receive more of the adjuster’s attention towards investigative means as well.  Especially when the employer notes on the first report of Injury that the claim is questionable on their end, this automatically raises a red flag for the adjuster.   The adjuster will review the initial parts of the claim, and can form questions that they will want to ask the employee when taking their statement.  
The first call an adjuster will make will be back to you, the employer, asking why the claim is questionable.  Employers can talk to witnesses, and follow up on leads made by other employees that a claim may not be 100% compensable and pass that information on to the adjuster in the beginning of their investigation.
All of these issues greatly help the adjuster, and in the end after all the investigation is completed, a proper decision can be made on the claim as to the overall compensability.
2 – What if a claim starts off as compensable then needs to be disputed later on?
Throughout the course of an investigation, a claim can start off as compensable. Say an employee strains his back while working. This was a witnessed injury, reported promptly, and the worker was sent for treatment the same day. Usually benefits will be conceded and the claim will be accepted in the initial stages. 
But say for example, a month later in the medical records the claimant tells the doctor they hurt their back over the weekend doing yard work, then made it worse while working. This should lead to a dispute in all cases. The adjuster has no way of knowing how bad the claimant had injured themselves while outside of work, and most often the injured worker will not be able to go back and say that the injury/ongoing disability is 100% work related. 
Unfortunately, these cases are hard to come by. Claimants are no dummies, and even if this did occur they sure aren’t going to go to an occupational clinic and talk to the doctor about how they injured themselves outside of work. But it does happen, and the adjuster should catch this every time. Using Nurse Triage can reduce the likelihood of this type of claim because the employees speak to a nurse immediately at the time of injury so there is less room to change a story. 
3 – What if a worker is injured doing a simple task, and the diagnosis is way worse than it should be in relation to what the worker was doing at the time of injury?
For examples like this, adjusters rely on the medical records, and the mechanism of injury. If a claimant states that they sustained a lumbar strain while at work lifting a 20 lb tote of parts, and the doctor finds all sorts of objective evidence on exam of severe, disabling back pain, then something is not right. The lifting of 20 lb. should not have such excessive force that it will herniate multiple lumbar discs.   The adjuster should set an IME, and let that IME physician comment on the severity of the symptoms in relation to the stated work injury. 
This type of scenario is a lot more common than you would think. The general public probably has never had a diagnostic workup on their spine, nonetheless an MRI test. If a claimant sustains a simple injury, then after an MRI was completed the MRI is positive for all sorts of issues, it doesn’t mean that they all are related to the work injury.
Plus you have to beware of false positives. Just because someone has multiple levels of disc bulges, that doesn’t mean that all of those are related to work. Research has been done that shows workers of all ages and occupations can have a varying level of degree of spinal issues, regardless of age.   It is the adjuster’s job to determine what, if anything, is related to the work injury, treat those issues, and deny ongoing treatment for the rest of the worker’s spinal problems.
4 –  What if you know the injury is not legit, should you file the claim anyway?
The answer is all cases is YES. It is the adjuster’s job to determine if an injury occurred out of the course and scope of employment. A Human Resources professional for a company is not an adjuster (at least not very often), and if a worker comes to you and alleges a work injury, no matter what the circumstances, it should be reported to your carrier. The adjuster has training and certification, and they are qualified to deny a claim that is alleged to be work related. Some jurisdictions can carry heavy penalties for failure to report a work injury to their Carrier, and you do not want to be hit with one of those penalties. You pay a premium to a Carrier to protect you in insurance matters, and this is what they are there for.   The employer should gather all the pertinent details, and report the claim promptly. Indicate on the First report of Injury that the claim is questionable, and then go from there. Follow up with the adjuster, and chances are it will be denied as you suspected.
There are several way to dispute a questionable claim. But the most important thing to do, as an employer, is to gather all the information you can on the claim, then report it promptly to your carrier and follow it up with a phone call to the adjuster. The more you work together with your Carrier, the better the chance that questionable claims will be denied and not paid.

Author Rebecca Shafer
, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website 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, Manage Your Workers Compensation: Reduce Costs 20-50%  Contact:

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

10 Adjuster Mistakes Resulting in Unintended Consequences of a Wrong Claim Reporting Decision

It seemed like a simple enough claim. The employee, a truck driver, was driving along when a car pulled in front of him from a stop sign. The big Mack knocked the car out of its path, while the truck driver brought the truck to a stop. The truck driver jumped out of the cab and ran over to check on the woman and her children in the car. The ambulance arrived and took the family away. When the police interviewed the truck driver and asked if he was hurt, he said, “No.” The next morning the truck driver awoke with a very sore neck and aching back.



It was three weeks to Christmas and the truck driver, having a family to care for, continued to work each day taking heavy doses of Tylenol. By Christmas he was in constant agony and with his wife’s encouragement, went to the local emergency room. The doctor diagnosed both back and neck strain, and told him he could not work. The employee reported the claim to the trucking company. The trucking company clerk, whose job it was to report all workers comp claims to the third party administrator (TPA), noted the accident occurred three weeks prior to being reported. The trucking company’s policy with its employees was for all injuries to be reported within five days of the date of injury. When the clerk reported the accident to the TPA, she told the adjuster the claim should be denied, as the police report showed the truck driver was not hurt and failed to report the claim within the employer’s five-day reporting period. (WCxKit)



The adjuster said, “Okay, if that is what you want,” and promptly sent the truck driver a denial of benefits letter. Unfortunately, the state law where the claim occurred, allows the employee one year from the date of the accident to report the claim. When the truck driver received a denial of benefits letter he immediately hired a lawyer.



The adjuster knew what the law was, but made a wrong decision, by allowing the employer’s reporting policy to prevail over state law. The adjuster should have immediately advised the reporting clerk that the state statutes give the employee a year to report the injury. The adjuster abandoned decision-making on the claim to the employer, even though the adjuster’s knowledge of workers comp statutes was greater than the clerk reporting the claim.



Since the adjuster denied the claim based on the employer’s wishes (or the WC clerk), no further action was taken.


Ten things the adjuster failed to do:


  1. Make 24-hour three-point contact with the employee, employer, and medical provider.
  2. Obtain a recorded statement from the employee regarding the details of the accident and the nature and extent of the employee’s injuries.
  3. Obtain documentation on the damage to the truck (to reflect the force of the impact suffered by the driver).
  4. Obtain information on the woman who caused the accident for the purpose of subrogation.
  5. Put the insurance carrier for the other party on notice of the intent to subrogate.
  6. Obtain the doctor’s diagnosis and prognosis.
  7. Obtain wage documentation and in order to calculate the indemnity benefit rate.
  8. Establish appropriate reserves for the indemnity and medical cost.
  9. Arrange for the employee to return to work on light/modified duty.
  10. Provide any type of medical management on the claim.


Now, since employee hired an attorney who expects to earn a fee, when the employee was released to light duty following his first doctor’s visit, the attorney failed to convey that information to the adjuster. The attorney arranged for the employee to see a doctor he referred his client to. This new doctor kept the employee off work until the employee, ignoring the doctor’s advice, returned to work on his own.



The attorney waited until the employee was released back to full duty before sending his letter of representation. The attorney-selected doctor gave the employee a small impairment rating from which the attorney would take his fee, plus his percentage of the employee’s PPD, for the time the employee was kept off work.



When the defense attorney strongly recommended the claim be settled, the adjuster had nothing to mitigate the damages. As a part of the settlement agreement, the TPA gave up the right to subrogate against the woman who caused the accident, allowing the employee and his attorney to bring a lawsuit for the traffic accident.



The employer and/or the clerk did not know the law or understand the consequences of denying compensation on a legitimate claim, even when reported late. What should have been either a medical-only claim or a very minor indemnity claim became a PPD claim, costing at least five times what it should have, because the adjuster abandon her (or his) responsibilities and allowed the employer to make the decision on compensability. The TPA also had to negotiate away the right of subrogation to get the claim settled. With subrogation rights, the entire amount paid by the TPA on the claim could have been recovered. (WCxKit)



If, as an employer, you do not know all the aspects of the workers compensation statutes in your state, trust the adjuster to make the correct decision. If you question the adjuster’s decisions on claims, discuss why they are proceeding in the way they are. Create a partnership with the adjuster in the handling of your claims, but trust the adjuster judgment and knowledge of the law. It is usually a wrong move to handle workers comp claims by what you want rather than by what state statutes require. And, it might be a good idea to train all employees involved in processing workers comp claims to not make suggestions on how a claim ought to be handled.


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 website 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. See for more information. Contact:


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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.


©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact


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