How to Develop a Framework to Measure Your Internal Claim Quality Control System

Whether you are a self-insured, a TPA or an insurer, you need to be able to measure objectively the quality of your workers' compensation claim handling system. For an internal workers' compensation claim quality control program to succeed, it has to measure effectively the performance of each adjuster on an on-going basis. To achieve this goal you must repeat the quality control file reviews on each adjuster within a stated time frame. The following framework  is useful in creating an internal claim quality control system or using it to improve your existing claim quality control system. 

 

If the claims handling company, whether a self-insured, an insurer or a TPA, has a sophisticated Risk Management Information System (RMIS), the collection of the necessary data to measure the performance of each adjuster is easier, but not simple. If the RMIS is not state of the art, then it becomes necessary to have internal quality control auditors to review individual claim files to measure/record the performance of the adjusters. The claim quality of each individual workers’ comp adjuster is measured, whether by a RMIS system, a manual file review or a combination of the RMIS and manual review.   

 

Each obtainable measurement has a benchmark to be compared to. Obtaining performance measurements without knowing if the results are good, average or bad, does not benefit your company. Knowing the performance goals set by your company allows you to determine if the performance of the adjusting staff is meeting the criteria set for your claims handling program. Each work comp adjuster, supervisor, branch manager, regional manager and home office VP of claims needs to have their claim quality criteria plainly stated in their performance objectives/performance evaluation. 

 

All of the measurements for adjusters working for one workers’ comp supervisor are combined to reflect the overall performance of the supervisor's unit.   All measurements for the supervisors working for one branch manager are combined to reflect the performance of the branch.   All measurements for the branches within a geographical region are combined to measure the performance of the regional manager. The regions are combined to reflect the performance of the company.

 

Easy time frames to measure against are months and years. By providing monthly data, the internal claim quality control system allows management to see trends in performance, improvements or declines, on a month-to-month basis. The same is true with a roll-up of monthly data into an annual total, allowing management to see improvements in performance or declines in performance from year to year. Monthly or quarterly scores can be given to each adjuster and also to the unit manager. The best adjusters can be receive cash bonuses to reward excellence.

 

Measurement reports reflects current month results, year-to-date results and year-to-date results versus a predetermined performance goal. The performance data of each individual workers’ comp adjuster is shown, with the adjuster's performance data combined into the performance of the supervisory unit, branch office, region and company-wide.  

 

Two of the important items to measure in a claim quality control system are timeliness and completeness. 

The claim activities measurable against the time standards stated in your company's best practices include

·       Initial contacts

·       On-going contacts

·       Initial reporting

·       Status reporting

·       Initial supervisor's futurity

·       Ongoing futurity

·       Average Claim Cost (comparison to the industry)

·       Closings

The claim activities measurable against the completeness of the file handling include

·       Files on diary

·       Claim file notes usage

·       Initial reserves

·       Initial index filings

·       Supplemental index filing

·       Payments made on closed files

·       Closed file payments as a percentage of all payments

·       Percentage of data errors

·       Medical bill processing timeliness

 

Other areas of importance to the TPA, insurer or insured can be included in the measurements if there is the ability to calculate and measure the performance on the adjuster level. (workersxzcompxzkit)

 

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