Make Your Lag Report and Loss Run Count by Careful Analysis

When an employer gets a loss run from the carrier, he may glance at it before tossing it into the recycling bin. Most do not review it as they should. A lag report can show many good things and many bad things. It can show injury dates, dollars paid out, claimant information, and so on. But most importantly, it shows the lag time between the alleged injury date and when the carrier received the actual claim and had it set up and ready to investigate. It is within this realm that information really, really counts. Lag time can count for a lot of wasted claims dollars. We go over the importance of reviewing a lag report below.

1. Why does it cost more when there is increased lag time?

It comes down to time. In the adjuster’s world, time is critical. Time is what can kill your defenses on a claim. Time can mean accrued lost wages before the adjuster even gets a claim. Lag time means medical treatment that has already happened may or may not be important to the rehabilitation of an injured worker. Lag time contributes to losing certain defenses an adjuster may have, depending on the jurisdiction of the claim being handled. It’s all about time, time, time.

You can take any one of the issues mentioned in the paragraph above and tell an adjuster. Watch them cringe with discomfort. All of these aspects hurt our defenses handling a claim. Adjusters like to be involved from the very beginning. This way they can steer the worker toward an occupational clinic. They can get an injured worker back to work in the light duty program, eliminating wage loss exposure.

Adjusters can decrease wasted medical treatment dollars by not covering unauthorized treatment. All of these things mean fewer claim dollars paid out in one capacity or another. The bottom line is… the sooner the adjuster gets the claim, the better chance you have of saving money. And not just on one claim. Think in the scale of years. Over the course of a year, if you took the expenses paid out when an adjuster gets a claim the day after an injury, and compare it to the costs associated when an adjuster gets a claim 30 days after a reported injury, the results are night and day. Call your claims in right away so the professionals can do their job. Don’t bleed money and claim expense dollars over nothing.

2. Why is it a big deal when a claim is reported late to my carrier?

It is not just a big deal, it is a HUGE deal. As mentioned above, every single one of those issues is a major expense and can lead to large exposures. Some employers do not even call a claim in until a worker is heading for surgery. This means months and months of treatment have gone by without the proper person monitoring it — the adjuster. Most lag reports are broken down by whether the delay was between the injury and reporting to the employer or from the reporting to employer to reporting to the carrier. If the employee is late in reporting the claim to the employer, there could be a problem with the post-injury response. If there is a delay in reporting by the employer to the carrier, there could be a problem with staffing in the department charged with calling in the claims. Either situation is fixable, if you have taken the time to analyze the report. Review of a lag report is a standard part of a cost containment assessment. Consultants will want the lag report broken down by division.

The adjuster loses out on chances to form a defense from the very beginning when a claim is reported late. There can be other medical costs associated that did not even need to be considered. If a person is in chiropractic care for eight weeks, and not improving, the adjuster would have been monitoring the situation. There is a correlation between increased claim costs and every day that goes by when it is not reported to your carrier. You need to file those claims as soon as possible, to save your own money.

3. How can I save money spent on claims?

It is easy. Call claims in to your carrier. And do not wait until next week, do it now. Do not wait for your agent or broker to call it in for you; just call it in. That way it is off your desk, and in the hands of the people whose job it is to handle claims every day. This simple act, calling the claim in as soon as it is reported, can save you a ton. It speeds everything up. The adjuster is involved from the very beginning, and the injured worker knows what to do because they have been in contact with their adjuster. If the injured worker know what to do, knows the claim is being handled, it is much less likely that person will hire an attorney. Once an attorney is hired, the cost of a claim nearly doubles.

The doctors know what treatment is authorized and what treatment is not, so they can provide only authorized treatment. Everyone wins the sooner a carrier gets a claim. This is what they do everyday, and they are good at doing it. Calling a claim in does not take that long. Some carriers allow you to email or fax claims in.

Everyone is busy these days. A common excuse given when a claim is called in late is, “I forgot.” Unfortunately, that is not acceptable. By forgetting, not only did you potentially ruin the defense of a claim, but you may have opened yourself up for a state fine, depending on the jurisdiction. So no more excuses!

4. What else should I look for on my loss run?

You may get these reports every two weeks or once a month. They can provide you with a lot of information. It can show trending in injuries. It can show that a certain department is having a streak of slip/falls, automatically telling you that you should analyze what is going on at that facility before someone gets seriously injured; it’s time for a hazard analysis.

It shows you injury dates, injury details, claimant names, dollars spent to date, dollars reserved for the life of the claim, etc. It really takes a lot of time to compile that information in a nice, neat report and send it to you. The carrier monitors these reports very closely, as a way to see how they are doing and what claims they have out there for each employer. Carriers take a lot of time to analyze the injuries, and the associated costs.

So for you to toss it aside, you are doing a great disservice to your own company. If you do not know how to read it, call your adjuster or broker. Make an appointment to go over it with them in person. Develop that relationship with your carrier and adjuster. This is what helps your claims environment run smoothly. In the end, just do not toss it aside. Take the time to look at it, and know what you are looking at.

5. How do I implement new practices for improving my lag time/loss run?

You have identified some injury trends and you need to know how to correct the problem. First off, good for you – knowing is half the battle! By coming to this conclusion, you are already helping improve your claims exposure. The first step is identification.

The next step is to talk with your carrier or adjuster to see what tools they have to help you. Carriers have loss-prevention departments, and these people can come out to your shop to take a look at what is going on, and recommend ways to decrease claims and injury exposure. Sometimes ergonomic consultants can be brought in to view your workstations to make them easier on your employees. Not only does this help you from a claims standpoint, it can also help your employees become more productive while decreasing the stress and strain on their bodies. And that is a win-win combination.

When you get that lag report or loss run, take the time to go over it. Know what it means, and how it can help you identify problems you can improve on. Nobody wants to get hurt, and no employer wants to lose money paying for claims. Decrease your exposure, increase your knowledge, increase your chances of defending a claim by getting your losses to your carrier as quickly as you can, and increase your productivity for your workers. This creates a winning environment for all involved.

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. See www.LowerWC.com for more information. Contact: [email protected].

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