Adjusting Claims: A Slow Death From Inside A Cubicle

“Adjusting claims, a slow death from inside a cubicle”, this was part of a quote from a friend of mine. He happens to be a seasoned claims examiner with decades of experience. You would think this person would be a total asset to his—or any insurance carrier/TPA–employer due to his work experience, multi-jurisdictional knowledge, and years of front-lines claim handling. Alas, I get the opinion he is not.

Adjusters Feel “Dead In The Water”

At least he does not feel that he is. I believe the exact quote my friend said was:

“I feel like I am working in Hell. Every new email talks about how someone is leaving, and that they are not being replaced with someone new. People around me are dropping like flies, tired of dealing with it all. Since I am the claims person with the most experience the bosses are turning to me to pick up the slack. I’m already dead in the water. What a great marketing campaign: ‘Come here to adjust claims, and experience a slow death from inside a cubicle.’”

I must admit, I did laugh. I laughed for a while, because this person is very conservative. I don’t think I have ever heard this person even complain about his job in the long time I’ve known him. This person earned his college degree and started off in the claims profession at the ripe age of barely 22 years old—having no idea what a claims adjuster even is. Fast forward 23 years later and here he is.

Earlier that morning I caught the latest posting from Work Comp Champion Joe Paduda. He talked about the business we are in, and how most comp executives now really have lost touch with the nature of today’s business. To quote Joe’s article, What Business Are You In?:

“Senior management misunderstands their core deliverable-they think it is providing financial protection from industrial accidents, when in reality it is preventing losses and delivering quality medical care designed to return workers to maximum functionality…..Senior management does not understand that success in their business is based on delivering high-quality medical care to injured workers.”

Claims Industry Significantly Different Than Past

After catching up with this person for a while I started to reflect upon how much different the business is now, versus in the mid-90s when this person started out. Even go back before then; I hear claims elders discuss the great times of the 1980s in the insurance claims business when you were out doing statements in-person while at the same time trying to measure up if your claimant is being totally honest with you while telling you about how the injury occurred. It was a skill you learned by hours and hours of sitting in front of people reading non-verbal cues. Looking to see if the house was clean and the lawn was mowed. Looking for inconsistent pain behaviors. All clues to be used later on, maybe to prep the IME doctor for what to look for, or to see if this claimant was exhibiting the same behavior when at physical therapy. This is what made the job fun and exciting. It was the aspect of catching a fraudulent employee trying to cash in on the employer’s dime. Sure, most claims were fine and compensable, but it was the thrill of the hunt!

Fast forward to today in 2013. The average caseload for an indemnity adjuster now hovers near the 200 file mark. I know of house legal Counsel that has a caseload over 130 files, sometimes over 150. Those numbers are quite striking and at the same time very telling of the industry today, to handle more claims with less staff. The existence of support staff now is sometimes laughable. Even the house legal staff has cut down on the appearance of paralegals and secretarial assistance.

But it is not just a staffing issue. The demands and service requirements now are higher than ever. In order to be more competitive every carrier now demands the greatest service expectations of every employee, no matter what their job title is. Probably every phone call an adjuster gets is something that needs to be addressed as soon as possible because of the promise to the client that their issues will be put before those of everyone else.

Claims Quality Compromised

Since this seems to be the scenario at every carrier, the question begs to be asked that if caseloads and demands are that high, how can one skeleton team of adjusters be able to comply? The answer is that adjusters may indeed comply, but at a cost. The cost is quality of claims handling. The costs are hard and soft leakage. The costs are a staff working 10-12 hour days without extra pay and without any special recognition. The costs are high turnover because Joe Adjuster is not going to put up with it and will seek employment elsewhere.

My friend made another great point–the fact that he has almost zero monetary authority. He has to seek permission from his manager, who is a person with half the experience, and who seems to have little knowledge of workers comp to begin with. I think many adjusters could overcome the caseload, the long hours, and the overwhelming demand if they were left to make decisions on their own. After all, who better to make the choices on a claim than the person who is spending hours and hours of time dealing with it? Again, this is not the case today. He has to go to his manager for authority on everything, even for when to set up a simple everyday IME. It takes time to obtain that authority, sometimes weeks at a time because the manager is busy doing other tasks. Now the adjuster has become a babysitter for the manager’s duties, making sure they follow up so their claim does not fall through the cracks.

The power of being a seasoned claims adjuster has been taken away. It doesn’t matter how many years of claim adjusting experience you have because that is seen as essentially worthless and has no bearing on your job today. Today is about who can push paper the fastest and as efficient as possible. It is about who can clear their pending bills out to be processed for payment the quickest. It is about who is willing to do whatever the manager tells them to do on a file, even if the adjuster thinks it is not the best move to make.

I think it could perhaps be easily forgotten that the adjusters and other front-line staff are the actual face and voice of the company. These are the people interacting with the employers and injured workers every day. These are the people getting the wage loss checks out every week, and dealing with the providers on billing issues. These are the people authorizing surgical procedures and diagnostic testing as quickly as possible so the claim can travel along its path with as little interruption as possible. These are the workers who have to listen to injured workers cry to them over the phone about income loss, disputed claims, future unknown medical issues, surgical and medication side effects, etc.

Not Every Carrier / TPA

In a service-oriented industry such as ours, competition is fierce and the demands are high. There are companies out there that set the industry standard for best practices, which these comments do not apply. However, the unfortunate reality is many companies have made changes in the claims process over the years at the expense of quality. If you find that your carrier / TPA has fallen into this trap, it is our recommendation to find one that follows industry best practices.

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: [email protected].

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