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.
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