Over the course of several years and numerous files I have reviewed, I would say that most of the time an adjuster does their job very well. Files that should be compensable are compensable. Benefits are paid out on a timely basis. Reasonable and necessary medical treatment is authorized and covered under the claim. Providers are paid in a timely basis, and so on.
From time to time, I do see claims where I question the motivation of a certain denial. For example, it is not a claim where it is a flat out denial due to clear non-occupational circumstances. Those claims are easy to see a non-occupational correlation between a diagnosis and the alleged claim details. Perhaps there is a lack of witnesses, or the physical exam showed clear signs of secondary gain or malingering, or the objective medical evidence is not there to support compensability.
I have come across claims where I see a clear causal relation, and the medical seems to support the mechanism of injury. Why are these claims denied, and steered towards potential litigation rather than just accepting the claim? Is this clearly the fault of the adjuster or manager? Is it a lack of claim investigation? Is the adjuster maybe giving in to the manager and their motivations of hitting a certain benchmark for denials?
Maybe it is all of the above, but I do wonder about motivations from time to time. I would hope that the adjuster or manager or carrier in general has the best interests of claim ethics on their side. However, I lack faith that this is held true 100% of the time. So why would a claim that appears on the surface to be compensable be denied on purpose?
The employer does not want the claim accepted for whatever reason
The employer does not have the right, nor the authority, to force a claim to be denied for any reason. However the pressures the employer can create for the carrier/adjuster/manager are always going to be there, especially when they strongly feel a claim should be denied for whatever reason. In this scenario, the adjuster/carrier/manager needs to discuss this with the employer/client and explain to them the rationale behind the claim and its acceptance. To blindly look the other way and just deny the claim is not only doing so in bad faith, but it is totally unethical, unacceptable, and that type of behavior should never be tolerated at any time.
The claims manager thinks the claim should be denied but the adjuster has good rationale for claim acceptance
The claim manager should be there to help with these decisions in the first place. But the adjuster is the one that completed the claim investigation. Does the manager know the whole story? Are the claim notes complete and updated with the current information at the time the manager reviewed the file? Disagreements between the adjuster and their manager on the outcome of the investigation of the file should then be round-tabled with other claim staff. This meeting should include the adjuster, the manager, the employer contact, and the manager’s supervisor. Somewhere along the way some fact is being misinterpreted by one of the parties, and everyone needs to be on the same page before moving forward. Quite often the adjuster left out a note, or piece of medical, or some other fact that can be the missing piece of the puzzle the manager is not seeing which can swing the claim from being denied to being accepted.
Or the other way around—the adjuster wants to deny and the manager thinks the claim should be accepted
This is due to a lack or breakdown in communication between the adjuster and the manager. Before moving forward, the file needs to be broken down and reassembled so everyone is on the same page. Perhaps the adjuster did not complete a thorough investigation, and is trying to deny the claim without completion of the investigation. A claim denial can lead to significant future exposure. Before a denial should take place, everyone has to agree to the decision to protect the insured and the carrier.
The claim involves high exposure and the adjuster/manager/carrier wants to control the claim by steering it in to litigation rather than voluntarily paying it
Should a claim involve a serious injury, that should not mean that you dodge responsibility by pushing it towards litigation in order to control costs. It all comes back to proper and complete claim investigation. Denials should be based on the investigation of the claim and the supporting case law. It should not be based on the fact that the carrier does not want to complete the proper investigation and they just want to “rubber-stamp” the denial on the case in order to make the claimant escalate the issues in litigation.
Renewal time is approaching and the carrier wants to look aggressive to the broker and insured
Perhaps the most severe behavior of all, this type of issue is more common than you would think. When you review a loss run, it is not uncommon to see a bunch of denials starting a few months before policy end. This is because the insured wants to put on a face of aggressiveness for the broker and for this account, to show how they are fighting to protect the employer/client. I would love to say that this does not happen, but sadly it does. Not at every carrier, and not all of the time. But this fact is out there, and if anything it should thrust that red-flag to the tallest flagpole in the land. If your carrier is exhibiting this type of behavior near policy-end, it should reveal the weakest attempt at showing their worth. If I were the broker/insured and I see this happening, I would run for the hills as fast as possible. This type of behavior should show the insured the obvious—that their current carrier does not have their best interests at heart.
I have probably only scratched the surface here, and I wish I did not have to mention this happening anywhere. Let me clearly state that this type of behavior is not rampant, but it can be out there, and it is something to watch for. If a broker or insured even thinks that the carrier is not acting in their best interest, then they need to get out of that carrier as soon as possible. Denying claims is not the stamp of approval for a proper carrier/insured relationship. Every single claim needs to be properly investigated and handled according to Jurisdictional case law and Statute. Blind denials and unethical behavior should never be tolerated on any claim, even the most insignificant.
Author Michael Stack, Principal of Amaxx Risk Solutions, Inc. He is an expert in employer communication systems and helps employers reduce their workers comp costs by 20% to 50%. He resides in the Boston area and works as a Qualified Loss Management Program provider working with high experience modification factor companies in the Massachusetts State Risk Pool. As the senior editor of Amaxx’s publishing division, Michael is on the cutting edge of innovation and thought leadership in workers compensation cost containment. http://reduceyourworkerscomp.com/about/. Contact: mstack@reduceyourworkerscomp.com.
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