In school an “A” grade is the standard that everyone wants to meet. Whether you are in elementary school or working on your master’s degree, your performance results in a grade being given to the work you complete. To earn an A grade requires having at least 95 percent of the school work done correctly. Following the same basic grading principles – A, B, C, D, F – you can measure the performance of your workers compensation adjuster.
The following is a grading outline you can use to measure the performance of your workers’ comp adjuster on each claim. There are ten categories with 10 points each, or 100 points total. When you review your adjuster’s file on-line, grade each category against the measurements listed here. [If your Best Practices give the adjuster different time lines then what is given here, use your own Best Practice guidelines in grading your adjuster]. Give the adjuster the number of points (zero to ten) earned in each category.
Category 1 – Employee Contact:
The adjuster should contact the injured employee within 24 hours of the receipt of the claim (same day contact would be more points than next day contact). True contact entails an exchange of information between the adjuster and the employee, not just leaving a message on voice mail. If the adjuster was unable to reach the employee within 24 hours by telephone (or in person on severe claims), a contact letter should be sent to the employee along with a medical authorization or any state required forms. On any claim involving questionable compensability or subrogation, a recorded statement should be obtained from the employee. You’re looking for a “quality contact.”
Category 2 – Employer Contact:
The adjuster should easily score all ten points in this category by contacting the employer by phone (in person with extreme employee injuries) within 24 hours of receipt of the claim (same day contact would be better). On any claim involving questionable compensability or subrogation, a recorded statement should be obtained from the employee’s supervisor. Also, any witnesses to the accident should be contacted if the injuries are severe.
Category 3 – Medical Provider Contact:
The office of the medical provider should be contacted within 24 hours of the report of the accident to confirm the nature and extent of the accident, and the ability of the employee to return to work on modified duty/light duty. In the jurisdictions that do not require a medical authorization to obtain the medical records on the employee’s injury, the medical records should be requested during this initial contact.
Category 4 – Investigation:
If the adjuster has done a quality job in the three contact categories, earning points for completion of the investigation should be rather easy. The investigation should address all issues that impact coverage, the nature and extent of the injuries, the benefits owed, subrogation and subsequent injury fund (where applicable). An ISO Index Bureau search should be filed. If the investigation has been completed properly, the adjuster should be able to make a decision on the compensability of the claim. All of this should be accomplished within the first 14 days the claim file is open.
Category 5 – Average Weekly Wage and Benefits:
To earn points in this category, the adjuster should obtain from the employer the wage records or wage documentation on the proper state approved form. It is not acceptable for the adjuster to take the hourly rate off the Employer’s First Report of Injury form and estimate the average weekly wage. The weekly wage and the calculation of the indemnity benefit should be clearly documented in the adjuster’s file. In addition to calculation of the indemnity benefits with proper documentation of the wages, if owed, they are issued timely. Also, all medical bills are reviewed and paid timely.
Category 6 – Reserves:
The initial file reserve should be set by the adjuster within 72 hours of the file receipt, but after completion of the three contacts – employer, employee and medical provider. After the adjuster has obtained the initial medical records, within 60 days of file receipt, the reserves should be reviewed for accuracy. Throughout the course of the file the receipt of any information, medical or otherwise, that would impact the files, the reserves should be updated. On severe claims that remain open for an extended period of time, the adjuster should review the reserves every 6 months to verify their accuracy.
Category 7 – On-Going Contact:
A mistake that many adjusters make is not staying in contact with the employee, the employer and the medical provider. Consistent and on-going contact with the employee will maintain rapport with employee and eliminate many of the reasons that could delay the progress of the claim. The adjuster should maintain the file on diary to ensure all on-going contacts and necessary follow-up is completed. If the adjuster stays in contact with the employee at least monthly until the claim is resolved, and stays in contact with the employer and medical provider as needed, award all 10 points in this category.
Category 8 – Medical Management:
When the adjuster makes the initial medical provider contact, medical management begins. In the initial contact the adjuster should learn the diagnosis, prognosis, the treatment plan and the return to work status. The adjuster should coordinate with the employer and the medical provider to allow the employee to return to work on modified duty as soon as possible. If the injury is severe enough, the adjuster should provide the medical provider with the information on utilization review and pre-certification, plus a nurse case manager should be assigned to the claim timely. If a medical bill review service is used to audit medical bills, the adjuster should ensure all medical bills are sent to the appropriate audit vendor for review and processing.
Important note: To grade this portion of the score, have an MD review the file to make sure the injury is, in fact, work-related. Also analyze whether all medical reports are in the file, that complex medical language is recognized, and that medical care is appropriate, e.g. that nurse case management made a difference in the file and did not simply replace duties an adjuster should be doing. My view is that the best qualified person to review a medical file is a DOCTOR. Use TPAs that have appropriate MD resources for services such as peer-to-peer. If the nature of a claim is unrecognized or inappropriate, it won’t matter how many administrative details are done well, because the claim shouldn’t have been paid in the first place. Keep this in mind.
Category 9 – Litigation Management:
Any time a workers’ compensation board hearing or a court hearing is requested by the attorney for the employee, a prompt referral to pre-approved defense counsel should be done. The initial referral to defense counsel should outline the status of the claim, request a litigation budget and provide instructions to defense counsel on how the adjuster wants defense counsel to proceed. (If the adjuster does not instruct counsel on what the adjuster wants done, deduct at least 5 points in this category). The adjuster should continue to provide on-going instructions to counsel throughout the course of the claim.
Category 10 – File Documentation:
Every activity completed by the adjuster should have a clear, concise file note stating what was done and how it impacts the claim. All medical reports, reports from defense counsel and any other file development should be outlined in the file notes.
Occasionally, their will be other important activity in the file that is not included in the 10 categories noted above. For instance, the adjuster’s pursuit of subrogation to recover the cost of the claim deserves 5 or 10 bonus points based on your evaluation of how much extra effort the adjuster put forth to recover the subrogation.
Another area for consideration for bonus points would subsequent injury funds or other offsets. Any effort made by the adjuster to mitigate the cost of the claim should be recognizes by the award of bonus points.
Tally the number of points (from zero to ten) you gave the adjuster in each category. Compile the scores from all the claim files you review. Using the A, B, C, D and F grading system you had in school, does your adjuster deserve an “A”? If not, what category/area(s) did the adjuster consistently fail to earn all ten points? Identify the weak areas and ask your adjuster to strive to comply with your Best Practices in those areas. Some TPA’s grade their own adjusters; this can be valuable information for you to learn.
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.