Self-insured employers (SIE) for workers compensation take on the role of claims management in exchange for the cost savings of self-insurance. Whether you elect to self-handle all of your workers’ compensation claims or to hire an independent third party administrator (TPA), you need to be able to verify claims are handled properly. Rather than reviewing the adjuster’s every activity and item of documentation, it is more time efficient if the SIE claims manager requires the adjuster to submit written reports on all efforts to move the claim forward.
First Report of Injury
The initial report, (First Report) and subsequent reports, (Status Reports) are submitted on a predetermined frequency schedule. Most self-insured employers opt for the First Report submission within 14-15 days of the report of the claim to the claims office. Sometimes a SIE elects to have the First Report submitted by the 30th day of the claim. Status reports are routinely placed on a 30-day reporting cycle, with older claims moved to a 60-day or even a 90-day reporting cycle, depending on the amount of activity on the claim.
For consistency in reporting and ease in reading the reports, the establishment of a reporting format is standard protocol. The First Report is all inclusive covering all aspects of the claim. In the initial report, the adjuster discusses each of these areas:
- Coverage– policy number where applicable, policy dates, applicable deductible for loss location.
- Accident description– date and time of accident, location within the insured’s premise or if away from the premise, where and why away from the premise.
- Insured location– includes the department or unit, the street address and the type of work performed at the location.
- Employee – name, age, social security number (edited if required by state law), how long employed, years experience in the current job, number of dependents (if the number of dependents might impact the indemnity rate), prior injuries including both workers comp and non-workers comp injuries, summary or recorded statement when appropriate.
- Jurisdiction– the state where the injury occurred or federal benefits.
- Investigation – a discussion of the investigation and all the applicable information learned about the accident.
- Compensability– why the claim is compensable or why it is being controverted.
- Reserves– the expected cost of the claim divided into indemnity benefits, medical benefits, and expenses for the anticipated life of the claim.
- Nature of injury– the treating physician’s diagnosis.
- Medical care – the treating physician’s prognosis, the expected recovery time, plus any information on surgeries, hospitalization, and projected length of recovery.
- Indemnity benefits– the average weekly wage, the indemnity benefit rate, the availability of light duty work, the estimated return-to-work date.
- Rehabilitation and Physical Therapy – the reasons for rehabilitation, whether it is physical or vocational, the length of rehabilitation and the facility or provider of the rehabilitation service.
- Subsequent injury fund – in states where available, the anticipated amount that can be recovered from the state fund.
- Subrogation – whether or not there is a third party from whom the cost of the claim can be recovered, and if so, the identity of the responsible third party, the theory of negligence, the preservation of evidence, the employee’s right of recovery vs. the employer’s right of recovery.
- Action Plan– steps to be taken to move the claim forward and the potential barriers to resolving the claim. These are often called Specific Plans of Action (SPOA). An SPOA is a “real” plan, not just the adjuster saying they are trying to close the claim…
- Litigation– if the claim is being contested, the name and address of the defense attorney, the issues in contention, the probable outcome of the claim, and the anticipated legal budget.
- Future report date – when the claim will be reported again.
- Attachments– any pertinent information to the claim the adjuster believes the claims manager may wish to review or all documents to the claim if the reporting guidelines dictate same.
Note: If Nurse Triage is employed, a report from the triage nurse will be sent to the carrier automatically before the claim is even made. This type of immediate medical advise often obviates the need for medical care at a clinic or prescription medication, and the injury may never turn into a “claim.” This is especially true if the injury is treated with “self care” by the employee .e.g. ice your lower back, etc.
Status Reports normally do not repeat all the information covered in First Reports. It is standard protocol for status reports to be limited to the topics that have changed or are the subject of change. For instance, the status reports would not repeat the information on coverage, accident description (unless new information becomes known), insured location, employee, jurisdiction, compensability, or the nature of injury. ASK for the “grades” of your adjusters. Yes, “grades,” some TPAs score or grade the adjusters files each month and post the grades on the bulletin board! You want the adjusters with high grades! If the adjusters do not have grades above 80, they are sent for remedial training; if their score is > 85 they receive a cash bonus and if higher than 95 they receive a larger cash bonus in their paycheck that month.
However, the status reports usually restates the reserves and explains any changes in the reserves, the status of the indemnity benefits, the status of the medical care, the progress in rehabilitation (when applicable), the status of the subrogation claim or second injury fund claim (when applicable), the status of the litigation (when applicable), the action plan and the next report date.
In essence, proper claim reporting is designed to provide the claims management of the self-insured employer with all the information needed to properly oversee the workers comp claims, without the claims manager having to actually handle the claims