Third-party administrators (TPA) perform many important functions in workers’ compensation claims. It is important to make a reasoned decision when selecting the right TPA. Failure to do so can result in a chaotic program that does not serve the best interests of the client, nor does it ensure the injured employee receives best in class service.
Keys to Effective Contact
A three-point contact system results in establishing and maintaining effective communication with all key parties to the claim to facilitate the investigation, claim control, and explanation of benefits. This includes the following:
- The claim handler will verbally contact the injured employee or attorney, if represented, the employer and the treating physician by the end of the next business day following receipt of the loss to the TPA;
- When unable to reach an injured employee within one business day, a letter will be sent asking the injured employee to call;
- The claim handler should make at least two attempts to contact the applicable parties within 3 days following receipt of the loss. A letter will be sent if unable to reach the parties; and
- If contact cannot be achieved due to circumstances beyond the control of the claim handler, the claim file should be appropriately documented.
The contact process should continue throughout the life of a claim. The following steps should be taken during a claim until it reaches its conclusion:
- Ongoing contacts with the employer, the injured employee and the medical provider;
- All contact efforts should be detailed in the claim notes. It is not written down contemporaneously, it did not happen;
- The claim handler should vary calling times to increase the chance of a successful contact;
- Significant changes in the injured employee’s condition should be documented in the claim notes; and
- If the injured employee is off work or on transitional duty, contact should be maintained, at maximum, every 30 days by the claim handler and/or medical case manager.
Medical only claims require contact just like any other claim. Important steps that need to occur to be effective include:
- The medical claim analyst verbally contacts the employer by the end of the next business day following receipt of the loss report;
- The medical claim analyst sends letters to the employee and medical provider by the end of the next business day following receipt of the loss report; and
- On transitional duty claims with lost wages or a reduction in hours worked, three-point contact is verbal for all three contacts areas.
Effective Claims Investigation
Prompt and thorough investigation provides the framework for timely analysis of coverage, compensability decision, effective claim management, pursuit of cost containment opportunities, and the timely issuance of claim benefits.
- The scope of the investigation considers the type of accident, complexity of injury, and compensability issues. Investigation applies to all claims other than those designated as medical-only claims through the assignment process;
- Initial investigation is completed within 14-calendar days of receipt of the loss report. This TPA utilizes a proprietary claim advantage system, an evidence-based decision tree software tool, to support investigation and prioritize claims. The claim-handling process continues to re-evaluate the exposure as the case progresses and allows for the development of a goal-centered strategic plan of action; and
- Identification and investigation of potential subrogation or second-injury fund maximize recovery potential and reduces client/carrier loss cost. All claims with potential subrogation are handled by a claim handler who teams with licensed subrogation partner to evaluate and pursue recovery opportunities.
The TPA, as a matter of sound business practice, and in recognition of its public policy obligations, has a duty to identify and resist all fraudulent claims. When the evidence supports withholding benefits, such claims are promptly rejected, and aggressively defended. When the evidence is inconclusive, the claim is promptly adjusted.
TPAs play an important role in the claim management process. It is important to understand how a TPA communicates with parties following a work injury and investigates claims. Examining these factors allows the insured to run an effective workers’ compensation program and provide better services to the injured employee, and all interested stakeholders.
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a 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 .
Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/
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