3 Simple Tasks To Apply To Every Work Comp Claim

Members of the claims management team are always looking for cost saving measures on their workers’ compensation claims. This is due to the fiduciary duty to the insurance carrier they work for and requirements under the workers’ compensation act to provide injured parties with the benefits they are entitled to receive. While there are techniques developed over time, simple tasks on every file can lead to responsible cost savings on every file.

Step 1: Know Your Files

The average workers’ compensation claim handler can be responsible for handling up to 200 claim files from potentially a variety of jurisdictions. This creates countless headaches for everyone involved on the claim management team. While each person may have their own style or file organization, there are certain steps that one can take to master the process and be effective and efficient. These steps include:

• Analyzing workers’ compensation claim trends and identify the various drivers that increase risk and impact loss experience. Various important trends include the demographics of the injured workers, the nature and extent of their claimed injuries and economic trends in the community in which the injury took place.
• Understanding the barriers to settlement and ability to resolve cases in a timely manner. In the business of claims management, “the only good file is a close file.” While some claims take longer than others to close, an initial analysis on what pitfalls might lay ahead will help the claims handler develop a strategy for getting the file closed in a timely manner.

Step 2: Move Your Claims toward Settlement

The inability to move claims toward settlement causes stress on the individual claim handler and the rest of the team. In some instances, more experienced claim handlers will need to pick up files from a team member if the claims are not handled in a proper manner. Tips for closing files in a timely manner, but at the same time ensuring the injured party receives the care they are entitled to receive include:

• Setting proper reserves on claims. Claims that are reserved too high need to be adjusted downward. This places financial stress on an individual carrier and limits their ability to use capital in an appropriate manner. In the same regard, claims that are reserved too low also have a negative financial impact and place limitations on settling other cases. Common issues that arise when setting proper reserves include a realistic evaluation on future disability and medical care an injured employee may need.
• Failure to review files on at least a quarterly basis. Dust collecting on a claims file is a sure sign of ineffective claims management. By making the effort to review files on a consistent basis, proper evaluation will be given to matters that hopefully can close.

Step 3: Leverage The Insurer Relationship

An effective workers’ compensation claims management team should communicate with their insurer about risk. This includes helping to understand simple items like how their workers’ compensation insurance premium is calculated and how to legally and ethically reduce costs. This includes a number of different cost-saving mechanisms:

• Ongoing discussions regarding the impact injury and disability have on the experience modifier;
• How to legally report payroll amounts as required by state law. This is often an issue with part-time employees, or persons working for an employer as an independent contractor; and
• How to improve the overall safety of work sites and facilities.

Conclusions

There are many simple ways to reduce workers’ compensation costs through effective claims management. This includes the work of the individual claim handler to better organize their files and assist the interested stakeholders in the process.

 

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 the founder & lead trainer of Amaxx Workers’ Comp Training Center, which offers the Certified Master of Workers’ Compensation national designation.

Contact: mstack@reduceyourworkerscomp.com.

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