Employers often wonder if they are getting quality claim handling on their workers’ compensation claims. At the same time, the third-party administrators (TPA) providing claim services to employers often struggle with producing a quality product due to the facts and circumstances of each claim being different.
Top-Tier TPAs Evaluate Every File for Claim Quality
Each TPA will have a set of Best Practices stating what is expected on every claim. A top-tier TPA will not only have a written set of Best Practices, they will evaluate the adjuster’s claim quality using both performance measurements and diagnostic indicators to evaluate the adjuster’s performance.
As every activity of the adjuster on the claim file is recorded in the electronic notes of the computer file, it is simply a matter of data mining to determine if the adjuster is complying with the established Best Practices. The date and time are automatically recorded when the workers’ compensation adjuster enters a new file note. Each file note has two drop-down selection codes, one for the type of activity being completed and one for the type of person contacted – employee, employer, medical provider, employee’s attorney, defense attorney, etc. After the note is coded, the actual details of what was accomplished are entered. For example: “Requested Dr. Smith’s office to email us the office visit notes.”
With all this data, the grading and evaluating of the adjuster’s performance becomes highly measurable. To prevent ‘gaming’ of the system, the TPA will have internal auditors reviewing select files, or with some top-tier TPAs all files, to insure accuracy of what is recorded in the system. For example, if the adjuster coded the file note ‘contact – employee’, but the details of the file note reflect only left a voice mail, the proper coding should have been ‘attempted contact – employee’, and the file note coding can be corrected.
The areas of quality evaluated and graded through performance measurement include:
- Initial employee contact within 24 hours
- Initial medical provider contact within 24 hours
- Initial reserve within 72 hours
- Reserve review with 30 days
- Initial report to client within 14 days
- Status reports to client every 30 days, or as previously indicated in a prior report
The areas of quality evaluated and graded through diagnostic indicators include:
- File on diary
- Proper completion of claim progress notes
- Reserve worksheet to support reserve changes
- Timely ISO filing
- Timely supplemental ISO filings
- Payments made on closed files
With all the data generated, the software calculates the adjuster’s performance. The software can be set to select only indemnity claims, or it can include all claims. The software identifies all claims reported within the reporting month (normally a calendar month, but data can also be compiled on any 30-day period). For example: The software identifies all indemnity claims assigned to Adjuster Jones during July, it reviews all data for the claims that had initial employee contact within 24 hour, and calculates the percentage of claims where the employee was contacted within 24 hours of the initial report of the claim.
The software completes the calculation for each performance measurement and diagnostic indicator and assigns a numerical percentage score to each category. The software combines all the categories into a numerical score for each adjuster to provide the TPA management a quality score for each adjuster.
Claim Quality Scores are Invaluable Tool for TPA
The quality scores compiled by the TPA are an invaluable tool that can be used for several different purposes. The score results can be used as:
- A component of the adjuster’s semi-annual or annual performance review
- A promotional tool to sell the TPA services
- A motivational tool to encourage the adjusters to perform at their maximum
- A way to encourage friendly, internal competition in each office to see which adjuster can provide the highest level of service
In addition to building adjuster’s pride by scoring well, some TPAs offer bonuses for top scores or a bonus to everyone who exceeds a predetermined mark. For example – $100 monthly bonus for a score of 95% or higher, or a $500 annual bonus for averaging 97% or higher for the entire year. Other prizes can be offered for the most improvement, the highest overall performance, etc.
Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment system and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaches injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.
Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/
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