Searching For The Right TPA Critical Step in Self-Insurance

 

Finding Right TPA Toughest Part of Setting up Self-Insurance

 

The toughest part of setting up a self-insurance program is finding the right third party administrator (TPA) to administer the workers’ compensation claims.  The selection of the right TPA is essential to the success of the program.  The TPA should work with your company in a partnership arrangement where both your company and the TPA are striving for the best possible outcome on each and every claim.

 

Finding the right TPA partner is a challenge.  While there are mediocre TPAs, there are also some excellent TPAs that will anxiously await your selection of a TPA.  When you have received the responses to your Request for a Proposal, take time to interview three to five of the TPAs.  The following areas should be included in your interviews.

 

 

Geographical Fit

 

The TPA needs to be somewhat local to your location(s).  If the TPA is in another state, for example – New York, and you have two facilities in Texas, there are several problems that will arise.  First, the TPA adjusters will not know the law in your state, which can result in some serious financial (over-payment) mistakes.  Second, the adjusters will not be licensed to handle the claims in your state.  Third, the adjusters will not know who the better doctors are and which doctors should be avoided.  Fourth, the adjusters will not know who the better defense attorneys are.

 

Being located in the same state often is not enough.  In some states the adjusters are often called on to attend board hearings, mediations, settlement conferences, etc.  If the TPA is in the same state as your company, but 250 miles away, attendance at out of the office events becomes an issue.

 

Obtaining a proper geographical fit can is more difficult for the large company with numerous facilities or locations in several states.  The large employer will need either a TPA that has a national presence, or a regional TPA that matches up with the employer locations.

 

 

Claim Management Information Systems

 

The TPA must have a claims management information system (CMS) that is compatible with your computer system.  If not, the exchange of information between the TPA and your company will be very time consuming if not a nightmare.  If you do not have the expertise to know if your computer system and the TPA’s system can be integrated, have your IT person(s) talk in detail with the TPA’s IT person(s).

 

If it is determined that your computer system is compatible with the TPA’s CMS, you need to establish ahead of time who will be responsible for the interface between the two computer systems.

 

Assuming the TPA’s CMS is flexible enough to work with your computer system, you will need to know the amount of information that will be available to you via on-line access.  At a minimal, you should be able to read the adjuster’s file notes, review documents attached to the claim file and review the financial information on each claim.

 

To err is human, and humans input the information into the computer system, so expect errors in your data.  Wrong locations codes, wrong body part codes, wrong nature of injury codes, wrong social security numbers (999-99-9999 is a favorite), wrong employee age (99 again), etc. can seriously undermine the accuracy of your data and financial management.  The TPA’s CMS should provide you with the ability to correct mistakes of this nature.  If not, expect to either have seriously inaccurate information for your risk management program, or to spend a considerable amount of personnel time getting each data error corrected.

 

For many years self-insured employers had to rely on the TPA to produce their loss runs.  With the more modern CMS systems, the employer can now run their own loss runs and produce ad-hoc reports to address issues of particular concern.

 

 

Claims Handling

 

TPAs are notorious for saying “we have excellent adjusters” and hoping you will leave the discussion of claims handling at that point.  The self-insured employer needs to ask lots of questions of the prospective TPA about how the workers’ compensation claims will be handled.

 

To maintain high quality of claims handling on every claim, a set of Best Practices outlining what is expected on every claim should be agreed to.  The Best Practices should state the requirements for contacts, investigation, payments, reporting, etc., and give precise guidelines for timeliness.

 

The submission process for new claims should be established.  The TPA’s CMS should allow you to report new claims electronically.  The TPA should also provide you the flexibility of calling in the claims report in emergencies and emailing the First Report of Injury.

 

The number of workers’ compensation indemnity claims assigned to one adjuster should be discussed in detail.  If the TPA assigns too many claims to their adjusters, few of the claims will receive all the attention necessary, resulting in higher claim payments.  The maximum number of claims an experienced adjuster will be able to handle properly will vary by the jurisdiction, depending on the number of state forms to be filed, the complexity of the state laws, the selection of medical providers and the amount of involvement of the industrial commission/workers’ compensation board.  Generally speaking, 125 claims are a full load for an adjuster without an assigned administrative helper.  For the overall success of your self-insured program, the maximum number of claims assigned to the adjusters handling your self-insurance program should be clearly stated in your contract with the TPA.

 

Depending on the size of your self-insured claims program, you will need to have either a designated adjuster and/or a dedicated adjuster(s).  The designated adjuster is one adjuster who handles all the claims for a client, plus claims for other clients.  A designated adjuster is used when the claim volume is insufficient to keep one adjuster busy full time.  A dedicated adjuster handles the claims of only one client.  If you will have enough claims to keep one adjuster busy full time, the TPA should agree to assign a dedicated adjuster to your work comp claims.  Often for larger self-insured employers, the TPA will have a number of dedicated adjusters handling the claims along with one designated adjuster who handles variances in the claim load.

 

It is important for the self-insured employer to know the skill and experience of the designated/dedicated adjusters assigned to their claims program.  Not only is the number of years on the job important to know, the employer should know the level of training the adjusters have had including industry courses, completion of continuing education requirements and certifications or designations the adjusters have earned.

 

 

Interface

 

The level of communication and information exchange between the self-insured employer and the TPA should be established before a claims handling contract is signed.  The employer should establish what level of claim settlement authority the adjuster(s) will have and at what level the adjusters will need to consult with the employer prior to settling a claim.  As it is your company’s money that is being spent on the work comp claims, the level of claims direction, supervision and control needs to be clearly delineated prior to the TPA starting to handle your claims.

 

While the TPA is acting as your fiduciary, the claims are still the responsibility of your company.  There should be complete transparency in everything the TPA does on your behalf.  Whether you access information about your claims via computer or by talking with the adjuster(s) assigned to your claims, your company should never be in the dark about the status or progress on any claim.

 

Even though you have complete access to your claims information via the CMS, you should also include in your contract with the TPA the right to fully audit any aspect of your claims program.  A file quality review by an independent claims file auditor should be completed at least every other year (larger programs yearly) on all self-insured programs to be sure the TPA is complying with the Best Practices previously agreed to.

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

 

©2013 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional about workers comp issues.

How to Gather All Information Necessary for High Quality Claims Management

 

System Creates Repeatable, High Quality Results
A significant improvement in the world of claims management over the years is the implementation of an electronic system for entering and managing claims.  Used by employees of the Carrier/TPA, this is an automated system that assigns risk if certain conditions are present.  These systems allow the claims professional to gather more information in less time, follow up appropriately on responses to high-gain questions, and evaluate the information systematically. 

System Guides the Questions So Nothing is Missed
The person receiving the claim for the Carrier/TPA will have questions that need to be answered.  If the answers are positive for certain criteria, the system will assign the claim a risk number within certain values from the software. The higher the score, the more risk is assigned to the claim. The system will be used initially for 3-point contacts to the injured worker, the employer, and the medical provider.  Positive responses to certain criteria will pop up other questions to ask which ensures the adjuster does not forget anything that can be crucial to the claim.

When the claim arrives at the desk of the adjuster, they already have some risk areas highlighted that can negatively impact the claim.  This streamlines investigation and saves costs as the sooner a problem area can be addressed, the better.   

Adjusters are all under a heavy workload. Claims are in various stages of their lifespan, and some claims will get more attention than others.  This program presents a way for new claims to get the needed attention they require as early as possible.  Like any system, it also takes out a portion of the human factor.  After a while adjusters can get stuck in a rut and a question could be missed or skipped by accident.  The answer to that question could have a huge impact on the outcome of the claim.  This system can prevent those misses, which helps everyone in the end.  In no way does the system replace the need for a qualified adjuster, it does however, make every adjuster better.

Adjusters Can Receive Bonus for Following Best Practices

Bonus incentive can be another positive with the use of this program. Carriers/TPAs often use a bonus system to reward adjusters, and these bonuses revolve around timeliness of their contacts, resolution of their claims, and overall reserve savings by proactive claims handling.  A system that helps the adjuster hone in on what gets them salary bonuses is a nice incentive to ensure they are motivated to follow best practices.


Makes Process Efficient

Claims can also be classified based on their system score.  Medical only claims or minor lost time claims can be routed to the appropriate adjuster, instead of going initially to a senior level adjuster, only to be passed back to the medical only adjuster after contacts have been made.  Many Carrier/TPAs will assign the claim based on what information is listed in the injury report.  This process can be inefficient if the injury report was completed in error.  Time and money can be saved when each adjuster is making the highest and best use of their day.


Outside Vendor Usage Identified Right Away

Outside vendor usage can also be identified right away.  If the system has certain positives, it can trigger assignment to a field nurse case manager right away, instead of weeks after the claim process has begun.  This is another proactive benefit as the earlier a claim can be assigned to a vendor for help the better.  The outside case manager can get involved in the claim at the outset, instead of a month later.  This can equate to large cost savings as this month can include crucial moves within the claim, preventing missed work when a return to work could have been possible.  Another example is when the injured worker needs a medical referral to a specialist. Instead of waiting for the paperwork the case manager can get it at the appointment and send it to the adjuster the same day, instead of when the actual medical reports come in with the bill weeks later.


Summary

Several technological advancements are going on within the claim industry.  As an employer, you should be open to new technology, and trying new things in order to be more proactive in the claim process.  The same can be said for the adjuster.  Oftentimes the adjuster is very set in their ways, and there can be some resistance to the introduction to new techniques and new technology.  These advancements are made to help all parties involved to make the process more streamlined and more effective for the claims profession.


Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.
 
Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional about workers comp issues.

Best Practices in TPA Medical Management

TPA Medical Management Critical for Cost Containment

 

The third party administrator (TPA) who handles your workers’ compensation claims needs to be especially strong in their medical management skills.   The top tier TPAs will have their own medical management division overseeing and controlling the medical cost of your claims and working in conjunction with the workers’ compensation adjusters.

 

The most effective ways to control your medical cost include:

 

  • Telephonic nurse case managers
  • Field nurse case managers
  • Senior nurse reviews
  • Utilization reviews
  • Medical bill reviews
  • Prescription management
  • Physician review
  • On-site clinics
  • Injury triage
  • Wellness programs
  • Preferred provider networks

 

 

Nurse Case Managers

 

Nurse case managers are experienced nurses who are utilized to coordinate and manage the medical care for an injured employee.  There are two primary types of nurse case managers, telephonic case managers (TCM) and field case managers (FCM).  Both TCM and FCM will:

 

  • Coordinate the medical care
  • Consult with the physician on treatment options
  • Prevent over utilization of medical treatment
  • Monitor the employee’s medical recovery
  • Provide frequent updates to the adjuster and employer on the employee’s medical progress
  • Coordinate the employee’s return to work, either light duty or full duty
  • Facilitate communication between the employee, employer and physician
  • Manage the medical rehabilitation of the employee

 

The primary difference between the TCM and the FCM is the location of their work.  The TCM will work from his/her office and perform all activities on the workers’ compensation claim by telephone and e-mail.  The FCM will often meet in person with the injured employee and will accompany the employee to medical appointments when appropriate.  While not a strict division of injury assignments, the FCM is more often utilized on severer injuries.

 

 

Senior Nurse Review

 

With the senior nurse review, a highly experienced nurse provides continuous oversight of medical care. This provides for identification of recovery obstacles early in the life of the claim. Through continuous monitoring of the medical care, the senior nurse reviewer can also verify the quality of medical care if the recovery time exceeds the normal disability duration guidelines.  When a senior nurse reviewer is involved in the workers’ compensation claim, the medical management provider will also have physicians with whom the senior nurse reviewer can consult.

 

 

Utilization Review

 

The medical management company should provide utilization review services.  A utilization review is an independent confirmation of the necessity for medical services.  There are 3 types of utilization review.  They are:

 

  1. Pre-certification Review – an experience nurse will collect all the medical information including the symptoms, diagnosis, test results and the reason a physician is requesting a specific medical service.  The nurse will compare the medical information against the normal criteria for a specific treatment.  If the nurse concurs, the medical service is approved.  If the nurse determines the medical care is not necessary, the matter is referred to a physician for a peer review, and acceptance or denial of the requested medical service.
  2. Concurrent Review – is a review of the medical necessity while it is in progress.  This type of utilization review is often used during hospital stays, or on-going multiple outpatient visits, for example: physical therapy.
  3. Retrospective Review – After a medical service has been completed, but before a payment is made for the service, the nurse reviews the reasons for the service and the necessity for it.  If the medical service was not needed, the retrospective review gives the adjuster justification and documentation as to the reason the medical provider is not compensated for the medical service.

 

 

Medical Bill Review

 

The medical management company reviews and verifies the accuracy of the medical bill diagnostic codes and the medical bill charges. The medical bill charges are compared to the medical fee schedule established by the state.  When there is no fee schedule, the medical charges are compared with what is customary, reasonable and necessary

 

 

Pharmacy Benefit Manager

 

A pharmacy benefit manager provides a network of pharmacies to provide medications at the best possible price.  The pharmacy benefit manager will also monitor the utilization of prescription drugs to prevent the overutilization of drugs through premature fill request, excessive dosages, multiple providers, multiple pharmacies and multiple drugs used for the same purpose.

 

 

Physician Review

 

When an injured worker is not responding to the medical care within the range of normal recovery time, a physician review is often appropriate.  The physician review is a peer review by a specialist who will evaluate and document the medical necessity of the past, current and future medical treatment.  The physician review provides an in-depth evaluation of the medical necessity of the treatment being provided to the injured worker.  The review process can strengthen the return to work program by verifying the appropriateness of an injured worker being on modified duty work. The review process can also be used to evaluate the accuracy of an impairment rating provided by the employee’s medical provider.

 

 

On-site Clinics

 

On-site (employer’s work site) medical clinics staffed by RNs, nurse practitioners and physician assistants have proven they can curb the fast-rising cost of medical care for both personal and work-related injuries and illnesses. The on-site clinic provides the medical care making it convenient for employees who do not have to leave work for care.  Employees are referred to off-site medical facilities only if the injury or illness is beyond the scope of the medical professionals in the on-site clinic.

 

 

Injury Triage

 

Injury triage is the process of having an experienced nurse evaluate the injured employee’s medical needs through the use of algorithms, software and an in-depth interview of the injured employee.  Based on the information obtained, the triage nurse makes decisions on the appropriate level of medical care needed.  While triage nurse can be utilized any time in the course of the workers’ compensation claim, it is most effective when it is conducted immediately after an injury.  The triage nurse directs the employee to the most appropriate medical provide within the in-network of service providers. This prevents the employee from over utilizing medical care while ensuring the employee obtains the medical care needed.

 

 

Wellness Programs

 

A wellness program is a company sponsored effort to improve the health of employees.  A complete wellness program will include nutrition and health education, physical fitness, health screenings and behavior modification.  An employer benefits from a wellness program through both lower cost of health insurance and lower cost in the workers’ compensation benefits.  Additionally, a wellness program will result in lower absenteeism and a corresponding increase in productivity.

 

 

Preferred Provider Networks

 

A preferred provider network is an organization of doctors, hospitals, diagnostic facilities and other medical providers who have agreed with the insurance company or self-insured employer to provide medical services to injured employees covered by workers’ compensation insurance. In exchange for the insurer or employers sending a volume of business to them, the medical providers agree to a pre-determined reduction in their normal charges for services. The reduction in cost can be substantial for the insurer or employer.

 

Employers should select one medical management partner that can provide expertise in all of these areas rather than multiple medical management partners.  A medical management partner that covers all of these areas can integrate the medical cost control services eliminating duplication of services and eliminating gaps in medical cost control.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. 

 


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional about workers comp issues.

How Your Carrier or TPA Should Process Claims Intake

 

It is pretty hard to be proactive on your injury claims if you struggle to get the claim to your carrier/TPA.  Several Carriers now have a complete, customizable system to make this task easier on you the employer. 

 

In the past, if an injury occurred you would pick up the phone, call the carrier or your agent, and give them the pertinent information over the phone.  From there, those people would complete the injury report and the job would be complete.  Nowadays, the need for information has become more and more prevalent.

 

 

Different Ways Carriers/TPAs Should Accept Claims:

 

 

  1. Email the claim info to the intake center

 

We live in a world of electronic communication.  This form is not only faster, but more efficient.  Carriers give their insured’s forms to complete, and then they can scan and email them to the intake email address.  This also gives the employer a copy of the information, so they can keep it on file. This is a fairly failsafe option, and very common in the insurance world.  [WCx]

 

 

  1. Fax an injury report to the carrier

 

If email is not your thing, most carriers will supply you with forms to complete and fax to your intake center.  This is a fairly easy task, but it can lead to some problems.  Because they can be written out by hand, faxing can make the print hard to read for the carrier employee to input into their system.  Even worse is when the employer does not complete all of the necessary fields.  This stalls the claim, because the carrier employee has to call the employer and confirm the information that they need for claim setup. Submitting claims via the fax machine is no longer the preferred option.  Carriers make it an option, but rarely will they prefer fax over the other electronic forms of communication.

 

 

  1. Call the injury details in to your carrier or agent

 

Even in today’s electronic world, calling in the claim is still a very popular option.  Calling the claim in is a bit more labor intensive for the employer, but there is comfort in actually talking to someone.  If requested, carriers will give you a dedicated phone line to call which goes right to their intake center.  Top carriers/TPAs will offer adaptable call scripts to ensure questions specific to your business are answered every time.

 

.

  1. Submit the injury report via the internet

 

Most carriers can provide the employer with a secure website in order for the employer to report the claim.  This way the employer sees exactly with the intake employee would see from the carrier side, and if you do not have all of the information that the page needs you can always save your work and come back to it once you have the information that is needed.  This eliminates a phone call, being placed on hold, and repeating information to the intake employee.

 

 After you submit the claim you will receive a tracking number that is verification the claim was received and will be assigned to an adjuster.  This has become a common form of injury claim reporting and it has proven to be efficient. 

 

 

  1. Submit the claim information using intake software

 

As popular as website reporting has become, the new wave is giving the employer the software needed to report the claim direct and right into the new claim system the carrier uses.  Almost all carriers/TPAs use a type of claims software to handle their claims and intake process. To make themselves more integrated with their insureds they have allowed employers certain access to this software, including the ability to report a new claim.  This process has many benefits It has decreased phone calls for both parties, and it allows the employer to see into the claim and some of the claim notes to find out whatever info the employer is looking for, be it wage information, injury reports, loss runs, reserves, and the like.  The employer will not have access to the entire claim due to HIPPA privacy laws involving medical records, but they will have a lot of access for the most part.  This is the current trend, and more and more carriers are marketing this as a way that can separate them from other carrier competition. [WCx]

 

 

  1. Key points to remember when submitting a claim

 

No matter how you choose to report the claim, you have to be sure of a few things prior to reporting.  Make sure you have all of the information the carrier needs, including date of birth, social security number, claimant address, injury details, wage history if applicable, the last day worked, the return to work date, if you have light duty work for this employee, the employer address and contact person, contact person information such as phone number and email address, type of injury, and so on.  Without all of this information submitted with the claim, the adjuster will have to contact the employer to obtain it.  No matter how insignificant the injury, these are all facts the adjuster will need in order to do a proper investigation into a claim.  A lot of times the insignificant claims are the ones that can turn into more severe claims when conditions warrant.

 

 

  1. Key points to look for from your Carrier / TPA

 

  • 24 / 7 reporting
  • Escalation Procedures for Critical Claims:  Critical losses require immediate attention, ensure your carrier/TPA has established procedures for once the claim intake is complete.
  • Immediate Distribution of Confirmation Letter: Necessary for you to confirm and acknowledge the information delivered during intake.
  • Integration with the Claims Management Process:  The intake process has to be integrated with the claims management process for the system to run on an optimal basis.  Any breakdown in this structure will lead to less than perfect results.

 

 

Summary

 

Having a streamlined claims intake process is not only beneficial to the employer, but also to the carrier as well.  By being able to have the information they need, the adjuster handling the claim can hit the ground running and work on ways to be proactive on the claim rather than being slowed down chasing information.  The first days in a claim are often the most vital, and any steps you as the employer can take are the most important.  You will see claim expense savings sooner by being thorough rather than by being complacent about the whole process. 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

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MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

Selecting High Quality Third Party Administrator Adds Directly to Your Bottom Line

There are many programs a self-insured employer can implement to have a positive impact on the cost of their workers compensation.  Safety, aggressive transitional duty return-to-work, effective medical cost containment, and solid fraud prevention programs all will have a positive impact on the cost of workers compensation.

 

 

The one area of workers compensation cost control that is frequently overlooked is the quality of the third party administrator (TPA) handling the claims.  All the savings from the safety, return to work, medical management and fraud prevention programs can be easily lost by the selection and continuation of a poor TPA.  If the workers comp adjusters at the TPA do not handle the claims correctly and efficiently, the cost of the claims will be significantly higher and will cost the self-insured employer far more than they might realize. (WCxKit)

 

 

 

The skilled workers comp adjusters who followed the established Best Practices for Workers Compensation claims handling will have substantially better outcomes financially then the adjusters who take short cuts.  Workers comp adjusters are human and when they are taught by TPA management to meticulously follow the Best Practices, they have great results.  When adjusters are taught to give lip service to Best Practices and are assigned too many claims by TPA management, the end result is the overpayment of claims.

 

 

If the self-insured employer selects their TPA by the lowest bid to provide their claims handling services, they may or may not get quality claims handling.  There are several measurements of quality the self-insured employer should look at in selecting and retaining a TPA from year to year.

 

 

Prior to making a decision on the selection of a TPA, ask all the TPAs submitting proposals to handle claims to submit a copy of their Best Practices for review. Eliminate from consideration any TPA who has vague Best Practices. Each of the Best Practices should state precisely what their criteria are and a time frame for accomplishment.  For example:  If the Best Practices state “will keep in regular contact with the injured employee”, that is marginal.  If the Best Practices state “will contact the injured employee the day the claim is assigned and after each doctor’s visit”, that is excellent.

 

 

Ask the TPA what is the average experience level of their workers compensation adjusters. Experienced adjusters tend to make fewer mistakes than inexperienced adjusters (and the self-insurer is the one who pays for the mistakes made by the adjusters, regardless of experience level).  Experienced adjusters know what to investigate, when to investigate, what to deny and when to settle.  They know the doctors, lawyers and workers comp boards.  They know how to move claims to a conclusion.

 

 

Experience of the adjusters is not the sole criteria.  Ask what the tenure is for the staff.  If the staff have had a lot of turn-over, there may be underlying problems in adjusters working for the TPA.  Also, turn-over and changing adjusters on the claims can have a negative impact on the outcome of the claims.

 

 

Ask the TPA for the average number of lost time claims assigned to an adjuster. If the TPA states the adjusters have on average 175 lost time claims, expect a poor outcome in most of the lost time claims.  If the TPA states it will vary by jurisdiction, by experience level, and by the number of litigated/board cases, you will have a much more sensible answer.  On average, an experienced adjuster can handle approximately 125 claims at a time, in a state with a moderate amount of state forms to process and in an area where most injured employees are not represented by an attorney.  If the state has complex forms and is highly litigious, for example, California, the average case load for an experienced adjuster may be only 100 claims. Much depends on practices and staffing within the claim office such as whether each adjuster has administrative support for obtaining medical records and pay bills; The more support provided to adjusters the more claims they can handle.

 

 

Ask the TPA what their practice is in assigning claims.  If the TPA rotates the assignment of claims, the self-insured employer will end up with multiple adjusters working on the claims.  If the TPA uses designated adjusters (where the adjuster handles all the claims for the self-insured employer, plus claims for other employers) or the TPA uses dedicated adjusters (where the adjuster handles claims only for one self-insured employer), the self-insured employer will have a better overall outcome on claims as the adjuster(s) thoroughly learn the requirements of the account and know what is expected of them by the self-insured employer. (WCxKit)

 

 

Ask the TPA for a list of clients it services in the area.  If the TPA is reluctant for you to know its other clients or is reluctant for you to contact its other clients, that is a red flag.  If the TPA readily provides you with a list of clients, contact some of them at random and ask what their overall level of satisfaction is with the TPA.  Good references from other clients is a definite positive, while a polite refusal to provide any input on the TPA selection should be a negative, especially if other clients are also reluctant to give a positive recommendation.

 

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20-50% www.WCManual.comContact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact:  mstack@reduceyourworkerscomp.com.

 

 

Our WORKERS COMP BOOK:  www.WCManual.com

 

WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

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SUBSCRIBE:  Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.


©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact  Info@ReduceYourWorkersComp.com.

 

Not Too Many, Not Too Few, Make Sure Your Adjusters Caseload is Just Right

The risk manager is perplexed.  The workers compensation adjusters on the self-insured program always seem to be behind in the work.  Very little is getting accomplished on time.  Investigation on new claims took longer than they should, vendors are calling about missed payments, the employer’s workers comp coordinator seems to be doing half of the adjusters’ jobs for them and the cost of the workers comp program keep creeping higher.

 
 
A discussion with the claims manager for the third party administrator (TPA) does not provide many answers.  The claims manager is reassuring, verifying the 3 dedicated lost time adjusters worked only on the self-insured program and do no work for anyone else.  The adjusters know the Best Practices and are striving to meet them, even though they often fall short.  The risk manager knows the adjusters are working long hours from the various e-mails and phone messages being sent at night or even on the weekends. (WCxKit)
 
 
While the risk manager is reviewing the lost run at the end of the month to see how much the workers compensation cost has increased, he notes the 3 adjusters are handling a combined 513 lost time files, an average of 171 files each.  Is that too heavy a caseload?  What is a reasonable number of lost time files for each adjuster to handle?
 
 
Any discussion of caseloads has to be tempered with consideration of where and what the claims are.  An adjuster in California handling construction workers could handle maybe half the claims of an adjuster in Mississippi handling office workers.  With that caveat in mind, a TPA caseload of 100-125 is normal without full ancillary support, which is something most adjusters do not have.  Most TPAs provide only partial ancillary support, if any.
 
 
Best-in-class TPAs provide administrative support for adjusters.  This allows them to focus on return to work strategy, communications with employer/employee/medical providers, and making judgments and decisions on the files. Adjuster administrative assistants perform tasks such as paying medical bills, sending requests for medical records, and filing and copying as needed.  A lower case loan will be necessary for adjusters without administrative assistance. 
 
 
In our risk manager example above, depending on the state, a caseload of 171 would be doable if each adjuster had their own personal assistant.   The cost of service, however, would be proportionally impacted.  State laws, state mandated forms, the level of litigation and the nature/extent of the injuries all impact caseloads. 
 
 
TPAs have a built-in conflict of interest.  The higher the caseload, the more adjusters and support staff the TPA must provide.  If the TPA raises the cost per claim to pay for the additional adjusters and support staff, they drive away customers and lower their market share.  It is therefore in the interest of the TPA owners to handle as many claims with as few adjusters as possible.  When the caseload gets too heavy for the adjuster, mistakes are made, oversights occur, and errors & omissions increase.  
 
 
Caseloads are a constant balancing act between what is in the best interest of the self-insured employer and what is in the best interest of the TPA owners.  When the caseloads get too heavy, the TPA owners profit at the expense of the clients.  When the caseloads are full, but not over burdensome, the conflict of interest between the TPA and the clients is kept in check.  When the caseloads are too light, which is rare, the TPA loses money, but there is little impact on the clients.  When caseloads go up, and all else remains the same, the adjuster’s quality will decline. 
 
 
Unethical TPAs who intentionally look for clients shopping TPA services by price only, will provide a low price per claim, but then load the adjusters with 200 – 250 files knowing the adjusters will provide mediocre service at best, The clients of these TPAs pay for it with higher indemnity costs and have an overall higher cost of work comp.  It is better for the TPA clients to pay more for the TPA services and negotiate into the client instructions and claims handling contract the maximum number of files the designated or dedicated adjusters will be assigned
 
 
The employer’s level and nature of involvement in the claims will impact the caseload the adjuster can handle.  If the employer is reporting all claims timely, maintaining regular contact with the employee, and providing a transitional duty program, the adjuster can handle a higher caseload.  If the employer does not report the claims until a letter of representation arrives from an attorney, the amount of work per claim is increased and the number of claims the adjuster can properly handle decreases proportionally. (WCxKit)
 
 
To evaluate whether or not your TPA has assigned too many claims to the adjusters is often a difficult task as the TPA will be reluctant to admit the adjusters have too many files.  You can obtain a general idea as to whether the caseload is too high by reviewing the nature and type of claims, as well as the requirements of your states work comp act.  To know more precisely what the caseload should be, hire an outside, independent claims auditor to complete a Best Practices Audit of the TPA files.  The outside expert can assist you in identifying the issues impacting the claims quality and identifying the appropriate caseload for each adjuster handling your claims.
 
 
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20-50% www.WCManual.com. Contact: RShafer@ReduceYourWorkersComp.com.
 
 
 
Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. Contact Mstack@ReduceYourWorkersComp.com. 

 
 
 
Our WORKERS COMP BOOK:  www.WCManual.com
 
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact  Info@ReduceYourWorkersComp.com.

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Skills, Qualifications, and Support, Critical in Selecting TPA

 

The selection of a third party administrator (TPA) is critical to the success of the claims operation.  With the wide variety of TPAs available for self-insured workers compensation insurance programs, determining the best TPA for a program will require an understanding of the difference between TPAs. When issuing a Request For a Proposal (RFP), it is possible to receive numerous proposals from TPAs that differ extensively in skills, qualifications, support services, and price.

 

Skills

The large national TPAs with an office in every state, or even every large city, may have the size and breadth of operations to have experts in every insurance line.  The local and regional TPAs will often specialize in one product line. For example, a TPA that is excellent and has a strong reputation handling property insurance claims may not have the expertise needed in workers compensation claims.  When selecting a TPA, a solid, verifiable background in workers compensation is necessary for the self-insured employer’s program. [WCx]

 

 

Qualifications

A common mistake self-insured employers make is measuring qualifications of a TPA based on its size.  The small TPA with four or five adjusters can be an excellent fit for the mid-size employer which has a limited number of workers compensation claims each month.  The small TPA can provide a high level of consistency, for the same designated adjuster will be working all claims.  Conversely, a large self-insured employer will need a larger TPA to handle the claims, as the number of additional claims from the large employer could overwhelm the personnel resources of the small TPA.

 

 

Any TPA being considered for the self-insured program should have a presence in the state(s) where business takes place. The TPA must understand the specific requirements of the workers compensation laws in the state where the claims occur.  This includes both having the state required adjuster’s license for all adjusters and a program of continuing education and training.

 

 

Another consideration beyond the licensing and experience of the adjusters in workers compensation is the level of experience in the industry.  A TPA that specializes in the handling of workers compensation claims for the manufacturing industry may not have any experience in the trucking industry.  Ask the TPA being considered to provide a list of companies they work for in the pertinent industry.

 

Support Services

A TPA that appears to be the right size, has the right skill set, with experience in your industry still may not be the best TPA to select for a self-insured workers compensation program if it does not have the necessary support services.

 

 

The TPA with an established workers compensation claims handling program has built a network of medical providers, triage nurses, nurse case managers, medical fees schedule reviewers, defense attorneys, surveillance companies and IT support.  A TPA that thinks the RFP is a good reason to expand into handling workers compensation claims will have a difficult time handling claims without an established support network.

 

 

Most locally established TPA’s will have carefully built up a network of support services to cover the services they do not provide.  Regardless of the size of the TPA, they will utilize a medical providers network, defense attorneys and surveillance companies that are separate businesses.  While large national TPAs will provide their own nurse case managers and medical bill review service, most regional and local TPAs will utilize outside vendors.  A review of the support services provided by the TPA or arranged by the TPA is a necessary part of the review process in the selection of the best TPA.

 

 

One of the primary reasons for the decline in the number of TPAs available is the cost of technology systems.  Each individual claim produces volumes of documents and data.  The TPA must have an integrated risk management information system that is compatible with the claims data information system. This includes the ability to accept electronic submission of the First Report of Injury, along with the ability to submit all state forms through the EDI system required by the state.

 

Price

The pricing structure will vary as there are several pricing structures used by TPAs.  Some bill an hourly rate plus out of pocket expenses.  This is referred to as time and expense billing. Other TPAs will charge a flat fee per file for each claim they handle, with different flat fees for the complexity of the claim.  A third approach is a lump sum program fee where all claims are handled for one set monthly or quarterly payment.

 

 

Regardless of the pricing structure offered by the TPA, be sure to ask about what other expenses will be incurred.  Ask if there are extra charges for a data and technology interface, as well as if there are additional charges for related in-house services like EDI interface and ISO filings. (WCxKit)

 

 

We strongly recommend not to select your TPA solely on price.  A TPA that provides the lowest price per claim file will often increase the overall cost far more due to overloading their adjusters with too many claim files. Look at “value” not just “price.”

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%Contact: RShafer@ReduceYourWorkersComp.com.

 

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their Workers Compensation costs by 20% – 50%.  He is a writer, speaker, and website publisher.  ContactMstack@ReduceYourWorkersComp.com

 

 

 

WORKERS COMP MANAGEMENT GUIDEBOOK:  www.WCManual.com

WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE:  Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

Physical Therapy Management Company Celebrates 15 Years, Expands

2012 is Network Synergy Group (NSG)’s 15th anniversary. Its physical therapy management programs started in 1997 and this year expands to Illinois, Indiana, Louisiana, and Mississippi. NSG now offers a Therapy Management Solution to self-insured employers, insurance companies, and Third Party Administrators throughout those states and others – 25 in all.
 
 
According to NSG employees, the company broke the fee-for-service model in which medical providers were rewarded for more, not better, services. “NSG’s idea was simple – realign the financial incentives of the therapy providers to do the right thing, and reward them for providing better care, not more care. This idea would grow into a unique concept known as NSG’s Condition Rate Program,” the company writes.
 
NSG provides management services for physical therapy, occupational therapy, functional capacity evaluations, work hardening and other medical management services. Having a firm manage providers of these services ensures that networks will be more tightly controlled and follow rigorous guidelines for management, cost and monitoring. It also ensures they will provide a solid return on investment for the money employer's invest in their services.
 
 
NSG partners with therapy providers across the country and won the Tampa Bay Chamber of Commerce: Small Business of the Year Finalist in 2010. It also was acquired by GENEX Services, Inc., one of the nation’s leading providers for managed care solutions in 2010.
 
 
NSG now offers a Visit Rate model that gives payers and providers a reimbursement method that improves clinical outcomes and results in claims cost reductions. Greg D’Ambrosio, vice president of client services, said, “We are pleased to provide our services in these states with a keen focus on expanding our network nationally in 2012. This product offering allows us to maintain our core philosophy and values while meeting our clients needs to manage therapy on a national level.”(WCxKit)
 
 
To learn more about their products or to join the provider network, visit NSG’s website www.network-synergy.com or email us at info@network-synergy.com.
 
 
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He is an editor and contributor to Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: Info@ReduceYourWorkersComp.com.
 
 
 
New 2012 WORKERS COMP MANAGEMENT GUIDEBOOK:  www.WCManual.com
 
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php
 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Maximizing the Value of Onsite Health Services

 
 
NOTE: This article appeared in Utility Products magazine, which serves the utility industry — it is reprinted with permission. It details Medcor’s work onsite at wind farm construction projects. These large utility construction projects can involve hundreds of employees working over many miles for many months. The article provides general information about onsite health care, regardless of who the provider is, but also highlights some of Medcor’s specific value. Medcor has many years of experience serving the utility and construction industries and has developed specific protocols and systems for that on-site environment.
 
 
By Kate Woldhuis
During the American Wind Energy Association’s WINDPOWER 2011 Conference and Exhibition in May, Occupational Safety and Health Administration (OSHA) announced its National Emphasis Program would target safety inspections at wind farms. Because systematic inspections of safety compliance at wind farms nationwide are probably going to begin in 2012, it has become paramount for safety managers to build on existing safety knowledge and work within the workplace to promote the development of compliance requirements by the end of 2011. Many safety managers have brought in third-party contractors to support worksite health and safety goals, so they are free to focus on maintaining compliance.
 
 
Choosing the correct onsite provider, however, can be a complex task. Parties to a wind farm project must be able to support onsite health and safety initiatives, as well as understand the law and new focus of OSHA so that these projects don’t face increased costs, litigation, fines or penalties.(WCxKit)
 
 
Onsite health care firms provide first aid care for workers, which is a beneficial service for both employers and their workers. Wind farms, in particular, face the common challenge of providing their employees with access to medical services. In emergencies, the ramifications of injuries might become magnified because of their commonly rural locations. Even in non-emergency situations, employees and employers alike enjoy the convenience of staying onsite rather than leaving work for 4-8 hours for one doctor’s appointment, leading to hundreds of hours of lost productivity over the length of the project.
 
 
Onsite services generally help employers reduce OSHA recordables and lost time, allowing companies to realize significant gains in productivity and their bottom lines. David Grogg, construction manager with Duke Energy, utilized onsite health care services at two wind farm construction projects in Wyoming. In addition to providing medical response to emergencies and core health services, he appreciated the flexibility it provided.
 
 
“Helping with safety orientations and providing a service to the team of people—a majority of whom are working miles away from town and don’t have the support structure to tend to their health needs all the time—kept the workforce in place so that they’re there and productive. That’s very valuable to us,” Grogg said.
 
 
Whether its in-house or outsourced, and if the onsite provider has the right experience and expertise, they can also support safety initiatives and monitor injury trends—freeing safety managers to focus on preventive measures, maintaining compliance, investigations and other core responsibilities. For the onsite medical team to provide immediate care to workers, the team must have the resources and experience to understand how to overcome obstacles specific to a worksite—including rugged terrain, extreme weather conditions, high-angle or confined space rescues, and hazardous materials. They must also be able to support compliance with applicable regulations and coordinate with local emergency rescue personnel. This is a specialty; the average medical facility does not have the expertise, systems and protocols in place to provide such safety and compliance support.
 
 
One health company that does specialize in onsite health services for wind farms and supports OSHA compliance and safety is Medcor Inc. Headquartered near Chicago, Medcor provides onsite health services to wind farms and other remote utility projects—including pipelines and highways, as well as “turn-arounds” and other services for power companies. The company also serves hundreds of more traditional businesses throughout the nation. Medcor has developed proprietary software systems and clinical guidelines specifically for onsite settings and supports its staff with physician medical directors, a 24/7 call center, off-road response vehicles and mobile clinics to ensure rapid deployment and effective services.
 
 
Medcor’s onsite staffs assigned to utility or construction projects have extensive experience as paramedics, registered nurses, and fire and rescue members, and have safety training up to and including OSHA 500-level certifications—so they can conduct OSHA safety training, environmental safety training (i.e., HAZWOPER) and other customized safety courses specific to their client’s environment. As such, the onsite medical staff is able to closely integrate into safety programs and practices at wind farms.
 
 
In other capacities, onsite medical staffs work closely with safety managers, conducting daily meetings to review daily safety initiatives, developing strategies for preventing injuries, etc., so that safety managers are able to focus on safety leadership. As another example, Medcor’s medical professionals walk the site each day to become familiar with the workers, their jobs and the potential hazards and work-related injuries that could occur. In addition, based on injury data and experiences in the field, these medical professionals are suited to conduct trend analyses and make safety suggestions based on their findings, which further improves the site’s safety record.
 
 
Luke Wright, operations director at Medcor, specializes in onsite health services at wind farm operations. Wright described an incident last year at a wind farm construction site involving an injury high inside a tower: “Our onsite medic worked closely with local fire and rescue to extricate the patient. In the process, our medic learned that the local fire department did not have the best equipment or techniques for that situation combining high angle and confined space. During the post-incident review, she recommended they use back boards designed for vertical extraction instead of typical horizontal boards.” Wright went on to explain other safety observations that were made throughout the course of the project, including changing the type of safety goggles being used, enforcing stricter safety belt rules and providing instruction on proper use of fall protection.
 
 
“Onsite providers offer a different type of service than the safety managers,” Grogg said. “They’re there for keeping workers out of trouble on all aspects. Medcor supplements safety and is more focused on tending to the emergency response plans and tending to health care needs. The greatest value was recognized at my last project when a person fell and Medcor took leadership in working with first responders to help provide the best care possible before they were able to get there.”(WCxKit)
 
 
Many managers like Grogg have found success in outsourcing health and safety support. Contracting third party health and safety professionals to work onsite allows safety professionals to be better positioned to meet the challenges of compliance to safety regulations, provide access to health care for employees and develop more effective safety programs. The wind energy industry is developing, and, with stricter OSHA regulations being enforced in the coming years, safety professionals will need to be free to focus on the changes.
 
 
Kate Woldhuis is a business development analyst at Medcor, Inc. She received a Bachelors’ Degree in Journalism and minored in Environmental Studies at Northern Illinois University and has written several articles regarding green energy and sustainable living for various publications. As a business development analyst, Ms. Woldhuis works with companies operating within a wide variety of industries to promote onsite health, wellness and safety initiatives, as well as strategizes onsite development opportunities to potential clients.
 
Medcor provides telemedicine services to nearly 90,000 worksites in all 50 states and operates 174 on-site workplace clinics. Medcor also provides safety services at construction sites, wind farms, utility and power companies, and government agencies through its subsidiary, Brown Services, LLC. For additional information contact csmith@medcor.com    www.MedCor.com

Our WORKERS COMP BOOK:  www.WCManual.com

 
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

Seven Ways Carriers and TPAs Ensure Quality Control

pic11Quality control does not just apply to files, it can also apply to personnel handling files. When you make that choice for a carrier or third-party administrator (TPA), you want to be confident the adjusters and managers handling your claims are qualified to do so, and that they are representing your company in the best way possible. Below we discuss some general employee screening tactics along with some quality control tactics used on claim files.

 

  1. Multi-level screening of adjuster candidates

 

Most carriers/TPAs actually prefer to hire entry-level candidates that have no experience. When you talk to your adjuster to see how they got started in this business, a good percentage of them will say they just “fell into the business.” This happens because of the way  HR departments look for new candidates.(WCxKit)

 

Carriers/TPAs will require their candidates to be college graduates. It also helps to have a degree in some area that applies to insurance. This could be economics, accounting, finance, human resources, criminal justice, etc. That is not to say someone with a different degree would not qualify, but it is probably not the carrier/TPA’s first choice for the perfect candidate upon first glance. The best carriers/TPAs provide career path training so trainees know what they must do to move to the next level. In addition to onsite training, virtual training may be offered so new adjusters can commute virtual to training.

 

As the adjusters move forward with their careers, they attain the AIC (Associate in Claims) designation from the AICPCU (The Institutes), which is a nationally recognized program. At each career path level the adjuster also has in-house and some external courses to complete to meet their educational requirements to be promotable. There is also annual compliance training, which includes insurance fraud awareness training.

 

 

The candidate will also have to pass a credit check, and a normal criminal background check. They also have to be verified to be eligible to be considered as a “fiduciary agent” since they will be making payments for your carrier/TPA on behalf of another party. So it makes sense that you have to be good with money, and have no blips on your personal history that could be construed as potentially negative to employment with said company.

 

 

  1. Proper, extensive, continued training and education
    Going back to carrier/TPAslooking for candidates with little to no experience, this is because the carrier/TPA does not want anyone bringing bad habits into a company that they may have learned other places. Once hired, they will be sent to an extensive claims school, or formal training program – normally these are in-house training facilities. They will learn the skills from veterans of the insurance industry. They will handle fake claims to go through the motions, and the education on the medical aspect can be fairly thorough.

 

 

Once they are established adjusters, continued education is still required. An adjuster usually has to obtain a certain amount of extra training and education every year. This is obtained by attending legal/medical seminars, taking online courses, or obtaining an insurance designation such as an AIC (associate in claims). In most cases, it does not matter how many years of claims adjusting you have under your belt, carriers/TPAs still require you to stay current with legal changes, medical techniques, etc. The adjuster role is one that is constantly being improved and educated at all times.

 

 

  1. Two week manager brief review on new files
    When new filescome in, unless it is a very minor claim or a “report-only” claim with no medical treatment, the claims manager will review the file at or around the two-week mark. This way, the contacts have been made, a medical diagnosis is obtained, and it is fairly clear if a claim is lost time or not. The manager can then set another date for review depending on the future outlook and risk drivers on the claim, and go from there at the 60-day mark.

 

 

  1. Sixty-day status report

A 60-day status report is the first formal report on a claim the adjuster makes to the file. This report will usually go in the file, and will be reviewed by the unit manager. This report summarizes the contacts made, the medical obtained, and the future outlook on the claim. It also will address the reserve amounts. Most carrier/TPAs will place a default reserve in the file once they get assigned to it, and they will address those amounts at this 60-day mark. The manager again will review the report, make recommendations on the file, and place another date to further review the file as needed.

 

 

  1. Status report: 120-150 days in
    This report willassign the current and future exposure on the claim. By 150 days, It will be fairly clear if this will be a long-term large exposure claim or not. By this time, an injured worker may have had surgery, or has surgery pending. Or, using the flip side, at the 150-day mark the worker may be released from medical care and the file will be set to close.

 

 

Reserves will also be placed in the file for the long-term exposure. This is when the large reserve increases will be made depending on the file exposure based on risk drivers. Again, by this time in the file, it will be known what the future should hold.

 

 

  1. Roundtable of higher-exposure files
    For a complex file, around the 150-day mark, a roundtable may be set to discuss the claim with senior adjusters, managers, and probably the employer. If several parties are involved, they will be brought together to discuss the future of this claim. If the exposure is there, the file may be assigned to a senior-level adjuster. The roundtable is used to brainstorm the file and come up with ways to limit exposure. This could be by assigning a nurse case manager, review by legal counsel, or creation of a light duty job to reduce wage loss exposure. Whatever the reason for the roundtable, it is a common tool used to the carrier/TPA to come up with ways to move the file onward towards the common goal which could be return to work, release from medical care, or overall redemption of the claim through a settlement.

The best TPAs include medical professionals on the roundtable teams such as mental health professionals to determine if there is a mental health component to the claim and, if so, RNs with mental health expertise may be assigned to the claim.

 

  1. Following up with involved parties
    Whatever the claimmay be, quality control is best assessed by proper communication with all parties. Adjusters should be talking to employers to keep them up to date. Adjusters should be talking with their on-site nurses or with their vocational counselors. Adjusters should be talking with plaintiff counsel or defense counsel to keep the file moving towards resolution. Carrier/TPAs always preach trying to keep all parties current and up to date with the activity of the file. Lack of communication is a recipe for disaster, no matter what the exposure is on the claim. (WCxKit)

 

 

In summary, carriers or TPAs have several tools they use to maintain that the work product they put out is of top-notch quality, no matter what the exposure. We have touched upon a few here, and these will vary slightly from carrier to carrier and from TPA to TPA. You should ask your adjusters and managers at your carrier/TPA what they do to maintain quality, and let them take you through the process. The more you know, and the more involved you can be, the better outcome your claims will have.

 


Author Rebecca Shafer
, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.

 

 

Our WORKERS COMP BOOK:  www.WCManual.com

 

 

WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:   www.linkedin.com/groups?homeNewMember=&gid=1922050/

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

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