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.

Quite Possibily The Worst Workers Comp Claim Handling Ever

 

Candidate for the Worst Claim Handling Ever

 

A leading candidate for the worst claim handling everturned up in a workers compensation claim file audit.  A third party administrator (TPA) was handling claims for a statewide government self-insurance pool. And yes, all of the following mistakes were on one file!

 

 

Coverage

 

The TPA adjuster, upon receiving the claim, went to verify coverage.   The coverage had expired twelve days before the claim was reported. The date of loss was five days after the coverage expired. The adjuster wrote in the file notes that he would confirm coverage before making any payments.” However, before the adjuster had done so, the TPA switched adjusters and the coverage question was forgotten.

 

Mistake #1. Handling the claim before coverage was verified.

 

 

The lack of coverage wasn’t addressed again until the pool’s executive director contacted the adjuster over a year later. By then over $65,000 had been paid on medical and indemnity by the TPA from the pool’s trust fund. There was no coverage but the pool was in an estoppel situation, so the TPA continued to cover the claim.

 

Mistake #2. The second adjuster not reading the first adjuster’s file notes.(WCx)

 

 

 

Contacts

 

Best Practices for a TPA include making contact with the employer, the employee and the medical provider within 24 hours. The TPA had overloaded its workers comp adjusters with over 200 files each. The government pool’s contract did not contain any provision for the maximum number of claims to be assigned to an adjuster.   The second adjuster on the file never even saw the claim during the first three months it was assigned.

 

Mistake #3. Not reviewing the file when it was assigned.

 

Mistake #4. Timely contacts with the involved parties were not made.

 

Self Insured Mistake: Not having a contract stipulation on how many files could be assigned to one adjuster. 

 

 

 

Investigation

 

Since the second adjuster never contacted the insured, the claimant or the medical provider, there was no investigation of the claim. The Employer’s First Report of Injury reflected that “the employee (a painter) hurt her lower back when she tried to move a five-gallon bucket of paint.”

 

Mistake #5. No investigation of the claim.

 

 

Medical Handling

 

File note entries read “Received medical bill” or “Paid medical bill” with the name of the medical provider and the bill amount. One medical report summarized in the file notes stated, “employee continues to work with her low back pain and wrist pain.”   Three months into the claim a medical report stated “will need to do bilateral CTS (carpal tunnel syndrome) surgery.”

 

Mistake#6.  Not comparing medical reports with the reported injury on the claim.

 

 

The employee was an obese woman with diabetes – two factors that can bring on CTS without an injury. Even though the claim was reported as a back injury, at no time did the adjuster question the carpal tunnel syndrome treatment.

 

Mistake #7. Failure to separate a covered injury from other medical conditions of the employee.

 

Mistake #. Lack of medical knowledge that CTS is not always injury related.

 

Mistake #9. Failure to get a medical termination based on whether the CTS was work related. If it was it should have been handled as a separate claim.

 

 

Indemnity Handling

 

The first contact with the employee occurred over four months into the claim when the employee called the adjuster inquiring about when she would be paid for her Temporary Total Disability, as she was off work due to the right wrist Carpal Tunnel Syndrome surgery (the left wrist would be done a couple months later). The adjuster did not follow up on the Temporary Total Disability question and got another phone call from the employee. The first contact with the employer occurred almost five months into the claim when the adjuster asked the employer for a wage statement.

 

Mistake #10. No on-going contacts with the employee and the employer.

 

Mistake #11. Not obtaining the wage statement from the employer when it was first noted the employee was going to need CTS surgery.

 

 

The adjuster put the temporary total disability (TTD) checks on autopilot and forgot about them. After about six months, the employee returned to work. As the adjuster had not been in contact with the employee or the employer, the Temporary Total Disability checks just kept on going out. The adjuster did not know the employee was back to work until receiving medical reports stating that the employee was at maximum medical improvement on her wrists and had been given a 15% impairment rating for both wrists combined. The employee received an extra eight weeks of Temporary Total Disability after she was back at work. The adjuster stated in the claim file notes that the overpayment of Temporary Total Disability would be taken out of the permanent partial disability (PPD) settlement. However, it never was recovered.

 

Mistake #12.Not making any effort to get the employee back to work earlier or to return to work on light duty.

 

Mistake #13. Putting Temporary Total Disability checks on long-term automatic issue. (WCx)

 

 

Remember the low back pain?

 

The employee had only been back to work for two months when the adjuster contacted her about the overpayment of Temporary Total Disability and settlement of the Permanent Partial Disability claim. The employee advised the adjuster that her back still hurt and she needed to go to the doctor.   The doctor ordered an MRI of the low back. The employee had a herniated disc at L4-L5 and a partially herniated disc at L5-S1. The doctor scheduled surgery for the employee.

 

Mistake #15. Not having inquired about the lack of medical treatment on the low back for almost a year.

 

 

The adjusterfinally paying attention, refused to approve the surgery until an independent medical evaluation (IME) could be completed. The IME confirmed the need for the surgery. After the surgery, the employee was off work for another seven months before the doctor placed her at maximum medical improvement with a 25% rating.    

 

Mistake #16. Not making any effort to get the employee back to work earlier or to return to work on light duty.

 

 

Negotiations

 

The adjuster contacted the employee with an offer to settle both of her Permanent Partial Disability ratings based on her being 40% disabled. The employee argued that she should be considered 100% disabled as she was not able to go back to her job as a painter. The adjuster refused to consider the claimant as having permanent total disability (PTD). A week later, the adjuster received a letter of representation from the employee’s new attorney, who claimed the employee was PTD. The attorney requested an administrative law judge (ALJ) hearing. The ALJ reviewed all the medical records and agreed with the adjuster’s defense attorney. The employee’s attorney appealed. The Workers Comp Board (WCB) agreed with the defense attorney. The adjuster paid the 40% PPD rating.

 

 

Worsening of Condition

 

A year later the employee’s attorney contacted the claims office, but the second adjuster was no longer with the TPA. A third adjuster on the claim learned that the attorney filed a request for the WCB to consider a “worsening of condition.”

 

 

Index Search

 

The new (third) adjuster looks over the file and realized that an ISO Index had never been filed on the claim. Once the index was filed, it was discovered that the employee had a prior back injury claim eight years before this claim. The employee was represented by the same attorney for both claims. The prior insurance company already classified the employee as 10% Permanant Partial Disability for a non-operated herniated disc. The prior medical reports showed that the employee’s earlier claim was for an L4-L5 herniated disc – the same injury the claimant had surgery for in this claim.

 

Mistake #17. Failure to index the claimant resulted in the TPA/pool paying for a claim that should have never been paid.

 

 

Exacerbation vs. New Claim

 

It was now obvious that the present injury was not a new claim, but the exacerbation of an old claim. If the index had been done when the claim first was received, it could have been referred back to the prior insurance carrier. The defense attorney requested that the ALJ transfer the claim back to the original insurance company. This is after the TPA had already paid the employee a 40% award (15% wrist and 25% back) on top of the 10% award the employee had received for the earlier claim.

 

The ALJ stated that as the TPA had already accepted the injury as a new claim, it would not change it now. The WCB appeal was denied, so the current insurer was stuck paying for the claim although it was an exacerbation of a preexisting injury.

 

 

Back to the Medical

 

The employee’s disk fusion surgery had failed. The treating doctor recommended another surgery. The third adjuster was too inexperienced to be handling this type of claim.

 

Self Insured Mistake. Not having a stipulation in the contract requiring experienced adjusters to handle claims -especially high dollar ones.

 

 

The adjuster asked her supervisor what to do. The supervisor said to get another IME. The IME stated that the fusion had partially failed, but absolutely did not recommend another surgery.

 

 

Sympathy

 

The attorney gave the third adjuster a sad tale of how much pain the employee was in, that the employee’s marriage was falling apart due to her pain and she was desperate to have the surgery. The attorney played on the adjuster’s sympathy until the adjuster agreed to the surgery.

 

Mistake #18.  Allowing emotions instead of medical facts to make the determination on how to proceed on a claim.

 

 

The adjuster should have had denied the additional surgery and forced the employee’s attorney to have the ALJ or even the WCB make the determination.

 

 

Permanent Total Disability Granted

 

Following the second surgery, the employee’s attorney filed a petition for PTD.   The treating physician had given the employee a total 75% Permanent Partial Disability rating based on the bilateral CTS surgeries and the two back surgeries. The defense attorney arranged another IME and got a similar rating of 65% total. The ALJ looked at the total medical history and the employee’s 65% or 75% permanent partial disability rating following her two wrist surgeries and her two back surgeries. The ALJ gave the employee a PTD finding. The defense attorney appealed to the WCB.   The WCB agreed with the ALJ and the third adjuster paid the employee another 50% rating. (WCx)

 

 

Summary

 

The failure to do the simple things in the claim file handling resulted in the self-insured pool paying out over a half million dollars in medical, indemnity and legal expenses. Verification of coverage would have stopped this claim before any dollars were spent. A proper investigation at the start of the claim, including an index of the employee, would have shown that the low back claim was an exacerbation of a prior injury and would have eliminated that portion of the claim. The review of the medical reports would have resulted in a denial of the CTS or at least had it treated as a separate claim. Non-compliance with Best Practices changed what should have been zero dollars paid into a PTD claim.

 

 

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

VIEW SAMPLES PAGES

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.

 

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

VIEW SAMPLES PAGES

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.

 

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

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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.

 

©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.

 

Know These 5 Ways to Keep the TPA Relationship Running on all Cylinders

Whether your carrier/TPA is a small firm in your state, or a larger nationwide facility located on the opposite coast of the US, you will always have to have some sort of interaction with them. 

Claims will never be avoided, and since you are the employer, risk manager, claims coordinator, whatever your title may be, you need to know who to reach out to with questions. If the only source of contact with your carrier/TPA is a 1-800 number to call with questions, you probably will not get very far. You may eventually get to the right person, but it could take you all morning. 

 
 
To avoid such a scenario, you need to know who is handling your claim, where they are located, and how they can help you. The more you personalize your relationship with them, the better they will work for you, and the quicker your questions will be responded to.   Even if you only have a handful of claims per year, adjusters will respond to those employers they have a good interpersonal relationship with. Let’s discuss 5 ways to improve your relationship with your adjusting team: (WCxKit)
 

1.    Know your adjuster and their team

If you do not have a lot of claims per year, or you are a smaller shop with limited exposure, you may not really know which carrier/TPA office location will be handling your claims. Maybe they start off in one city, such as Boston, then end up in Philly. Or maybe they start off and end in Milwaukee. Do you really know who has your claims, where they are, and who to contact with questions?
 
 
If you call your agent/broker, they may have the answer to this question. But with insurance carrier/TPA offices becoming more and more consolidated, even your Agent may not be 100% sure. So reach out to your carrier/TPA and find out if a dedicated local office will be handling your claims. Or, maybe they will start out at their Home Office in Boston, and then be transferred out to a local office in your state if it is a lost time claim, a claim that needs special investigation, or a claim that has issues with compensability. If you know who to call or email with questions, it will make filing claims and getting answers to your questions that much easier and quicker.
 
 
2.    Communication is key
The main reason a claim derails from running smoothly is a lack of communication. Whether it is from the employee not talking to the adjuster, or a miscommunication between the employer and the adjuster, communication is extremely important when dealing with any aspect of claim handling. Be sure to check with your adjuster on all your open claims, and get an update on what is going on, and what their plan is to resolve the claim.  
 
 
Even if you only have a handful of claims per year, your input is valued more than any other. After all, you as the employer are their client, and the carrier/TPA wants to make you happy. Adjusters will appreciate someone out there that cares about what they are doing to move these claims along. Scheduling regular claim updates is also a great way to prevent a claim from slipping through the cracks. Plus the more you as the employer are involved, the more the adjuster knows they have to keep an eye on your claims since you will be checking up on them. The more you are involved, and the more you communicate, the better your claim will be handled.
 
 
3.    Answer all questions the adjuster asks
If an adjuster has a question about something, no matter how insignificant it may seem to you, it is probably really important to the adjuster. Several states require reporting to the State Bureaus of Work Comp, and missing information will hold an adjuster up from completing their filings. Even minor missing info such as a date of hire is important to the adjuster. They need complete info as part of their job for their state filings, so if they have questions about personal info, phone numbers, hire dates, wage history, etc. do what you can to get that info for them so they can move on with the claim. 
 
 
Details such as the hire date could also key them in on certain aspects of the claim. If it is a new hire, maybe that explains why a worker cut their hand, or strained their back. Wage info is always needed when there is lost time. If the adjuster needs the wages, they probably can’t pay your worker until they get that info. A date of birth is needed for state filings, but it is another key to the claim, since an older worker may mean that this particular claim won’t resolve as easily as it would with a younger worker. The examples here are endless, and the bottom line is to get any requested info to your adjuster on a timely basis. You don’t have to stop what you are doing to look that info up, but try to get it for them within a few business days. The sooner you do, the quicker it is off your desk and the less chance you have of forgetting about it.
 
 
4.    Bring your adjuster and their team out for a tour of your facility
If you are a large enough employer to churn out 50 claims per year, you probably will know who your adjuster is by name. You may even know who their manager is by name. But do you actually know who they are, other than just by name? Employers that have a lot of claims may know a little about their adjusters through casual conversation, such as if they are married and have kids, if they are sports fans, etc. 
 
 
A way to strengthen the relationship is to have them come out to your facility for a tour. Not only can you put a face to a name, but it greatly helps your adjusters by seeing the premises. Adjusters can look at the machines, observe the workers doing their jobs, and get a better idea and understanding of what you guys do day in and day out. This helps them mentally process the claim by knowing what your injured workers are talking about when they are describing what they were doing when they were injured. If you describe a machine injury to 10 people, you could get 10 different ideas of what happened. But if you show your claims team the machines and how your operators run them, and then they know exactly what a worker is talking about when they were injured.
 
 
5.    A “Thank you” goes a long way
As we have said time and time again, the work of a claims adjuster is often a very thankless job. Sure, it is the adjuster’s job to handle these claims, but often it is a stressful, high demand profession. Taking the time to thank your adjuster for their hard work will mean a lot to them, and they will take that compliment and use it to handle any of your issues right away. Your adjuster certainly will not forget your praise, and you can get them to work that much harder for you now and in the future. (WCxKit)

 

Summary:  
Even if you only have a few claims per year, you will want those claims to be handled as if you are the only client that adjuster works for. Unfortunately, this is not the case. Adjusters usually have 150+ claims they are keeping an eye on, and a good way to get yours handled effectively is by implementing what we have described above. Get to know your team, take the time to meet them in person and show them around, and hand out praise when it is deserved. Your adjusting team will not forget it, and it will only make your life that much easier when it comes to getting claims resolved.
 

Author Rebecca Shafer
, JD, President of Amaxx Risks 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.
 
 
Our WORKERS COMP BOOK:  www.WCManual.com
 
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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.
 
©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

7 Things Your Insurance Claims Office Will Not Tell You

Most employers like to think that their workers compensation claims office, whether it is with their workers compensation insurer or with a third party administrator (TPA), has their best interests in mind. In most cases, they do. But, there are areas where the claims office may put their own self interest ahead of the best interest of the customer – you the employer. Here are some of the situations where the claims office does not want you to know what is going on.

 

 

  1. The Bigger the Account, the Better the Service

The claims office, whether a part of the work comp insurer or a part of a third party administrator, is in business to make money. The bigger the client, the more money the claims office receives for handling their claims. While large accounts can have some minor impact on the pricing of claims services, the cost to handle a workers compensation claim is roughly the same regardless of whether it comes from the largest account or the smallest account. Hence, the bigger the account the more important it is to the claims office profit. The management of the claims office will strive harder to provide the level of service needed to keep the big accounts happy. If you are a small or middle-size employer, you are often better off being with a smaller insurer or TPA (better to be the medium size fish in the pond, then to be a minnow in the ocean) that provides boutique service and is willing to customize their services. (WCxKit)

 

 

  1. What Gets Reviewed Gets Done

If you report your workers compensation claim and then forget about it, that is usually okay with the adjusters (however, they do love it when you provide a modified duty return to work program which gets the claims closed faster). But, if you have a program where you check the medical status of each injured employee each month until they are back at work, the adjuster(s) soon learn to be up-to-date on the medical status of each of your employees. If you have a monthly round-table discussion on the progress of your larger claims, the adjuster(s) soon know to be sure the claim keeps moving forward so they can report positive results. If you have an independent Best Practices Audit done every six months or annually, the adjuster(s) learn to comply with your Best Practices requirements.

 

 

  1. We Don’t Like Dedicated Adjusters

One of the best ways to minimize the hiccups and hitches in handling your claims is to have a dedicated adjuster(s) assigned to your account. The dedicated adjuster works only on your work comp claim files and soon knows exactly how you want things done. That is great for you, but it creates some staffing issues for the claims office. The number of claim files – the claim volume – fluctuates in the claims office. When the claim volume increases, they want to spread out the additional claims to all their adjusters so they can get additional income without hiring additional people. However, if you have a dedicated adjuster assigned to your account only, they can not assign the additional new files to “your” dedicated adjuster(s). On the flip side, when claim volume decrease and they have to reduce staff, your dedicated adjuster is harder to terminate, as they do want you to be unhappy and take your claims business elsewhere. It is more cost-effective to provide “designated” rather than “dedicated” adjusters. In many cases, it may serve you better to use the designated adjuster model.

 

 

  1. Our Mistakes Cost You Money

When the claims office provides poor service and the lack of good claim handling skills cause the work comp claim to cost more than it should, the claims office will not call you up and say “sorry, we did a bad job, here is your money back.” Both the frequency and the severity of claims is used to calculate your workers compensation premium. When any aspect of the Best Practices is not done, the result is normally a higher claim payment – severity. That “extra” severity is money out of your pocket with future higher workers compensation premiums.

 

 

  1. We Do Not Like Client Instructions

One of the biggest mistakes the self-insured employer can make is to not have their own set of client instructions. The claims office management will tell you “we have a stringent set of best practices” with the hope that you will let them go their merry way doing things the way they want to do them. When you provide a custom set of client instructions, then the claims office feels a certain amount of pressure to do it your way, especially when you call them on it when they deviate from your client instructions. Your own customized client instructions to do it your way combined with your dedicated adjuster(s) will result in much higher product quality in the claims office.

 

 

  1. We Love Medical Case Management

To keep the claims office profit at the optimum, the claims office management strives to keep every adjuster with a full case load. Sometimes, the full case load gets a bit too full for the adjusters. When the client has a medical case management program, the triage team or the nurse case manager can provide important information to the adjuster without the adjuster having to take time to develop the information her/his self, and RNs provide additional insight into the medical conditions. The saved phone calls to the medical providers, and the time saved coordinating medical care for the employee makes the life of the work comp adjuster a bit easier, but it is not an easy job!

 

  1.  We Have a Lot of Information We Never Share

As the claims handling world has become computerized (for the most part), a ton of information is now available in the claims management information systems (computers). The insurer or the TPA will usually offer to provide you with the basic loss run. However, with the modern computer systems, you can slice and dice the information just about any way you want. Want to know how many “accidents” are reported on Monday morning? You can a request a computer run by date of loss. Want to know your average number of days of TTD payments? The computers can calculate that. The claims office may not  bring you suggestions on how they can provide you with more information, but if you have an information question that can be measured, ask the claims office to share the information with you.

 

A bi-annual roundtable with your entire claims team (in person, the old-fashioned way) build relationships and provides a forum for adjusters to make suggestions that can improve your workers compensation claims handling program.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risks 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 or 860-553-6604.

 


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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.

 

©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

 

Turnaround of a Bad Claims Office Where Adjusters Fail Work Comp Audit

A third party administrator’s (TPA) office in a large city was consistently performing poorly on the workers compensation claims for the Fortune 500 self-insured employer. The TPA office had the highest overall average claim cost, the claims stayed open longer and the self-insured employer received more complaints from their local management staff than they did from other local management staffs dealing with any of the other claims offices for the same TPA. The adjusters routinely missed seven best practices. It wasn’t a good situation.

 

 

The self-insured employer decided he had to figure out what was wrong and what could be done to correct whatever was wrong. An actuarial study reflected the problem: the TPA office had a higher percentage of indemnity claims than other offices. The actuarial study also reflected the subrogation recoveries were less than one percent of total paid, while a second TPA office in the same state had subrogation recoveries over three percent of total paid. (The other TPA office in the same state was used for comparisons to avoid open-ended accounting for variances in work comp laws in different states.) The actuarial study also reflected the average medical claim cost was higher for both medical-only claims and lost-time claims. The average legal fees were higher; the average expenses other than legal were higher, but the average cost of medical case management was lower. (WCxKit)

 

 

While the actuarial study confirmed what the employer already knew, it did not explain why this particular claims office was performing poorly. The risk manager for the employer did not have the time to spend in the problem claims office, so she decided to bring in an independent claims file quality auditor to see what a review of the actual claim files could provide in the way of information.

 

 

The claims auditor requested a list of the open workers compensation files and a list of the claim files closed in the last 90 days. The claims auditor made a random selection of 100 claim files, and scheduled a week long audit. The claims auditor obtained a copy of the TPA’s claim file handling standards (“Best Practices”) and revised the claim file audit sheet to reflect the TPA’s own Best Practices.

 

 

After reviewing the 100 workers compensation files, the claims auditor compiled the statistics for all 100 files. Several trends were apparent. The TPA’s claims office never bothered to verify coverage on any work comp file, figuring if the employer had reported the claim, their must be coverage. The TPA’s stated Best Practices included three-point contact – the employer, the employee and the medical provider would all be contacted within 24 hours of receipt of the claim. Based on the averages from the 100 files, three-point contact was happening on less than 50 percent of the claims.

 

 

Most of the work comp files reflected very little initial investigation by the adjusters. The adjusters would contact the employer and verify the employee had reported the claim, and ask if the employer “questioned” the claim. If the employer did not dispute the claim, no further investigation was being done. Often the employee was not contacted at all.

 

 

When medical bills and medical reports were received in the claims office, they were not delivered to the adjuster. The medical records were scanned and added to the electronic claim file. The adjuster would be unaware of the new medical information until the file came up on the adjuster’s monthly, bi-monthly, or quarterly diary. Unfortunately, the diary is examined regularly in less than 60 percent of claims.

 

 

When the claims auditor tallied up the overall TPA claims office score, the overall Best Practices audit score reflected the claims office was complying with their own Best Practices only about 55 percent of the time. In a significant portion of the 55 percent of the time the TPA was in compliance with the Best Practices, it was because of events that occurred on the claim files, not because of efforts by the adjusters.

 

 

In the wrap-up meeting with claims office managers and work comp supervisors, the auditor (with the employer’s permission) questioned the office management about non-compliance with their own Best Practices. The claim office manager stated they were “way too busy for all that Best Practice stuff.” She said Best Practices look good in sales material, but are not realistic with a typical office workload.

 

 

The claims auditor reported these audit results to the risk manager. The claims auditor explained to the risk manager there are consequences to non-compliance with Best Practices. The failure to follow the TPA’s own Best Practices resulted in:

 

 

  1. Payment of a claim without coverage – the employee had quit work two weeks before the date of the injury and the employee had sent in the First Report of Injury. The claims office never contacted anybody, and paid indemnity benefits off of the average weekly wage shown on the First Report of Injury.
  2. Over $100,000 had been paid in medical and indemnity benefits on a non-compensable claim.
  3. Adjusters’ failure to contact the employees initially and on a regular follow-up basis, resulted in many of the employees hiring attorneys, which increased the overall settlement cost.
  4. The failure of the adjusters to investigate the claims caused the adjusters to miss several claims that had “red flags” (fraud indicators). Not a single claim had been denied.
  5. The adjusters did not refer severe injury claims to medical case management unless the employee or the employee’s attorney requested it. Many of the claims needed a nurse case manager assigned to them, but had none.
  6. The adjusters never asked about light-duty work or modified-duty work for the employee when they made their initial contact with the employer (if they made contact with the employer’s local office). Many employees, who could have been returned to work light duty, continued to draw temporary total disability benefits until they reached maximum medical improvement.
  7. The adjusters did not recognize the subrogation potential of claims that arose out of products liability, general liability and other third-party caused injuries. The only subrogation they knew to pursue was automobile accidents where another party was at fault.

 

What the claims auditor recognized and explained to the risk manager was the failure to comply with the Best Practices was creating a lot of extra work for the claims office staff. While compliance with the Best Practices would entail more time on the part of the adjuster at the start of the claim, the decrease in the amount of time worked on the claim over the life of the claim would more than off set the extra time invested in the claim file at the beginning.

 

 

The risk manager discussed the claim office failures with the senior management of the TPA. The TPA’s senior management convinced the claim office manager to enforce compliance with their own Best Practices (which the claims office manager did reluctantly).

 

 

A follow-up Best Practices audit was completed six months later. The claims office scored significantly higher on those files that had been opened in the interim. As a results of the claims office complying with their own Best Practices, the employer saw:

  1. A sharp decrease in the number of new indemnity claims, as the employer and the adjusters were working to put all employee’s with minor injuries back to work on light duty.
  2. A decline in the number of employee who were hiring attorneys.
  3. Coverage was being confirmed on every accident.
  4. The adjusters were obtaining wage loss statements from the employer, instead of calculating indemnity rates off the information on the employer’s First Report of Injury form, which results in more accurate calculations of indemnity benefits.
  5. In the first four month since the prior audit, several files had been denied for compensability (the employees at the employer’s location had previously known they could make bogus claims and get away with it, as the claims were not investigated). In the last two months prior to the follow-up claims audit no questionable claims had been received.
  6. An increase in the number of claims with nurse case managers assisting the employee (which would eventually result in lower medical cost and lower indemnity cost).
  7. Subrogation had improved only marginally as the work comp adjusters still did not understand the liability issues that could give rise to subrogation. The claims auditor recommended a subrogation specialist review each file and provide guidance to the work comp adjusters.(WCxKit)

 

Compliance with Best Practices in claims handling improves not only the claim file quality, it improves the financial cost of claims. Any time an employer is uncertain of the quality of the claims handling, or believes the quality of the claim handling needs improvement, an independent claims file auditor should be hired. By insuring compliance with the claims handling Best Practices, the employer saves money.

 

Author:  Rebecca Shafer President of Amaxx Risks 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 or 860-553-6604.
 

WC IQ TEST:  http://www.workerscompkit.com/intro/

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

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

 

WC GROUP:  http://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.


©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.

 

How Does a Third Party Administrator Correct Poor Performance?

A few years ago one of the nation's largest Third Party Administrators (TPA) found itself in a quandary. Every year, for several years, there was a small decline in total revenue. While a decline in revenue in one year could be blamed on the business atmosphere, a decline in revenue year after year was causing major concern in the business world. The company stock of the TPA sank. The major insurance brokers the TPA relied on for business were not including this TPA when they needed TPAs to bid on new claim business. 
 
Something had to be done. The TPA hired one of the leading consulting companies in the insurance market to provide some guidance. The consulting company did their study. They interviewed employees, they interviewed clients, they studied the data and they did market research. Four months and many, many dollars later, the consulting company came to the same conclusion most of the TPA’s middle management knew . . . only 68% of the TPA's clients were satisfied with the quality of service being received on their claims. 
 
Some of the quality issues that were identified included:
1.     Communications and responsiveness of the adjusters.
2.     A need to retain knowledgeable, well-trained adjusters, i.e., too much turnover.
3.     Timely and accurate data.
4.     Timely reporting of claims status.
5.     A failure to keep the clients informed.
6.     Too many billing issues.
7.     Wide variation in the quality of service among branch offices.
 
These are the same issues faced by many TPAs and insurance carriers.
 
It was not enough to say “these are your quality problems.” The TPA's quality problems need correction and the quality improvements needed measuring in order to quantify the results. Three broad objectives were established.
1.     The TPA would create a new monthly operations report that quantified branch performance in terms of quality,
2.     Incorporate these measures into staff incentive programs for managers, supervisors, adjusters and other employees, and
3.      Use these measurements to identify performance deficiencies in order to implement corrective action plans.
 
To measure the success of the quality initiatives, the TPA decided to use three criteria,
1.     Marked improvement against the benchmarks they established to measure the quality of their performance,
2.     A reduction in the rate of employee turnover, and
3.     A positive change to their financial performance.
 
These were good criteria for the TPA to measure itself by, but the question became “How?” The following steps were taken:
1.     A creation of their own “Best Practices” as to what to do on every claim.
2.     Measure the quality of the claim files frequently, both subjectively and objectively.
3.     Offsetting quality indicators were established to achieve checks and balances in the measurement process.
4.     Measure management performance on both financial results and the improvement of quality against the benchmarks established.
5.     Expand branch performance measurements to include quality indicators.
 
All of the above ways of improving quality were beneficial, but the main reason quality began to improve at the TPA was they were providing financial incentives for quality at all levels of the operation — Regional, Branch, Supervisor and Adjuster.
 
The Quality Assurance (QA) Department moved from obscurity within the TPA to the forefront of the TPA's operation. To accomplish these goals, the QA established diagnostic measurements that could be taken from the data already produced by their computer system including:
 
1.       Workers compensation medical bill turnaround time
2.       Average days between reserve changes
3.       Closed file payments in excess of $1,000 aggregate
4.       Closed file payments as a % of total payments
5.       Data errors
6.       Reserve worksheet completion compliance
7.       Reserve to ultimate value comparison
8.       Index filing compliance
9.       Diary usage
10.    Claim file notes usage
11.    Average claim cost comparison
12.    Closings (average per full time employee)
 
Established an on-line auditing system to review a sampling of every adjuster's files each month to measure:
1.     Initial contacts timeliness
2.     On-going contacts
3.     Initial investigation completion
4.     First reports to clients
5.     Status reports to clients
6.     Compiled the results of the diagnostic measurements and on-line auditing into a monthly quality comparative operations report.
7.     Ensured the distribution of the monthly quality operations report to all parties.
8.     Published quarterly and annual compilations of the improvements against the established benchmarks. (WCxKit)
9.     Assisted the Regional Managers in identifying and correcting quality deficiencies.
10.  Assisted the Regional Managers in identifying and rewarding quality achievers.
11.  Assisted senior management in establishing and refining the quality measurement process.
 
By identifying the quality issues they were facing, the TPA was able to establish quality benchmarks to measure. By measuring the quality goals and rewarding the employees whose performance improved, the TPA was able to turn the performance of the entire company around and increase client retention to 95%.
  \
Author Rebecca Shafer,
 J.D. President, Amaxx Risks 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. Contact: 
RShafer@ReduceYourWorkersComp.com   or 860-553-6604.

WC Books:
http://www.reduceyourworkerscomp.com/workers-comp-books-manuals.php
WC Calculator: http://www.reduceyourworkerscomp.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.

©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
Info@ReduceYourWorkersComp.com

Employer Attending Settlement Conferences Decreases Work Comp Claim Costs

Who Should Settle the Claim?

For most routine  workers' compensation claims, the adjuster negotiates the settlement with the claimant.  Sometimes your workers' compensation coordinator or your in-house counsel needs to be involved in the settlement negotiations, especially if it appears the adjuster no longer has control of the claim.  One large retailer has a representative attend every settlement conference and takes an active role in the settlement negotiations (with the permission of their carrier).

This is a very effective approach.  In fact, the most pro-active approach I've seen recently is the risk manager attending every settlement conference, coming readying to settle the case. He gained cooperation of the insurance company as he initiated the approach, and he now attends the conferences rather than an insurance company representative. His company has a very large deductible and all claims are within that deductible, so essentially it's the company's money.

Sometimes  it is not additional money needed to settle the claim, but the alleviation of the employee's fears about what the job future with your company will be after the claim is settled. This is an ideal situation for the employer to be involved in the negotiations.  The employer can advise whether or not the necessary accommodation to modify a job to fit the employee's permanent disability restrictions can be accomplished.   When the employer takes an active role in discussing the employee's return to work, the benefits portion of the negotiations is easier to conclude.

Remember:  There are ADA Considerations when an employee has permanent medical restrictions, so make sure to discuss this with your corporate legal counsel.

In the very  large dollar litigated claims with multiple issues in contention, it is almost always best for the experienced defense attorney to negotiate the settlement, rather than for the adjuster or the employer to be involved in the settlement discussion.   Of course, prior to your office extending any settlement authority to your defense counsel, you need a detailed report from the defense counsel outlining reasons for the settlement recommendations being made.

The Right Time to Settle

There is an  old adage in the insurance business-the longer the claim is open, the more it costs. 

In the states  where the employer controls the doctor treating the employee, the optimum time to settle the claim is immediately after the employee has reached MMI  (Link to definitions) and the doctor gives the employee the disability rating.   In the states where the employee is treated by a personal doctor, the settlement negotiations begin immediately upon receipt of the IME disability rating.

If the claim  is being litigated, the financial optimum time to settle the claim is when the further cost of defending the claim exceeds the additional amount necessary to meet the plaintiff attorney's demand.

Occasionally,  an employee, due to financial reasons or other personal reasons, will be anxious to settle the claim.  If a low offer of settlement is received, compared to what could possibly be pain on the claim at a later date, the adjuster should immediately draw up the necessary releases and other documents to meet state requirements.   If the state requires the approval of the administrative law judge or the workers' compensation board, the completed documents is submitted to obtain the necessary state approval.

When the  adjuster has done a thorough investigation, verified the "specials" (incurred medical, estimated future medical, incurred indemnity benefits, estimated future indemnity benefits and permanent partial or permanent total disability benefits), completely and kept your company informed of the claim status through documented file notes and in-depth Action Plans, your company should be ready to settle when the adjuster is ready to conclude the claim.  If the adjuster wants to settle and your company is not to ready to settle, then it is usually because the adjuster has not properly documented the file as to why the settlement is appropriate at this time. 

What To Do If Your Insurance Company Wants to Settle But You Don't

When there  is a discrepancy between when your company wants to settle the claim and when the adjuster wants to settle the claim, discuss the reasons for the differences in opinion.   Usually a discussion resolves the issue(s) causing disagreement.  If the workers' compensation coordinator and the adjuster cannot come to an agreement, remember – it is your money and your decision to make except in those few states not allowing employer input. (workersxzcompxzkit)

Let your  insurance broker know about the issue(s) so it can be determine if any program changes are needed. If your workers' compensation coordinator and adjuster frequently disagree on whether or not to settle a claim, then it is time to get a new adjuster on your program because your philosophy on claim settlement is not being respected.

Author Rebecca Shafer, President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact:  RShafer@ReduceYourWorkersComp.com   or 860-553-6604.

Work Comp Calculator: http://www.reduceyourworkerscomp.com/calculator.php
Light Duty Calculator: http://www.reduceyourworkerscomp.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.


©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
Info@ReduceYourWorkersComp.com 

Critical Concepts to Improve Your Workers Compensation Program

In the 2009 RIMS Benchmark Surveymore than 60% of companies were found to need moderate to significant improvement in workers’ compensation cost-containment strategies.

The same  study showed  30% to 40% of most companies’ risk-management dollars are spent on workers’ compensation.

Employers think they need to wait for the claims administrator to tell them what to do next.

  1. Stop waiting — ask questions, get in the game.
  2. The claims adjuster can only do so much.
  3. Claims adjusters need and want your participation.

There are a million combinations of changes an organization can make to reduce WC costs. For now, let’s focus on items applying universally to most organizations.

Just because you have a top-notch third-party administrator and broker handling workers’ comp does not mean you should sit back and wait.

One of the first things to do is sit down with your TPA to have a discussion about some of your larger lost-time claims. He or she will have a list of a ton of little things your company could do as the employer to help the injured employee help you!

These costs are controllable and not just by your TPA. The employer has a significant role to play —  “Take Control.”

Some ideas  for being a proactive employer are:

  1. Send injured the employee to the doctor with Work Ability Form (WAF) in hand.
  2. Develop a transitional duty job bank — focusing on ABILITY as much as on DISability — and list 10 TD jobs in the job bank (as a start.)
  3. Make these available to the adjusters. Note in the account instructions that TD is available.
  4. Incorporate a “return-to-work theme” into call scripts.

By sending  the WAF with the injured employee to the doctor on the first visit, the doctor keeps this person fresh in her mind when filling out a form. You don’t wait days for the doctor to receive the form and several more days for her to re-open the forgotten file and offer general suggestions.

Instead of  generic restrictions like “Can’t lift more than 20 lbs,” you get specifics geared toward the type of work your employee does – because the worker is right there when the doctor is filling out the form. (workersxzcompxzkit) and find out what the employee CAN do as well as what they can’t do.

If just one  employee during one year has a WC claim grow from $10,000 to $20,000, your company has wasted $10,000 or, if you have a 10% profit margin, and you let one WC claim grow by $10,000, you need to find an extra $100,000 in sales to recover the cost.

Author Rebecca Shafer, J.D.  Consultant, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at:  RShafer@ ReduceYourWorkersComp.com or 860-553-6604.

Podcast: KNOW the New OSHA Recordkeeping Rules — OR Risk Fines and Criminal Penalties.
Click Here:  

http://www.workerscompkit.com/gallagher/podcast/Non_Compliance_with_Recordkeeping_Standards/

 

WC Calculator:  http://www.reduceyourworkerscomp.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.

 

©2009 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com

 

Professional Development Resource

Learn How to Reduce Workers Comp Costs 20% to 50%"Workers Compensation Management Program: Reduce Costs 20% to 50%"
Lower your workers compensation expense by using the
guidebook from Advisen and the Workers Comp Resource Center.
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