How to Play and Win in Claims Mitigation
True or False: Once a claim is sent to an insurance carrier, you're done?
Need to Phone a Friend?Many employers believe once a claim is submitted to the insurance carrier, they dont need to do anything more. This is far from true. Staffing companies still need to be involved with the claim until the file closes, as other information or details may surface related to denying or disputing parts of the claim. A prime example is when a claim is settled by the insurance carrier and the insured questions why payment was issued. The insured might know something the insurance company doesnt. For instance, the claim can be fraudulent due to the person having another job, witnesses claiming it didnt happen or even information the injury occurred elsewhere. For this reason, you need to communicate with all parties involved over the course of the claim.
Heres Your Lifeline.Step 1: Understand how a claim is processed, as well as current claims procedures. Then, report the claim to the carrier as soon as possible. Statistics show a claim reported a week after the loss occurred can cause 18% higher costs than if it was reported within the first seven days. Three to four weeks later, the costs increase by 30% or higher. So be sure to report the claim right away.
Once the claim is reported, maintain contact with the employee (if not attorney represented) and keep a diary of all dialogue related to the injury and/or claim. This not only shows you care about the employee, but also the employee may note issues with the adjuster or share other information relevant to his condition. This information should be communicated immediately to the insurance adjuster.
Step 2: Ensure you have a formal written Modified Duty/Return to Work Program in place. Modified duty is one of the best ways to mitigate a claim, but can be difficult for staffing companies as many clients dont have a job that matches the restrictions. If a doctor sets restriction as a result of an injury and youre able to accommodate those restrictions, you do not owe any lost wages to that employee if they refuse to work. This is a great way to get problematic claims back on track. Also, it sends a message that if an employee gets hurt, theyre not automatically guaranteed time off.
Be sure if you have a Modified Duty Program in place, you notify either the occupational clinics or physicians which treat your employees, so it can be addressed at the time of treatment. Insurance carriers also are more likely to quote a staffing account which offers modified duty as well.
Step 3: Review all claims at least once a year with your agent and the carrier. The Experience Modification Factor is calculated through information reported by the carrier to the governing body (NCCI for most states) normally six months prior to the effective date. At least one review should be conducted seven months prior to your effective date to ensure your reserves are appropriate to get the best possible renewal.
That's My Final Answer.Understanding the claims process and keeping a vested interest in an injured employee and the claim are great ways to ensure your business is protected. Through timely reporting, Modified Duty programs and annual claims reviews, youll be well on your way to effective claims mitigation.
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