First Reports Of Injury
Workers Compensation First Reports of Injury (FROI) are an employer’s first step in Loss Control. Loss Control is not the same as Loss Prevention. Loss Control to me is defined as the prevention of future losses AFTER an occurrence of a claim.
In fact, immediate filing of the first report of injury is one of my Five Keys To Cutting Workers Comp Costs. In a study of two different large collections of claims, I found that not filing a FROI quickly will increase claim costs by 400% on the average. *** Thanks to Frank Pennachio of The WorkComp Advisory Group for pointing out the mistake I made on the original post of this article.
Involving your claims adjuster very early in the process will always cut workers comp costs. In fact, the adjuster can rarely proceed without the filing of the FROI. One can look at the FROI as giving the adjuster permission to proceed on the claim.
One of the most important aspects of an employer that files FROI’s quickly is the impression that the employer is on top of their claims. Remember that this is the same person that will be setting reserves on this file and on files in the future. The FROI is the first impression that the adjuster has on the claim for your company.
Laggard companies (insurance company lingo) will always have higher reserves on their files, plain and simple. If your company does not care enough to file an injury report timely, it is seen as a negative connotation on the file.
Electronic/online FROI filing has been around for quite some time. This is an example of an insurance carrier’s online filing page. In fact, some companies charge extra to input a claim off paper. Filing a paper FROI when online filing is available is seen by the clams staff as a negative connotation similar to late reporting of injuries.
Your company is almost guaranteed higher reserves than normal when the first time your claims staff or adjuster hears about the claim from a medical provider. What can the Workers Comp claims staff do when the medical provider is the first one to report the claim? They are going to refer them back to the employer as the FROI has not been filed.
Once again, this is the same person that will be setting the reserves on the file that figure directly and are the most important variables in your E-Mod (X-Mod) or Loss Development Factor if you are self-insured. First impressions do count.
Insurance companies and TPA’s all keep very close track of the time it takes to file the FROI. The term is called “lag time.” It is measured from the time the claim occurs until an employer files the claim. If you mail it in, the days it takes for the FROI to be processed by the employer, mailing time, and for the carrier to process the mail all are figured into your lag time.
The easiest way to avoid all this is to file your claims online. If for some reason, your carrier or TPA does not have an online claim filing system, you should fax them. If a carrier or TPA does not allow for online claims filing, their claims processes should be viewed as antiquated at best.
Companies often contact us concerning their high E-Mods and ask us to help reduce them quickly. This is one of the areas we examine upfront in our E-Mod reduction programs.
Article provided by James J Moore, AIC, MBA, ChFC, ARM. All articles are original content. Check out the full website at www.cutcompcosts.com.