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Pennsylvania Employers – Workers Comp Premium Refunds Possible

February 14, 2019 By JL Risk Management Consultants Leave a Comment

Pennsylvania Employers – Left In Limbo On Workers Comp Premiums

Pennsylvania employers likely experienced overcharges on recent workers comp policies and audits.

A previous article was published on who is to blame when the rating bureaus make a mistake. Pennsylvania recently experienced system-wide workers comp premium overcharges due to a carrier misreporting their data to the PCRB (Pennsylvania Compensation Rating Bureau).

When a very large carrier in a certain state does not report the proper insurance rating data, then all employers data incurs a ripple-effect of inaccuracy. In fact, the overcharge was estimated at $250,000,000.

The main question in 2018 was – Did the PCRB have the proper data safeguards in place to catch when a carrier accidentally misreports their data? My main question was – will Pennsylvania employers receive their proper premium refunds? The premium overcharges were beyond obvious.

If an employer’s workers compensation experience rating information is incorrect, then the company did not pay the correct premium.

My question for 2019 was – Did the workers comp carriers refund the overcharges to Pennsylvania employers? My question was answered in two parts.

Two Questions For Pennsylvania Insureds

Two questions that I thought should be asked by Pennsylvania policyholders are:

Did the proper insurance authorities order an immediate refund? No, in fact the Insurance Commissioner Jessica Altman said that “carriers should do the right thing.” I have not seen to date where any carrier had produced a press release on refunds to employers.
What did any carriers do to correct the mistake? SWIF – The State Workers Compensation Insurance Fund published a press release of sorts by writing a letter to the Commissioner Altman adjusting the Loss Cost Multipliers to lessen the affect of the overcharges. One has to congratulate SWIF on their proactive stance. However, the LCM’s affect the future – what about the overcharges that Pennsylvania employers incurred in their past policies?

Should Pennsylvania employers contact their carriers and agents? Yes, but make sure that you have your “ducks in a row.” Never contact your carrier with a grievance on overcharges without the proper numbers down on paper. That type of contact has backfired on many unprepared employers in the past.

Pennsylvania employers – feel free to contact me with questions.

Filed Under: Pennsylvania, Work Comp Premium Overcharges

Workers Comp Premium Auditor Does Not Know My Final Bill Amount?

February 13, 2019 By JL Risk Management Consultants Leave a Comment

Workers Comp Premium Auditor Billing Question From LinkedIn

Recently, one of our devout employer article readers posed a workers comp premium auditor question to me through LinkedIn. By the way, my LinkedIn profile is located here. You can follow me on LinkedIn for posts and newsletter updates.

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The LinkedIn reader wanted to know – I just called/emailed my workers comp premium auditor about our final bill. She was in six weeks ago to do our final premium audit for the year. She said that she had no idea on the final premium audit bill amount. I am flabbergasted. She did the audit, but cannot discuss the bill – why? Was that not her job?

Answer – I do not want to disappoint, but she correctly answered your inquiry. The job of the premium auditor almost always does not include anything to do with the billing of the final premium audit. The final tally comes from a totally different department – the premium audit billing department.

The premium auditor’s main job consists of reviewing your company records to come to a final audit amount – not the final bill. If there was something inaccurate on the premium audit itself, then you can dispute it within the rules of your policy. A premium audit dispute can correct what you may think is inaccurate with your bill.

The work comp premium auditor’s job stops just short of calculating your final bill. However, the final bill does come directly from the premium auditor’s work. The main information that you should request from the premium auditor is the auditor’s workpapers. The workpapers usually show step-by-step of how your premium audit was conducted. You do have a right to ask for the workpapers.

The premium auditor WILL NOT be able to provide you with a final bill. Your company will usually receive a premium audit adjustment statement along with the audit. The workpapers usually are not included with the premium audit statement (PAS).

Phone calls are not recommended if you have a dispute or question or your bill amount. Email or write your questions to the address or email address on the Premium Audit Bill or Statement. Why do I not recommend phone calls? Your dispute rights are not preserved with a phone call.

Filed Under: Premium Auditor

Workers Compensation Fraud In New Jersey – Video Says It All

February 6, 2019 By JL Risk Management Consultants Leave a Comment

Workers Compensation Fraud – New Jersey Man Caught on Video

Workers Compensation fraud appears very rarely in the articles on this blog. (Why?) The subject remains one of the most overused and overwritten subjects since I first started in the business in the last part of the 1980s.

workers comp fraud picture french shell game

Wikimedia License – FaceMePLS

The Workers Compensation newswires and blogospheres lit up the scoreboard with a video obtained by CBS News. The video- see the end of the article for link shows a very feeble attempt at workers compensation fraud by an employee.

As you may already know, three types of workers compensation fraud are the most prevalent:

Employer – finding illegal methods to not pay for the company’s workers comp risks
Employee – intentionally filing for benefits not owed
Provider – billing for services not provided to the injured employee

Many years ago, a study was conducted – by a now-defunct carrier – that covered the elements of fraud. Three percent of claims started with an element of workers compensation fraud. As the claim progresses, the likelihood the same claim contains an element of fraud increases to 30%.

An assumption would be that the element of fraud could be from one of the three listed above, and not caused just by the injured employee.

One of the areas that Predictive Analyses made at least a few inroads was in the area of fraud detection at the beginning of a claim. I had seen some success identifying certain factors that pointed towards a claim that could have workers comp fraud.

No big breaking news stories were published on fraud detection using Predictive Analytics. An experienced workers compensation adjuster, to me, can be the best detector of fraud during a claim. Every adjuster (medical only and lot time) possess an innate ability to know when a claim heads off the rails.

One of my pet peeves on workers compensation fraud detection came from a list I was provided by my employer 25 years ago. The list contained a few suggestions as to what claimants might have an ulterior motive in filing a claim.

The list contained – has a PO Box. After having my credit card numbers stolen in the 1990’s out of my residential mailbox and multiple accounts opened using the ill-begotten info, I have used a PO Box for at least 25 years for credit card fraud avoidance.

I do not think there exists one bellwether on whether a claim will have some fraudulent element. One that used to concern me when I was handling a full claims count was injured the first day of beginning a job. My opinion was changed somewhat after learning how much The Learning Curve affected a new employee.

OK, so the link to the video is here. The man in the video has been charged with but not convicted of workers comp fraud.

©J&L Risk Management Inc Copyright Notice

Filed Under: fraud

Medical Only Claims Adjusting – One Super Critical Task To Consider

February 1, 2019 By JL Risk Management Consultants

Medical Only Claims Adjusting – Where Small Claims Can Turn To Crises

Most Medical Only Claims Adjusting sections in a claims processing manual consist of a very few pages. Lost time adjusting takes up the majority of a TPA or insurance carrier claims manual.

medical only claims adjusting picture large wave breaking

Wikimedia Public Use License Broken Inaglory

The Medical Only claims adjusting section may or may not cover what is just as important as any Lost time adjusting task. The recognizing, converting, and immediately handling of a medical only claim that has become serious has wrecked more than a few employer’s loss histories.

If a small claim festers lacking any administration/adjusting, the claim will likely end up being a non-investigated, expensive, out of control mess. Some claim systems will catch a small % of these claims. Those systems are few and far between.

How are small claims that are turning into uncontrollable claims discovered? The usual ways involve:

Twilight Zone Phone Call
Employee is denied an unauthorized treatment by medical provider
Employee’s newly hired attorney sends in representation notice
Employee calls into claims department to complain about no TTD checks
Claims reserves peg at higher than normal level for a medical only claim
Claim stays open for months/years
Claim is reopened and then re-closed multiple times to pay bills over a long period

Most medical only claims adjusting staffs and lost time adjusters could add on many more items to this list .

Some claim departments required a recorded interview on even medical only claims. This sickening requirement caused these claim departments to become overloaded in pending recorded statements. Most claim departments which required recorded statements on all claims changed the task to a recorded statement on all lost time claims and serious medical only claims.

Over the years, I have met and supervised great medical only claims adjusters that had a gut feeling when a claim was souring and going to be more costly than just a small amount of medical bills paid in the first few weeks.

Employer Role

I then discovered one of the techniques of these great medical only claims adjusters. They had established great two-way communications between themselves and the insured. The adjusters had a great open door policy for the employer to call them if they noticed anything suspicious or extraordinary occurring on even the smallest workers compensation claim.

Even if your company does not have this type of communication and relationship with your medical only adjusters, go ahead and start on it today. If you see anything strange on a medical bill, or if a large medical bill is received on a medical only, let the medical only claims adjusting staff knows about it immediately.

If the employee has an unexplained absence after reporting a medical only claim, get in touch with the medical only adjuster as soon as possible.

Email your medical only claims adjuster instead of calling in most cases. The email will allow the adjuster time to pull up the file and then discuss it with the lost time adjuster or medical only claims adjusting supervisor.

©J&L Risk Management Inc Copyright Notice

Filed Under: Medical Only Claims

PEO Data Session – NCCI Data Conference Earlier This Month

February 1, 2019 By JL Risk Management Consultants

PEO Data Session – Great Info from NCCI Data Conference

The PEO Data class from the NCCI Data Conference provided a treasure trove of great info nuggets. The Data Reporting Conference remains of the best sources of great info on workers compensation. Check it out here.

Public Use License – Meeting Rooms 4

The session of PEO Data Reporting covers 77 pages of info from the class manual. I will point out a few nuggets of information. I recommend downloading the complete PEO Data Reporting manual by clicking here. The manual may require a few minutes to download – please be patient.

Page 3 of the NCCI PEO data presentation contains the NAIC definition of a PEO.

A business entity that enters into agreements with other businesses, whether under a formal contract or otherwise, under which the PEO assumes or shares employment responsibilities for all or a significant number of worksite employees of the other business, regardless of the terminology used by the parties to describe the relationship. This does not include a business entity that recruits and hires its own employees, assigns them on a temporary basis, and customarily attempts to reassign them when finished with an assignment.

The important part of the definition – what a PEO is not.

Sometimes an employer will mistake a PEO for an ASO or an HRO. I will not cover the definitions of each type of organization. The main concept to remember is to READ THE CONTRACT very carefully. We had assisted at least two companies that thought they were in a PEO when they were actually in an ASO agreement. An ASO is usually not responsible for obtaining Workers Compensation through the ASO. ASO’s and HRO’s are not undesirable companies. Make sure your company ends up with the company you contracted for services.

Check out Page 6-states that do not require a PEO to register or regulates their operation.

The material on pages 6 – 11 covers critical terms:

Master Coordinated Policies (MCP)
Master Policy
Client Direct Purchase

Each state has its own set of rules on allowable types of PEO operational structures. The allowed structure should be reviewed very carefully before signing on with a PEO. Why? – Under a PEO, would your company have an individualized E-Mod or would your company assume the PEO’s Mod? The PEO’s Mod is almost always preferable.

I recommend reading all 77 pages. No one including myself or NCCI is saying that PEO’s are high-risk or an unwanted risk management technique. In fact, a properly handled PEO agreement can save a large amount of premiums.

So, go ahead and download the PEO data reporting workshop manual.

©J&L Risk Management Inc Copyright Notice

Filed Under: NCCI Conferences, PEO

Report Medical Only Claims To Carrier – Saves Later Headaches

January 24, 2019 By JL Risk Management Consultants

Report Medical Only Claims – The Devil Is In The Delay

Should I report my medical only claims to the carrier?

Public Use License – Frank Vincentz

Our newsletter and blog readers ask us this question as often as any other workers comp question. The other related question – Will my premiums increase if I report medical only claims?

Our answer is – Not reporting medical only claims will increase your premiums in the long run. A side note – most states give a 70% discount to the effect on your E-Mod when you report your medical only claims.

Claims Festering

Claims festering was coined by me approximately 10 years ago. When an employer decides to become the adjuster on small claims, the scenario proceeds along in this fashion:

An innocuous accident occurs resulting in a small injury
The employer does not report the claim to their insurance carrier
The injured employee keeps treating and the employer pays the bill or reports it to their health insurer
The claim slowly grows and becomes more serious with little or no oversight – festering like a boil
The injured employee now has incurred multi-thousands in non-fee scheduled bills
Now, after running up a large claim, the employee starts to miss time from work
The employer decides to report it to their carrier or TPA (self insureds)
The carrier cannot investigate a claim until the first report is filed
The claims staff becomes frustrated as they likely have received Twilight Zone phone calls
Your reputation has been eroded with your carrier – Oh, it is ABC Widgets, they always report claims late
The adjuster cranks up the reserves much higher than usual due to unseen bills and for the risk of a non-adjusted claim
Claims adjuster now has to play catch up
The claim is out of control – get out the checkbook

The same scenario occurs with a self insured except you do not wreck your E-Mod, you wreck your budget for claims payments.

Six Keys for Savings

Reporting claims timely remains one of our most highly recommended keys for cutting workers comp costs. My advice is to report any claim where the employee has to stop work due to an injury. If the injured employee receives medical treatment, then they had to stop work and seek out medical care.

With online reporting, filing a first report of injury is now easier and faster. I can still remember when the fax machine hummed from incoming claims.

The bottom line – report medical only claims to your carrier.

©J&L Risk Management Inc Copyright Notice

Filed Under: Medical Only Claims, Medical Only Festering

Workers Comp Bad Faith – Adjusters Look Back Over Their Shoulders?

January 24, 2019 By JL Risk Management Consultants

Workers Comp Bad Faith – The Rarely Discussed Possibility

For many years, Workers Comp bad faith remains one of those rarely-discussed topics due to many factors. The subject rears its ugly head for what seems approximately twice per year. The worn-out catchphrase is “sent a chill over the industry.”

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The reason I published this article originated with me reading an article this week containing that very phrase. My good friend Kevin Quinley was interviewed for the article. The article covered an automobile adjuster’s handling of a claim in Washington. See the Keodalah Decision

The workers compensation claimant bar has been pursuing bad claims handling as a tort for over 50 years. Yes, there have been some successes in this area.

Workers Comp Board Jurisdiction

The Workers Comp Board or Industrial Commission usually retains the authority over claims handling issues. If one looks at the current Appellate Court cases, the judge usually remands the case back to the lower court – usually the Appeals level within the respective workers compensation board or commission.

Approximately 20 years ago, an adjuster was found to have altered claims forms after obtaining signatures from the employer and employee. The changes to the forms occurred due to the adjuster wanting the claims agreement forms to be approved by the workers compensation commission. The adjuster even admitted altering the agreement forms. What happened to the case? The Court of Appeals remanded the case back to the Full Commission as they were deemed to have jurisdiction.

Exclusive Remedy

Exclusive remedy has always kept most claims issues within the board or commission’s authority. If one cannot sue their employer can they also not sue their adjuster?

Exclusive remedy is one of the underpinnings of how Workers Compensation insurance survives to this day. Exclusive remedy means that an injured claimant cannot sue his employer as a liability matter. Likewise, the employer cannot sue the employee for contributory negligence.

Structured Environment

Workers comp, overall, operates in a very structured environment. For example, making an offer to settle on a property or auto liability claim has many unknowns as to value. Offering too low (low balling) can be a path to a bad faith claim.

Workers comp bad faith remains a very structured environment. All the variable are pre-calculated from the Average Weekly Wage to a fee-schedule medical bill.

The great unknown of Workers Compensation barely exists from the way a First Report of Injury is filed to the settlement approval process.

Starve Them Out

The iciest my veins had ever felt reviewing a claim that I had taken over from a terminated adjuster was this phrase:

I am going to sit on this one and starve them out to get a quick, cheap settlement. Oh, yes that was documented in the file and could not be removed by anyone.

The file was not yet settled – back TTD and medical bill payments were inked that day along with a fine for late payment. That, to me, remains my crowning example of going down the path towards a massive bad faith claim.

Bottom Line

Even though the above passages point to a safe harbor while handling workers comp claims, no adjuster should ever think they are immune to a workers comp bad faith action against them.

©J&L Risk Management Inc Copyright Notice

Filed Under: bad faith

Workers Comp Premium Savings Generated With Website Updates

January 17, 2019 By JL Risk Management Consultants

Workers Comp Premium Savings – Keep Your Website Updated

How can workers comp premiums savings come from updating your website? One of our clients from last year had let their website sit for a few years without updating it. What happened caused me to write this article.

workers comp premium savings picture stop sign

Public Use License

During a workers comp premium audit, a premium auditor pulled up a page that said they were taking on jobs in a certain field. The company had not performed this type of work for over seven years. However, the website included a whole page dedicated to a higher risk service offering than the company was presently performing for clients.

This situation popped up many times over the last few years. I wrote an article concerning updating web pages a few years ago. If one thinks of your company’s website as a calling card and brochure, then what services that you include in your website easily compares to the days gone past.

You handed out brochures and business cards that concisely listed your services. The web pages of your website , including the long-forgotten underneath pages that no one (except possibly a wily premium auditor) ever sees when looking over your products or services.

Whenever a new client signs on with us, the first place we look to see what they do has always been their website. A parallel comparison is when you look at someone’s LinkedIn after they give you their business card.

Your company website can generate workers comp premium savings. If you have an old outdated website, here is a list of people that may construe your company to be something it is not:

Underwriter
Broker/Agent
Premium Auditor
Rating Bureau agent
Consultant (such as J&L)
Any other party in the Workers Comp arena

J&L’s website needs updating, too. The glass houses and stones euphemism applies to us. I am sure you have seen websites that need updates. Some can be very obvious.

Check the pages on your website:

About Us
Services Offered
What we do
Our other services – a real Workers Comp Savings edit is necessary if it is incorrect.
Our employees

Any web page that describes your operations needs to be exactly what you do for your marketing purposes and for Workers Comp premium savings.

Filed Under: premium recovery, premium refunds

WCRI 2019 Annual Conference – Data In the Desert

January 17, 2019 By JL Risk Management Consultants

WCRI 2019 Annual Conference Not In Boston This Year

The WCRI 2019 Annual Conference will be informative as always. Interestingly enough, the conference has moved from Boston to Renaissance Phoenix Downtown.

picture WCRI annual conference 2019 desert sunset

Public Use License good free photos Yiana Cheng

The conferences usually span 1.5 days as this year – Thursday, February 28 – Friday, March 1, 2019.

The theme this year is:

BREAKING DOWN BARRIERS TO IMPROVE INJURED WORKERS’ OUTCOMES

Check here for the agenda

The second day morning conference is one of my favorites (being a data wonk) –

According to WCRI:

STATE OF THE STATES: SELECTIVE FINDINGS

This session will discuss some of the latest findings and trends seen across WCRI’s core benchmark studies, including WCRI’s 18-State CompScope™ Benchmarks reports, a multistate benchmarking program that measures the performance of a growing number of state workers’ compensation systems.

This session will be helpful to stakeholders and public officials who are looking to better manage change and control costs while improving outcomes of injured workers.

WCRI usually presents some of the yet to be released data such as the outstanding studies on Workers Outcomes and Attorney Representation variances among the states.

The fees are reasonable for the information that you take home. I have spoken with many interesting stakeholders at the WCRI’s annual conferences over the years. The crowd is an eclectic mix.

The current companies/organizations that have registered are:

American Contractors Insurance Group
Adva-Net
Ahold Delhaize USA
AIG
Amerisure
Ametros Financial
Aon
ARAWC
Arizona Counties Insurance Pool
Arizona Industrial Commission
AWPRx, LLC
Bardavon Health Innovations
Bimbo Bakeries
Broadspire
Brooks Rehabilitation
Business Insurance
Carisk Partners
CNA Insurance
California Self-Insurers’ Security Fund
California Workers Compensation Rating Bureau
Care Bridge International, Inc.
ChronWell
Cincinnati Insurance Co.
Claims Bureau USA
CLARA analytics
Colorado Division of Workers Compensation
Conduent, Inc.
Construction Industry Service Corporation
CorVel
Coventry Workers Compensation Services
David Deitz & Associates, LLC
Definiti Comp Solutions
Eastern Alliance Insurance Group
Eberle Vivian
EMC Insurance
Equian
Everest National Insurance Company
Exam Works
Express Scripts
Gallagher Bassett
Genex Services, LLC
Georgia State Board of Workers’ Compensation
Goodman McGuffey LLP
Health Strategy Associates LLC
Healthesystems
Helmsman Management Services
HomeCare Connect
HOMELINK
Horizon Casualty Services, Inc.
Indiana AFL-CIO
Indiana Compensation Rating Bureau
Industrial Commission of Arizona
Insight
Institute For Work & Health
International Union of Elevator Constructors
Kentucky Employers’ Mutual Insurance
Kaiser Permanente
Liberty Mutual Insurance
Lockton
Marriot International, Inc.
Marsh
Massachusetts Department of Public Health
Medcor
MedMedtrics
MedRisk
Minnesota Workers’ Compensation Insurers Assn. (MWCIA)
Missouri Employers Mutual
Mitchell
Mitsui Sumitomo Marine Management
MKCM
Montana Department of Labor & Industry
MTI America
myMatrixx
Neurointernational
NJM Insurance Group
Nordstrom
Nova Medical Centers
OEHN
Office of Disability Employment Policy, U.S. Dept. of Labor
One Call
OnSite Physio
Optum
Oregon Workers Compensation Division
Origami Risk
Paradigm Outcomes
Pennsylvania Compensation Rating Bureau
Penn National Insurance
Pinnacol Assurance
PMA Companies
Publix Super Markets, Inc.
QBE North America
QTC Management, Inc.
R3 Continuum
Rucka, O’Boyle, Lombardo & McKenna
Safety National
Sedgwick
SFM Mutual Insurance Company
Shelter Island Risk Services
Southern California Edison
SPNet
Stanford University
Starbucks Coffee Company
State of Idaho Industrial Commission
Tennessee AFL-CIO
Texas Mutual Insurance Co.
The Cheesecake Factory
The Hanover Insurance Group
The Hartford
The Home Depot
The PMA Group
Therapy Direct
Travelers Insurance
Trilogy Health Solutions
United Airlines
United Heartland
Upjohn Institute
UPS
Wal-Mart Stores Inc.
Wisconsin Compensation Rating Bureau
Workers’ Compensation Trust
York Risk Services Group
Zenith Insurance Company
Zurich North America

The usual attendees each year are:

Employers
Risk managers
Public officials
Labor representatives
Insurers
Researchers
Claims managers
Legislative staff
Lawyers
Brokers
Actuaries
Consultants
Third-party administrators
Government affairs representatives
Workers’ compensation service providers

I have blogged the conference live for quite a few years. If you decided to attend, I will be up in the press row. Please stop by and say Hello. See you at the WCRI 2019 Annual Conference.

Filed Under: WCRI Annual Conference

NY Daily News Workers Comp Watch – Ocasio Cortez Says Woops!

January 14, 2019 By JL Risk Management Consultants

US Representative Ocasio Cortez Fined – NY Daily News Workers Comp Article

The NY Daily News Workers Comp article has been circulated around the blogosphere for mostly political means. Many of my fellow Workers Compensation bloggers publish articles that are politically-based. I try to avoid that as much as possible.

picture of ny daily news workers comp hummer traffic ticket

Wikimedia Commons – Specious

The article by Kenneth Loveth was the original source.

How could an article on forgetting to pay your workers compensation premium bill not jump off the page? Even a young Congresswoman that many consider a champion of the people (Socialist?) can forget to provide her campaign workers with the most basic of necessary benefits.

The NY Daily News workers comp article pointed out that she had forgotten to pay Workers Comp premiums for her campaign workers covering the month of April 2018.

Did she receive any special forgiveness for her campaign’s oversight? She definitely did not receive any special treatment. The New York Workers Compensation Board fined her $1,500 for going without coverage. What would have happened if one of her workers seriously injured themselves on the job?

Of course, Ocasio Cortez was excoriated by both Democrat and Republican pundits. This situation, unfortunately rears its ugly head in the PR arena.

Tina Fey paid a similar fine when she neglected to cover her workers a few years ago. The same thing occurred as in this case. However, Ms. Fey was originally fined $79,000. The NY Workers Comp Board then realized she might have had at least partially adequate coverage.

Ms. Fey and the Board agreed that her fine should have been reduced to an unreported amount.

Both situations show two things:

Not paying your workers comp premiums will catch with you eventually
The NY Board shows no favoritism or mercy – pay premiums or pay a fine

We receive at least a call or email once per week where an employer has let their Workers Compensation lapse. J&L Risk Management Consultants cannot fix an unpaid premium bill even if some of it was disputable.

The bottom line – do not forget to pay your workers comp premiums or your company may end up creating a column for the NY Daily News Workers Comp.

Filed Under: Fines Penalties Tagged With: ocasio-cortez, tina fey