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Work Comp Loss Run Reviews – Getting Online Access Saves Time

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Workers Comp Loss Run – Online Is Best

Your work comp loss run reviews are beyond critical in cutting your workers comp costs.  Obtain a copy of your current Workers Comp loss run for all claims less than 5 years old. If you have online access, that will help greatly. If not, check with your current and past carriers to see if you can access your claims online.

Concept Image Of OCCS Comp Loss Run Acronyms
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Ask for access to all notes, reserve increases, status updates, documents, and adjuster action plans.

Having the adjuster’s name and email address will help if there are any questions.  As I have mentioned often, use email to contact adjusters. 

Calling the adjuster will mean they have to pull up the file and then review it and then call you back.   I always contact the adjusters by email as this leaves them with an amount of flexibility they will appreciate. 

Only use a phone call if there is emergency contact is required on the claim.  You will be surprised at how quickly the adjuster returns your email.  

Paper loss runs are OK to use for workers comp loss run review.  You will usually find them out of date by the time they are received from the insurance carrier or TPA. 

As I have often said, having online claims access is worth an additional 20% on premiums if you are comparing two different quotes from carriers. 

2021 update – as loss runs and claims access is now more popular. the above 20% should be reduced to 10%.  Most carriers and TPAs now offer free online claims access.  If yours does not, then you should email your agent or carrier/TPA representative to find out why. 

The main figures on the loss runs are Paid, Outstanding Reserve, and Total Incurred.  

Total Incurred Figure on Workers Comp Loss Runs

The numbers that are reported to the Workers Comp Rating Bureaus – NCCI, WCIRB, etc.-  comes from the Total Incurred figure.  The formula is Total Incurred = Paid + Outstanding Reserves.  

Self-insureds, your actuary will use the same figures to produce a Loss Development Factor or LDF.   You do have an LDF calculated each year.  LDF’s can be expensive, but worth it many times over. 

Please do not think your company or organization is “outside the workers’ comp system” because you are self-insured. 

Rule of 7’s(c) 

If you have a massive amount of claims, such as in a large organization, you will want to use the claims review rule of 7’s(c) for the review of your claims.  I coined and copyrighted that term as I adapted it from Charles Givens’s Rule of 7’s in his investment books.  

In the massive claims reviews, we have performed, the rule of 7’s allows you to have a good idea of how your claims are being handled.   Make sure that you use a random number generator to pick the claims you will review.   You may find many of them online such as this one.   

You can set the random number generators to generate random numbers any way you wish.  Please make sure you have picked random claims, not every seventh one on the loss run.   That is not randomness.   

I have had long discussions with clients that wanted certain claims reviewed in a random claims audit.  This may not bode well for another overlooked claim that should have been reviewed. 

Why would you want randomness? – To make sure you did not center on certain claims, claims adjusters, or any other type of way the claims may have been organized. 

Only use the rule of 7’s if your loss runs have 50 or more claims on it.  You may wish to split medical-benefit only claims and lost time claims apart for the rule of 7’s review. 

 

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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