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Claim Auditing and Adjusting Tips – Claims Q&A With Claims Coach


Claims Q&A With Kevin Quinley – Claim Auditing Discoveries

We were caught up in a huge Workers Comp consulting project and I have neglected the blog page. OK, so here is the next installment of the Claims Q&A with Kevin Quinley on claim auditing discoveries.

Claim Auditing Questions . . .

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In doing claim audits, are there recurring issues or problems you see with claim handling?

There are two that we see the most that heavily affect the outcome of a WC file. Those two are Immediate First Contact and Poor Communication. Often we see where an adjuster writes the injured employee, employer, and treating physician a form letter and then documents that there was immediate three-point contact. Talking with the employer, doctor, and employee about their WC claim ASAP is a great way to start the proper communications in the file.

The other related area is adjusters working the file, but not making any contacts with all or at least some of the parties involved. Good communication is the main job of the adjuster. If this is not done as shown by a trend by an adjuster or by a TPA/Carrier, we become very concerned.

What are the most common findings or observations during claim auditing? See the previous question.

How should claims people prepare for an audit before undergoing one?

Quit stressing when they hear their files are being audited. Some file audit firms consider a very nervous adjuster as a “red flag.” There is nothing that can be done to do a “quick fix” on the files. The one thing that I recommend is to be friendly and smile at the initial meeting. Do not EVER put the auditor on the defensive if they ask you a question. Auditors that are on the defensive tend to be more subjective in their file appraisals.

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Are there “red flags” you look for when doing a claim audit?

We do heavy statistical analysis on the 33 areas that we look at for trends. If there is a trend by the adjuster or insurance carrier, then we red flag that one area. This happens very rarely except in one area. Over-reserving or under-reserving the files is a red flag that we notice very quickly. We do a stat analysis to confirm our findings. The numbers speak the loudest.


Over the years, do you sense any differences in skill among the claims profession in general? Is the claim service getting better or worse?

Claims adjusting has followed a definite trend. It is how the industry or a certain carrier decides on the file loads for adjusters. An overloaded adjuster cannot do the job that the insureds are relying on them to do on their files. When the industry/carrier trend is to lighten loads, the file handling improves proportionally.

For a firm looking to tame its workers compensation claim costs, what is the ONE thing they can do to deliver the greatest return on investment?

Time Management training pays big dividends. Stress management seminars seem to help. The old “claims roundtable” is also a great meeting to have for adjusters to discuss difficult files. We can tell the difference in file reviews between trained and untrained adjusting staff. The one word is training.

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How do workers compensation claims people avoid getting burned out?

As mentioned before, they must remember that they ARE NOT claims adjusters. That is their job. In other words, leave it all at work. That is the secret to surviving in claims. Forget the files when you walk out the door every evening.

In a blind taste test, can you tell much of a quality difference between TPA claim services and insurer/staff claim services? Comment, please.

Yes, when we compare files a carrier also functions as a TPA. Flat-fee files seem to receive less attention.

If there is indeed a “brain drain” of seasoned claims people retiring, how can companies counteract that trend to salvage acceptable levels of expertise?

Some carriers do a great job of training incoming recruits. They also weed out recruits that will not make it in the adjusting world. Liberty Mutual has an outstanding training program. Training and screening will fight the brain drain.

What are employers’ biggest complaints about workers compensation claim service?

Question Answer Claim Auditing session
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As I mentioned before, it is poor communication. They often do not know what is happening in their files. I always tell employers to request online claim access as they can follow the files without having to disturb the very busy adjusters.

What is the ideal caseload for an adjuster handling lost-time workers compensation files? Comment.

Oh, this is a loaded question. It depends on the state, but I would say 100 for a claims trainee, 150 – 175 for an experienced adjuster, and 200-225 for a Senior Adjuster. In my career, I have had to handle 250 files in 7 jurisdictions/states at one time. I juggled it very well until I burned out from fighting fires.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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