North Dakota WSI RFP and Results Conundrum
The North Dakota WSI RFP conundrum was revisited again due to the response from my last article.
Update – if our website looks a little in disarray, it is because our website provider’s server crashed. When they ran the backup, it was a file from an old work-in-progress file. The blog, however, is still working well. We are fixing the website as I am typing this info.
I was going to blog about Wyoming’s Workers Comp concerns, but I received such a huge response to my last blog on my assessment of the Workers Compensation file review that was performed by North Dakota’s recent service provider. I will not name the provider due to the legalities of disclosing the company that performed the audit. It is a public record and can be found on the WSI website and in different articles.
Some of the questions that I received today were:
- Why did I think there were not enough files examined in the audit?
- What is the usual normal % of files examined?
- How many areas does J&L look at in file audits?
- What is the area in which most of the mistakes are found?
- What can be done about the audit if it was less than adequate?
- Why did we not file a dispute with the North Dakota WSI?
- What is the normal charge for 350 files?
- Are you familiar with ********, the audit service provider?
- Did I write the last blog due to the underlying personnel changes that were made with the audit? Do I know any of the personnel involved?
- Did I realize that the blog was posted on a very reputable North Dakota political website?
My answer (respectively) to the above questions on the North Dakota WSI RFP are:
- The purpose of an audit is to show a statistical trend in certain areas of a group of Workers Comp files. There have to be enough files to generate instances of trends. Workers’ Comp files can be very complicated, so there may be a number of trends that have to be examined.
- The Workers Comp industry standard is 10% of the files. My standard is 1/7 of all files in a set. In the case of the North Dakota file audit, that would have been from 3,000 to 4,000+ files.
- We look at 33 areas that are scored by using a weighting system that is predefined. We usually have all 33 to add up to a number, which we designate as 100%, or the perfect score. The weighting system would change from state to state. We do more of a “performance audit.” With me being a former Workers Comp adjuster for many years, J&L is not in the business of questioning an adjuster’s decision on a file (usually).
- Most of the mistakes we find in Workers Compensation files are in two main areas, both with devastating effects on the file. They are the work performed by the adjuster upon receipt of the Workers Compensation First Report of Injury (three-point contact) and reserving of the files. Even self-insureds can be heavily affected by the wrong reserves on the file.
- This would be one that the citizens of North Dakota and the personnel at WSI would have to handle. As I said in the last blog, according to North Dakota rules, we could only object BEFORE the bid, not after. One interesting thing is that the number of files the provider was going to review was released AFTER the bid, not before the beginning of the audit. I have never seen that before in all my years of Workers Comp experience.
- 6. We could not file a dispute with the North Dakota government or WSI, as the dispute had to be filed BEFORE the end of the bidding. We would have filed a dispute for the small number of files that the provider examined in their review vs. cost, but the number of files reviewed was not published until AFTER the audit was completed.
7. A recent North Carolina public bid for a file review of 350 files had a range of $27,000 to $65,000. So with 475 files, that would be 475/350 * 65,000 = $88,214 maximum.
8. Yes, we are familiar with the audit provider. They are one of the larger companies that bid on quite a number of projects.
9. We know no one at the WSI or within the North Dakota state government.
10. Yes, we do realize that we were posted on some of the politically-based websites in North Dakota. We made no effort to contact anyone with the North Dakota press. We have heard from a few news outlets and have been interviewed on the blog postings.
11. This is another question that we just added – Did I review the report from the provider on WSI’s
website? What was my opinion on the report?
The report was well done from a structure standpoint. However, the numbers are not there to draw any conclusions. One area that was remarkable was that the provider’s team could have performed an audit on 475 files from 1/28/08 through 2/1/08. That is five workdays or 37.5 hours. The norm is one file per hour on the average. Lost-time files may take longer than one hour to review, but medical-benefit-only files bring the average back to within an hour. That would be 12.67 files per hour. The review team would have needed to consist of 13 auditors at a minimum to accomplish this task that quickly.
I think we can see the North Dakota WSI RFP Conundrum was not properly monitoring the RFP provider after awarding the RFP.
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