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Medical Reserves and CPT Codes In Workers Comp Claims

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Medical Reserves – CPT Codes

Workers Comp medical reserves are the most complicated of the three reserves to estimate. Can you imagine trying to predict all of the medical treatment that will occur over the lifetime of a file? There are as many medical treatments as there are CPT codes.  CPT codes number into the thousands.

Graphic Of Medical Reserves Icons
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If we look at CPT coding, there are six kinds of medical treatment

1. Evaluation and Management

2. Anesthesiology

3. Surgery

4. Radiology

5. Pathology and Laboratory

6. Medicine

There are other considerations that have to be taken into account that are not coded such as mileage.

Most of the Workers Comp injuries are orthopaedic in nature. It may be a good idea to review the orthopaedic CPT codes and their costs for each of the states where you company operates in most of the time.

Medical Personnel Medical Reserves Using Calculator
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The fee schedules for each state will likely reduce the full value of most medical procedures. Another area in the medical reserves that may help reduce reserves is if the insurance carrier or TPA has their medical networks that allow for a discount for medical services. It is advisable that you ask your claims adjuster if the fee schedules and Workers Compensation treatment networks were taken into account when the reserves were set for the claim.

Medical payments on claims are approaching 60% of the claim values nationwide. In some states, medical payouts are more than 60% of a claim’s value. There are many reasons for the increase. Workers Comp indemnity payments are based on wages. Medical inflation has increased much more quickly than wages.

I wish that I could be more specific on medical reserving. There are so many medical treatments that I am only able to cover the surface of medical reserving. The next post will cover the Expense reserves and a few areas that have resulted in confusion over what is a Medical or Expense reserve.

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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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