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E-Mod (Ex-Mod) Review – Leave This Part Alone For Best Results

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E-Mod (Ex-Mod) Review Of Outstanding Reserves 

An E-Mod (Ex-Mod) review is something to leave to the experts.   Usually, approximately one third of the Total Incurred value should be Outstanding Reserves. That is a very, very rough approximation.

Picture Of Hand Illustrating E-Mod (Ex-Mod) Review Chart
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I received a few question on this figure.This is an overall estimation on the thousands of premium audits or file reviews that I have done over the years.Your outstanding reserves can change overnight with the payment of one large medical bill.

This is one area where claims adjusting experience is golden.There is no exact formula or method for knowing which files to question the level of outstanding reserves.

Many years ago as a Workers Comp adjuster, I used to actually increase files when a certain file was brought to my attention that was deficient is reserves-often as a result of a claims review with the insured.   Most adjusters decide to do a reserve increase review while the file sits in front of them.  The 

For clarification Total Incurred = Previously Paid $ + Outstanding Reserves.   The previously paid figures can be reviewed with leakage audits.  Those reviews are totally different task best left to a highly experienced expert.  Leakage audits are complex and are not E-Mod (Ex-Mod) reviews. 

Most Workers Comp adjusters are drowning in work. Knowing which files to discuss is only 50% of the answer. Knowing which files to leave alone is the other 50%.I often advise client to not ask for a full file review of every open file. I am not advocating any type of deception.

Targeting certain files for an Outstanding Reserve inquiry will make your Workers Comp claims staff appreciate not taking the time to review a claim with an outstanding reserve of $98.67.That is a waste of time and resources for all parties.

One consideration is to not look at just files where the employee lost time from work.The Medical Only claims usually cause more needless funds to be paid out than any other type of claim.

I will cover Medical Only claims in the next article.

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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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