Large Deductible Programs
I had been asked this question three times over the last two weeks. “We have a large deductible program for our Workers Comp.” Can those policies be audited for overcharges?”
The three main questions that I asked were:
- Did your company pay some type of premium to your carrier for handling the claims?
- Did your company receive or should your company have received an E-Mod sheet from NCCI or your state’s rating agency?
- Was an audit performed by your insurance carrier on your large deductible policy?
If you answered Yes to all three, then your company should be able to have your current and last three years’ policies audited for overcharges. Even though you may have insuring agreements with your carrier, if you pay premiums and the carrier audits your policies, your company should be able to have your large deductible program examined by your independent auditor.
The mechanics of the policies whether a regular first-dollar insurance company or a large deductible are the same. The one main area that changes is there is an agreed amount to handle the claims that may be different from the carrier’s usual way of charging premiums.
One very large misunderstanding that we have heard from a few of our large deductible clients is that the insurance carrier will not report the claims to NCCI or the state rating bureau. Almost all large deductible policies I have ever seen are reported to the rating agencies.
Up next is the answer to the question “Did the CMS’s enforcement of the Workers Comp Medicare Set Asides cause claims to stay open much longer than in the past?”
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