Carrier or TPA Overcharging You?
Your Carrier or TPA could be charging you for their mistakes. Some state jurisdictions issue fines and penalties if state forms are not filed timely, if lost time benefits are not issued timely, or for frivolous litigation, etc. This is a more common occurrence than in the past years as many states have added more rules on top of an already ominous amount of rules. The number and amount of fines are increasing over time.
Workers Comp claims adjusting has become even more complicated than in the past. States seem to be very motivated to fine carriers for new rules that have just been enacted. The fining on the files also seems to be inconsistent from file to file.
Many carriers charge these fines directly to the file as an expense. These fines and penalties should be paid directly by the carrier or third party administrator if they were charged due to their lack of adherence to the state’s rules and regulations.
The carrier or third party administrator should cover these costs under their errors and omissions coverage and not charge the costs to the file.
Charging fines to the file under the expense category will only increase an employer’s E-Mod or increase the WC budgets for self insureds. The fines are usually denoted in the Expenses as being paid to the respective states Workers Compensation Commission or Department of Insurance.
One cannot assume these payments are always for fines and penalties. The WC Commissions very often assess fees for certain processing in the file.
Some of the fines and penalties can be very large or occur multiple times in a file. Your loss runs may be the first clue if the Expense category seems to be very large or has a large number of payments. For reference, the three categories of payments are Indemnity, Medical, and Expense.