Archives for January 2015

January 1st Renewals, Your Premium Audit Is Approaching

January 29, 2015 By JL Risk Management Consultants

Upcoming Premium Audit For January 1st Renewals

The January 1st renewals for Work Comp policies have a premium audit approaching soon.

We receive many inquiries this time of year on preparing for a premium audit. There are numerous articles in this blog on premium audits, including preparation.

Picture Of January 1st Renewals Calendar

Please note that we do not and you should not accept help from any company that may look to alter your policy, payroll numbers, classification codes, or anything else from your policy as preparation for your audit.

One can refer to this South Carolina article on what can happen if you try to manipulate your numbers upfront. Your company should pay everything you owe each year for Workers Comp, but not one penny extra.

Auditors, by their nature, be they tax, insurance, or from other disciplines notice the insureds that are very unorganized. Excel(r) can be a great aid in organizing your materials.

If you have been through a premium audit previously, look over the old audit. You will likely be reminded of what the auditor was searching for in the data. If you organize the audit using Excel and then attaching backing data to the Excel spreadsheet, the auditor will much appreciate the effort.

Wikimedia Commons – Niklas Bildhauer

Anything you can produce to aid the auditor in the work will usually result in a smoother insurance audit process.

A few other areas to consider are:

Make sure you present all Certificates of Insurance for any subcontractors that you used during the last policy period
There is no rule that allows any premium auditor to leave your premises with any of your company records.
If , after receiving your premium audit bill, you disagree with your premium audit results, there are specific rules on disputing your audit.
Make sure that you have someone available at all times for the premium auditor to consult with on obtaining further records or if there are questions about your operations.

Search for premium audit, dispute, or certificates of insurance in the search box for many more articles on this subject.

©J&L Risk Management Inc Copyright Notice

Could Google Enter WC Markets – Not Any Time Soon

January 28, 2015 By JL Risk Management Consultants

Google Could Enter WC Markets But Not Likely

Wikipedia – Google Inc

Google is poised to enter the US auto insurance market according to an article in the Insurance Journal.

Surprisingly, they already sell Auto Insurance in the UK. That caught me by surprise. I did not think Google was interested in any type of US insurance market. I stand corrected.

According to an article in the Insurance journal, the megalithic web searcher could present formidable competition for other insurance sellers. As many as two-thirds (67 percent) of insurance customers said they would consider purchasing insurance products from organizations other than insurers, including 23 percent who would consider buying from online service providers such as Google and Amazon, according to research by Accenture.

This would be quite a step to reach out from auto insurance to workers compensation. However, one cannot count them out for adopting a sales strategy that may be a profitable business.

I posted an article last year on the possibility of Wal-Mart selling Workers Compensation insurance. Do not count out large corporations when they seek out profitable lines of business.

Wikimedia Commons – Benchapple

One only has to look at Insurance Noodle as a way that they or Wal-Mart could broker insurance and not actually be a true carrier. Either giant corporation can cherry-pick data to the nth degree.

Google probably has the largest amount of corporate data of any company in existence. Liberty Mutual has a large amount of data in their Workers Comp database, but Google’s insurance database could rival that amount of data very easily.

That may be hard to believe, then again think of how much data the android smart phone systems feed into Google’s data stream or databases.

This is not likely to happen soon. Agents and brokers should be the most concerned as they may one day own a large portion of the commercial insurance market.

Update – They have pulled out of the insurance market. It is very unlikely to see an expansion into the workers comp markets for Google. However, companies such as Amazon or Wal-Mart could look to expand into the market.

©J&L Risk Management Inc Copyright Notice

Medical Treatment Authorization – New North Carolina Deadline

January 22, 2015 By JL Risk Management Consultants

Medical Treatment Authorization Has New Deadline

Many states have or will have time limits on medical treatment authorization responses. I recently received this from the law firm Cranfill, Sumner, and Hartzog on their monthly email.

Picture Of Woman Medical Treatment Authorization Signing

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You can sign up for it here or I will point out the “heavy duty” new rules on this blog as I see them.

North Carolina was one of the most liberal in allowing time for a claims staff to respond. This medical treatment authorization procedure moves North Carolina towards California’s med auth reviews. That is why I post very often on California.

Well, that has now all changed as of November 1, 2014. North Carolina claims managers, supervisors, adjusters, rehabilitation workers, and other claims personnel better take heed to this new rule or you may end up buying the medical treatment that you may not have ever authorized in the first place.

I have included the new and rather concise rule below. Some of the more important parts are highlighted.

SECTION .1000 – PREAUTHORIZATION FOR MEDICAL TREATMENT

04 NCAC 10A .1001 PREAUTHORIZATION FOR SURGERY AND INPATIENT TREATMENT

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An insurer that requires preauthorization must establish a preauthorization review policy that describes the process for requesting preauthorization review. The policy must be publicly available on the insurer’s website.
As used in this Section:
- “insurer” means an insurance carrier, self-insured administrator, managed care organization, employer, or any other entity that conducts preauthorization review;
- “preauthorization” means the determination by an insurer that proposed surgical or inpatient treatment is medically necessary; and
- “preauthorization review” means a prospective review process conducted by an insurer to determine whether a proposed surgical or inpatient treatment is medically necessary.
Insurers shall, on an annual basis, electronically submit an electronic copy or link for any medical practice guidelines the insurer utilizes in the preauthorization review process to the Commission at the following electronic site (ftp://ftp.ic.nc.gov) by July 1 of each year.
The insurer shall list each surgical procedure and each inpatient service for which preauthorization review is required. These procedures and services shall be publicly available on the insurer’s website.
The preauthorization review policy shall include:
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- procedures for requesting preauthorization, responding to and approving requests for preauthorization, and appealing a denial of preauthorization;
- procedures via telephone, fax and email for communicating with the preauthorization agent with decision making powers on a pending request for preauthorization (including Peer Review Physicians) on a continuous basis on every business day (which excludes weekends and holidays) between the hours of 8:00 a.m. and 8:00 p.m. eastern standard time;
- methods by which the insurer shall respond to requests for preauthorization and methods by which a health care provider, claimant, person, or entity requesting preauthorization may respond to inquiries or determinations by the insurer;
- a statement that the insurer will provide a statement with supporting documentation of the substantive clinical justification for a denial of preauthorization, including the relevant clinical criteria upon which the denial is based. Denials based upon lack of information shall specify what information is needed to make a determination;
- an outline of the appeal rights and procedures with instructions on how to submit appeals by mail, email or fax;
- a statement that advises the appealing party of the right to seek authorization for any denied treatment from the Commission; and
- the name, title, address, telephone number, fax number, email address and other contact information for the person with authority over all decision-making for preauthorization determinations (in addition to the claims adjuster), and the normal business hours and time zone of this contact person.
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Delivery of a request for preauthorization to the claims adjuster or other designated Preauthorization Agent at the place (email address, fax number, telephone number) provided by the insurer shall constitute receipt of the preauthorization request by the claims adjuster.
Preauthorization agents shall acknowledge receipt of all communications within two business days of the request, and the acknowledgment shall satisfy G.S. 97-25.3(a)(2).
Upon receipt of a request for preauthorization, the insurer shall provide to the health care provider or person making the request the name, telephone number, fax number and email address of the Preauthorization Agent. The Preauthorization Agent must be available on a continuous basis, every business day (which excludes weekends and holidays) from 8:00 a.m. to 8:00 p.m. Eastern Standard Time to facilitate responses to insurer communications or determinations.
Insurers that utilize a Peer Review Physician in making preauthorization decisions shall indicate in their preauthorization review policy the name, licensure, and specialty area of that Peer Review Physician and shall provide a profile (“Peer Review Physician Profile”) of that Peer Review Physician. The Peer Review Physician shall be licensed in either North Carolina, South Carolina, Georgia, Virginia, or Tennessee and shall hold professional qualifications, certifications, and fellowship training in a like specialty that is at least equal to that of the treating provider who is requesting preauthorization of surgery or inpatient treatment.
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Insurers shall, on an annual basis, electronically submit their Peer Review Physician Profiles to the Commission at the following electronic site (ftp://ftp.ic.nc.gov) by July 1 of each year.
All requests for preauthorization by health care providers, claimant’s attorneys, or unrepresented claimants, and all preauthorization determinations made by insurers on the preauthorization requests shall be submitted on Industrial Commission Form 25PR. The Preauthorization Agent is responsible for providing the preauthorization review (PR) claim number and for forwarding medical records, communications, and preauthorization review determinations to the proper entities upon receipt, unless the insurer’s Preauthorization Plan designates and identifies another person to perform this requirement.
The failure of an insurer to make a determination on a request for preauthorization within seven business days as specified in G.S. 97-25.3 shall result in an automatic waiver of the insurer’s right to contest the requested treatment, unless:
- an extension of time, not to exceed seven business days, is agreed upon by the insurer and the medical provider requesting preauthorization (or the claimant’s attorney or unrepresented claimant, if no medical provider has requested preauthorization); or
- an additional extension of time is granted by the Commission pursuant to G.S. 97-25.3(a)(3).
Requests made to the Commission for an extension of time shall be directed to the Office of the Executive Secretary, and shall be simultaneously copied to the requesting health care provider, if any, and to the claimant’s attorney or to the claimant, if unrepresented.
In accordance with G.S. 97-18(i), insurers are obligated to pay for any surgery or inpatient treatment provided under G.S. 97-25.3, for which preauthorization was requested for an admitted condition after the right to contest the preauthorization request is waived.

History Note: Authority G.S. 97-25.3; 97-80(a); Eff. November 1, 2014.

Bottom line – if a carrier or TPA delays a medical treatment authorization response, the state may enforce penalties.

©J&L Risk Management Inc Copyright Notice

Buzz Around California’s AB 1897 Has Been Amazing

January 20, 2015 By JL Risk Management Consultants

Big Buzz Around California’s AB 1897 and Temporary Employment Agencies

The Buzz around California’s AB 1897. Please note that this article will likely apply to other states than just California. Senate Bill AB 1897 has caused quite a stir in California. Our California clients have begun to pay attention in a big way since January 1st. There are pages and pages of analyses on AB 1897.

Map Of Buzz Around California's AB 1897 With Location Icon

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I first heard of the bill at the National Workers Comp and Disability Conference last November. When I first heard of AB 1897, I thought the presenters were just being too paranoid. That was until I actually read the bill.

I then started receiving emails from California companies and multi-state companies with interests in the state.

A great summary of the bill, its effects, and a few strategies to avert a claim from a temporary employee or employees were written by CalChamber. If you read the bottom of page 2 of the guide, there can be catastrophic results such as a class action lawsuit.

[From The CalChamber guide: ]

Basically, if the labor contractor fails to pay its employees properly or fails to provide workers’ compensation coverage for those employees, the client employer will now be legally responsible.

Why do I reference California so often on Workers Compensation? The laws and rules from the state often end up as similar concerns in other states. As we often say at J&L Insurance Consultants, what happens in California will be coming to a state near you in the future. California remains the Work Comp pacesetter for change.

Making sure your temporary employee provider has a legitimate policy in place is tantamount to not paying for employees your company did not realize it had in place.

Reviewing your contracts with your temporary service provider and verifying their Workers Comp policy in effect is going to be very important in the future.

©J&L Risk Management Inc Copyright Notice

Workers Comp Cost Savings – Onsite Medical Clinics

January 8, 2015 By JL Risk Management Consultants

On Site Medical Clinics = Workers Comp Cost Savings

One of the best ways to increase Workers Comp Cost Savings without sacrificing medical care is to use

Picture Of Walk-In Medical Care Workers Comp Cost Savings Building

Wikipedia Commons – Klaus D. Peter

onsite or near-site medical clinics. Medical control has been one of my Keys To Workers Comp Cost Savings since 1989.

Onsite or near-site medical clinics can lessen the likelihood that a medical only claim will turn into a claim that festers until it results in a large lost time claim.

A recent article on onsite or near-site medical clinics basically proves this premise.

A recently published National Association of Worksite Health Centers’ 2014 Benchmarking Survey noted these results:

Less than 50% of the companies surveyed actually used this great Workers Comp risk management technique
70% of employers providing on-site and near-site clinics said the clinics contributed to improvements in employees’ overall health
75% said their employees had become more engaged in work-site health and wellness programs.
The most important WC figure of all – more than 95% of those employers also said the clinics had at least partially improved employee job satisfaction and productivity

Walk In Workers Comp Cost Savings Clinic

Wikipedia – Taeyebar

Happy employees that feel well-taken care of by their employers will almost always result in lower numbers of Workers Compensation claims. There are numerous studies that indicate job satisfaction (for some reason) lowers the Workers Comp risk for that employee.

Employers do not have to have a clinic onsite to produce these savings. A local walk-in clinic has been one of my recommendations for years as a way to cut costs. I have performed multiple studies that show significant reductions (up to 75%) with having a walk-in clinic as an initial medical provider.

An industrial-based or industrial-minded walk-in clinic is even better. The communications flow by industrial walk-in clinics are usually significant. Almost all walk-in clinics will even take plant tours so that they understand the work processes at employers.

The bottom line is that a local clinic that provides injured employees with quick high-quality medical care along with a proper information flow can be looked upon as a Workers Comp cost savings partner.

New Congress, TRIA, and Workers’ Compensation

January 6, 2015 By JL Risk Management Consultants

New Congress, TRIA, and Workers’ Compensation

Wikimedia Commons – Josh

The New Congress, TRIA, and Workers’ Compensation all are very important keeping WC as a viable marketplace.

Over the holidays, many articles were published on the throes of not having TRIA (Terrorism Reinsurance Act). Some articles made it seem like the sky would fall without TRIA.

TRIA was a great backstop for settling the nerves of the Workers Comp insurer community over the last decade+. One has to remember that WC is built for accidents to happen, so to speak.

For instance, a business buys a fire policy that has a very low expectation of any type of occurrence. WC is built more around the fact that accidents do happen more often in the workplace than a boiler explosion.

TRIA was a great bargain for employers. If you look at your WC policies and audits, a very minute % of your total premiums was charged for TRIA. If there had been a terrorist attack of large proportions, this would have been a great way to sustain the WC market temporarily so that the subsequent policies would have priced most employers out of the market.

Unless, I am mistaken, there was never an actual claim again TRIA, so the very small %’s had no associated claims. The proof was in the pudding, so to speak , when Congress did not renew the TRIA provisions.

Wikipedia – Susan Sterner

The WC market fared well even without the TRIA considerations. There has been no market panic and carriers still wrote the same companies in the voluntary market. You may want to follow the link in this paragraph as the authors did a bang-up job on TRIA. (Kudos)

As the article points out, a quick-fix may be in the offing. However, as the article also points out, even without TRIA, the WC market was business as usual.

TRIA may someday be a reminder of the states that thought PIP insurance for autos was the only way to coverage drivers properly.