Archives for November 2020

ARM Designation – Claims Staff Make Your CV Resume’ Shine

November 19, 2020 By JL Risk Management Consultants

Venerable ARM Designation – Beyond the AIC For Claims Staff

The ARM Designation may be a good fit and advance your claims career at light speed.

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One of the questions I often receive from Workers Comp claim staff is – What can I or we do to advance our claims career quickly? One of the most widely read articles on this website is the AIC (Associate in Claims) designation article.

The search for that topic means people are searching for ways to advance quickly and show a level of dedication to their claims career. Having the AIC means that you may likely be placed at the top of the resume or CV pile in any organization.

The #1 question I receive from AIC designees is ‘What Can I add to my AIC to make me stand out among other job applicants” or “What is the best path for my future if I want to branch out from claims?”.

The ARM Designation would be the answer. The AIC shows a commitment to claims where the ARM designation means you are looking for a career possibly beyond claims.

Associate in Risk Management – What Other Organizations Are Saying

RIMS says: (Risk and Insurance Management Society)

To be an effective risk manager, you need to develop the skills that are vital to effectively controlling, assessing, and financing risk. The Associate in Risk Management (ARM) program helps you enhance your risk management skills by teaching you how to build and implement a balanced risk financing strategy using retention, transfer, and hybrids.

ARM helps employees to:

Enhance contribution to the organization’s value by acquiring skills needed to develop effective and thorough risk assessments.
Increase participation in risk control programs through a better understanding of staff motivation.
Support the organization’s overall financial goals by learning to build and implement a balanced risk financing strategy using retention, transfer, and hybrids.

We recommend ARM for: Agents/brokers, agency principals, line of business managers and executives, risk managers, and operational risk staff for banks and insurers.

The Institutes – organization that provides the ARM Designation says:

Associate in Risk Management (ARM™)

Make a real-world impact by gaining a holistic and strategic understanding of risk assessment and treatment.

79% of completers said earning the ARM designation prepared them for their long-term career goals.
79% of those in their career less than 2 years said the ARM accelerated their career
93% of ARM completers would recommend The Institutes’

Hedging at 79% – accelerated their career in 2 years – Payoff!!!

ARM Designation and Expert Witness Work

I have used concepts and often referred to concepts in my ARM textbooks when I write expert witness reports. Local and Federal Judges have agreed with my reports on those concepts often – even ruling for summary judgments using my reports alone.

Writing Risk Manager expert witness reports using “plain speak” concepts that I learned in my ARM curriculum has been one of me fortes’ for over 15 years.

Secret Way To Study For The ARM

Jack Keir’s study guides have long been lauded for students desiring Property and Casualty designations –

You can find Jack Keir here. My response to using his manuals and practice tests was Whew, that was a relief!

What the Jack Keir organization says about the ARM Designation

ARM – Associate in Risk Management

Recommended for persons who have been working in the risk management field and have some previous experience. Earning this designation requires you to identify and evaluate exposures to both accidental losses and business risks, analyze risk control and financing techniques for each exposure, select of the most effective risk management alternatives, and ways to implement and monitor selected risk control and risk financing techniques.

You have previous Risk Management experience if you have been working claims – you may not have realized it – setting reserves and handling claims is a form of Risk Management – trust me.

The Best of Everything with Designations

Your employer may reimburse you when you complete your AIC or ARM. Check out your benefits manual. Getting your AIC, ARM, or other designations and then being reimbursed – wow, the sun shines bright on advancing your career.

Many state licensures will accept the AIC or ARM courses as a credit on your license CEs – usually a large number of hours.

Now go get your ARM designation or other ones. Good luck!!!

BIG PS – Just In on the ARM Designation!

Kevin Quinley over at the Claims Coach

Kevin, a long time friend and mentor had this to say about obtaining the ARM: (Good info – he is referring to Workers Comp and the ARM)

Pro’s: knowledge content that goes beyond just knowing about insurance policies; expanding one’s knowledge horizon to a Big Picture, panoramic perspective on workers compensation issues outside of the insurance mechanism. This includes noninsurance methods of addressing workers’ compensation exposures and loss control/mitigation methods of addressing workers’ compensation exposures.

Another “pro” is that the additional credential is a “signaling mechanism” telegraphing to current and prospective employers and clients that you have mastered a subject matter domain that may set you apart from competitors. It may enhance your market value either to your employer and/or your clients. Further, it is a portable credential that you take with you wherever you go in terms of job changes or career changes. It gives you an opportunity to different differentiate yourself from competitors who may lack that credential.

Give the ARM designation a shot – or the AIC, then the ARM.

©J&L Risk Management Inc Copyright Notice

Workers Comp Medical Treatment Networks – What Studies Are Missing

November 19, 2020 By JL Risk Management Consultants

Workers Comp Medical Treatment Networks – Claims Adjuster’s Different Paradigms

After reading a few studies on workers comp medical treatment networks, one glaring aspect becomes apparent very quickly. As I often have commented on claims studies – “Did they interview any adjusters for input?” The answer remains “no” on most of them.

picture of barber dimes workers comp medical treatment network

On a side note, Rachel Fikes over at Rising Medical out of Chicago did just that earlier this year. Get your free copy of the study here – totally worth a read.

One recent study by NCCI (you can find it here) says that some treatment costs are higher for “in-network” medical treatment.

The one huge consideration is – do the claims adjusters feel the medical provider is one they can work with over the “long haul” and implicitly trust to treat the injured worker that is their claims responsibility?

Of course, (and this has been challenged by non-claims persons), the worker’s comp claims adjusters want the injured worker with a legitimate claim to have the best care possible even if it costs a little more.

The adjusters want to have:

Proper medical care that results in the highest level of care possible
Return to gainful employment as soon as possible
All benefits paid timely
File closure

Proper Care With The Workers Comp Medical Treatment Networks

Very often, workers comp claims adjusters have given a large medical network provided by their employer (carrier or TPA). The informal network that exists can usually operate inside the carrier’s or TPA’s medical network. Sometimes the physicians are non-network.

What physicians and other medical providers are contained in this informal workers comp medical network? Those medical providers are:

Trusted to provide the appropriate conservative medical treatment
Have an industrial background – think workers comp or industrial clinic
Huge one – communicate with the adjusting staff by providing medical notes rapidly
Huge one Part 2 – communicates with the employer on the injured worker’s medical status
Refer the injured worker to more specialized physicians (orthopedists, neurologists, etc.) that the adjuster is used to working with on claims
Return the injured worker to light duty when possible
Another huge one – seeks authorization from the adjuster for certain medical procedures such as surgery, referral to another medical provider, etc.
Avoids giving the adjuster the Twilight Zone Phone Call
Avoid litigation – Ok, – all employees have the right to consult and hire legal counsel.

When I review adjuster file notes, one aspect I see often is the adjuster is willing to work with an “out of network” medical provider if they cover the above bullet points.

Sideways Cost Savings

Is there still a cost-savings element when working with a physician that is not in the carrier’s or TPA’s prescribed network? Yes, any claims staff that is reading this will be nodding their head now.

Most medical networks save approximately 10 – 15%. By working with a medical provider that covers the above points well, the cost savings of an out of work provider can easily cover the 10 – 15%. I will save you all the math today, it does cover the network savings.

If one looks at the studies by WCRI’s Dr. Bogdan Savych, the employees tend to have a better outcome if they trusted the employer before the accident. I think we can add into that equation the trust level of the medical provider whether or not they are in a workers comp medical network.

Who can facilitate many of the above items – one of my favorite risk management techniques, the venerable worker’s comp rehab nurse or case manager.

I am not giving the advice to ignore the prescribed workers comp medical treatment networks. Then again, the cost-benefit tradeoff may be enough to use non-network physicians and according to NCCI, the non-network physicians may be less expensive.

©J&L Risk Management Inc Copyright Notice

Workers Comp Adjuster Goals Conflict With Management Expectations?

November 12, 2020 By JL Risk Management Consultants

Advocacy Model vs. Workers Comp Adjuster Goals – A Point Missed?

Did I miss The Point – Maybe?

I recently attended a webinar provided by the National Workers Comp and Disability Conference where some of the Workers Adjuster goals were compared to the expectations of claims management.

picture of workers comp adjuster goals geophysical survey

Public License – Vadams

Two of my favorite workers comp people, Rachel Fikes of Medical Rising and Denise Zoe Algire of Albertsons Companies led the event. Those two ladies have always been kind and gracious to me at all times, especially in-person.

I had written multiple articles pleading with adjusters to fill out the surveys to voice the claims staffs’ opinions on what their goals were during the process of a claim.

You can sign up here to listen to the webinar – totally worth it if you are in a claims office or if you have any interactions with workers comp adjusters.

The Survey Says (thanks Richard Dawson)

The shocking part was the congruence (similarity) between claims management expectations and the workers comp adjuster goals. Slide #6 had the Top Competencies Alignment between management and the claims staff. You will need to register to listen to a recording of the conference and to obtain the slides, please do listen to it – take the time.

The conversation in the webinar focused on:

•   Alignment of frontline staff perspectives with those of claims leaders surveyed in prior years
•   Assessment of job meaningfulness
•   Ranking of company benefits that frontline staff most value
•   Adequacy of new hire and senior staff training
•   Ranking of core competencies and key practices most critical to claim outcomes – the one I am covering today.
•   Assessment of technology and data’s impact on job performance
•   Understanding of advocacy-based claims models

Frontline Staff Rankings

Compensability Investigations
Disability / RTW Management
Medical Management
Claim Resolution / Settlement Strategy

As one can see, these are the steps to “getting the claim off my list”. I could possibly be too “old school” in my views, but this is what I always hear from any adjuster that I speak with presently.

If one opens up any workers comp claims manual, the above 4 are major headings in the manual. The survey was spot-on to ask those questions (good job).

Yes, we all want to make sure the injured worker receives every penny they are owed timely. Many states are now ratcheting up the investigations and fines for sloppy or late adjuster benefit actions (payment, filing forms, etc.). The prior link is behind a WorkCompCentral paywall so I cannot share passages from it.

Adjusters want to naturally provide benefits timely. Some of the state-enacted COVID-19 presumptions made adjusting staffs look like draconian claim deniers – very unfortunate. Occupational disease statutes have long taken care of claimants when a disease has been contracted on the job.

Did Claims Management And Workers Comp Adjuster Goals Align?

As with any survey, the opportunity to dig deeper exists. I hope to see the question of Workers Comp Claims management and adjuster goals have a further explanation to it.

Good job – the survey and results production required a ton of hard work.

©J&L Risk Management Inc Copyright Notice

Workers Comp Premium Audit Dispute Delay Can Be Very Costly

November 11, 2020 By JL Risk Management Consultants

Premium Audit Dispute Delay Costs Company $500,000 – Ouch!

Over the last 13 years that I have been writing articles for the J&L website, I have warned very heavily against any type of premium audit dispute delay. Delaying a dispute of or ignoring a bill from your current or prior carrier often turns into money lost from your company’s budget.

OK, you or your company may not agree with the workers comp premium audit. Many times, your company must act quickly regardless of the circumstances.

This website and I provided many articles on this very subject. Why? Because I see the leftover problems once a company contacts J&L too late in the premium audit dispute process.

By the way, thanks to William Rabb and the folks over at WorkCompCentral for providing me with the location of the ruling on a major premium dispute delay. I cannot point you directly to the article as it is behind a paywall.

The lawsuit can be found here. I will not name any of the parties involved in the lawsuit. I recommend you take a few minutes to read over the decision. In the proverbial nutshell, this is what happened:

A company separates from its parent company
The company then requests a policy from a carrier
The rating bureau (WCIRB) gives the new company a higher X-Mod than the parent company.
The carrier provides the company with an endorsement on the higher X-Mod
The company thought the X-Mod should have been from the parent company
At the premium audit, the company is charged with the higher Mod which sharply increases the premium.
The carrier sends out the premium audit bill.
The company does not think they should pay it due to verbal guarantees.
The company does not file a response to the collection lawsuit timely.
District Court and Appellate Court says Pay Up.

Experience Modification and not Premium Audit Dispute Delay?

I will not cover the Ownership Rules or what happened when the companies split. I do not have that information and will not attempt to assess what happened in that part of the dispute.

If your company disagrees with an Experience Modifier decision by the Workers Comp rating bureau including WCIRB, here are the time rules right out of the manual – (Note there are some exceptions to the below rules – these are the GENERAL Rules from their ERP Manual:

In the event of the discovery of an error in the current experience modification or the two immediately preceding experience modifications, a revised experience modification shall be published and be effective as follows:

a. The revised experience modification shall be effective as of the effective date of the erroneous experience modification, provided:

(1) The revised experience modification is less than the erroneous experience modification;

(2) The revised experience modification is published within three (3) months of the effective date or publication date of the erroneous experience modification;

(3) The WCIRB was notified, in writing, within three (3) months of the effective date or publication date of the erroneous experience modification of a possible error; or

(4) The WCIRB notified the carrier of record, in writing, within three (3) months of the effective date or publication date of the erroneous experience modification that the erroneous experience modification was under review.

b. Except as provided in paragraph a, the revised experience modification shall be effective as of the date it is published provided, however, that the revised experience modification shall not be applied if it is published three (3) months or less prior to its expiration.

The above timetable represents very distinct periods of time on the X-Mod changes after a policy goes into effect.

Endorsements Can Completely Change Aspects of Any Policy

Any changes to a policy once issued is accomplished by Endorsements. I have written or spoke on Endorsement many times. The endorsement letters from the insurance carrier may be more important than the policy itself. Check out this article on Endorsements. I have written at least seven articles on Endorsements.

I have seen up to 75 endorsements on a large company’s workers comp policy.

Insurance Carriers Now Using Collection Agencies – with different response timetables

Once an insurance carrier turns over a premium audit bill to collections, a new timetable, besides any of the insurance timetables, kicks in and must be handled properly.

Knowing your local collection rules/laws may be helpful. The best tactic to use is responding ASAP to any collection notice in writing with Certified Return Receipt.

We often hear from policyholders with a premium audit bill after the collection agency contacts them. Please refer to this article on collection agencies.

No matter if a policy generates a premium audit dispute or an Experience Mod dispute, the clock is ticking.

©J&L Risk Management Inc Copyright Notice

California Prop 22 – Nationwide Effect on Workers Comp Debate

November 5, 2020 By JL Risk Management Consultants

California Prop 22 – Not Just A One State Issue

California Prop 22 was overwhelmingly given a thumbs up by the Golden State’s Voters.

Pubilc Use License – Makaristos

If you are saying, yes, but I do not live in California, check out the last heading in this article – worth your time.

For many years, California had moved towards defining independent contractors as employees.

California Assembly Bill 5 (AB 5) was passed in 2019. The effects on the independent contractor vs. employee debate were chilling. The Dynamex Supreme Court decision was the basis for AB 5.

AB 5 enumerated each industry where the workers should be considered employees. The Dynamex Decision was very vague as to the exact companies that should not allow the independent contractor classifications.

From truckers to independent press contractors – AB 5 changed the rules of having independent contractors working for your firm.

For instance, many independent writers of worker’s comp articles seemed to disappear overnight. Due to privacy, I will not mention them by name.

When I traveled to what I thought was going to be an all-day WCIRB Conference earlier this year, I even asked the question to the presenter after they presented on the Class Code changes involved with AB 5

There are at least three Assembly Bills pending that contradict AB 5 – what effect will that have on how the WCIRB views any Class Code changes or premium audits that involve independent contractors? The WCIRB told me that they would have to get back to me. Fair enough.

According to the Ballotpedia (Updated 10:30 AM Eastern Time today), 58.4% of California voters checked Yes on their ballots. By the way, if you have not visited Ballotpedia, it is worth a look.

The Beginning of AB 5 – Dynamex Decision

The Dynamex Decision provided the three tests to see if a California worker was an employee or an independent contractor – they are-

The worker is:

Free from the hiring company’s control and direction in the performance of work
Doing work that is outside the company’s usual course of business; and
Engaged in an established trade, occupation, or business of the same nature as the work performed

After the Dynamex decision, many employers contacted J&L/me on premium audit and policy confusion. Their basic question was – How do we tell if the workers working for us are contractors or employees?

What California Prop 22 Does Not Do

California Prop 22 does not define any other employees/contractors beyond independent drivers such as Uber, Lyft, and Doordash.

Earlier I mentioned reporters and other types of workers – these workers are still under AB 5/Dynamex presently. Prop 22 covered a very defined section of independent contractors.

More workers may be added to the independent contractor list in the future.

What California Prop 22 Means For Companies Not in CA

One of my catchphrases is – what happens in California will be coming to a state near you. The Golden State always seems to make rules and regulations that are often adopted by other states in some form. Massachusetts and Tennessee even used some of AB 5’s wording in introduced legislation.

Bottom line – make sure your independent contractor contract spells out everything in great detail. Do not use a boilerplate contract. A different version of AB 5 or California Prop 22 may show up in your state – be prepared.

WCIRB Delayed Medical Treatment Study Backs Up Six Keys Study

November 5, 2020 By JL Risk Management Consultants

WCIRB Delayed Medical Treatment Study Proves What We Knew All Along

The WCIRB Delayed Medical Treatment Study can be found here. The WCIRB (California Workers Comp Rating Bureau) recently published a study on delayed medical treatment due to the recent COVID-19 pandemic.

picture of COVID-19 WCIRB Medical Treatment Delay Study

Public Use License – Maximilian Schönherr

I was hoping the study replicated or at least came close to the numbers that I had published in the late 1990s and early 2000s that showed if an injured worker experiences medical treatment delays, employers pay dearly.

Six Keys And Delayed Medical Treatment

Check out the Six Keys To Workers Comp Savings here. The Six Keys were developed over time as first a workers comp adjuster and then a consultant. I sampled 7,000 public entity claims files in 1998. I performed the same study again in 2008 to confirm my findings.

The Six Keys are:

Timely First Reports
Medical Network
Return To Work Program
How the Employer Treats the Employee
Management Adoption of Keys
Understand your final policy bill or premium audit

My signature presentation subject comes from the first four from the above list. Those four not being put into place costs an employer 400% more on their claims. Looking at it from a cost reduction viewpoint, the total cost saving experienced by providing timely medical treatment equals 75%.

I hoped very intensely that my numbers matched the WCIRB study and report. Some of my numbers had varied from WCIRB’s numbers over the years. WCIRB seemed to back up my numbers in this study.

One exasperating area for the claims department is the Twilight Zone Phone Call. Doing #1 and #2 on the list quickly means not introducing the claim to a claims department with a filing delay mistake. The phone call often causes the adjuster to set the reserves to a much higher level than normal.

In other words, the employer already blew this claim, so the reserves need to be more to cover the increased payments incurred during the lifetime of the claim. Yes, reserves are set that way most of the time.

How The WCIRB Delayed Medical Treatment Study Relates To the Six Keys

Let us look at the WCIRB Study. By the way, you should download a copy of the study. It is worth the read. See the first link in this article to read and download the WCIRB article. Yes, it is worth your time.

The chart that made me feel good about my old (yet still accurate numbers are included in the WCIRB charts below. You may need to click on the chart thumbnail below to see it more clearly. The charts are from pages 9 through 11 from the study.

wcirb medical treatment delay study chart

Please click on the chart to see full size

wcirb delayed medical treatment study graph

The charts show that overall when medical treatment is delayed the medical and indemnity costs increase sharply. These charts are comparing delays due to COVID-19. “Delays are delays” – the numbers bear me out.

Both charts parallel the same time when workers comp adjusters set the final reserves for the life of the claim. Many more charts in the study come to the same conclusion – delayed medical treatment cost employers dearly.

Post-COVID-19 Recommendations

Long after the COVID situation resolves, the numbers on delayed treatment will stay the same. If timely injury reports and medical treatment is provided, the savings are approximately 75% on the overall costs.

The numbers between the WCIRB delayed medical treatment study and the numbers I have seen on file for over 30 years may not match exactly, but they are close enough to cause concern for employers nationwide.