Reopened Workers Comp Claims – Watch The Reserves

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Reopened Workers Comp Claims – Big Problem

When does a reopened Workers Comp claim cost more budget for insured and self-insured employers?

picture of wise old workers comp reopened claims owl
Public Use License – Jordiferrer

I reviewed a file this morning that had one of the classics that cause agents, risk managers. underwriters, rating bureaus, and most importantly insureds to become very irritated at claims adjusters.

Adjusters have a tough enough time making everyone happy (think impossible) 

As with my last article, an easy fix can be accomplished. I will give you the exact example with all the names removed for anonymity.

UNITSTAT Date vs Reopened Workers Comp Claims

All Was Not Well, as Reopening Made The Claim Not End Well

A very good Senior adjuster had handled a claim very well, in my opinion.  Good job! The file was closed timely.   The claim was an eye injury.   Those claims can be complicated sometimes.  

The injured employee, being a conscientious employee that was moved into their home from the office increased her dedication to the utmost.   She worked 15 hour days for her employer – possibly too many hours.   Here is an E for Effort from me to her.   

A good employee that had an eye injury on the job was only out for two weeks.  This is one of those claims where the employee, employer, carrier, and provider all worked together to return a good employee as soon as possible to gainful employment.   

The employer provided her a desk-type job.   My Six Keys For Saving On Workers Comp claims were followed.  All parties in the claim did an excellent job.   

Because the employee only had two weeks out of work, the reserves were set very accurately.  The medical portion of the reserves was set very high due to the possibility of eye surgery, which never happened with the injured employee’s medical treatment.     

Check here for articles on UNISTAT Date if you want to see more about them.   In short, think 6 months after the policy expiration for timing. 

Just Bad Timing?

This situation happens quite often.   The file was reopened with the old reserve even though it was just to pay for a few medical bills.  The bills totaled $845

The file was reopened with in excess of $20,000 in medical reserves.   What happened from there was the injured employee was seen and all medical bills were paid.   Even if there was a future office visit, the file reserves were left open with $20,000+.  

The UNISTAT date hit and Boom! – $20,000 of extra reserves hit their Experience Modification Factor.   

Moral of The Reopened Workers Comp Claims Story

Reopened files happen often.  The main idea – regardless of timing – is to reclose the file or reduce the reserves quickly when the file is reopened to fit the situation.  

No, $20,000 was not a tragedy in this situation.   

I have seen files during the pandemic in much larger amounts for reopened workers comp claims.   No, I am not being too picky.   

 

 

 

©J&L Risk Management Inc Copyright Notice

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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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