Very Old Workers Comp Subrogation Claim – Loss Run Says Open – Why?
A new blog and newsletter reader asked this question last week after reviewing their Loss Runs – we have a very old workers comp subrogation claim open after seven years – will that affect our Experience Mod – why is it not closed?
$350,000 Claim Open – Let’s Look at the Why
Many Workers’ Comp carriers leave the claim open as it generates a large number of claim notices that enable the adjuster to track the claim. When claims are closed, the notices sometimes do not generate and the claim may fall off a diary system very easily.
Each carrier’s claims department has their own way of handling a large or any workers comp subrogation claim.
Some of the carriers and TPAs that I have worked for or consulted with all use different methods for tracking the claim. One TPA even has a subro-open status that closes out the claim but generates internal messages and diaries to follow the claim.
I had written an article that recommends that employers keep their own diaries for subrogation claims. Checking in on a claim every six months will keep you up to date. If the claim was due to a motor vehicle accident, always keep a copy of the initial and finalized police report for your records.
Always email the adjuster, do not call them. They will appreciate the email instead of a call. If you do not know the name of the adjuster, most carrier and TPA websites will provide the claims adjuster’s email.
But then that points out a possible problem, to keep your reserves lower on any set of claims, you should have a working relationship with the workers’ comp claims staff. Check out this article on how to establish a working relationship.
Workers Comp Subrogation Claim Units
On the $350,000 claim, the file has been referred to a specialized subrogation unit in Florida. You may be dealing with a department than with one adjuster. That is an Ok situation. If you see different adjusters responding to your email, that is acceptable as more than one subrogation adjuster may be working on your file at that point.
With this large claim amount, attorney representation by all parties may cause the claim to be open for years on end. The original adjuster that you have been working with may not know the current status.
Experience Mod Effect (or not)
The Experience Mod effect will usually not have any effect from a claim with no reserves. The claim is the same as a closed claim – Paid = Total Incurred.
The Total Incurred is the same. The Total Incurred is the figure that the carriers report to the rating bureaus that calculated your Mod.
The $350,000 Mod had affected your Experience Mod for the 2017 – 2019 years. You likely had to pay higher premiums for those years.
But hold on! – if the subrogation recovery unit recovers funds the process is usually:
- Subro claim recovery
- Funds credited back to file
- Carrier data reporters report the recovery of funds to the rating bureau (NCCI, WCIRB, etc.)
- Rating bureau recalculates Mod and sends back to the carrier
- Carrier processes workers comp premium refund
The last bullet point is why I HEAVILY recommend that you establish a diary system to follow the subrogation recovery. Please see the first link for this article that I wrote on the subject in 2009 – workers comp does not change that much.
Bottom Line – do not be concerned if a claim is still open that has no outstanding reserves if it is a workers comp subrogation claim. Build a diary and follow it – use any calendar program.
©J&L Risk Management Inc Copyright Notice