Reopened Workers Compensation Claims Conundrum
I have not covered reopened workers compensation claims articles for many years. This type of claim exists on almost all the loss runs that I have seen over the years. You are reviewing your claims loss runs, right?
Let us look at what a reopened status could mean on a claims loss run. The reopened workers compensation claims review covers approximately 5% loss run review tasks. The 5% is still important.
Having a Reopened Status is not really a bad thing every time it appears on a loss run. It is not a red flag situation – more of a yellow flag.
How to Spot These Claims on a Loss Run
If you have access to your loss runs and claims online, you are definitely ahead of the game. If you have to request your loss runs, you should be doing it quarterly, if not more often. As I have said often, online claims access is golden.
Each insurance carrier or Third Party Administrator (TPA) has its own format. No standardization exists – unfortunately. Search for the column that says Claims Status. The three statuses you will usually see are Open, Closed, and Reopened designated as O, C, or R. Sometimes you will see RC which means Reopened Closed.
Why Are Claims Reopened?
A reopened workers compensation claims status usually means the claims adjuster has previously closed the claim – which is a good thing. Now some type of occurrence resulted in further future benefit payments. The reason could be anything. A few examples are:
- A medical bill is received after the file was closed
- The injured employee is now seeking treatment and possible benefits again
- An unexpected Permanent Partial Disability rating was given by the treating physician
- Attorney involvement
- To pursue Subrogation
Most carrier or TPA systems do not allow any type of work on the file without the file being reopened by the adjuster – other than inputting a note. Very few allow payments without reopening the file.
How Reopened Workers Compensation Claims Can Wreck Insurance Programs
The Bad Part
See this article for more info. I wrote it back in December 2020. The old reserves that were on the file sometimes peg back to the reopening reserves. A file that was closed with $12,500 in benefits paid was reopened with $75,000 in reserves to pay a $500 bill, then not closed before the UNITSTAT Date, so an extra $60,000+ was added into their Experience Mod – ouch! The Rating Bureaus will not back out of the increased reserves.
The same goes for self-insureds and large deductible programs. An actuary or predictive analytics may not reduce the claim back to $12,500. ouch!
The OK Part
Usually, a Reopened Workers Compensation claims status on a loss run results from an innocuous situation. The file had to be reopened to pay a medical bill and the file was subsequently re-closed. Unless the bill was huge, the result will have little effect on your WC program.
Working With Your Adjuster To Get The Claim Reclosed
If a file has the R status, then an email (not a call) to the adjuster may be all you need to do on the file. If you have online claims access, then you could review the claim to see why it was reopened.
If the file needs to stay open, just make a note of it and review it monthly or whenever you receive or request new loss runs.
Bottom Line – Not all R Statuses are bad, but they can be negative. Workers Compensation reopened claims need to be part of your review.