Workers Comp Closed Claim Review – Necessary Task – See Why
An easy task that any insured can perform is the closed claim review. Why is this necessary? Look no further than the last article to see why skipping over closed workers comp claims may cause an error that no one wants to experience with their WC program.
Yes, just reviewing the claims with an Open Status may lead to certain avoidable situations such as losing part of your business by not being able to bid on commercial or government projects that require an Experience Mod of 1.0 or lower.
You may not have to review the claims online. Reviewing your company’s claims loss run may suffice to avoid the situation – see the previous link.
Some Workers Comp claim systems allow a claims adjuster to pay a bill without ever opening the claim or to reopen the claim and immediately close after a payment was made on a medical bill.
Best Method
The easiest method to accomplish a closed claim review starts with making or obtaining copies of claims loss runs at least quarterly. Check to see if the values changed between each period. If so, find out why by looking at the payments online during your closed claim review.
Often, this may involve an old medical bill that was billed very late. If the bill is large, the payment could push your Experience Mod to an undesirable level. The same can be said for self-insureds, except the large bill may blow out your workers comp budget for the year.
If a more than minor claim has low medical payments, the bills may add to your losses for the policy year more than expected.
If the payment was an Allocated Adjustment Expenses – listed under Expenses in the claims loss run, the payment can usually be ignored unless you are a self-insured.
Also, look for the Reopened Closed, or the Reopened Status.
Closed Claim Reviews Do Matter
If you are on the edge of a less than 1.0 Experience Mod – good job. However, the added values of the closed claim payments may push your company’s Mod above 1.0.
To fix this situation, you will need to reduce some of the other outstanding reserves to offset the late payment increase. So many articles exist on the website that will help with a loss run and claims review. Check out these two links for a list of articles
Bottom Line
Yes, it may seem a little picky or like you are only chasing small amounts. I am now reviewing a situation that caused me to write an article on what happened during a closed claim review that I performed for a large insured last week.
You can make this part of your quarterly or monthly loss run reviews.
