Answering Questions on Closing Workers Comp Claims
Closing Workers Comp claims remains one of the subjects that generate many questions from our blog readers. The questions all seem to have the same theme.
Why is the claim still open, and how does an open claim cause employers to pay more premiums at renewal? Those are fair budgeting concern questions.
I used to call this subject “The Silent Budget Killer” when I first started the company and in an old manual that I now give away and in this blog. One article to read on this website is this one on an overall claims guide.
Claims adjusters hear these questions often from insureds, agents, and coworkers. Ever since I started handling Workers Comp claims decades ago, the same questions on closing Workers’ Comp claims have appeared over and over again.
Please see the one caveat about answering claims questions at the end of this article. Remember to search the blog for any terms by using the search box.
The Questions – Same Theme Since the 1980s – Still Critically Important
My question(s) are in regard to open claims and best practices. What criteria need to be met to be able to close a claim?
The answer has been the subject of whole sections of claims adjusting manuals. On top of that, each state has its own WC rules that make claims adjusting in each state a very separate function. With no two injured workers healing in the same timeframe, this aspect of claims handling requires 5 – 7 years of claims handling experience just to know when claims are up for a closure status.
Does the length a claim stays “open” affect your E-Mod and/or premium?
Yes, it does, but not necessarily directly. I recommend viewing these very short videos by NCCI. I recommend these quick videos all the time. The manual that covers it well can be found here.
For example, once a claimant reaches MMI with or without an impairment rating and has returned to work full duty, is it standard for carriers to quickly wrap up the claim and get its status to “closed”. Or does every last bill that may take 3-6 months or longer need to be paid to be able to “close” a claim to properly calculate total costs?
With bills pending, most insurance carriers and TPAs (self-insureds) are not going to close and reopen claims over and over again. The effect may be a shocker premium bill out of nowhere. See the answer to the next question for more info.
Can a claim be closed, receive a bill, and easily be reopened, paid, and closed again?
Most states allow a certain amount of time after the policy ends to adjust the reserves. The usual timeframe clocks in at 18 months after a policy starts (inception). The manual mentioned above covers it well. Closing Workers Comp claims has a built-in 6-month buffer after the policy expires to close Workers’ Comp claims or to make sure the reserves are set properly.
Can policyholders set expectations for insurance carriers on closing claims if indeed it affects overall costs?
After working in and administering over many claims departments, the secret to closing claims timely comes about when the insured establishes a reputation for following the Six Keys to Saving on Workers Comp and establishing a working relationship with the claims adjusters who are adjusting your files.
Caveat: each state is unto itself when reviewing claims for closure. No two states are exactly the same. Make sure you remain state-specific.
