Workers Compensation Reserves More Accurate With Fee Schedules
Workers Compensation reserves (Total Incurred minus Paid) receive an accuracy boost with fee schedules. Why? – Let us go into the mind of an adjuster getting ready to set permanent file reserves at 60 days.
Very few adjusting staffs sit down with a medical reserve and read it out of the state fee schedule. Usually, the adjuster has a list of blanks to fill in to come up with the file reserves. Areas such as surgery, hospitalization fees, physical therapy, etc. are listed on the sheet.
The Workers Compensation reserves at the 60 day mark are for the life of the file. An experienced adjuster with 7+ years into their career has a great feel for reserving in a state with fee schedules. The states with Usual & Customary (U&C) are more of a negotiated price. If you have ever received a U&C bill in a health insurance matter, you are shaking your head – yes. It is by zip code and area of specialty and on and on.
With fee schedules, the adjuster can easily say -OK- the price of treatment for a non-compound ulna fracture (after filling in the aforementioned blanks) is $23,545.00. With U&C, the adjuster creates even more of an estimate as the adjuster has to know the price of medical treatment for every specialty in every zip code. Whew! – that is not easy.
I became very experienced in the U&C area after I received two boxes of paper files from a failed captive in a run-off situation. Some of the providers had not been paid for quite some time. All the injured employee bills originated in non-fee schedule states. The ever complicated negotiation was on – by each zip code, and even some of the U&C Zip Codes were split.
In a fee schedule based state, I could have sent the bills for processing through a bill review company. The charges would have been paid – possibly with an applicable late fee. The task turned out to be not that easy.
Workers Compensation reserves with a fee schedule state have one set of numbers to use in the complete state – in most cases. A few fee schedules have a synthetic add-on such as BR (By Report).
A disclaimer – I am not a U&C health insurance expert. I am more versed in Workers Compensation reserves.
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