Following a workplace injury, the insurance company is immediately responsible for assigning some value that they will have to pay in order to close out a claim. Often times the amount is very reasonable and in line with what will ultimately need to be paid to resolve the claim. However, too often, this value is more than what is ultimately paid out. After such an injury occurs, insurance companies tend to air on the side of caution by opening up larger claim reserves in case the injury requires further treatment or results in long term disability. It is a reasonable decision that is made by the insurance company at the time, but it still remains true that these large open claim reserves can impact your Work Comp premium for up to 3 years at a time. When a claim is reserved it is considered a loss and the amount of the reserve is treated the same as if the claim was paid in that amount. According to Accucomp, a company that focuses on following up and closing out these reserves, conducting routine open claims reviews saves business owners 30% on their Work Comp costs. Here are a few ways in which your business and/or 3rd party services can facilitate the reduction and closing of these reserves:
- The most direct way to combat these inflated reserves is to be constantly following up with the claims adjuster that is responsible for allotting the reserve to the particular claim. The individual speaking to the adjuster must know what questions to ask the adjuster and what they can demand of the claims adjuster.
- Our agency, works alongside 3rd party specialists who handle these matters and hold claims adjusters accountable for conducting constant reviews of open claims. These routine follow ups have resulted in an average of a 30% Experience Modification reduction for our clients. Merely keeping in contact with claims adjusters and figuring out what may be hindering the closing out of a claim ensures the speedy resolution of the claim and results in thousands of dollars in Work Comp premium savings.
- Typically claims adjusters have a large case load, and your claim is one of many they may work on in a given week. By being in constant communication with them and perhaps assisting them attain the required documentation they may need in a quicker manner, there will be a larger impact on the time in which a claim takes to be closed out and therefore a reduced impact on your Work Comp costs. Remember, the longer a claim drags out with an inflated reserve, the more it will end up costing you in Work Comp premium in the years to come.
- Even though having a 3rd party service has proven to be very effective in closing out these claims, there are numerous ways in which business owners and employees can further facilitate the process. For example, it is critical that claims are called in quickly and accurately, any sort of delay or inaccuracies in the beginning of the reporting process usually leads to the dragging out of a claim.
- It is also crucial that the employee maintains constant communication with all other parties involved. A flow of communication between the employee, employer, physician, and claims adjuster is a practice that needs to continue through the entire process so that the claim is handled as efficiently as possible.
After briefly examining some of the various strategies to combat inflated reserves it is evident as to why business owners who are practicing these strategies are paying 30% less than their peers. Persistent follow up, prompt claims reporting, and constant communication are all procedures that yield effective and cost-reducing results for business owners dealing with large claim reserves. Have you been dealing with claims that have dragged out and have yet to be closed out? Have you had a recent claim that you want to ensure is resolved as efficiently as possible and does not end up costing you significantly in the next 3 years? Call Knight-Dik Insurance Agency, Inc. at (508)753-6353 for more information on Massachusetts Workers Comp Insurance.
Rami Dalli, CWCA
“The Workers Comp Guru”