By Dennis Tierney, Senior Vice President, Director of Workers’ Compensation Claims, Marsh
In the many meetings, forums, and conferences that I attend throughout the year, one question consistently gets raised and discussed between insureds, insurers, brokers and claims professionals: Is there value to conducting a claims review? It is a question that seems to have support on both sides of the equation depending on one’s experience with the claims review process and one’s view of other options available to manage claims costs.
In my opinion, claims reviews are an effective tool to help manage claims and drive positive outcomes. But like anything else, how one goes about conducting that claims review will determine its ultimate value.
An effective workers’ compensation claims review meeting should focus on strategies that best resolve claims for the least amount of money, while ensuring that the injured worker gets proper medical care to return to gainful employment. As such, many organizations are now referring to claims reviews as “strategy sessions.”
Key components to an effective claims review include:
- Planning — The insured, TPA/carrier, and broker should meet ahead of time to discuss expectations and goals for the review.
- File selection — Selecting the right files to review is imperative. Files should be jointly discussed between the insured, broker, and carrier/TPA and picked based on the impact that can be achieved.
- Claims summary reports — The carrier/TPA should create a comprehensive report that outlines the insured’s current open claims state, the strategy to resolve selected claims, and a reserve rationale. These reports should be delivered to the insured and broker one to two weeks prior to the claims review meeting, so everyone has time to review. This leads to a more productive meeting.
- The claims review meeting — The carrier/TPA should present each file and get to the main points of where the claim is currently and the plan to resolve it. This should generate a robust discussion between all parties at the review and lead to an agreed upon plan of action for resolution.
- Follow up — Upon conclusion of the review, a brief wrap-up meeting should take place between the carrier/TPA , the broker, and the insured, to ensure all expectations have been met and any outstanding issues are addressed. A subsequent plan detailing action items for follow up with a corresponding time-frame for completion should be discussed and agreed upon.
Of the claims review components listed above the two most important are file selection and follow up.
The days of selecting files based on a reserve threshold are over. Most carriers, TPAs, and brokers today offer predictive analytical tools that should be used to select files for a claims review. By using predictive analytics, insureds are able to identify claims that have the potential to turn into high exposure claims. By reviewing and discussing them today, plans can be put into place to help prevent the claim from getting out of control. Such predictive analytics enables insureds to not just review those high dollar claims, which they may not be able to change, but also to look at lower level reserve claims that have the potential to get out of control.
The second key component to a claims review is follow up. I have seen many reviews where some good action items are discussed, but they never get implemented by the responsible party. Without proper follow up to ensure that the action items discussed are put into place, the claims review loses much of its value. It is important that all action items are tracked for each claim discussed and that the insured and the broker work with the carrier/TPA to ensure these action items are addressed in a timely manner on each file. The worst thing that can happen is to agree on action items and get to the next review and those action items are still outstanding. A plan and timeframe for action on each action item need to be put in place— by either the broker or carrier/TPA — in order to keep the file moving toward resolution.
Claims reviews will continue to be a hot topic within the workers’ compensation industry and such reviews may not be the best solution for everyone. I would argue though, that they are a tool insureds can use to help drive down their total cost of risk. They are also a way to bring all the different parties together to discuss, communicate, and share ideas on how to best resolve a claim. The key to a successful claim review is that it is implemented correctly, with the right files selected and where follow-up and communication continues after the meeting is concluded.
About Dennis Tierney
Dennis Tierney is a senior vice president in the Marsh Claim Practice (MCP) and serves as the Director of Workers’ Compensation Claims. In this National Role, Dennis works closely with the Workers’ Compensation Center of Excellence to enhance the Marsh Claim Practice’s value proposition around Workers’ Compensation claims and managed care. Dennis is also responsible for establishing continuing processes and protocols around the delivery of advocacy services relative to Workers’ Compensation. Dennis also works closely will Risk Consulting claim leaders on all total cost of risk related tools and analytics. In addition, Dennis interfaces with senior Workers’ Compensation claim leaders from all major carriers and Third Party Administrators.
Marsh is a global leader in insurance broking and risk management. Marsh helps clients succeed by defining, designing, and delivering innovative industry-specific solutions that help them effectively manage risk. Marsh’s approximately 30,000 colleagues work together to serve clients in more than 130 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and people. With annual revenue of US$13 billion and approximately 60,000 colleagues worldwide, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a leader in providing risk and reinsurance intermediary services; Mercer, a leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a leader in management consulting. Follow Marsh on Twitter, @MarshGlobal; LinkedIn; Facebook; and YouTube.
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