Protecting the Bottom Line Avoiding a # PRFail Presented by:
Managing Claims Protecting the Bottom Line
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Transcript of Managing Claims Protecting the Bottom Line
Managing ClaimsProtecting the Bottom Line
September 30, 2010
Betty Arinder, Attorney – Wells Marble and Hurst, PLLCHal Caudell, District Manager – CorVel CorporationBob Fusinatto, Regional Claims Manager – Safety National Casualty CorporationSteve Link, Executive VP of Marketing – Midwest Employers Casualty Corporation
Claims ManagementImpacting Outcomes
Timely Report of Injury Investigate and Adjudicate Predict and Intervene – Right Resources at
the Right time! Concurrent Reviews Analytics and Trending Impacting Outcomes
Important Guidelines for Claims Handling
Agent Reporting◦ Why is the Center for Medicare Services (CMS)
Requiring Reporting Complying with Medicare Mandatory Insurer
Reporting Requirements (MMIRR) Identifying Authorized Representative,
Account Manager and Account Designee Testing Going Live
Medicare’s Effect on Workers’ Compensation
What are the CMS Requirements for MSA’s◦ Claims estimated to settle for more than
$250,000 when the beneficiary will become eligible for Medicare in less than 30 months
◦ Claims estimated to settle for more the $25,000 when the beneficiary is already eligible for Medicare
What about Liability Claims?
Medicare Set Asides (MSA)
Current Medicare Guidelines and Affect on Settlement Values◦ Major Cost Driver’s – Pharmacy
Real Life Example of MSA Impact: Lifetime Medical Treatment - $22,528.08 Lifetime Medicare Prescription - $611,994.04
Total $634,522.12
What Type Settlement Should I Pursue What Interventions/Options are
Available
Medicare Set AsidesThe Affect on Claim Settlements
CONTROL LITIGATION COSTS
Top Five
AVOID LAWYERS Explain workers’ compensation process to
injured employee Employer: stay in touch with injured
employee; re-assure of employment Adjuster: communication is key; prompt
payments
CHOICE OF PHYSICIAN Explain choice of physician to injured
worker Make sure that employee has clear choice Document choice
RETURN TO WORK Temporary Longer out of work, less likely to return Permanent
TEAM WORK Attorney represents employer, not just
carrier Communication with adjuster and attorney Providing information and documents
promptly
MEDIATION You have more control Less costly than hearing More options for concluding; can be more
creative Maintains relationships
Claims ControlExcess Coverage
Reduces Direct Costs (losses)
Reduces Indirect Costs (Lost productivity, increased labor costs, etc.)
Reduces Excess Premium
and Self Insured Retention
Improves Employee Morale-Increased Productivity
How Does Proactively Managing Claims Protect the Bottom Line?
Investigation Medical Management Vendor Management Reserving Recoveries Return to Work – Settlement Supervision, Documentation, Action
Plans
Proper Management of Claims
Excess Reporting
Proper Management of Claims – (cont.)
Excess Reinsurance 101 We Share the Risk of our Clients TPA “Quality is Critical to our own Mutual
(Client/Excess Insurer) Success High Quality Claim Administrative Services
Alone cannot Guarantee an Employer will Achieve Best Practice Results
Best Practice Results can only be Achieved Through Proactive Employer Management of all Aspects of the Program
4.5%3.5%
2.8% 3.2% 3.5%4.1% 4.6% 4.7%
4.0% 4.4% 4.2% 4.0% 4.4%3.7% 3.4%
5.1%
7.4%
10.1%
8.3%
10.6%
7.3%
13.6%
7.6% 7.2%6.2%
9.2%8.6%
5.8% 6.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Change in Medical CPIChange Med Cost per Lost Time Claim
WC Medical Severity Rising at Twice the Medical CPI Rate
Sources: Med CPI from US Bureau of Labor Statistics, WC med severity from NCCI based on NCCI states. Insurance Information Institute.
Average annual increase in WC medical severity from 1995 through
2008 was more than twice the medical CPI (8.1% vs. 4.0%). New
healthcare reform legislation is unlikely to have any impact on the
gap.
Medical Distribution of Total Costs
Indemnity54%
Medical46%
Source: NCCI (based on states where NCCI provides ratemaking services).
Indemnity47% Medical
53%
Indemnity42%
Medical58%
1988
1998
2008
Medical Claim Cost InflationWC Insurers Experience Inflation More Intensely than
2009, CPI Suggests
Healthcare Costs Are a Major WC Insurance Cost Driver. They Are Likely to Increase Faster than the CPI for the Next Few Years, at Least
Source: Bureau of Labor Statistics; Insurance Information Institute.
1999
2008
1990
No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%
Obesity EpidemicObesity Trends* Among U.S. Adults
BRFSS, 1990, 1999, 2008(*BMI 30, or about 30 lbs. overweight for 5’4” person)
Source: CDC Behavioral Risk Factor Surveillance System
Questions?