a case study
You will be presented with two versions of a closed claim case study.
Claim Adjuster's View
Read about the claim as told through the eyes of the carrier/TPA at one of your quarterly workers' compensation claims review meetings.
Employers Comp Advocate's View
How does a claim that should be $28,000 turn into a $39,231.69 claim? Read about the same claim through the eyes of Employers Comp Advocate—we're your second set of eyes, critiquing claim-handling efficiency.
Claim Adjuster's View
On April 19, 1999, a 41-year-old man reported an injury to his thumb from metal shavings penetrating his glove on March 31st while working as an Assembler.
The adjuster's initial 3-point contact (employee, employer, and medical provider) was completed on April 23rd. With antibiotic treatment, the recovery period was expected to be 2-3 weeks. Follow-up medical treatment with the Carrier's Primary Care Provider showed complications, extending the disability an additional 3-4 weeks. Employer was unable to accommodate "light duty" return to work.
Upon advisement of medical complications, the adjuster assigned both a Telephonic Case Manager and Medical Case Manager at the end of April. During May, claimant underwent physical therapy. Mid May, claimant advised the adjuster that his own physician noted slow progress and therefore was continuing the initial medical restrictions.
At the end of May, the adjuster ordered an Independent Medical Examination (IME) and surveillance upon hearing from claimant's supervisor that claimant was involved in home-improvement projects using his disabled hand/thumb. Even though two separate days of surveillance tapes confirmed rigorous use of disabled hand/thumb, the IME report maintained existing medical restrictions. Claimant continued to receive disability payments and periodically saw his own physician until December 20, 1999 when he received a full release to return to work without restrictions.
Employers Comp Advocate's View
The following case study helps illustrate the typical findings of an Employers Comp Advocate audit where inefficient claim handling created a projected 28.63% increase in the incurred claim amount. Events in blue represent the claim adjuster's activities. Notations in red show Employers Comp Advocate's comments as this claim was recently critiqued while reviewing both the physical file as well as the adjuster's computer documentation.
INITIAL REPORT
3/31 Metal shavings caused injury to Employee's thumb
4/19 Employee reported injury to Employer
4/20 Employer reported injury to Carrier
TREATMENT PLAN QUESTIONABLE
4/23
- 3-point contact completed by adjuster
- Clinic treated thumb - 2-3 weeks anticipated duration of disability
- Indemnity payments began $ 372 / week
- Why was adjuster's 3- point contact late?
- Why late reporting by employee?
- Should claim have been disputed?
- No witness statements
- No outlined action plan
- No follow up with supervisor about gloves--worn? adequate?
- Employers Comp Advocate Initial Recommendations Report would have been distributed to employer and adjuster outlining projected treatment, recommendations and anticipated duration of disability
5/10-31
- Medical follow-up exam: complications projected 3-4 weeks more disability
- Adjuster assigns telephonic & medical case managers
- Physical therapy bills paid: $1,456.94
- Why off-loading to telephonic & medical case managers needed?
- File notes sketchy regarding progress and status
- No Physical Therapy Evaluation and status reports
- Who approved?
- Why ordered?
- No notes regarding its progression/success
- No notes on revisiting "light duty" return to work
ATTEMPT TO BE PROACTIVE
5/20
- Claimant sees personal physician who recommends continued disability and medical restrictions
- Technician orders an Independent Medical Examination (IME) and surveillance based on rumors from co-workers that claimant was okay
- Surveillance cost - $2,156.68
- Good proactive measure
LACK OF FOLLOW THROUGH
6/24
- IME maintained current medical restrictions
- Surveillance tapes confirmed rumor of numerous rigorous activities using "hand/thumb"
- Periodic office visits with personal physician continued disability
- Why did it take so long to get IME report?
- Clarification of IME report needed re vague contents & conclusions
- Why weren't results of surveillance shared with Telephonic & Medical Case
- Managers, IME physician, employer or claimant
- Why was surveillance done if not used?
- File notes continued to be sporadic and sketchy
- Claim should have closed with no further indemnity payments
12/20
- Claimant's physician gave full release with no medical restrictions
- Claim should have been closed back in June subsequent to IME
- File notes continued to be sketchy and lacked content
- Random periodic contact by adjuster with claimant
EMPLOYERS COMP ADVOCATE'S CONCLUSIONS
A claim that should have been closed within 2 months continued unnecessarily for an additional 6 months.
Total hidden costs of $11,231.52 found in:
$3,867.63 - unnecessary assignment of case workers
$1,456.94 - Physical Therapy; lacked evaluation, status reports, evidence of approval
$2,156.68 - surveillance/ IME -should have been used to close claim
$3,750.27 - over 10 weeks unnecessary additional indemnity payments
Total projected hidden costs are conservative and do not reflect indirect hidden costs the employer incurred. The 28% in direct hidden costs was representative of all claims reviewed in this employer's audit where total average incurred claims for 3 years was $978,362, resulting in projected annual direct hidden costs of $273,941.
As seen in this case study, Employers Comp Advocate can show "what should have been" on a closed claim. Ongoing monitoring of new or open stagnant claims allows Employers Comp Advocate to be your second set of eyes to ensure efficient and cost effective claims handling by the insurance carrier/TPA claims adjusters.