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Managing Claims Protecting the Bottom Line

Managing Claims Protecting the Bottom Line. September 30, 2010. Betty Arinder, Attorney – Wells Marble and Hurst, PLLC Hal Caudell, District Manager – CorVel Corporation Bob Fusinatto, Regional Claims Manager – Safety National Casualty Corporation

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Managing Claims Protecting the Bottom Line

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  1. Managing ClaimsProtecting the Bottom Line September 30, 2010 Betty Arinder, Attorney – Wells Marble and Hurst, PLLC Hal Caudell, District Manager – CorVel Corporation Bob Fusinatto, Regional Claims Manager – Safety National Casualty Corporation Steve Link, Executive VP of Marketing – Midwest Employers Casualty Corporation

  2. Claims ManagementImpacting Outcomes

  3. Important Guidelines for Claims Handling • Timely Report of Injury • Investigate and Adjudicate • Predict and Intervene – Right Resources at the Right time! • Concurrent Reviews • Analytics and Trending • Impacting Outcomes

  4. Medicare’s Effect on Workers’ Compensation • 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

  5. Medicare Set Asides (MSA) • 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?

  6. Medicare Set AsidesThe Affect on Claim Settlements • 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

  7. CONTROL LITIGATION COSTS Top Five

  8. 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

  9. CHOICE OF PHYSICIAN • Explain choice of physician to injured worker • Make sure that employee has clear choice • Document choice

  10. RETURN TO WORK • Temporary • Longer out of work, less likely to return • Permanent

  11. TEAM WORK • Attorney represents employer, not just carrier • Communication with adjuster and attorney • Providing information and documents promptly

  12. MEDIATION • You have more control • Less costly than hearing • More options for concluding; can be more creative • Maintains relationships

  13. Claims ControlExcess Coverage

  14. How Does Proactively Managing Claims Protect the Bottom Line? • 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

  15. Proper Management of Claims • Investigation • Medical Management • Vendor Management • Reserving • Recoveries • Return to Work – Settlement • Supervision, Documentation, Action Plans

  16. Proper Management of Claims – (cont.) • Excess Reporting

  17. 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

  18. WC Medical Severity Rising at Twice the Medical CPI Rate 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. Sources: Med CPI from US Bureau of Labor Statistics, WC med severity from NCCI based on NCCI states. Insurance Information Institute.

  19. Medical Distribution of Total Costs 2008 1998 1988 Source: NCCI (based on states where NCCI provides ratemaking services).

  20. Medical Claim Cost Inflation WC 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.

  21. Obesity Epidemic Obesity Trends* Among U.S. AdultsBRFSS,1990, 1999, 2008 (*BMI 30, or about 30 lbs. overweight for 5’4” person) 1999 1990 2008 No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30% Source: CDC Behavioral Risk Factor Surveillance System

  22. Questions?

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