In several previous articles, we have covered different aspects of claims management, including claims auditing, key metrics, and the desired characteristics of a third party administrator (TPA). We have also identified some of the types of claims management services that are available in today's market, which includes numerous niche players. Some of these players are important partners that can help you manage your program toward better results. Also, many of them have already been packed in the box for many years, and will work well with you and your employees if they are properly implemented and executed.

Some of the services that various claims-related vendors provide vary by line of insurance, while some are universal in their application. Some of the services that vendors provide are shown in the matrix below. By no means is this exhaustive of the many services and products offered.

The many services provided and the variety of providers sometimes makes it difficult to determine the services needed and the specific vendor to use. Rather than focus, however, on the many different types of vendors, we will focus on the primary parties that are already “packed in the box.” The two that immediately follow are the most crucial to successful outcomes.

The Company

The most important party in claims administration is the company or public entity. For purposes of this article, we will focus on workers' compensation claims, which require the greatest number of different functions or responsibilities to achieve the desired outcomes, and which require the greatest input and contribution by the company / employer.

Employers, whether insured or self-insured, self-administered or TPA-administered, have the highest level of responsibility, and their ability and willingness to become actively involved in the personnel management and claims management aspects of workers' compensation claims will have the greatest impact on the outcomes. Employers must continue to manage the employees, whether they are at work or off work, continue to communicate with the employees, and prepare them for return to work. This means that they must develop an assertive program prior to the first claim, if possible, so that it runs as smoothly as possible once an injury occurs.

One of the most important aspects is the development of a stay at work / return to work program that works across all business units or departments. If an employee fails to properly manage their employees, both before and after an injury, and refuses to take them back to work, then the most effective claims administrators will be working with one hand tied behind their backs. It also conveys a message to the employees that they are not important to the company.

The employer must also avoid using workers' compensation as a means to rid itself of employees that it no longer wants. In too many cases, a supervisor or employer has refused to allow employees to return to modified duty because the supervisor has not dealt with personnel issues that should have already been addressed. Poor-performing employees, who should have been counseled, disciplined, or terminated previously for poor performance, become costly workers' compensation claims.

Claims Administration

The claims administrator, whether it is an insurance company claims department or a third party administrator (TPA), should be treated as an extension of the employ / company. Claims administrators have been packed “in the box” for many years, but are still often misunderstood and misused by the companies that hire them. As we discussed in the prior paragraph, claims administrators are sometimes handicapped by employers' actions, and sometimes are blamed for results that were beyond their control.

In some cases, however, the claims administrator may not perform as well as expected, and this often can be avoided or mitigated by clarifying the roles, responsibilities, and expectations at the beginning of the company/claims administrator relationship. This is the point where the employer confirms its responsibilities in continuing to manage the injured employees and providing return to work opportunities, while the claims administrator confirms its responsibilities in properly managing the claim to achieve the optimal outcome in accordance with the applicable workers' compensation laws.

It is vital in this initial agreement that the company and the claims administrator also understand how their responsibilities and communications are intertwined. They must develop strong communication channels between the company and its supervisory and management personnel, the claims administrator and its adjusters and supervisors, the medical providers in the area served, and other service providers that might be a part of the program.

In many cases the claims administrator also has an ongoing process for the mandatory Medicare reporting that is required for workers' compensation claims. This process, whether performed by the claims administrator or by a vendor with which it has contracted, is often seamless to the employer.

Note that these first two parties—the company/public entity and the claims administrator—have been “packed in the box” since workers' comp began approximately 100 years ago. The lack of clarity, coordination, and communication has led to some of the poor outcomes that we have seen. The proper cooperation between just these two parties will go miles toward creating better results.

Other Claims Services

As illustrated in the earlier matrix, other specialized services may be needed. Some of these may be offered by the insurer of TPA as part of its “bundled” services, or they may be “unbundled” to provide specialized services, as the risk manager or claims manager desires. There are also some niche players that offer services that are required less often. Most of these services have been “packed in the box” for many years, and must also be part of the service coordination process that we discussed above regarding claims administrators. From a workers' compensation standpoint, some of the already “packed in the box” services are:

• Medical bill review/re-pricing. Many states have fee schedules, and in those do not, usual and customary rates (UCRs) are applied to re-price the medical bills in compliance with these schedules. This service, which requires frequent updates to remain in compliance with changing fee schedules and UCRs, may be part of a larger Managed Care Organization (MCO) service, and may incorporate preferred providers, pharmacy benefit management, and other service offerings.
• Medical case management. The need for this service varies to a great extent upon the amount of communication and coordination developed between the company and its claims administrator. If the company is continuing contact with the employee, treats him/her as an important contributor to the company, and providers light duty if it is needed, then the need for case managers diminishes, except in cases of complex or severe / catastrophic injuries. Nurse case managers and other medical specialists can be very helpful in providing the necessary expertise to help with difficult return to work issues or severe injuries

There are myriad other services that may be provided on an ad hoc basis. Their many functions and responsibilities are beyond the scope of this article, but play important parts at various points in a claim's life cycle.

Before a company spends a lot of time and money searching for an “outside the box” solution, the employer must develop a claims program using “what is already in the box.” There is no substitute for a disciplined, assertive, organized and well-communicated program with a few key players.

Once that goal is successful, the employer may then look for other services that are already “in the box,” but are needed less frequently. This will avoid the search for those services, products, and programs that will not provide long-term success in the absence of a disciplined approach.