Auditing claims files for 30 years will give one a broad-spectrum view of general adjusting trends. Of course, three decades ago files were paper in construction, with mainframe computers
just beginning to make their debut to record elemental information such as reserves, payments and policy information. However, the meat of the claim folder was paper.
Reviewing claims back in the early '80s involved flipping through adjuster and supervisory notes and diary control, seeking 24-hour three-point contact results, examining medical reports, vetting disability management efforts, digging through legal correspondence, reading case analysis reports, listening to recorded statements or reading handwritten statements, analyzing reserve changes for both timeliness and accuracy, digesting settlement strategy and tactics, etc. Of course, all of the foregoing items remain relevant in the technology era in order to determine if files are being adjusted in proper fashion, but the "modern" reviews largely consist of staring at a screen rather than dealing with paper.
So has the advent of the computer as a replacement for the paper file, and the telephone as the primary investigation tool (replacing in-person contacts) made the adjusting profession more facile? Do the files generally reflect more comprehensive investigations and salutary results than the days of yore? From my perspective, the answer is a resounding "No!"
Sadly, investigations that I have reviewed in the last few years are lacking in specificity and authentic endeavor to determine if the alleged accident transpired while the employee was in the course and scope of employment. For the most part, there exists a mentality that if an occurrence is submitted on an employer's first report of injury, it must be compensable. Recorded statements of the employee and witnesses are few and far between, and the ones that are extant are often taken by Special Investigative Unit personnel rather than the handling claims adjuster.
Medical management practices have been fairly well abandoned to either RN telephonic case managers or field case managers. This constitutes a costly development in terms of allocated loss adjustment expense increase in instances where the RNs are not on staff, which seems to be predominantly the case. Ancillary to this is a general lack of understanding of basic medical terminology by the adjusters. I'm sure a distinct minority of claims adjusters would be able to explain the sense and significance of a positive Babinsky test.
Likewise, claim settlement negotiations are now normally accomplished by the defense attorney, rather than the assigned adjuster. Arguments claiming that adjuster is not involved in the settlement talks because some states require attorneys to "put the case through" the WC Board or Commission are disingenuous; the adjuster can and should still negotiate the settlement, and then can allow the defense attorney to have the settlement legally approved.
Reserving remains a source of continued irritation. It has always been a difficult adjusting task to promptly translate factual developments into accurate financial consequences. However, decades ago, technical training was more ubiquitous. Now training is mostly "on the job," with predictable consequences. Late reserve development, stair stepping and overpaying the established financials (on systems that allow the reserve positing to be overpaid) is commonplace. Additionally, the detailed rationale behind reserve changes is often lacking.
Timely and incisive supervision also seems to be the exception rather than the rule. A supervisory entry regurgitating the history of the file to date is a way of (poorly) masking the lack of pertinent analysis, which should deal with instructions on how best to resolve the salient issues extant so a resolution can be attained as soon as practicable. Supervisory case analysis reports seem to be a thing of the past. Also, there is almost a shocking lack of "claim committees" (aka "file staffing") where the adjuster, supervisor and other germane parties to the loss congregate to come up with a documented, relevant action plan with timeframes for completion to help promptly propel the claim toward ultimate resolution. It is difficult to initiate pertinent "action initiator" if no one is thinking about what type of action to initiate.
Of course, modern technology has helped reduce "cycle time" in terms of correspondence. Rather than awaiting paper mail, email makes instantaneous contact with file stakeholders easier. Computer based files also greatly assist with facilitating the completion of data calls by the various independent rating bureaus and the NCCI. Client "read only" access to computer claim files also helps reduce inquiries on the status of cases. So it is not all doom and gloom.
Unfortunately, my view (based on national claim audit experience) is that file handling has generally deteriorated as case counts have increased, in-person contact is virtually unheard of, a myriad of subcontractors now are involved in almost every aspect of claims, and adjusters are usually undertrained. Technology, no matter how innovative, cannot be expected to make up that those shortcomings.
JOHN D'ALUSIO has more than 30 years of experience as an insurance businessman with executive management positions in administration, field operations and claim technical areas. He can be reached at firstname.lastname@example.org.
September 10, 2013
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