A five-minute or shorter review at the time of a workers' comp claim closing will avoid a situation that has become more common since the start of the pandemic.

James Moore

During the pandemic and after, claims adjusters doing their jobs may need to add a step to their closing routines.

As always, check with your supervisors before initiating any of my adjuster advice. Each insurer and third-party administrator has its own way of processing, including closing procedures.

When I wrote this article, I was motivated to add this one to the long list of adjuster job duties. I included the reopen claim mistake that has become more common over the last five years. Medical bills cause the reopen-then-closed status more than any other type of invoice. ALAE was not far behind.

I used to say that ALAE (allocated loss adjustment expense) does not affect the insured employer or self-insured as much as medical bills. Then, I noticed in a loss run review that a $15,000 legal bill was paid to the attorney after closing. No, it did not affect the experience mod. 

However, with the advent of predictive analytics, ALAE analysis has increased significantly. ALAE invoices can be hard to trace.

Small medical bills usually affect only the fact that a reopen status occurred on a claim. A trend that we now see starts with the receipt of a large medical bill after the claim has been closed, sometimes for months.

A five-minute review to see if any large medical bills were not processed is worth the time. Even though the bill may have arrived late, it still has to be paid to the provider.

A clear sign to avoid this situation comes from medical reserve redundancy. If the medical reserve was closed out with a large balance, two things may have occurred on the file:

• The medical treatment was not as extensive as anticipated.
• One large or a few medical bills have not yet been forwarded for payment.

The bills that seem to arrive late more than others are for:

• Durable medical equipment.
• Ambulance.
• Anesthesiology.
• Physical therapy.

These bills usually are not the large ones that I was referring to earlier. If the claims system allows the medical bills to be sorted or downloaded to a spreadsheet, arrange them from largest to smallest.

Checking that the largest bills at the time of closing — usually hospital and surgical — have been processed will avoid the reopened status with a large bill pending.

This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website at www.cutcompcosts.com.