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Moore: Self-Insured Claims Data: Going Beyond a Loss Run

  • National

J&L examines loads of self-insured claims data every month. Some third-party administrators offer loads of information that go beyond just reviewing a loss run.

James Moore

James Moore

Much of the self-insured claims data can be reviewed using notifications as bells and whistles. The ones I like that seem to work well can be set up as emails or notifications on the home or main screen.

If you do not have online access and are self-insured, you need to obtain it to set up your own system.

Let us cover a few of the notifications. Remember: You need to make the settings at a level you feel comfortable with without becoming the adjuster on the file. 

Payments over X$

One notification that you should have set up is a basic one for self-insured claims data analysis. When a payment is made over, for instance, $10,000, you should receive an email immediately.   

Most systems have that in place. If not an email, then at least have the payments over $10,000 or the largest 10 payments made over the last 60 days right on the home screen.   

Remember, self-insureds: The TPA is spending directly out of your bank account, so a large payment should be a notification to you to at least see what it entailed and on what file. 

Risk managers: You do not want to justify to a C-level manager why you did not review a large subtraction out of your budget.  

Reserves over Y$

As with the payments, you need to know when the reserves have increased significantly on a certain file. This is another one that when a certain amount is added to a file — for instance, an increase of $25,000 in total — an email is sent to you immediately.  

This is an important aspect of self-insureds claims data. Why? Usually, reserves are fed into your loss development factor, and the reserves are being increased to make some type of large payment.  

Litigation, denial, subrogation, fines, settlement, hearings, closing

Any major development on the file should have a flag notification sent out or have it on your TPA’s home screen when you log on to see your self-insured claims data.   

The subrogation flag is one of the more interesting ones. You can know if the TPA's claims adjuster is looking into the subrogation on the file that has third-party involvement.  

The list of flags can be enormous. The states in which a self-insured operates may dictate which one of these flags are more useful than others. 

Vendor assignment 

This unique flag lets you know what vendor is being assigned by the TPA. This cost-saving flag becomes very important when the TPA is using an internal company vendor such as a pharmacy benefits manager or rehab nurses. 

Do not adjust the files — risk manage them

Having too many flags set or having the reserve or paid values too low turns a risk manager into an adjuster. You are paying your TPA to adjust the files. Let it do its job. 

Manage the risk by going beyond your loss run. Adjusting the claims can be an exercise in frustration. 

TPA fees should be on self-insured's claims data cost spreadsheet  

Make sure you know every penny your TPA is charging you for its services, including the internal vendor assignment flag.   

One can usually request a screen to be set up to show these or downloaded as an Excel (not CSV) spreadsheet. You need to know where the internal charges originate. The TPA fees can be surprising, yet informative, self-insured claims data. 

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.

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