Adjusters for third-party administrators may have too many cases to handle, especially when employers are unable or unwilling to pay for high-quality service, several risk and workers compensation managers say.

In turn, that can drive less-than-desirable outcomes, with injured employees not getting the attention they deserve and medical and indemnity expenses dragging out longer than necessary.

To avoid that, workers compensation managers and risk managers say their TPA contracts limit the number of claims each adjuster can manage at a time, a number that varies depending on several factors.

“Clearly, the more cases an adjuster has to handle means he or she has less time to spend on a case,” said Stephen Truono, vp of global risk management for Starwood Hotels & Resorts Worldwide Inc. in White Plains, N.Y. “When you get up to 175 to 200 claims (per adjuster), you have to ask yourself, "Are they really able to spend the time on those claims as closely as they need to?' And if not, does the claims expense run away?”

It is better to pay for more adjusters to keep an individual adjuster's caseload than spend more on runaway claims costs, said Mr. Truono and other employers.

But some employers impose strict limits on their TPA's compensation, which limits the number of adjusters the TPA assigns to their account.

“As a result, the outcomes are horrible,” said Tom Dolan, senior manager of workers compensation for the Houston Independent School District.

The TPA has “to skinny up things so you find your adjusters handling 150 or 200 files, and what do you expect?” Mr. Dolan asked rhetorically. “Do you think the adjusters will have time to analyze, strategize and implement” practices that help improve outcomes?

Mr. Dolan says his TPA contract requires that adjusters dedicated to his account handle no more than 100 open claims.

He derived that number by weighing factors such as the amount of record documentation he requires and characteristics of the school district's employee population. He also analyzed data to determine factors such as how long claims remained open and the district's past performance in managing claims.

But the weak economy is placing greater pressure on employers, driving some to reduce their immediate expenses by cutting the amount they pay their TPAs, said Judie Tsanopoulos, director of workers comp and loss control for St. Joseph Health System in Orange, Calif.

But excessively squeezing a TPA's pay can be misguided and result in an inadequate number of adjusters provided by the TPA, Ms. Tsanopoulos added.

“You are going to get the lowest common denominator in terms of experience; and if you put that (financial) restriction on your TPA, they are going to adjust to that dollar demand and you are going to have high case loads,” Ms. Tsanopoulos said.

To help win the loyalty of her TPA's adjusters and limit their turnover, Ms. Tsanopoulos said she limits their load in California to an average of 88 open claims, a number she acknowledges is “very low.”

However, she also said she has “very stringent client service instructions” and high expectations that the adjusters will meet St. Joseph's philosophy of caring for its employees.

Meeting those expectations, as measured through audits, is “very time-consuming and cumbersome,” so adjusters' caseloads are kept to a minimum, Ms. Tsanopoulos added.

The state where claims are filed should be a factor in determining the optimum number of claims that adjusters manage at any one time, said Fred O. Pachón, vp of risk management and insurance for Select Staffing Inc. in Santa Barbara, Calif.

The number of claims that adjusters handle in California should be capped at around 90 to 100 because of frequent litigation in the state, Mr. Pachón said. In other states, a caseload of 120 claims may be appropriate.

In addition to the number of adjusters per account, they also must have sufficient experience, Mr. Pachón added. Cases involving claims denials or serious medical issues, such as back surgeries, require senior-level adjusters with at least five years of experience, he said.

In the Chicago area, meanwhile, Advocate Health Care Network recently renewed its TPA services contract with Itasca, Ill.-based Gallagher Bassett Services Inc. and paid for an additional adjuster to manage its claims, said Diane M. Pidgeon, Advocate's director of workers compensation.

That will lower the caseload of each adjuster handling Advocate's claims to 125 from 150 to 170 , she said.

“We did that because of the size of our program and we are so "hands on' that it makes for a better (work) flow if adjusters at Gallagher drop their load a little,” Ms. Pidgeon said.