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To help defend against general liability claims, Harrah's Entertainment Inc. turns to a practice more often associated with managing workers compensation or employee disability losses.
Harrah's risk management department also shuns a fee-per-claim arrangement with its third-party administrator, which handles the gaming and entertainment company's general liability and workers compensation claims.
For any general liability claim seeking medical costs of at least $10,000, the company turns to a medical review nurse provided by Philadelphia-based Intracorp Inc., said Roger Davis, director, claim management for Harrah's risk management department.
"It's a little out of the box," contracting with a company such as Intracorp to review the medical component of general liability claims, Mr. Davis said.
A spokeswoman for Intracorp agreed that most insurance industry observers would associate her company with providing managed care services for workers compensation, disability and employee medical programs. But Intracorp, a unit of CIGNA Corp., does provide general liability claims review for some employers, she said.
"We like to push our service providers outside of their comfort zones to do things they normally wouldn't do," said Lance J. Ewing, vp-risk management for Harrah's, said of his risk management department.
That expands the services available to other risk managers.
An Intracorp nurse provides Harrah's with a report that can help determine a general liability claim's true value and whether the medical condition for which the claimant is seeking expenses is indeed related to an injury that happened on Harrah's property.
The nurse review "has been a very effective tool" because Harrah's claims adjusters do not possess similar medical expertise, Mr. Davis said.
"If you submit $10,000 worth of medical bills, I want to know if it is related to that slip and fall you had on our property six months ago or is this something that happened 10 years ago," Mr. Davis said.
Intracorp also provides Harrah's with managed care services for treating the company's workers compensation injuries. Those services include utilization review and provider networks with discounted fees.
The workers compensation services have saved Harrah's millions of dollars over several years by eliminating unnecessary treatments, Mr. Davis said.
Mr. Davis oversees three managers, each with responsibility for claims filed in three different regions of the country. In addition, Harrah's contracts with Memphis, Tenn.-based Sedgwick Claims Management Services Inc. for TPA services that include 53 claims professionals dedicated to handling his account.
In 2006, the claims team closed out 8,994 general liability claims and thousands more workers comp claims, Mr. Davis said.
But Harrah's doesn't pay Sedgwick on a fee-per-claim basis as some employers do. Instead, Harrah's pays Sedgwick a flat fee based on factors such as the adjusters' salaries and the expense of closing claims.
The program prevents Harrah's TPA expenses from shooting "through the roof." That would otherwise happen during summer months when tourists flock to certain casinos and claims spike, Mr. Davis said.
"So if an adjuster (closes) 10 or 50 claims, we pay them the same amount of money," Mr. Davis said.
A few years ago Mr. Davis said he estimated that forgoing the fee-per-claim payment system saved about 10% to 15% in costs.