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While observers say medical-only claims easily can fall between the cracks and spiral into costly lost-time cases when adjusters fail to properly manage them, several third-party administrators say they guard against that happening.
The problem arises because medical-only adjusters often have minimal experience and are relegated to processing large caseloads of claims that typically are expected to be resolved quickly because the injuries appear minor.
But merely processing claims, rather than carefully reviewing them to assure claimants receive the necessary level of medical management, can cause small problems to grow worse, sources said.
“Some of the worst cases you will see started out as medical-only,” said Charles Martin, casualty operations consulting leader in the risk consulting practice at Marsh Inc. in Norwalk, Conn. “People didn't manage them (properly), and then down the road (they become) a lifetime case and you are spending hundreds of thousands of dollars.”
Observers also say not paying proper attention to underlying health factors, such as co-morbid conditions stemming from obesity or aging, also can complicate medical-only claims.
And when employers have established modified-duty return-to-work programs, claim handlers also may fail to assure that medical-only claimants comply with their work restrictions or return to their normal, full duties when released to do so.
Employees who do not comply with their work restrictions can exacerbate their injuries, while those who are not promptly returned to full duty when appropriate can become lost-time indemnity claimants, sources said.
But several TPAs say they have implemented practices to ensure from the outset that medical-only claims are thoroughly reviewed so additional medical resources are immediately called in when necessary.
ESIS Inc., for example, analyzed its claims data a few years ago to learn more about its medical-only claims outcomes, then implemented measures that would prevent unnecessary cost drivers, said Nancy DiVincenzo, ESIS vp of claims product management.
The data showed that the Philadelphia-based TPA could improve on its medical-only claims by “actually managing them, as opposed to just processing them,” Ms. DiVincenzo said.
So ESIS created a unit dedicated to handling medical-only claims. In addition to medical-only claims supervisors and claims analysts, a dedicated team includes nurses who provide clinical guidance for managing the claims.
The unit's nurses evaluate incoming claims “at Day 1” as well as reviewing the medical treatment provided to the claimant the entire time a case remains open, Ms. DiVincenzo said.
“They are evaluating the (current procedural terminology) codes and making sure that everything is in line with treatment guidelines for that injury,” Ms. DiVincenzo said.
The nurses look for co-morbid conditions and any other factors that could prolong a claim.
They also help determine if a claim should be transferred to an indemnity adjuster rather than leaving it the hands of a medical-only claims analyst.
“If anything seems like it's going to prolong treatment or it's going to drive up the cost of that claim, we are going to pull it right out of medical only,” Ms. DiVincenzo said.
Several years ago, TPA Gallagher Bassett Services Inc. also improved its claims management process by setting up “centralized medical-only units,” said Emil Bravo, executive vp in Itasca, Ill.
The units' goal is to ensure medical-only claims do not unnecessarily become lost-time cases, and the units have helped reduce the average cost per claim and the average amount of time a claim stays open, Mr. Bravo said.
Gallagher Bassett also offers customers the option of paying an additional fee for lost-time adjusters, who command higher wages, to manage medical-only claims instead of a medical-only adjuster handling them, Mr. Bravo added.
“They pay a little more up front, but when we look at their program in the aggregate…it shows that we reduced the cost of risk for them with an indemnity adjuster vs. a medical-only adjuster,” Mr. Bravo said.
Overall, the management of medical-only claims has improved, but they still can fall between the cracks, Marsh's Mr. Martin said.
To help keep that from happening, employers should stay engaged with the management of their claims by TPAs or insurers, said Debra Levy, workers compensation solution leader in the risk consulting resource group for Wells Fargo Insurance Services USA Inc. in Atlanta.
Employers also need to communicate directly with their injured employees to learn, for example, about their ability to work in a modified-duty capacity and their ability to return to full duty, said Hattie Cunningham, a claims cost expert for Lockton Cos. L.L.C. in Kansas City, Mo. A TPA's or insurer's adjuster may not conduct those conversations, she added.
“Med-only adjusters generally have a very diverse claim load, and not every TPA/carrier on a medical-only claim is going to reach out to the employee and verify that the doctor has released them for return to work,” Ms. Cunningham said.