Get Your Stories Straight

When you have worked in the work comp industry as long as I have, you end up spending a lot of hours in claim reviews.

I mean a LOT.

When I started my career, I was the adjuster presenting at the claim reviews. These days, I’m the one being presented to. I’ve been on both sides of the table, and I can tell you this: you probably aren’t paying attention to the right things during a claim review.

See, most employers attend a claim review to get updated on the story of the claim:

·       What happened?

·       What’s happening now?

·       What do we think is going to happen next?

And I get it, the narrative is interesting.

But the story is also told in numbers. And you all need to be looking at the numbers.

Every status report submitted for a claim review will include the following financials:

·       Total Paid (the money you’ve already spent)

·       Total Reserved (the money set aside for the future)

·       Total Incurred (paid + reserved)

These numbers also tell a story, and they tell a story in a way that has a much more direct financial impact than the narrative.

During the file review, you need to make sure the financials and the narrative align.

For example, let’s say the adjuster tells you that the injured worker is scheduled for a spinal fusion next month. You have $40,000 in reserves.

Only $40,000? To cover the surgery, resulting temporary and permanent disability as well as future medical care? That is definitely not enough money. The financials and the narrative are telling different stories.

Your rates are based on your total incurred, so if those numbers are not accurate, you are going to run into some big problems.

Your reserves should be sufficient to cover everything you will pay from now until the claim is closed.

So, the next time you’re attending a claim review, I beg you: look at the numbers. They are part of the formula that determines how much you’ll pay for coverage.