Unit Statistical Data Loss and Claim Conditions

Transcription

1 Unit Statistical Data Loss and Claim Conditions January 15 18, 2019 Palm Beach County Convention Center West Palm Beach, FL Your Source for Data Quality

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3 Unit Statistical Data Loss and Claim Conditions Presented by: Stephan Cartright and Bruce Hallman Agenda 1 Reporting of Losses 2 Claim Conditions 3 Loss Limited/Excluded From Experience Rating 4 Additional Loss Rules 5 Example 2 1

4 Reporting of Losses Accident Date Required for All Claims Traumatic, Occupational Disease, and Cumulative Injuries Consistent throughout life of claim Traumatic Injuries Actual Accident Date Within policy period Occupational Disease and Cumulative Injuries If known Actual Accident Date If not known Last date of exposure to conditions causing the injury 4 2

5 Indemnity Losses Claim Reserves Compensation Benefits Claimant Attorney Fees Vocational Rehabilitation Employer Liability Losses (including ALAE) Awards Penalties for Delays in Compensation Payments Expenses Benefiting the Claimant Statistical Plan: Part 4 C 5 Medical Losses Claim Reserves Doctor and Hospital Payments Physical Rehabilitation Impartial Examinations Other Medical Items Transportation Expenses, etc. Bonuses or Return to Work Incentives Expenses Benefiting the Claimant Statistical Plan: Part 4 B 6 3

6 Allocated Loss Adjustment Expense (ALAE) Expenses Allocated to Specific Claims Attorney Fees (Staff or Hired) Court Expenses, Dispute Resolution Medical Cost Containment Claim Expenses Required by Statute or Regulation Statistical Plan: Part 4 D 1 7 Unallocated Loss Adjustment Expense (ULAE) Expenses Excluded From Unit Statistical Reporting Carrier Employee Salaries, Overhead, Travel Fees Paid to Independent Claim Services or Attorneys (Performing Claim Adjuster Duties) Statistical Plan: Part 4 D 2 8 4

7 Loss/Expenses Benefits Claimant In the Loss? Benefits Carrier Indemnity Medical ALAE ULAE 9 Vocational Rehabilitation Job Placement Schooling Testing Vocational Rehabilitation Return to Work Expenses Evaluation 10 5

8 Physical Rehabilitation Medical activities to achieve maximum medical recovery Provided by medically trained personnel Includes evaluations, therapies, consultations, and coordination of services 11 Claim Expense Pick the Category Physical Rehabilitation Claims Investigation Vocational Rehabilitation Carrier Attorney Fees Doctor and Hospital Payments Medical expenses incurred for the benefit of the claimant Legal court expenses incurred for the benefit of the claimant Employer Liability Losses Employer Liability ALAE Bill Auditing Expenses Carrier Employees Salaries Medical Loss Indemnity Loss ALAE ULAE 12 6

9 Claim Conditions Claim Conditions Loss Development Loss Reduction Conditions Loss Limited/Excluded From Experience Rating Additional Loss Rules 14 7

10 Loss Development What Is Loss Development? Any changes in loss from one report level to the next Indemnity and medical loss reserves Indemnity and medical payments ALAE paid/incurred amounts How Do We Report Loss Development? Loss development is on a going forward basis never submit correction reports 15 Loss Reduction Conditions Subrogation Special Fund Reimbursement 16 8

11 Subrogation The carrier receives a recovery from a third party with a legal liability for the claim. The gross incurred loss must be reduced by the recovery less recovery expenses. Type of Recovery Loss Conditions Code Description 03 Subrogation Only (Third Party) 04 Subrogation and Second Injury Fund Reimbursement 17 Subrogation Determine Total Loss Total Loss = Total Indemnity + Total Medical Calculate Net Cost Total Loss (Subrogation Recovery Subrogation Expenses) = Net Loss Determine Which Units Require Corrections Compare Net Loss to previous report levels When was the recovery received? 18 9

12 Subrogation Reporting Subrogation Recovery Prior to 1st Report Include calculated subrogation recovery in claim value Type of Recovery Code 03 (Subrogation) or 04 (Subrogation and SIF) Subrogation Recovery After 1st but Before 6th Report Calculate the Net Loss (as of latest report level) Determine if correction reports are needed Type of Recovery Code 03 (Subrogation) or 04 (Subrogation and SIF) Subrogation Recovery as of 6th Report Include calculated subrogation recovery in claim value Type of Recovery Code 03 (Subrogation) or 04 (Subrogation and SIF) 19 Subrogation Allocation Subrogation Allocation Is Known Allocate to Indemnity and/or Medical, based on the allocation Subrogation Allocation Is Not Known Allocate to Indemnity and/or Medical, based on the proportion of original loss amounts 20 10

13 Subrogation Example Claim Reported on 1st 3rd reports 1st Unit Report: Inc. Indemnity $20,000 Inc. Medical $30,000 Pd. Indemnity $18,000 Pd. Medical $20,000 2nd Unit Report: Inc. Indemnity $35,000 Inc. Medical $40,000 Pd. Indemnity $22,000 Pd. Medical $28,000 3rd Unit Report: Inc. Indemnity $45,000 Inc. Medical $55,000 Pd. Indemnity $45,000 Pd. Medical $55, Subrogation Net Loss After the 3rd report, a subrogation recovery was received. Subrogation Recovery $45,000 Subrogation Expense $3,000 Indemnity $45,000 Medical $55,000 Total $100,000 Net Loss $100,000 ($45,000 $3,000) = $58,

14 Subrogation Correction Report Determination Which report levels require a correction report? Net Loss = $58,000 3rd Unit Report: Inc. Indemnity $45,000 Inc. Medical $55,000 2nd Unit Report: Inc. Indemnity $35,000 Inc. Medical $40,000 1st Unit Report: Inc. Indemnity $20,000 Inc. Medical $30, Subrogation Correction Report Determination Which report levels require a correction report? Net Loss = $58,000 3rd Unit Report: 2nd Unit Report: 1st Unit Report: Total $100,000 Total $75,000 Total $50,

15 Subrogation Loss Allocation Subrogation $45,000 Subrogation Expense $3,000 Indemnity 30% Medical 70% Indemnity ($13,500 $900) = $12,600 Medical ($31,500 $2,100) = $29, Net Loss Values 3rd Report Net Loss Net Indemnity $45,000 $12,600 $32,400 Net Paid Indemnity $45,000 $12,600 $32,400 Net Medical $55,000 $29,400 $25,600 Net Paid Medical $55,000 $29,400 $25,600 2nd Report Net Loss Net Indemnity $32,400 Net Paid Indemnity $22,000 Net Medical $25,600 Net Paid Medical $25,

16 Subrogation 3rd Report Correction Pol Nbr: W Carrier Cd: Pol Eff Dt: 01/01/13 Rpt Nbr: 3 Corr Seq Nbr: 1 Corr Type Cd: L Exp St: 01 Update Type Claim Nbr Accident Dt Nbr of Claims Class Code Injury Type Claim Status Cat Nbr Jurisdiction St P /01/ Update Accident Nbr of Injury Claim Jurisdiction Type Claim Nbr Dt Claims Class Code Type Status Cat Nbr St R /01/ Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees 45,000 45,000 55,000 55,000 3, Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N 00 Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees 32,400 32,400 25,600 25,600 3, Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N Subrogation 3rd Report Correction 28 14

17 Subrogation 2nd Report Correction Pol Nbr: W Carrier Cd: Pol Eff Dt: 01/01/13 Rpt Nbr: 2 Corr Seq Nbr: 1 Corr Type Cd: L Exp St: 01 Update Type Claim Nbr Accident Dt Nbr of Claims Class Code Injury Type Claim Status Cat Nbr Jurisdiction St P /01/ Update Accident Nbr of Injury Claim Jurisdiction Type Claim Nbr Dt Claims Class Code Type Status Cat Nbr St R /01/ Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees 35,000 22,000 40,000 28,000 3, Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N 00 Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees 32,400 22,000 25,600 25,600 3, Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N 00 Unit Statistical Reporting Guidebook: Part 5 H 29 Subrogation 2nd Report Correction Unit Statistical Reporting Guidebook: Part 5 H 30 15

18 Incorrect Subrogation Reporting Premium reduction firm sends payment to reduce the cost of the claim Payments are not from a third party with a legal liability for the claim These payments should not be applied as reductions to incurred loss Effects of incorrectly reporting as subrogation May incorrectly reduce Experience Mod May incorrectly reduce premium If incorrectly reduced, correction required to reinstate to original incurred loss Refer to Circular UNITS Special Fund Reimbursements Claims eligible for carrier reimbursement from a special fund (Second Injury Fund, etc.) require anticipated reimbursement The gross incurred loss must be reduced by the anticipated reimbursement Type of Recovery Loss Conditions Code Description 02 Second Injury Fund Only 04 Subrogation and Second Injury Fund Reimbursement 32 16

19 Special Fund Reporting Special Fund Anticipated Reimbursement Prior to 1st Report Include anticipated reimbursement in claim value Type of Recovery Code 02 (SIF only) or 04 (Subrogation and SIF) Special Fund Anticipated Reimbursement After 1st but Before 6th Report Calculate the Net Loss (as of latest report level) Determine if correction reports are needed Type of Recovery Code 02 (SIF only) or 04 (Subrogation and SIF) Special Fund Anticipated Reimbursement as of 6th Report Include anticipated reimbursement in claim value Type of Recovery Code 02 (SIF only) or 04 (Subrogation and SIF) 33 Loss Limited/Excluded From Experience Rating 17

20 Losses Limited/Excluded From Experience Rating Noncompensable Claims Fraudulent Claims Catastrophe Claims 35 What Is a Noncompensable Claim? A claim that meets one or more of the following: Official ruling denying benefits Claimant s failure to file for benefits Claimant s failure to prosecute a claim following carrier s denial of claim 36 18

21 Noncompensable Claim Reporting Determined Noncompensable Prior to 1st Report No claim to report Determined Noncompensable After 1st but Before 6th Report Report corrections to applicable units Do NOT change loss values Type of Settlement Code 05 (Noncompensable) Determined Noncompensable as of 6th Report Do not report corrections Type of Settlement Code 05 (Noncompensable) 37 Noncompensable Example The carrier submitted a claim on a 1st Unit Statistical report 6 months after the 1st report was submitted, the claim was declared noncompensable A correction report is required to be submitted updating Loss Condition Type of Settlement Code to 05 (Noncompensable) 38 19

22 Noncompensable Example Pol Nbr: W Carrier Cd: Pol Eff Dt: 01/01/13 Rpt Nbr: 1 Corr Seq Nbr: 0 Corr Type Cd: Exp St: 41 Update Type Claim Nbr Accident Dt Nbr of Claims Class Code Injury Type Claim Status Cat Nbr Jurisdiction St R /01/ Noncompensable Example Pol Nbr: W Carrier Cd: Pol Eff Dt: 01/01/13 Rpt Nbr: 1 Corr Seq Nbr: 1 Corr Type Cd: L Exp St: 41 Update Type Claim Nbr Accident Dt Nbr of Claims Class Code Injury Type Claim Status Cat Nbr Jurisdiction St P /01/ Update Accident Nbr of Injury Claim Jurisdiction Type Claim Nbr Dt Claims Class Code Type Status Cat Nbr St R /01/ Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees 55,000 55,000 65,000 65,000 13, Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N 00 Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees 55,000 55,000 65,000 65,000 13, Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N 00 Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees 55,000 55,000 65,000 65,000 13, Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N 00 Unit Statistical Reporting Guidebook: Part 5 L 40 20

23 Noncompensable Example Unit Statistical Reporting Guidebook: Part 5.L 41 Noncompensable to Compensable Claim Development A previous noncompensable claim can develop to become compensable This is considered loss development Report the change to compensable on a going forward basis Do not submit correction reports going back 42 21

24 Fraudulent Claim A claim that has been ruled or officially declared fraudulent by a court decision. 43 Fraudulent Claim Reporting Determined Fraudulent Prior to 1st Report No claim to report Determined Fraudulent After 1st but Before 6th Report Report corrections to applicable units Do NOT change loss values Fraudulent Claim Code 02 (Fully Fraudulent) Determined Fraudulent as of 6th Report Do not report corrections Fraudulent Claim Code 02 (Fully Fraudulent) 44 22

25 Catastrophe Claims (Nonextraordinary Loss) One employer One accident involving two or more reportable claims, per state, per policy Catastrophe Codes 01 to 10 Assigned by the data provider Subject to loss limitation rules 45 Catastrophe Claims (Extraordinary Loss Event) Multiple employers A significant loss event that may involve many claims Catastrophe Codes 11 to 99 Assigned by the WC bureau Reviewed on a case by case basis May be excluded from experience ratings and state loss cost/rates 46 23

26 Extraordinary Loss Events Year ELE Cat Code ELE Event Hurricane Harvey TX Tornado and Storms OK West Fertilizer Plant Explosion TX Kleen Energy Systems Fire/Explosion CT ConAgra Plant Explosion NC Imperial Sugar Co. Explosion/Fire GA World Trade Center Rescue, Recovery, and Cleanup NY Terrorist Attacks DC, NY, and PA 47 Additional Loss Rules 24

27 Additional One Claim Reporting Rules Accident with losses under both WC and EL with combined loss experience Type of Claim Code 03 (WC and EL) Accident with losses under State Act benefits only Report State Act Code 01 Accident with losses under USL&HW Act benefits only Report USL&HW Act Code 02 Accident with losses under both State Act and USL&HW Act benefits Report Act Code 02 with combined loss experience 49 Not Reportable Claim Rules Claims closed without any payments and ALAE as of the 1st unit report ($0 at 1st Report) Claims with Accident Dates outside of the policy period and no corresponding exposure and required to be paid due to an official ruling 50 25

28 Example Example Sales manager is testing the newest cell phone prior to the release to the public. He put the cell phone in his pocket to take home with him. The cell phone caught on fire and severely burned his leg. He was rushed to the hospital and missed the phone s launch. Insurance company is investigating to determine the cell phone or battery was faulty. *The example being shown is fictious including any and all characters, incidents and places. Resemblance to any person living or dead or any incident or place is purely coincidental

29 Example Claim Fact Sheet Claimant was burned by a cell phone battery and has severe burns on the upper thigh Accident occurred in Georgia claimant receiving GA benefits Claimant receiving Medical and Indemnity benefits: Wage Loss Benefits Doctor visits Hospital stay Medicine Physical rehabilitation Job evaluation/testing 53 Example Injury Description Codes Part of Body What got injured? Nature of Injury What was the result? Cause of Injury What caused it? Upper Leg (52) Burn (04) Fire or Flame (04) 54 27

30 Example Carrier Claim System Injury Type Part, Nature, Cause Temporary Injury Upper Leg, Burn, Fire or Flame Exposure State GA 10 Accident State GA 10 Jurisdiction State GA 10 Wage Loss Benefits $10,000 Hospital Payments $20,000 Medical Treatments $20,000 Physical Therapy $15,000 Job Evaluation/Testing $5,000 Medical Cost Containment $3,000 Claim Adjuster Time 15 hours Indemnity Reserves $10,000 Medical Reserves $20, Example Claim Dollar Mapping Claim Mapping Carrier System to Unit Reporting Claim Components Claim System Indemnity Medical ALAE ULAE Indemnity Reserves $10,000 Wage Loss Benefits $10,000 Medical Reserves $20,000 Hospital Payments $20,000 Medical Treatments $20,000 Physical Therapy $15,000 Job Evaluations/Testing $5,000 Medical Cost Containment $3,000 Claim Adjuster Time 15 hours 56 28

31 Example Reporting 1st Report Loss ``````````````````````````````````````````````````````````` Wage Loss Benefits $10,000 Hospital Payments $20,000 Job Evaluation Testing $5,000 Medical Treatments $20,000 Indemnity Reserves $10,000 Physical Therapy $15,000 Medical Cost Containment $3,000 Medical Reserves $20,000 Pol Nbr: W Carrier Cd: Pol Eff Dt: 01/01/17 Rpt Nbr: 1 Corr Seq Nbr: 0 Corr Type Cd: Exp St: 10 Update Type Claim Nbr Accident Dt Nbr of Claims Class Code Injury Type Claim Status Cat Nbr Jurisdiction St R /01/ Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N Example Claim Fact Sheet Update Confirmed that a faulty battery caused the accident Insurance Company received subrogation recovery from the battery manufacturer 58 29

32 Example Carrier System Update Subrogation $35,000 Subrogation Expenses $5, Example Claim Mapping Update Claim Mapping Carrier System to Unit Reporting Claim Components Claim System Indemnity Medical ALAE ULAE Subrogation $35,000 Subrogation Expenses $5,

33 Example Subrogation Recovery Subrogation Subrogation Recovery $35,000 Subrogation Expense $5,000 Net Loss Calculation $100,000 ($35,000 $5,000) = $70,000 Type of Recovery Subrogation 03 Indemnity Medical $17,500 $52, Example Subrogation Correction Report Pol Nbr: W Carrier Cd: Pol Eff Dt: 01/01/17 Rpt Nbr: 1 Corr Seq Nbr: 1 Corr Type Cd: L Exp St: 10 Update Type Claim Nbr Accident Dt Nbr of Claims Class Code Injury Type Claim Status Cat Nbr Jurisdiction St P /01/ Update Accident Nbr of Injury Claim Jurisdiction Type Claim Nbr Dt Claims Class Code Type Status Cat Nbr St R /01/ Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees 25,000 15,000 75,000 55,000 3, Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N 00 Indemnity Paid Indemnity Medical Paid Medical Paid ALAE Deductible Reimbursement Emp Attny Fees Clmt Attny Fees 17,500 15,000 52,500 52,500 3, Loss Conditions Codes: Injury Description Code: Act Loss Recovery Claim Settlement Part Nature Cause Voc Rehab Lump Sum Fraud Claim N N

34 Example Subrogation Correction Report 63 32

35 Supplemental Information

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37 Presenter Biographies Stephan Cartright currently works as a Unit Data Analyst in the Data Resources Division; he has been with NCCI for over 15 years. Stephan s primary responsibilities include unit reporting and answering rules questions. Stephan started in Customer Operations as a Customer service representative on the Mods Team. Bruce Hallman, AIDM, has worked in NCCI s Data Services Department for 22 years. Bruce is a consultant in the Data Services Department in NCCI s Data Resources Division. He is a Unit Statistical data subject-matter expert and the data liaison between NCCI and the independent bureaus. Bruce participates in many projects, including enhancements to Unit and Policy edits and serves as coordinator for NCCI s Data Collection Procedures (DCP) Subcommittee. He is actively involved in various industry groups, including the Workers Compensation Insurance Organizations, Policy Advisory Task Group, and Advisory Statistical Work Group Committees. Bruce earned the Associate Insurance Data Manager designation from the Insurance Data Management Association (IDMA). Before joining NCCI, Bruce worked for the Pennsylvania Compensation Rating Bureau.