Unit Statistical Data Loss and Claim Conditions

Transcription

1 Unit Statistical Data Loss and Claim Conditions January 30 February 2, 2018 Palm Beach County Convention Center West Palm Beach, FL The Path to Data Excellence

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3 Unit Statistical Data Loss and Claim Conditions Presented by: Richard Saltzman and Stephan Cartright Objective Become familiar with Unit Statistical loss reporting and claim conditions topics. 2 1

4 Agenda Case Study Reporting of Losses Claim Conditions Loss Limited/Excluded From Experience Rating Additional Loss Rules 3 Reporting of Losses 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 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 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 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) 8 4

7 Claim Expenses Included in Indemnity, Medical, ALAE, or ULAE Medical Medical or legal court expenses incurred for the benefit of the claimant (Interpreter Expenses) Indemnity Expenses incurred for the benefit of the claimant (Vocational Rehabilitation) ALAE Specified expenses that can be allocated to the claim but are not in the loss (Medical Bill Auditing) 9 Claim Fact Sheet Claimant run over by bulldozer multiple injuries to entire body Accident occurred in Georgia claimant receiving GA benefits Inspection confirmed that faulty brakes caused the accident Subrogation from bulldozer repair shop is in progress Claimant receiving Medical and Indemnity benefits: Doc visits Hospital stay Meds Physical rehab. Job evaluation/testing 10 5

8 Loss/Expenses Benefits Claimant In the Incurred Loss? Benefits Carrier Indemnity Medical ALAE ULAE 11 Vocational Rehabilitation Job Placement Schooling Testing Vocational Rehabilitation Return to Work Expenses Evaluation 12 6

9 Physical Rehabilitation Medical activities to achieve maximum medical recovery Provided by medically trained personnel Includes evaluations, therapies, consultations, coordination of services 13 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 14 7

10 Claim Expense Pick the Bucket Physical Rehabilitation Claims Investigation Vocational Rehabilitation 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 15 Claim Conditions 8

11 Claim Conditions Loss Development Loss Reduction Conditions Loss Limited/Excluded From Experience Rating Additional Loss Rules 17 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 18 9

12 Loss Reduction Conditions Subrogation Special Fund Reimbursement 19 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 20 10

13 Subrogation Determine Total Incurred Loss Total Incurred Loss = Total Incurred Indemnity + Total Incurred Medical Calculate Net Incurred Cost Total Incurred Loss (Subrogation Recovery Subrogation Expenses) = Net Incurred Loss Determine Which Units Require Corrections Compare Net Incurred Loss to previous report levels When was the recovery received? 21 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 22 11

14 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 Incurred 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) 23 Injury Description Codes Part of Body What got injured? Nature of Injury What was the result? Cause of Injury What caused it? 24 12

15 Carrier Claim System Injury Type Permanent Partial Injury Part, Nature, Cause Multiple Body Parts, Multiple Injuries, Motor Vehicle Exposure State FL 09 Accident State GA 10 Jurisdiction State GA 10 Wage Loss Benefits $20,000 Hospital Payments $40,000 Medical Treatments $20,000 Physical Therapy $15,000 Job Evaluation/Testing $5,000 Subrogation $25,000 Subrogation Expenses $5,000 Medical Cost Containment $3,000 Claim Adjuster Time 15 hours 25 Claim Dollar Mapping Claim Mapping Carrier System to Unit Reporting Claim Components Claim System Indemnity Medical ALAE ULAE Wage Loss Benefits $20,000 Hospital Payments $40,000 Medical Treatments $20,000 Physical Therapy $15,000 Job Evaluations/Testing $5,000 Subrogation $25,000 Subrogation Expenses $5,000 Medical Cost Containment $3,000 Claim Adjuster Time 15 hours 26 13

16 Loss Reporting Subrogation Subrogation Recovery $25,000 Subrogation Expense $5,000 Incurred Loss Calculation $100,000 ($25,000 $5,000) = $80,000 Claim Status Injury Type Accident State Jurisdiction State Part of Body Nature of Injury Cause of Injury Open PP 09 GA GA Multiple Multiple 90 Motor Vehicle 77 Act Type of Loss Type of Recovery Type of Claim Type of Settlement Incurred Indemnity Incurred Medical ALAE State 01 Traumatic 01 Subrogation 03 W/C Only 02 Not Subject 00 $20,000 $60,000 $3, Claim Impact to StephRich Policy Question How could the accident have impacted our policy? a. Get cancelled b. Affect our experience mod c. Lower premium 28 14

17 Subrogation Question a. Gave funds to Richard to buy a new chainsaw b. Recovery reduced losses used in Experience Rating c. Stephan bought more TNT What happened to the subrogation recovery? 29 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

18 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 31 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 Incurred 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) 32 16

19 Loss Limited/Excluded From Experience Rating Losses Limited/Excluded From Experience Rating Noncompensable Claim Fraudulent Claim Catastrophe Claims 34 17

20 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 claim following carrier s denial of claim 35 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) 36 18

21 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 37 Fraudulent Claim A claim that has been ruled or officially declared fraudulent by a court decision

22 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) 39 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 40 20

23 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 41 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 Terrorist Attacks DC, NY, and PA World Trade Center rescue, recovery, and cleanup NY 42 21

24 Additional Loss Rules 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 44 22

25 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 45 Wobbly Wheel Game Catastrophe Code Reported in Medical Loss $0 Claim at 1st Report Reported in Indemnity Report Actual Accident Date Requires Reducing Losses via Corrections Demo and Salvage Fraudulent Claim 46 23

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27 Supplemental Information

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29 Presenter Biographies Richard Saltzman has more than 30 years of experience in the insurance industry, including 20 years of insurance company experience. Richard works in Data Services, and his responsibilities include data reporting compliance projects, industry communications, and working on NCCI s data reporting manuals. Stephan Cartright currently works as a Unit Data Analyst in the Data Resources Division; he has been with NCCI for 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.