Copyright 2016 National Council on Compensation Insurance, Inc. All Rights Reserved. Detailed Claim Information Overview and Claim Selection

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1 Detailed Claim Information Overview and Claim Selection

2 Agenda Overview DCI Resources General Rules Claim Selection and Sampling Recap

3 What is DCI Data? Detailed Claim Information is: A method to collect detailed information on Indemnity Claims for legislative pricing and research Indemnity Claims (or Lost-Time Claims): A claim in which compensation is paid to an injured worker for lost wages due to a workrelated injury

4 Why We Collect DCI Data Detailed Claim Information allows for: Comparison of wages to benefits Attorney involvement Lump-sum payments Used extensively for a variety of purposes: State Law Pricing State Insurance Department Reporting State Advisory Forums Research Studies

5 DCI Resources Reporting Requirements Instructions Record Layouts Edit Matrices General Rules for claim reporting

6 DCI Resources Access this page by clicking on Data Reporting in the top banner and selecting Detailed Claim Information on the left

7 DCI Resources For access to items found in the Tools section, contact Customer Service at

8 State Applicability Applicable states 36 NCCI states 9 independent bureaus IN, MA, MI, MN, NJ, N, NC, PA, WI Jurisdiction State corresponds to the state under which the claimant s indemnity benefits are determined

9 Participation Eligibility 1 At least 1% market share over the most recent three years, in at least three DCI states Market share is greater than or equal to 5% in any one DCI state in the latest year 2

10 State Exceptions Massachusetts: All carriers are required to report DCI claims E X C E P T I O N S Texas: All carriers are required to report DCI claims Participation is on an individual carrier basis Carrier group reporting is not permitted

11 All companies aligned within an affiliate group are required to report DCI Participation

12 Participation All companies aligned within an affiliate group are required to report DCI Report for all applicable DCI states 36 NCCI States and 9 independent bureaus

13 All companies aligned within an affiliate group are required to report DCI Report for all applicable DCI states Continue reporting even if below the eligibility threshold Participation

14 Participation All companies aligned within an affiliate group are required to report DCI Report for all applicable DCI states Continue reporting even if below the eligibility threshold Reporting obligation remains with any carrier/group that was required to report prior to a merger or acquisition Carrier B Carrier A

15 Participation Reporting obligation remains with any carrier/group that was required to report prior to a merger or acquisition Carrier A Carrier B

16 Participation Reporting obligation remains with any carrier/group that was required to report prior to a merger or acquisition Carrier A Carrier B

17 Participation Reporting obligation remains with any carrier/group that was required to report prior to a merger or acquisition Carrier B Carrier A

18 Participation Reporting obligation remains with any carrier/group that was required to report prior to a merger or acquisition Carrier B Carrier A

19 Claims Included in DCI Direct workers compensation, voluntary compensation, employers liability Claims included in DCI reporting: Pool of Claims Incurred Indemnity loss value (including reserve) greater than zero Death and Permanent Total Disability (PTD) Regardless of when established May be based only on reserves

20 Claims Excluded from DCI Claims excluded from DCI reporting: Medical Only Jurisdiction state not an applicable DCI state Reinsurance assumed claims Claims payable under Federal Acts Noncompensable Fraudulent Including Admiralty, USL&HW, FELA, Jones Act, Coal Mine See Statistical Plan Part 4.A.1.C and D

21 Reported to Insurer Date (RTI) Reported to Insurer Date = month, day, and year claim is reported to the insurer Triggers first Loss Valuation (18 months after RTI) Texas first valuation occurs six months after RTI Determines valuation level ( months) for reporting claims that become Death or Permanent Total Disability

22 DCI Valuation Valuation of Claims: First valued 18 months after Reported to Insurer Date +12 Reported to Insurer 9/ Value 3/ Value 3/2017 Subsequent reports every 12 months or until claim is closed or reclassified as: Medical only Federal Act Non DCI jurisdiction state Noncompensable or fraudulent Valued at 138 months

23 Claim Selection Timing of selection and sampling process: Occurs 18 months after RTI Texas Exception: Occurs 6 months after RTI Monthly for each state required Sampled only once per RTI Percentage of open and closed per State Sample Ratio table

24 Claim Selection

25 DCI Sampling Recommend three-digit number method ( ) Each of the 1,000 possible numbers is equally likely Can be assigned/used more than one time Select the specified percentage of open and closed claims RANDOM SAMPLING Computerized random number generator is acceptable

26 Claim Selection and Sampling Exercise Step #1 Select the Appropriate Jurisdiction State From the population of claims that fall within the Reported to Insurer Date, select all claims within the jurisdiction state to be reported. If the jurisdiction state is not an applicable DCI state, do not include the claim in the selection. Claim Number Jurisdiction State Include in Selection for this Jurisdiction? WC WC WC WC WC WC WC WC WC WC WC WC

27 Claim Selection and Sampling Exercise Step #1 Select the Appropriate Jurisdiction State From the population of claims that fall within the Reported to Insurer Date, select all claims within the jurisdiction state to be reported. If the jurisdiction state is not an applicable DCI state, do not include the claim in the selection. Claim Number Jurisdiction State Include in Selection for this Jurisdiction? WC WC WC WC WC WC WC WC WC WC WC WC

28 Claim Selection and Sampling Exercise Step #1 Select the Appropriate Jurisdiction State From the population of claims that fall within the Reported to Insurer Date, select all claims within the jurisdiction state to be reported. If the jurisdiction state is not an applicable DCI state, do not include the claim in the selection. Claim Number Jurisdiction State Include in Selection for this Jurisdiction? WC WC WC WC WC WC WC WC WC WC WC WC

29 Claim Selection and Sampling Exercise Step #1 Select the Appropriate Jurisdiction State From the population of claims that fall within the Reported to Insurer Date, select all claims within the jurisdiction state to be reported. If the jurisdiction state is not an applicable DCI state, do not include the claim in the selection. Claim Number Jurisdiction State Include in Selection for this Jurisdiction? WC WC WC WC WC WC WC WC WC WC WC WC N N

30 Claim Selection and Sampling Exercise Step #2 Exclude Non DCI Claims From the population of claims that fall within the appropriate jurisdiction state, exclude all claims that are not eligible DCI claims. Claims excluded from DCI are: Medical only claims Claims with losses paid to another insurer because of reinsurance assumed by the reporting insurer Claims where the benefits are payable under a Federal Act (i.e., Admiralty, USL&HW, FELA, Jones Act, or Coal Mine Acts) Claim Number Benefit Type Claim Status Eligible for Selection Process? WC Death Closed WC Medical Only Open WC Permanent Partial Closed WC Temporary Total Open WC Temporary Partial Open WC Temporary Partial Closed WC Permanent Total Disability Open WC Temporary Partial Open WC Medical Only Closed WC Temporary Partial Closed

31 Claim Selection and Sampling Exercise Step #2 Exclude Non DCI Claims From the population of claims that fall within the appropriate jurisdiction state, exclude all claims that are not eligible DCI claims. Claims excluded from DCI are: Medical only claims Claims with losses paid to another insurer because of reinsurance assumed by the reporting insurer Claims where the benefits are payable under a Federal Act (i.e., Admiralty, USL&HW, FELA, Jones Act, or Coal Mine Acts) Claim Number Benefit Type Claim Status Eligible for Selection Process? WC Death Closed WC Medical Only Open WC Permanent Partial Closed WC Temporary Total Open WC Temporary Partial Open WC Temporary Partial Closed WC Permanent Total Disability Open WC Temporary Partial Open WC Medical Only Closed WC Temporary Partial Closed

32 Claim Selection and Sampling Exercise Step #2 Exclude Non DCI Claims From the population of claims that fall within the appropriate jurisdiction state, exclude all claims that are not eligible DCI claims. Claims excluded from DCI are: Medical only claims Claims with losses paid to another insurer because of reinsurance assumed by the reporting insurer Claims where the benefits are payable under a Federal Act (i.e., Admiralty, USL&HW, FELA, Jones Act, or Coal Mine Acts) Claim Number Benefit Type Claim Status Eligible for Selection Process? WC Death Closed WC Medical Only Open WC Permanent Partial Closed WC Temporary Total Open WC Temporary Partial Open WC Temporary Partial Closed WC Permanent Total Disability Open WC Temporary Partial Open WC Medical Only Closed WC Temporary Partial Closed N N

33 Claim Selection and Sampling Exercise Step #3 Select Death and PTD Claims Once the appropriate claims have been excluded from the population of claims, identify all Death and Permanent Total Disability claims. This is the last step in the selection process. All claims remaining after this step will be subject to sampling. Since all Death and Permanent Total Disability claims are required to be reported, they will not go through the sampling process. Claim Number Benefit Type Claim Status Subject to Sampling? WC Death Closed WC Permanent Partial Closed WC Temporary Total Open WC Temporary Partial Open WC Temporary Partial Closed WC Permanent Total Disability Open WC Temporary Partial Open WC Temporary Partial Closed

34 Claim Selection and Sampling Exercise Step #3 Select Death and PTD Claims Once the appropriate claims have been excluded from the population of claims, identify all Death and Permanent Total Disability claims. This is the last step in the selection process. All claims remaining after this step will be subject to sampling. Since all Death and Permanent Total Disability claims are required to be reported, they will not go through the sampling process. Claim Number Benefit Type Claim Status Subject to Sampling? WC Death Closed WC Permanent Partial Closed WC Temporary Total Open WC Temporary Partial Open WC Temporary Partial Closed WC Permanent Total Disability Open WC Temporary Partial Open WC Temporary Partial Closed

35 Claim Selection and Sampling Exercise Step #3 Select Death and PTD Claims Once the appropriate claims have been excluded from the population of claims, identify all Death and Permanent Total Disability claims. This is the last step in the selection process. All claims remaining after this step will be subject to sampling. Since all Death and Permanent Total Disability claims are required to be reported, they will not go through the sampling process. Claim Number Benefit Type Claim Status Subject to Sampling? WC Death Closed WC Permanent Partial Closed WC Temporary Total Open WC Temporary Partial Open WC Temporary Partial Closed WC Permanent Total Disability Open WC Temporary Partial Open WC Temporary Partial Closed N N

36 Claim Selection and Sampling Exercise Step #3 Select Death and PTD Claims Once the appropriate claims have been excluded from the population of claims, identify all Death and Permanent Total Disability claims. This is the last step in the selection process. All claims remaining after this step will be subject to sampling. Since all Death and Permanent Total Disability claims are required to be reported, they will not go through the sampling process. Claim Number Benefit Type Claim Status Subject to Sampling? WC Death Closed WC Permanent Partial Closed WC Temporary Total Open WC Temporary Partial Open WC Temporary Partial Closed WC Permanent Total Disability Open WC Temporary Partial Open WC Temporary Partial Closed N N

37 Claim Selection and Sampling Exercise Step #4 Assign a Random Number For this step, a random number is assigned to each claim Claim Number WC WC WC WC WC WC Random Number ( ) Claim Status Closed Open Open Closed Open Closed

38 Claim Selection and Sampling Exercise Step #4 Assign a Random Number For this step, a random number is assigned to each claim Claim Number WC WC WC WC WC WC Random Number ( ) Claim Status Closed Open Open Closed Open Closed

39 Claim Selection and Sampling Exercise Step #5a Apply Sampling Ratios to Open Claims Once the three-digit random number is assigned to the claims subject to sampling, the separate sampling ratios for open indemnity claims and closed indemnity claims specified on the State Sample Ratio table for each state will be used to determine which open and closed claims will be reported. Each sampling ratio is multiplied by 1000 and the result is subtracted by 1 to provide a range for selecting the open and closed claims. Claim Number Random Number ( ) Claim Status Report to NCCI? WC Open WC Open WC Open

40 Claim Selection and Sampling Exercise Step #5a Apply Sampling Ratios to Open Claims Once the three-digit random number is assigned to the claims subject to sampling, the separate sampling ratios for open indemnity claims and closed indemnity claims specified on the State Sample Ratio table for each state will be used to determine which open and closed claims will be reported. Each sampling ratio is multiplied by 1000 and the result is subtracted by 1 to provide a range for selecting the open and closed claims. Claim Number Random Number ( ) Claim Status Report to NCCI? WC Open WC Open WC Open

41 Claim Selection and Sampling Exercise Step #5a Apply Sampling Ratios to Open Claims Once the three-digit random number is assigned to the claims subject to sampling, the separate sampling ratios for open indemnity claims and closed indemnity claims specified on the State Sample Ratio table for each state will be used to determine which open and closed claims will be reported. Each sampling ratio is multiplied by 1000 and the result is subtracted by 1 to provide a range for selecting the open and closed claims. Claim Number Random Number ( ) Claim Status Report to NCCI? WC Open WC Open WC Open

42 Claim Selection and Sampling Exercise Step #5a Apply Sampling Ratios to Open Claims Once the three-digit random number is assigned to the claims subject to sampling, the separate sampling ratios for open indemnity claims and closed indemnity claims specified on the State Sample Ratio table for each state will be used to determine which open and closed claims will be reported. Each sampling ratio is multiplied by 1000 and the result is subtracted by 1 to provide a range for selecting the open and closed claims. Claim Number Random Number ( ) Claim Status Report to NCCI? WC Open WC Open WC Open N

43 Claim Selection and Sampling Exercise Step #5b Apply Sampling Ratios to Closed Claims Claim Number Random Number ( ) Claim Status Report to NCCI? WC Closed WC Closed WC Closed

44 Claim Selection and Sampling Exercise Step #5b Apply Sampling Ratios to Closed Claims Claim Number Random Number ( ) Claim Status Report to NCCI? WC Closed WC Closed WC Closed

45 Claim Selection and Sampling Exercise Step #5b Apply Sampling Ratios to Closed Claims Claim Number Random Number ( ) Claim Status Report to NCCI? WC Closed WC Closed WC Closed

46 Claim Selection and Sampling Exercise Step #5b Apply Sampling Ratios to Closed Claims Claim Number Random Number ( ) Claim Status Report to NCCI? WC Closed WC Closed N WC Closed

47 Claim Selection and Sampling Recap Selection hierarchy is a five step process based on reported to insurer month Step 1 Select jurisdiction state 10 Georgia 2 excluded Step 2 Exclude non-dci claims Step 3 Select Death and PTD claims Step 4 Assign random numbers Step 5 Apply sampling ratios 2 Med only 1 Death 1 PTD 3 digit 2 open 2 closed

48 Recap DCI program collects information on indemnity claims (lost time benefits) DCI Data Reporting Page on ncci.com DCI Claim Selection Random Sampling

49 Recommendation

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