Conflict Between Employers and Claims Administrators Can Drastically Increase Workers’ Comp Costs
October 7, 2010 –We were quoted in a recent article by Peter Rousmaniere in Risk & Insurance, “When Employers and Claims Staffs Clash,” about conflict between employers and their WC claims staff, whether internal employees or an outside third-party administrator (TPA.)
The focus of the article is that “while employers often blame their claims administrators and brokers when issues with workers’ comp claims arise, everyone can learn a lesson or two when it comes to claims disputes.”
A case involving an employer that was very dissatisfied with its TPA shows how a specific problem needs to be put into this perspective. Rebecca Shafer, president of Hartford-based Amaxx Risk Solutions, which advises employers often at the behest of brokers, recalled a clients that was very critical of the claims-handling by its third-party administrator. It turned out that, in one of the TPA’s three servicing claims offices, three-point contact was late, indemnity benefits were miscalculated and case managers were assigned too late to be effective, among other evident deficiencies.
The employer, however, had drastically under-invested in managing its workers’ compensation exposure, assigning only one person to oversee 3,000 annual claims. Its claims costs were twice the national average for the industry.
Both the third-party administrator and the employer subsequently reformed their practices.
About Rebecca Shafer
Rebecca Shafer is an attorney and risk consultant who has been helping employers decrease their workers’ comp costs for 20+ years. She has worked with retail, manufacturing, airlines, media/newspapers, healthcare, distribution facilities, and many other types of organizations. She can be reached at 860-553-6604 or by email, RShafer@ReduceYourWorkersComp.com.
About the Workers’ Comp Kit®
Amaxx Risk Solutions hosts the website ReduceYourWorkersComp.com, which publishes The Workers’ Comp Kit, a comprehensive workers’ comp cost-containment resource for employers. The Workers’ Comp Kit is an easy-to-use assessment tool to determine how well a company is controlling its workers’ comp costs and how much those costs can be reduced. The Workers’ Comp Kit includes a step-by-step implementation plan that provides the necessary materials to ensure success. The WCK application is a best-in-business process that is based on 20 years of experience lowering workers’ compensation costs while improving overall program efficiency.