Saturday, January 5, 2008

Profiles in Professionalism: Interview with a Work Comp Claims Guru

As a periodic feature, the Claims Coach this month conducts an interview with w claims and risk management guru James Moore of J&L Risk Management of Raleigh, NC. Moore is the E.F. Hutton of workers compensation – when he talks, people listen! His website and blog are packed with insights and strategies for taming your claim costs in the realm of workers compensation. You can access these at and his blog at Let’s hear what Jim has to say on claim audits, workers compensation claim costs and the state of the claims profession.

Quinley: In doing claim audits, are there recurring issues or problems you see with claim-handling?

Jim Moore (JM): There are two that we see the most which heavily affect the outcome of a workers compensation file. Those two are Immediate First Contact and Poor Communications. Often we see where an adjuster writes the injured employee, employer, and treating physician a form letter and then documents that there was immediate three point contact. Talking with the employer, doctor, and employee about their workers compensation claim ASAP is a great way to start the proper communications in the file.

The other related area is adjusters working the file, but not making any contacts with all of the or at least some of the parties involved. Good communication is the main job of the adjuster. If this is not done as shown by a trend by an adjuster or by a TPA/Carrier, we become very concerned.

How should claims people prepare for an audit before undergoing one?

JM: Quit stressing when they hear their files are being audited. Some file audit firms consider a very nervous adjuster as a “red flag.” There is nothing that can be done to do a “quick-fix” on the files. The one thing that I recommend is to be friendly and smile at the initial meeting. Do not EVER put the auditor on the defensive if they ask you a question. Auditors that are on the defensive tend to be more subjective in their file appraisals.

What “red flags” do you look for when doing a claim audit?

JM: We do heavy statistical analysis on the 33 areas that we look at for trends. If there is a trend by adjuster or insurance carrier, then we red flag that one area. This happens very rarely except in one area. Over-reserving or under-reserving the files is a red flag that we notice very quickly. We do stat analysis to confirm our findings. The numbers speak the loudest.

Over the years, do you sense any differences in skill among the claims profession in general? Is claim service getting better or worse?

JM: Claims adjusting has followed a definite trend. It is how the industry or a certain carrier decides on the file loads for adjusters. An overloaded adjuster cannot do the job that the insureds are relying on them to do on their files. When the industry/carrier trend is to lighten loads, the file handling improves proportionally.

For a firm looking to tame its workers compensation claim costs, what is the ONE thing they can do to deliver the greatest return on investment?

JM: Time Management training pays big dividends. Stress management seminars seem to help. The old “claims roundtable” is also a great meeting to have for adjusters to discuss difficult files. We can tell the difference on file reviews between trained and untrained adjusting staffs. The one word is training.

How do workers compensation claims people avoid getting burned out?

(JM) They must remember that they ARE NOT claims adjusters. That is their job. In other words, leave it all at work. That is the secret to surviving in claims. Forget the files when you walk out the door every evening.

In a blind taste test, can you tell much of a quality difference between TPA claim services and insurer/staff claim services? Comment, please.

JM: Yes, when we compare files where a carrier also functions as a TPA. Flat-fee files seem to receive less attention.

If there is indeed a “brain drain” of seasoned claims people retiring, how can companies counteract that trend to salvage acceptable levels of expertise?

JM: There are carriers that do a great job of training incoming recruits. They also weed-out recruits that will not make it in the adjusting world. Liberty Mutual has an outstanding training program. Training and screening will fight the brain drain.

What are employers’ biggest complaints about workers compensation claim service?

JM: It is poor communications. They often do not know what is happening on their files. I always tell employers to request online claim access as they can follow the files without having to disturb the very busy adjusters.

What is the ideal caseload for an adjuster handling lost-time workers compensation files?

JM: Oh, this is a loaded question. It depends on the state, but I would say 100 for a claims trainee, 150 – 175 for an experienced adjuster, and 200-225 for a Senior Adjuster. In my career, I have had to handle 250 files in 7 jurisdictions/states. I juggled it very well until I burned out from fighting fires.


insurancecopywriter said...

Yikes! IMHO, those caseloads over 150 are WAY too high for a lost-time adjuster. You simply can't do the proper medical management when your caseloads get above 150, and I like to see them a bit lower.

Kevin Quinley said...

Good point, Nancy. What the optimal number is may depend on who you ask. Management may say 150 or higher. Those in the trenches may say 100-125.

James J Moore said...

The average that we see right now in our WC claim reviews is 170 for an experienced adjuster. I think maybe the tipping point here is that is 170 with a full time assistant. I still feel comfortable with an experienced adjuster having 200+ files with that scenario. Our review stats show that without an assistant, 150 is a little high. Bottom Line - the answer depends on the jurisdictions and the level of assistance provided to the adjuster. I did say at the beginning of the answer that this is a "loaded" question as there is no right answer.

As a side note, we now see carriers shifting files to a non-audited adjuster to reduce the audited adjusters' file count. I wonder if they switch them back after we finish the audit. Hmmmm........