ASC's External Newsletter Current Issue
A metaphorical ‘earthquake’ has occurred in the industry with Sedgwick’s latest York acquisition, and all the attention is on the aftermath. You’ve likely seen this before and feel confident that you can work through it. However, let’s not forget the potential exposures at risk from smaller tremors, otherwise known as the acquisition ‘aftershock.’ As ‘mega’ third party administrators (TPAs) shrink the workers’ compensation and liability claims servicing industry, you should be on ‘high alert’ with plans in place for best claim outcomes.
As a ‘boutique’ third party administrator, we know how important it is to devote attention to our clients locally, regionally, and nationally. Boutique is not too big to fail, nor is it too small to succeed. Boutique falls somewhere in the middle, where growth is organic, and relationships are forged for the long-term. Here are some of the principal benefits of working with a secure, trustworthy ‘boutique’ TPA.
When the vision of the organization resonates from the top down, you have direction from the peak of the mountain and not from the valley. With a stable TPA, all levels of management are already in place, providing a uniform method of communication to all parties involved in the claims process without interruption. Established management does not need to quickly add or eliminate levels of management to compensate for the influx of disparate claims staff, mixed caseloads, and supervisory staff. With established management, your ultimate benefit is knowing your claims staff is taking care of you as established management takes care of them.
Risk managers, brokers, and others have taken considerable efforts to develop knowledge learned from other industry colleagues. Likewise, TPAs have developed relationships with businesses and brokers. Up until this point, a lot of time has been dedicated to achieving the best results for your business by seeking answers from TPAs through constructive, introductory meetings, formal presentations, request for proposals and more.
Relationships build trust. Relationships build long-term connections that reduce the need for a continued search for service providers. We are often posed with the question in RFPs that read, “What mergers or acquisitions do you plan for in the next one or two years?” Ask yourself the following question: should future growth plans posed in a question mean something to someone who identifies stability as a factor in the decision-making process?
Unlike established risk management information systems (RMIS) and other claims software, an acquisition can be challenging from an integration perspective. The TPA’s challenge for integration and the knowledge acquired to make the conversions and systems integration to operate at peak performance can take considerable time and resources to achieve. Established technology does not take your time, and time to establish technology should not be on your time.
With established TPAs, preferred vendor relationships and vendor system interfaces are already in place. Protocols are followed, and individuals are relied on by client staff to achieve the best possible claim outcomes. For example, medical bills are processed efficiently through one vendor and specialist, nurses are utilized from one managed care service provider, and the same claim adjuster investigates claims. Partnerships are established for the purpose of what is right for our clients, not the benefit of expediency.
Established Best Practices
The claim adjuster and quality control efforts are critical components to best claim outcomes. By following client/carrier or TPA best practice claim handling guidelines, the same claims staff will seamlessly perform without interruption. The same TPA trains these claims staff and offers the same level of service, creating a vested interest in the relationship.
Knowing your claim adjuster by name and reputation is the personal touch in claims administration. With a stable TPA, every claimant or injured worker needs personal attention during his or her difficult times. If you are making contact regarding a claim, it’s invaluable to have a claim adjuster who knows you, your loss, your companies’ best practices and someone who can gather and maintain all the facts of the claim immediately. A TPA that can retain its employees and not shift caseloads is a benefit to your risk manager, broker, and all of your company staff.
Established Financial Stability
An established TPA that grows organically can achieve growth without spurts resulting in financial stability through proper stewardship. With acquisitions may come additional debt or the TPA may grow too quickly incurring substantial risk to its clients. An established TPA that grows organically can be an excellent indicator of its performance; therefore, a TPA should be transparent with their financials.
Whether it’s a metaphorical earthquake or hazardous weather in the forecast, your best decision may be to recognize TPA alternatives. Some may tell you everything is going to be alright; however, even the best weather forecasters get it wrong, and we know how that can ruin plans.
Legislative & Regulatory News
Q2, 2019 Issue:
Effective Communication: How All Stars Communicate
One common complaint heard across the Property and Casualty industry from insureds that utilize Third Party Administrators (TPAs) is poor or an overall lack of communication. Some blame the problem on unmanageable caseloads, while others say it is a result of poorly trained claims staff. Effective communication plays such a vital role in the claims administration industry that it puzzles and concerns many that most TPAs fail to meet their client’s expectations. It shouldn’t be this way at all.
What do we mean by effective communication? When we think of communication, the first thing that comes to mind is conveying information to another person. The method of conveying can be accomplished through verbal, written, or physical (body language) communication and involves effective listening as much or more than talking. What do we mean by effective? According to dictionary.com, effective means “producing the intended or expected result.” Therefore, effective communication can be described as exchanging information to meet the intended or expected result, which, for an adjuster, is the successful adjudication of a claim at the lowest possible cost to the insured.
Implementation: Setting Expectations
The best time to establish communication protocols and set expectations is during implementation. A TPA must first invest their time to get to know the client, the client’s risk management programs, and their goals at the beginning of the relationship. When a TPA implements a new client, the claim adjusting staff plays a vital role in the transition process. Depending on the complexity/size and proximity of the claims staff, it’s best to offer either an introductory sit-down meeting or conference call with everyone involved. Communication begins with the account executive/manager whose responsibility it is to act as a liaison between the client and the servicing office and maintain frequent, ongoing communication with the client to ensure delivery of the highest level of service.
To ensure that all parties are on board, the TPA should also provide a written document that outlines important information. Expectations are memorialized in a document we refer to as a “Playbook.” A “Playbook” provides the claim staff with all necessary TPA contacts, broker contact, coverages, and any special claim-handling requirements. This living document serves as a useful reference guide not only for the claim staff but also for the client and assists with cross-training backup staff. The “Playbook’ reinforces the coordinated effort discussed during the implementation phase and serves as a ‘roadmap’ that guides all parties involved in the claims process.
Maintaining Communication Standards
Now that everyone is on the same page, communication must take precedence as the first claim is reported. A TPA’s or carrier/client’s claim handling guidelines must be carried out, which includes expectations related to the communication with the claimant, injured worker, client and medical provider for workers’ compensation claims. The claim adjuster then follows up as needed throughout the life of the claim and keeps the injured worker or claimant and client apprised of any issues related to the claim. Important claim components to communicate with the client upon first notice and after that include, potential subrogation, questionable compensability, potential lost time or permanent impairment, required surveillance and fraud measures needed, settlements, litigation potential and analysis for proper legal referral, claim denial, excess carrier reporting, and more.
Verbal and written communication is a two-way street. The claim adjuster should encourage the injured worker or claimant follow-up when questions need answering by phone or in-person. All communications from the client, employer, claimant, carrier, attorney, defense counsel, physician, claim supervisor, or another party on a claim must be responded to in a timely, thorough, and professional manner. Active listening and follow-through are critical communication skills. As my grandmother used to say, you have two ears and one mouth – make sure you use them proportionately!
Kinesthetic (Physical) Communication:
Body language (including tone and inflection of voice) conveys roughly half of the message you’re communicating. If your voice says one thing, but your body conveys another message, the receiver will be confused at best. In-person communication with a claim adjuster is a benefit for clients that prefer a dedicated, onsite claim adjusting staff. An imbedded adjuster can be available for impromptu meetings to readily discuss a variety of topics. In addition to verbal and written communication skills, a dedicated claim adjuster’s ability to reassure all parties can also be exhibited through their gestures. A claim adjuster with confident body language in conjunction with their verbal cues can exude confidence to the client that the claim is being handled efficiently.
Of equal importance is receiving information. Do TPAs and claim adjusters actively listen to the client, claimant, co-worker, prospective client, or medical provider and acknowledge his or her understanding by repeating back what they have heard? Does the account executive hear, acknowledge, and respond to questions or concerns from the client? Attentive listening leads to an effective dialogue.
Effective communication is crucial in the life of an adjuster. If your adjuster or TPA isn’t communicating effectively with you, how do you think they’re doing with your employees or claimants? It all starts with conveying clear expectations before the first claim comes in. After all, you often get what you expect.
Legislative & Regulatory News
Q4, 2018 Issue:
The Return-To-Work Claims Advocate in You
Returning to work for many injured workers is a must; therefore, the importance of a worker’s satisfaction throughout the treatment and return-to-work process is a necessary undertaking for developing overall trust post-injury while avoiding costly litigation. Most workers do not contemplate getting injured on the job, but they do expect to be taken care of throughout the process, which is where the claim adjuster comes in.
Employee satisfaction begins before an injury occurs which is why an employer and claim adjuster should be prepared in advance. Before a claim is reported, it’s essential to identify company jobs by their description so the employer and claim adjuster can take a proactive approach for evaluating physician and client pre-approved return-to-work opportunities. Depending on the extent of the injury, and assessing every claim on its own merits, it may be helpful to have an alternative, transitional light-duty position available and wage-earning capacity assessment completed. The importance of having transitional work/modified duty available before an injury occurs can significantly reduce an injured workers’ doubts and fears of returning to normalcy and being productive again. Getting ‘the ball in motion’ shows proactiveness and can help reduce the chance of having an attorney involved.
When a worker is first injured on the job, the claim adjuster and the employer will develop a medically approved return-to-work plan almost immediately. Return-to-work is effectively achieved when return-to-work evaluation begins by contacting the injured worker and treating physician within 24 hours of injury notification. The purpose for timeliness is to lower overall costa and reduce lost time/absenteeism by assigning the right medical resources early in the life of a claim, which becomes an integral part of the claim adjuster’s action plan that must be developed.
One component of an employee care plan may include meeting directly with the treating physician to discuss the plan together to determine if there is an agreeance on a job restriction based on the results of the treated injury. The claim adjuster and employer may choose to obtain and share photographs, work sample products, and videos of job tasks with the treating physician to delineate job tasks and allow the physician to make an informed decision regarding return-to-work issues. When the treating physician agrees with the transitional work position, then the claim adjuster and employer can encourage the injured worker with a promise of continued employment while receiving the necessary workers’ compensation benefits.
A unique alternative to employer available transitional work is modified duty work at a local non-profit. Sometimes employers simply do not have transitional work available at that moment. Modified duty off-site with a non-profit is employer determined. The transitional position may be paid, partial paid or no pay alternative work by the employer to assist a non-profit agency that benefits from a set of extra working hands. This temporary offsite transitional duty can help the injured worker resume a productive work lifestyle and foster goodwill while transitioning back into their regular employer job position or other onsite employer modified duty as it becomes available. This modified duty off-site work is managed by a managed care nurse, in conjunction with the claim adjuster, the non-profit, and the employer.
It is important for a claim adjuster to develop an ongoing working relationship among all parties to focus on returning injured workers to work as soon as feasible, either in the pre-injury position or in a transitional setting. For example, the claim adjuster serves as an empathetic injury counselor working alongside a nurse case manager, and a treating physician. In addition to reducing absenteeism, this collaborative effort can also help identify and eliminate presenteeism (on the job - but physically or mentally out of it) and identify and overcome other barriers such as cost-effective transportation and co-worker transportation for an employee released to temporary, restricted duty and prohibited from driving. The purpose of ongoing involvement is to eliminate as many obstacles to return-to-work as possible.
It is ultimately the health and well-being of the injured worker that makes the claim adjuster’s work so important. The empathetic claim adjuster in conjunction with the employer can be the biggest claim advocates available to that employee. When onsite transitional work or offsite work is available, or if the injury allows for the worker to return to their old position, the claim adjuster, employer, nurse case manager, and treating physician are improving the employee’s trust, loyalty, productivity, and assurance in their abilities.
Legislative & Regulatory News
Q3, 2018 Issue:
When it comes to hiring a third party administrator (TPA) or maintaining a successful business relationship with one, it requires choosing a TPA with the following characteristics: expertise in your industry, an adaptability to adhere to your risk management needs, a high claims staff retention rate, and a robust risk management information system (RMIS). Let’s take a closer look at some of the reasons why many have chosen their TPA and how they get the most from their TPA.
The Business Relationship
At this point, it is likely you have chosen a TPA based on a number of reasons. One of those reasons may be the TPA’s experience in your industry. We have found that clients often prefer their prospective TPA to have prior experience with similar types of accounts in their industry. This association provides a level of trust for the client knowing that the TPA is familiar with the type of injuries and liabilities that occur at this type of workplace.
When it comes to knowing the uniqueness of your industry, it is also important that your TPA understands your business culture and the nature of your business. Understanding your processes begins by having your TPA visit your facilities to learn about your daily work environment from the ground up. For example, TPAs must be willing to work within the client’s culture and organizational framework, which may include the TPA staff working on the client’s holiday schedule, and working onsite as a dedicated resource. More about dedicated claims staff later.
Another uniqueness that a TPA should understand about your business is the diverse cultures of the region where you have exposure. Claims may be handled differently in New York and Florida than in the Midwest. The differences can range from the technical handling to the psychosocial handling of the claim. Each state varies with claim handling requirements while each region can vary with claimant personalities and dialects. Knowing what staff options you have (e.g., bilingual, regional offices, etc.) will help you get the most out of your TPA.
The relationship is everything, which is why TPAs would be wise to first invest their time with everyone involved in the program. Your TPA needs to have an excellent alliance with all vendors (e.g., managed care), brokers, carriers, and the insured to coordinate a collaborative effort for the best possible outcomes. This is where dialogue comes in which forms the basic process for building a mutual understanding of your claims program.
As a way to measure effective dialogue, you should require regular claims reviews for in-depth discussion. Claim reviews are the time where you can cement the relationship with your claim adjuster(s) who provides face to face responsiveness for collective learning and inquiry. Claim adjuster discussion holds considerable assurance as a problem-solving strategy when reviewing open claims. Here is where you can review select claim files to measure proper contact made, reserves calculated, investigations completed, and more.
“Shopping” a TPA
Clients are likely not shopping for a service if they are happy with their current TPA. The long-term relationships that have been built can be more valuable than saving a few thousand dollars. When you consider the time and resources it takes to train a new TPA on the client’s company culture and needs, the “soft “costs from switching can outweigh the savings. For example, what if the new TPA is not as effective at closing claims early? Claims pricing is only one factor, so make certain you receive the best claims service to avoid costly claim outcomes.
Many clients have recognized the value in going beyond the biggest TPAs or the well-known TPAs who have a high search engine status on the Internet. Lesser-known TPAs may offer a specific culture or service package that may be as good as or a better fit for the client. We call this a “boutique” TPA service. Alternatively, clients find familiarity with TPAs based on name recognition and structured claims administration appealing. Either solution, it’s important that you receive the best claims service from the best claims resource available to you.
Now that you have finalized your selection, you may have noted the importance of selecting a TPA who places a high value on its claims staff. Employee satisfaction is one way to determine if your claims team will be engaged and happy serving your claims program. The critical factor with employee satisfaction is that a satisfied claims staff must do the job and make the contributions that the client needs. This begins with choosing a TPA that fosters employee motivation, goal achievement, and positive morale in the workplace.
Here are three aspects of the workplace that successful TPAs implement to keep claim adjusters and support staff happy and reduce turnover rates:
- A recognition program
- A lucrative benefits package
- A manageable caseload
A TPA’s recognition program is a very effective way to keep claim adjusters motivated and satisfied with their work. A monetary reward for meeting or exceeding their measured claims handling goals is one method of appreciation. Another is a support staff bonus based on the success of the TPA as a whole. Satisfied employees provide exceptional service. Exceptional service makes for satisfied clients.
Minimizing stress on claim adjusters through lucrative benefit packages and work/life balance opportunities can also reduce turnover. For example, a TPA that allows its workers to work remotely from home on occasion throughout the week. Another contribution is a generous PTO policy that re-energizes the mind and body.
Manageable claim caseloads are necessary to avoid claims staff burnout. A TPA that regularly monitors and measures claim types, and the time it takes to administer each new claim, can greatly distinguish between truly happy employees and those who are just getting by. Mismanaged claim caseloads by overworked claims staff will lead to poor claim outcomes.
Another operational component to consider is an alternative staffing model. As an option to traditional, designated claim adjusters, you may have chosen a dedicated/exclusive claims staffing model. Dedicated claim adjusters that work onsite or nearby the client make another excellent example of dialogue that generates positive outcomes.
With a dedicated service model, you are encouraged to participate in the hiring process to choose among candidates with the required expertise & professional personality/demeanor best suited to your company’s culture. A TPA that knows how to establish a dedicated claims model for its client can provide claim adjusters who attend regular or impromptu staff meetings, and interact with company/entity department heads regularly. It’s this business relationship that makes the claims team feel like a valued member of your risk management team which results in a very high staff retention rate. Knowing your claim adjuster by name makes for a loyal, long-term relationship.
With positive TPA operations come high employee satisfaction. High staff retention creates familiarity with the claim adjuster and employer that leads to better communication, higher responsiveness, and better overall outcomes.
RMIS Systems That Work
Clients require an intuitive RMIS that operates as a useful research tool for their staff. Proactive RMIS users want more value than just looking up individual claims. The ability of a RMIS system to handle predictive analytics has become very important to clients. In addition, the ability to run scheduled or on-demand claim data reports are a necessity. It is important to know what functions are available and what training will be provided as a resource in order to get the most value out of your TPA.
Getting the most from your TPA comes from first knowing your TPA. Whether you choose your TPA for their loyalty to their employees, their service with integrity, their flexibility of size and service models, or their expertise in your business, the decision should be a rewarding one.
Legislative & Regulatory News