How Is The Economy Effecting Workers Comp Claims?
Posted by Katrina Paglierani on Tue, Oct 13, 2009 @ 08:36 AM
The current economic conditions are having an effect on the entire insurance industry.
Claims are going up. Not just workers comp claims, but all claims. According to what I have read recently, this includes valid claims and invalid or fraudulent claims.
‘Suspected fraudulent claims related to workers’ compensation insurance were up 71 percent.’ 1 Some employees are filing claims after or pending employer layoffs that they did not file at the time of the injury. These are often valid claims but were not filed perhaps because the employee was worried about the effect it would have on their employer, or they would rather be working than recuperating while receiving Workers comp benefits. On the other hand, once an employee is laid off, workers comp benefits are better than unemployment benefits or no income at all. As I said, many of these claims may be valid claims but may not have been filed under different economic conditions.
Adjusters have a higher number of cases because insurance companies have downsized. Not only do adjusters have a heavier case-load but 40% of their time is spent on administrative duties unrelated to the business of helping move cases towards closure. Workers' Comp regulations require that this time be spent.
In a recent interview,John A. Mastropietro said "Insurance companies have downsized in recent years enormously, thereby leaving fewer claims adjusters, who are now handling a greater volume of cases. So there's a tendency to not move on the part of those making decisions." 2
Cases are taking longer because the insurers are trying to cut costs wherever possible, and are therefore taking a harder look at their workers comp claims. This also slows down the process, because cases that would just move along are being fought on both sides. More claimants and a more rigorous review process instituted by Insurers, which means more work per case with fewer adjusters to do the work.
Lastly,
the economy is causing the extension of cases due to the perception that no
jobs are available. Often labor market surveys are conducted that show
there are no jobs available for
the injured worker or claimant. So, an expensive and previously useful
tool available to the case managers and claims adjusters backfires.
It
is true that jobs are more difficult to come by. Why?
Companies are cutting their human resource departments and
their advertising budgets. This includes ‘open position’
advertising. Obviously, the cost of the ads is removed from the budget.
Another reason human resource departments are not
advertising is due to the overwhelming size of the applicant
pool. Any job that is
posted online from executive to laborer is bound to receive hundreds if not
thousands of applicants. This creates a situation very similar to the
adjuster’s;
more work is created while the staff has been
downsized. This creates a situation I have heard referred to as ‘Paralysis through Analysis’.
Too much paperwork and forms for each applicant.
As a result filling the
position is continuously delayed. Therefore, many human resource managers
are looking for alternative ways to locate the proper fit for their open
positions. Personal relationships and peer or other ‘networks’ are often the key to landing an
appropriate position in any field.
NICB: Data Links Fraudulent Claims to Poor Economy
http://www.claimsmag.com/News/2009/4/Pages/Data-Links-Fraudulent-Claims-to-Poor-Economy.aspxPoor economy doubles workers' comp claims
http://www.greenwichtime.com/localnews/ci_13535467?source=rssThe Future of Workers’ Comp Claim Adjudication
http://www.claimsmag.com/Exclusives/2009/7/Pages/The-Future-of-Workers-Comp-Claim-Adjudication.aspx