As UNICO continues to be recognized as the workers’ compensation experts dedicated to lowering costs we are amazed at how many companies are not getting any assistance to help them ensure their open workers’ compensation claims are monitored properly. This can have a dramatic impact on how the NCCI experience modification factor is developed.
When a workers’ compensation claim is submitted the adjuster will set up a reserve amount which is an estimate of what may be paid out for that claim. That reserve number may change as the claim develops and the adjuster learns more about the status of the
injured employee. This reserve will likely be what the ultimate settlement may be which can be inflated. However, there are many cases where communication breaks down and the reserve isn’t adjusted. Those reserves count against your experience modification factor as if they were dollars actually paid out on the claim. We find many instances where no one has followed up with the adjuster in the critical time period before that claim information is sent to NCCI to develop the experience modification factor.
Studies have shown that over 65% of all claim file documentation have some element of impropriety.
Reserves are set for ultimate settlement as opposed to what the claim file documents will actually support at any given moment in time. This means that reserves are overstated and causes inflated experience modification factors by over 27%.
We are proud of the work our Claims Advocate has done for our clients. She has helped lowered workers’ compensation reserves by $3,000,000 per year the last 4 years! This has saved our clients millions of dollars.
For example:
- A hospital had a reserve reduction of over $37,000 which saved them over $10,000 over a two year period because of the impact on lowering the experience modification factor.
- A restaurant chain had a reserve reduction of over $43,000 which will save that company over $16,000 over the next two years due to the impact on the experience modification factor.
- A contractor had a reserve reduction of over $41,000 which will save that company $5,000 over the next year.
These are just a few of the many success stories we have had for our clients and having a direct impact on improving their profitability. Don’t assume that your experience modification factor is correct or that nothing can be done to lower it. There are several ways to address this and UNICO would be happy to show you how we help you lower workers’ compensation costs. We are the only agency in Nebraska to have Certified WorkComp Advisors and we have received many testimonials about how we have helped clients improve their workers’ compensation program. Don’t hesitate to contact us to learn more about our proven outcomes for clients across the country.
