Legal requirements for reporting first aid claims vary from state to state and, in some cases, ambiguities exist. As a result, employers may have elected not to report medical-only claims where they have paid for the medical services.
The California decision
Recently, the California Insurance Commissioner approved amendments to the California Workers’ Compensation Uniform Statistical Reporting Plan (USRP). Beginning January 1, 2017, insurance carriers will be required to report any claim in which there is a medical cost incurred, regardless of whether it is paid by the employer or insurer. Employers that fail to comply with the new law may expose themselves to state fines and penalties in addition to existing Medicare fines and penalties associated with non-compliance. This is a notable development for two key reasons. First, California has historically been a leader in terms of workers’ compensation regulations (e.g., the sharing of personal healthcare information, the medical dispute resolution process). Secondly, the new law offers an unprecedented level of simplicity and clarity.
Reporting benefits: data, insights and outcomes
Independent of legislation, Zurich has long encouraged the timely reporting of all medical and lost time claims for the simple reason that reporting all losses can drive better data, insights and outcomes for our customers.
For example, Zurich’s rigorous medical bill review process is driven by automated systems designed to apply more than 750 rules and detect suspicious billing practices (e.g., consistent usage of the costliest and highest level of treatment, treatment of unrelated body parts). Insights are leveraged by a cross-functional team including medical professionals and bill review, regulatory and investigative specialists. In certain cases, Zurich may pursue a formal investigation or a recovery. Without access to sophisticated automation tools and dedicated professionals, employers are limited in their ability to efficiently and effectively identify potentially unrelated treatments or patterns of abuse.
Additionally, we cannot forget the potential for medical-only claims to develop into lost time claims. While these scenarios tend to be less frequent, the severity and complexity are often much higher. For example, a claimant injured his lower back at work. The insured treated it with first aid and did not report the claim. The insured’s health and safety division determined that the claimant was fine and no other treatment would be needed. The claimant then proceeded to go on vacation and when he returned to work he complained of severe pain. Shortly thereafter, the claimant retained legal counsel and alleged that he also experienced head and lower leg injuries that were left untreated.
Had the claim been reported to Zurich sooner, we would have had the opportunity to obtain a recorded statement from the claimant outlining alleged injuries at the onset of the claim, leverage predictive models to help assess the potential severity, as well as offer a series of integrated medical management solutions aimed at promoting quality care for the injured worker and mitigating loss costs for our customer.
Last but not least, when we are able to help our insureds analyze their full scope of workers’ compensation claims, we are better positioned to help them identify risk mitigation actions that could help avoid future injuries.