Best Practices to Prepare for a Workers’ Comp Claim Audit or Review

When managing workers’ compensation, a claim audit or review is a crucial opportunity for employers, carriers, TPAs (Third-Party Administrators), and brokers to come together and optimize claim-handling practices. This structured communication event is not just a formality but a powerful tool for identifying issues, aligning expectations, and ultimately reducing the costs associated with claims. Here’s how to effectively plan and prepare for a successful claim audit or review.

Avoid the Blame Game & Set Expectations

One of the biggest challenges in claim reviews is managing expectations and avoiding blame. Employers often blame carriers, TPAs, adjusters, and even medical providers for various shortcomings in the workers’ compensation program. However, this approach is unproductive. A claim audit should not serve as an indictment of the claims handling staff but as a collaborative effort to improve outcomes.

The most effective approach is to set clear expectations early on and emphasize open communication. All parties involved—employers, carriers, and service providers—must articulate their expectations and their role in the workers’ compensation process. Instead of pointing fingers, focus on constructive dialogue. The team can work together more effectively by defining roles and understanding what is expected from each party.

Create a Team Mentality

Claim management is a team sport, and the claim review is an ideal moment for everyone involved—employers, carriers, TPAs, brokers—to acknowledge that they are part of a partnership. For this partnership to succeed, each entity must contribute appropriately. The audit or review process is only meaningful when it goes beyond being a mechanical practice and evolves into a genuine assessment that aims to improve workers’ compensation programs.

Optimal results are achieved when each party not only communicates their expectations but also listens to the perspectives of others. Whether it’s the employer striving to reduce claims costs or the adjusters working to retain their business, mutual respect and openness to feedback are crucial.

Engage Employers in the Process

For employers, active engagement in the claims process is vital. Service providers such as claims handlers and insurance brokers have a responsibility to educate and inform employers about their role in claims handling. Setting expectations early on, including during client onboarding, helps foster a productive partnership. Employers must understand that their involvement can significantly impact the claims process.

Elements such as timely claim reporting, a well-implemented return-to-work program, an effective medical network, and appropriate treatment of employees are critical to managing claim values. Employers who take these steps will see a noticeable reduction in their claim costs.

Strategies for Claims Reviews

Once expectations are set, it’s important to implement strategies that drive the claims review process forward. One of the most effective tactics is holding weekly claims roundtables. These meetings bring relevant stakeholders together to discuss open claims, ensuring that goals are set and accountability is maintained.

During a weekly claims roundtable, the following topics should be covered for each claim:

• Employee name and job title
• Date and type of injury
• Return-to-work status: Are they back at work? How many missed or modified duty days?
• Recent communication with the employee and their attitude or cooperation
• The medical diagnosis and treatment plan, including any pending tests or surgeries
• The action plan and next steps to move the claim toward resolution

Frequent communication within the claims handling team leads to better claim outcomes. Although weekly roundtables are ideal, starting with monthly or quarterly meetings can still be an effective way to improve communication and accountability.

Tips for Brokers and Carriers

For brokers and carriers, it’s essential to demonstrate the value of partnering on claims audits and reviews. This starts with the onboarding process and continues throughout the relationship. Employers should be educated on why teamwork is essential, how to plan and prepare for a review, and the benefits they will receive from active participation, such as lower costs.

Sending letters that outline this process and following up with a conversation can help set the stage for a successful audit or review. This communication should occur well in advance, typically 30 to 90 days before the review.

Set Clear Expectations

Clarity is critical in the claims audit/review process. Both brokers and carriers need to clearly communicate what they expect from the employer and, in turn, ensure that employers know what to expect from them. Defining these roles early on ensures that everyone is working towards the same goal.

To sum it up, claim audits and reviews are an excellent opportunity for stakeholders to collaborate and improve the workers’ compensation program. By avoiding the blame game, setting clear expectations, and fostering a team mentality, you can enhance the efficiency and effectiveness of the claims handling process. Regular communication, such as through weekly or monthly roundtables, helps ensure that claims are moving toward resolution, ultimately reducing costs and improving outcomes for everyone involved.

Conclusion

Preparing for a claim audit or review is a proactive step that, when done correctly, can significantly improve workers’ compensation outcomes. By embracing collaboration, setting clear expectations, and committing to regular communication, employers, carriers, TPAs, and brokers can work together to close claims faster and more efficiently. The key takeaway is that workers’ compensation management is a team effort, and success depends on the active and engaged participation of all parties involved.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.com/

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