Claims Magazine - News from the Capitol

Insurance Journal - The study of 12 states, representing 50 percent of the nation‘s workers‘ compensation benefits paid, reported that higher payments for the medical care of injured workers and a larger proportion of claims with more than seven days of time away from the job were key reasons why costs per claim in Illinois ranked higher than other states. Workers‘ compensation costs per claim in Illinois also continued to grow rapidly, increasing 10 percent between 1998 and1999 (evaluated as of mid-2000), at about the same rate than the 11 percent growth experienced between 1997 and 1998, according to the Cambridge, Mass.-based WCRI.

Claims Magazine - News from the Capitol

Claims Magazine - News from the states

Claims Magazine - News from around the nation.

National Underwriter - The National Council on Compensation Insurance reported today at its annual conference here that the combined ratio for the workers‘ compensation insurance sector made a "remarkable" 12-point improvement over 2001. The NCCI preliminary market analysis found the combined ratio for Calendar Year 2002 is 110, down from 122, ending a six-year string of increasingly unprofitable results. Not all of the NCCI "State of the Line" was positive, however. Investment income for comp, NCCI said, fell to an estimated 14 percent in 2001 compared with 20 percent during 1997-2000. NCCI attributed the decrease to lower interest rates and a reduction in realized capital gains. By NCCI calculations the combined ratio incorporated with the investment gains results in a pretax operating profit of 2 percent for workers‘ comp in 2002.

Claims Magazine - In a recent California case, falsification of the medical record cost the self-insured client nearly $300,000 ($150,000 indemnity; $135,000 attorney fees and expenses). This result was particularly painful because the underlying claim was completely defensible, but for the falsification. The alleged falsification of medical records in a lawsuit will change the dynamics of the case to the extent that the focus is no longer on the alleged malpractice or elder abuse, but rather on the integrity of the medical record. The altered record significantly damages the credibility of the witnesses and the entire defense of the claim. The plaintiff will argue that the falsification of records is just one aspect of the defendants’ conspiracy to cover up the truth.

Insurance Journal - A recently released Texas trial court ruling will help control workers compensation medical costs by setting reasonable medical fees within the state‘s workers compensation system, according to the Alliance of American Insurers. The ruling, by Travis County Judge John Dietz, upheld a revised medical fee guideline promulgated by the Texas Workers Compensation Commission (TWCC) last year. "The ruling will reduce medical claims costs by about 6 percent by reducing highly-overpaid surgical services and increasing fees for underpaid General Practitioners," said Joe Woods, assistant vice president of the Alliance‘s Southwest Region. Last year, TWCC adopted a new medical fee guideline based on legislation of the 2001 Legislative Session. The guidelines adopted Medicare billing, coding and payment policies and set the reimbursement rate for physician services at 125 percent of Medicare.

Business Insurance - California Insurance Commissioner John Garamendi Wednesday urged state lawmakers to pass several measures that would reform California’s troubled workers compensation system. One bill, S.B. 328, would base injured-worker treatment costs on a Medicare/Medi-Cal fee schedule. The bill, which aims to promote consistency and predictability of costs, “represents a major step forward in containing medical costs,” Mr. Garamendi told California’s Assembly Insurance Committee. Currently, statewide fee schedules do not exist for some medical services. Sen. Richard Alarcon, D-San Fernando Valley, introduced S.B. 328 in February. The measure, which has broad employer support, is scheduled for a May 5 hearing by the Senate Appropriations Committee.

Claims Magazine - The pursuit of a workers’ compensation subrogation claim can be broken down into two phases, the development phase and the negotiation phase. During the development phase, the third party investigation is conducted to determine if a third party can be held negligent, and, if so, whether the actions of the third party could meet the negligence or strict liability standard required by the states’ statutes. The negligence or strict liability standard determines whether the carrier, if it pursues a direct action against the third party, or the claimant, if he hires his own attorney to pursue bodily injury claim and the carrier asserts a lien, can collect damages. During the negotiation phase, the carrier is trying to obtain a favorable recovery.