Lateclaim

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Lateclaim

  1. 1. The Cost of Late Claim Reporting The Study adjusted for inflation and benefit level The prompt reporting of claims is changes. Additionally, each claim was one of the easiest ways to lower capped at $250,000 to minimize the your total cost of risk; the sooner we impact of outliers on the dataset. Data learn about the claim the quicker we excludes claims that resulted in a fatality, can engage in medical and disability as catastrophic claims are more likely management. What is the cost if a to be reported immediately. Allocated claim is reported late? It depends. loss adjustment expense (ALAE) was included in the total cost of claims. This is an update to an earlier study Data for this study was compiled from compiled by Liberty Mutual Risk Liberty Mutual’s large database of Management Solutions that National Account size customers using continues to demonstrate that, on a 3 year period from 2007 through 2009. average, the sooner the claim is reported, the lower its ultimate cost. Conclusion Late claim reporting can contribute Results to increased costs due to the following The results of this study emphasize Best Practices factors: the importance of reporting claims as soon Reporting claims sooner can represent • Delayed access to medical attention. as possible. Using the 0-3 day period as significant savings to your organization. the baseline, the cost of a late reported Below are some best practices to follow • Delayed access to our Preferred Provider claim is 9% more if reported between 4-7 when it comes to reporting claims: Organization. days, 20% more if reported between 1-2 • Designate an individual to be responsible • Potentially higher rate of litigation. weeks, 32% more if reported between for reporting claims and enforce compliance. • Inability to maximize on injured worker’s. 2-3 weeks, 48% more if reported between • Educate employees about their responsibility inclusion in Return-To-Work programs. 3-4 weeks, and 72% more if reported to report injuries. at one month or later. The driving force • Measure and monitor report timeliness. behind the increased cost are late reported • Report claims as they medical-only claims, or claims that have occur, 24 hours a day, zero dollars of indemnity incurred losses. 7 days a week. Since our last study in 2007, Liberty Mutual • Centralize the reporting experienced a significant improvement in first process (i.e. online). reporting efficiency among its policyholders; • Target reporting 80% of that is more claims were reported within claims within 3 days. 0-3 days. In 2007, 57% of all claims were reported within 0-3 days, which increased Methodology to 64% by 2009. Clearly, policyholders see This study focuses on the the benefits associated with reporting Workers Compensation line claims as soon as possible—it lowers the of business. Losses and total cost of risk. claim counts were developed to their estimated ultimate values using standard actuarial methods andwww.LibertyMutualGroup.com/businessThis brochure is for marketing purposes only and is not a contract.It provides only a general description of these programs. Only yourpolicy or contract can give actual terms, conditions and exclusions.© 2011 Liberty Mutual Group. All rights reserved. CM 3027 03/11 SR

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