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Monitoring the claims process has always been a key component in controlling claims costs. A claims review helps organizations ensure that the insurance carrier, third-party claims administrator (TPA), or claims service provider is representing the best interests of the company in all interactions with claimants and their representatives. Additionally, claims reviews help ensure that the TPA or service provider is complying with the law and regulations governing the proper handling and disposition of claims and delivering the quality claims services that were promised when the service provider was engaged.
What Will You Say when They Ask What Happened?
To begin to determine how well the organization handles claims, ask if it is experiencing any of the following:
- Complaint calls from business units or employees concerning claims-handling
- Reserve fluctuations, stepladder reserving, or reserves consistently trending upward
- Change in the type or frequency of claims
- Reserves consistently under reserve-advisory levels
- Retrospective premium adjustment around the corner
- Loss-pick/loss-projection increases
- Significant law change
- Underwriter insolvency
- Letter of credit issues
- Missed subrogation opportunities
- Failure to pursue second injury fund reimbursements
- The prospect of a merger or acquisition
Organizations that have experienced any of the above should consider claims file reviews.
Who’s Looking Out for You?
Before starting any review, Marsh consultants meet with clients to discuss their concerns and issues. Based on this information, the consultant will select a list of claims that best address the client's concerns. The audits can be general or they can focus on specific areas such as best practices and performance guarantees, aged losses, retrospective premium claims adjustment reviews, loss portfolio transfers (LPT) and buy-out projects, inventory close-out projects, or other custom reviews to fit the organization's needs.
Using TrendTracker®, Marsh's proprietary software that automates and enhances the corporate audit process, Marsh consultants rapidly identify and access areas that need attention, either in the claims files or within the organization. TrendTracker can be customized to audit virtually any organization's process, protocols, reports, and standards.
The results of the review provide the necessary knowledge of the quality of the work being performed, produce accurate data for better decision-making, and identify current and potential claims issues to:
- Reduce the number of open claims, which helps offset existing reserves on a com-pany's balance sheet, thereby protecting its earnings
- Improve loss history and enhance renewal options
- Reduce needed collateral
- Ensure retrospective premium claims adjustments are done with appropriate loss data
- Provide the necessary understanding of outstanding claims and loss reserves of a company considered for merger or acquisition
The claims audits and reviews include an analysis of losses, target issues, trends, and causes, enabling Marsh claims consultants to discuss the results with the claims service provider and develop solutions to any problems or issues that have been identified. In addition, Marsh consultants provide a written executive summary outlining the results and providing recommendations on action plans and strategies to bring claims to resolution or to get them back on track toward resolution.
Clear Benefits to the Organization
There are several advantages gained by conducting claims audits and reviews. By thoroughly reviewing and analyzing an organization's claims, executives can help to eliminate surprises, determine whether best practices are being used, and ensure they have the necessary knowledge to put plans into action.
In addition, the review helps identify loss quantum, at-risk claims, concern areas, and potential business issues while avoiding several pitfalls such as:
- Settlement costs that exceed case reserves
- Customer and employee complaints
- Unexpected reserve increases
- Unexpected claims going to trial
The bottom line is claims audits and reviews provide information in an easy-to-use summary format and can not only help improve the claims process but also enhance relationships with providers.
If you have any questions or would like additional information, please contact us.
If you are seeking information about insurance and related services, please visit marsh.com.
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