5 Deadly Sins of Claims Management- Part 3 of 5

Feb 12, 2010

Welcome to Salt Associates

Since 2003, Salt has been performing disability claim audits and reviews, claim data analyses, claim operation reviews and consulting to disability insurance companies, third party administrators, disability reinsurers and large employers¹. We've seen the good, the bad and the ugly. Recognizing that no one is perfect and understanding the complexities of managing claim operations in this day and age, we continue to find elementary claim management techniques missing. We call them The Five Deadly Sins:

 

  1. Timeliness
  2. Use of the Telephone
  3. Use of Risk Management Tools
  4. Written Communications
  5. Something we call "Risk Management Critical Thinking"

 

1Based on over 80 claim audits and reviews in 31 different claim operations.

Appropriate Use of Risk Management Tools

Wikipedia defines risk management as "the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate event or to maximize the realization of opportunities." Similar risk management strategies are used in the claim operations with proven results.

Disability claim operations have varying levels of resources and tools at their disposal to assist in the management of the carrier's risk posed by lengthy durations. One of the areas we review while performing disability claim audits and/or claim operation assessments is this area we call "use of risk management tools", i.e. how effectively does the claim staff utilize available tools?

 

The tools include:

  • Claimant Questionnaires
  • Labor Market Surveys
  • Transferrable Skills Analysis
  • Independent Medical Evaluations, Peer Reviews, and
  • In-house Medical
  • Personal Visits
  • Vocational Rehab
  • Offset Management

 

Examples of what we saw in a recent claim review:

  • Appropriate risk management tools were utilized only 24% of the time
  • Only 13% of the sample reviewed demonstrated a return to work focus
  • After the initial approval, appropriate ongoing use of risk management tools were used only 38% of the time
  • Only 32% of the claims contained a documented supervisor review

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