This is the first in a two-part blog series involving the day-to-day role of a claims adjuster at the average P&C insurance carrier and how Flagship Services Group can make that day easier and more rewarding. In this post, we'll look at some potential pitfalls the average claims adjuster is not going to want to deal with. In the next post, we'll discuss how these pitfalls are avoided.
The average claims adjuster at a mid-size to large P&C insurance carrier – let's call him Bob – has myriad tasks to handle throughout a given day.
Bob's Busy Day
Bob starts the day listening to 14 voicemails that came in since he left the previous day. Three are from one particularly tenacious and obnoxious lawyer who enjoys trying to bully adjusters with crude language and a lot of bluff and bluster. The rest are from various claimants, attorneys, and other sources he's been playing phone tag with for days now.
Next, over a cup of not-so-good coffee, Bob reviews his inbox to find two new files in his queue. This puts his total case load at 134 – not the worst he's seen, but right up there. He sighs and pulls out a Post-It note to remind himself to make the obligatory contact call on each of these new claims before he leaves today since the 24-hour service standard will have expired before he gets in tomorrow.
After ten minutes of organizing, Bob has a full to-do list in front of him and he starts pounding the phone. He's calling back yesterday's voicemails, catching up with cases that have been in process for a few weeks to update claimants and attorneys on progress, following up on paperwork that was promised but hasn't reached his desk yet, and generally working his way through this case load with an eye on service and efficiency. He wants to help people get the settlements they deserve, but at the same time, he has a lot of internal and external guidelines to keep in mind and he knows every step he takes puts him potentially into dangerous territory.
You see, in Bob's world success and failure are defined by three key ingredients:
- Cycle times
- Paid costs
Bob's job is to provide excellent service to his claimants. But, he's also required to do everything in his power to keep cycle times, paid costs, and reserves as low as possible. That means settling claims quickly and keeping costs lower by avoiding litigation and unnecessary fines and other fees.
At about 4:30 pm, Bob glances at that Post-It note from first thing this morning and realizes he's never made one of the two initial contact calls he needs to make before he leaves at 5:00. He quickly pulls up the case summary so he can doesn't have to call completely blind. And suddenly, he stops and holds his head in his hand for a moment.
It's a Medicare claim. The claimant is 68 years old and was injured in a motor vehicle accident that resulted in several days in the hospital and residual physical therapy and follow up visits. Medicare has already paid the hospital bills, so Bob knows there's going to be a Conditional Payment Letter (CPL) on its way if it's not already somewhere in the file. Then, he's going to have to work with Medicare's BCRC and deal with unclear paperwork, muddled language, documents that are hard to find and interpret, and waiting on hold for 30 minutes at a time.
Bob hates Medicare claims. After all, he only sees one or two per month, if that. And it seems like every one of them takes longer than average, which always makes his supervisor get on him about cycle times. And there are so many little nuances to the regulations, it feels like he needs to reinvent the wheel every time he works one.
Where Medicare claims can go wrong
Let's leave Bob holding his head in his hands for a few moments because his concerns are justified.
Medicare-related personal injury claims are a completely different ballgame from the bulk of the claims the average adjuster works, and they only account for about 17% of the their total case load. That means that the average adjuster is unlikely to be completely familiar with all the ins and outs of Medicare compliance requirements to begin with, much less up-to-date on any recent changes to the applicable laws and regulations – and they change a lot.
What's more, claims involving Medicare beneficiaries can have more expensive and serious consequences attached to imperfect filing and payment than the average claim, including:
- Bad Faith – if these claims are processed wrong, or just allowed to sit too long due to inexperience or processing errors, they can result in being sued for Bad Faith by the claimant.
- Motion to Enforce Settlement – again, if these claims are processed wrong or if the adjuster is forced to wait too long for Medicare, a claimant or claimant's attorney can file a Motion to Enforce Settlement which may result in the carrier paying the settlement plus attorney's fees and interest.
- Referral to the Department of the Treasury – Medicare can refer a claim in which they feel they are owed more money than they've received to the Department of the Treasury. When they handle the case, it's very much like a tax audit: a time-consuming paperwork nightmare.
- Referral to the Department of Justice – In some cases, Medicare can refer a claim to the DOJ, which ends up not only being a time-consuming annoyance, but also a potentially damaging PR situation.
- Recovery Demand – Even years after the claim was supposedly closed, if a Medicare audit turns up any irregularities in how it was processed or paid, they can still come back demanding recovery of funds, regardless of “hold harmless” language or any other legal stipulations you've placed on the settled claim.
Bob already has a lot of responsibility, trying to manage a heavy case load, close cases quickly and efficiently, and stay in line with his company's internal KPIs. After all, he wants to qualify for a bonus this year and potentially a raise when his annual review comes around. It’s hard for him to get excited about challenging Medicare claims when they cross his desk.
Fortunately for Bob, a solution exists that will take these difficult and problematic Medicare claims off his hands while ensuring his employer they'll be settled efficiently, at the lowest defensible cost, and completely compliant to current Medicare law.
More on that in our next post.