Claim Review Reveals Misallocated Charges and Helps Reduce Annual Premium
Brown & Brown participate in triannual claim review
Industry: Staffing & Recruiting
A loss–sensitive customer hired Brown & Brown as its broker and requested the team participates in triannual claim reviews. In preparation for the first review, Brown & Brown analyzed the large national carrier’s online system for the selection of open workers’ compensation claims identified for the review. Using this information, Brown & Brown obtained an understanding of the claim and developed an aggressive action plan that would help bring it to resolution. Additionally, all other payments and reserving practices were reviewed.
Brown & Brown’s review revealed misallocated charges
In reviewing the 17 identified claims, Brown & Brown noticed a payment trend. Charges for independent medical evaluations and any associated charges were being incorrectly accounted for as a medical expense rather than an allocated loss adjustment expense (ALAE).
The carrier was engaged to address its payment practices, as they were not up to the national council and state bureau standards. After reviewing those guidelines, the carrier agreed to reallocate all incorrectly coded charges from the previous four years.
The misallocated claims totaled $100k, and were adjusted
Brown & Brown found 43 claims that required adjusting, totaling nearly $100k. These adjustments reduced the customer’s experience modification by .03 for the current term and its annual premium by over $30k.
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