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Thread Title: Question about claims in excess
Created On Wednesday September 17, 2008 2:36 PM

Cement
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Wednesday September 17, 2008 2:36 PM

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For a self insured/self administered employer, we have over a dozen claims that are now in excess. We've pierced the retention and are receiving reimbursment from the excess carrier. Someone asked me, if it was possible to hire a TPA to handle the excess claims. Their rationale is that since the claim is in excess the self insured employer, is off the hook for the claim and it's the responsiblity of the excess carrier. I disagree with this, can anyone offer me anything to support my position, that this is not possible? Or is it?.....

50lake4
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Wednesday September 17, 2008 3:49 PM

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I am not sure you could find a TPA to take on 12 Excess files. However as the self insurer you are the entity receiving the bills and paying them and if you send these files to a TPA they would take over the bill review UR and claim administration and the cost would be crazy for a dozen or so files. You know these files and are getting reimbursement from your Excess Carrier why bother. I do not know how large your examiner staff is but I usually have trained my CA's on this function and the request every 6 months or so depending on the bills received.

steve appell
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Wednesday September 17, 2008 3:56 PM

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You are off the hook for your future payments, but you are not off the hook for your x mods when it comes to renegotiating with your excess carrier. Nevertheless, I'm sure administering the claim once the retention is pierced is negotiated and completely covered in the contract you have with your excess carrier just like the UR, bill review, VR, and IV companies you are required to use.

Good Luck!

-------------------------
Steve

A government which robs Peter to pay Paul can always depend on the support of Paul.
- George Bernard Shaw

Cement
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Wednesday September 17, 2008 4:24 PM

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Thanks for the info.

jakelast@aol.com
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Thursday September 18, 2008 10:09 AM

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you might also look to your contracts with the Excess Carrier. In all likelihood, it is not required to administer the claim just insure above your retention. The obligation to administer the claims still rests with the self-insured employer and or the entity it has contracted with to provide administrative services.

Jake Jacobsmeyer
Shaw, Jacobsmeyer, Crain, Claffey & Nix

postscript2
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Sunday September 21, 2008 1:24 PM

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Just because the handful of claims has met the retention level, doesn't get the administrative adjusting agency off the hook from handling the claims issues. It does mean that it's the re-insurer's $'s and they will take a much more active role in the claims decisions.

Nice try though--I used to loathe preparing those "large loss" status reports, that took 1/2 day to complete!

LCS

Cement
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Monday September 22, 2008 8:18 AM

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The point of the question was not to get the reinsurer to handle the claim. The purpose was whether a self insured employer could contract out those claims,, to another adjusting agency not turn them over to the excess carrier.

postscript2
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Monday September 22, 2008 8:22 AM

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It's their dollar!

LCS

Jpod
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Wednesday October 01, 2008 2:42 PM

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Even when you have excess the primary liability is to the self insurer.

But the answer to your question is yes. It means as a self insurer you have one more adjusting location so you will need to complete the annual report accordingly.

I do not think it is wise b/c the purpose of being self insured and self administered is to control your owe claim decisions. On high dollar claims it would seem this would continue to be of great value. There is also the issue of employee turnover at TPAs (which in my experience is a huge issue in the bigger markets like California) and if you only have 12 files guess what...unless you pay the TPA time and expense to handle those claims you are not going to get any service from the TPA b/c you are a small fish.

And as others have pointed out the ultimate costs will come back in the form of increased excess premiums, plus the TPA fees, the audit penalties etc.

If you have already borne the cost of paying for and staffing a claims unit why would you consider paying another company fees that duplicate those costs in an additonal fee, in which profits are tacked on, when you have already paid for the biggest cost (staffing a claims unit) outside of the claim costs?

Lastly TPAs do not have the same goals as a self-insured, self administered employer.

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