Author, David J. Garcia, A.A.I., CRIS, President, Rancho Mesa Insurance Services, Inc.

Studies have shown, by reporting your workers compensation claims in a timely basis, not only will your injured employee receive better medical treatment, it will boost company morale. Both the injured worker, as well as other employees, will see your sincere concern for their wellbeing. In addition, timely reporting practices will also improve your risk profile through reducing the overall cost of the claim, which leads to lower loss ratios and lower experience modifiers, thus, resulting in lower premiums and improvement in your bottom line.

The following are four areas that support the early and timely reporting of claims:

Manage Claims More Efficiently

Reporting a claim quickly allows the claims examiner:
To determine whether or not the claim is compensable.
To meet state regulations that prohibit denial of claims after a specified time period.
To secure appropriate treatment for the injured worker.
To conduct an investigation and determine if fraud is suspected.
To receive timely witness statements and pictures of the incident.

Keep The Claim Costs Down – Improve Loss Ratio – Improve Experience Modifier

Delayed reporting can significantly increase workers’ compensation claim costs, according the National Council on Compensation Insurance.
  Claims reported after 2 weeks of occurrence are 18% more expensive than those reported within 1 week of occurrence.
Claims reported after 3-4 weeks of occurrence are 30% more expensive than those reported within 1 week of occurrence.
Claims reported 1 month of occurrence are 45% more expensive than those reported within 1 week of occurrence.


  
    Reporting (Lag) Time
    Expense Increase
  

    2 Weeks
    18%
  

    3 Weeks
    29%
  

    4 Weeks
    31%
  

    4 Weeks
    31%
  

    5 Weeks
    45%
  
First Report of Injury: Impact of Claims Cost, 2001 Anne Enleman and Patrick Vice.
Most significantly, back injuries, as a group, are 35% more expensive if not reported within the first 7 days post-injury.
Reduce Litigated Claims
47% of all claims reported after 4 weeks become litigated, which on average increase claims costs by 30%.
Source: NCCI’s Detailed Claim Information data for Report Years 2010 and 2011 case incurred losses valued as of 18 months after report date; not developed to ultimate
Close Claims Faster
50% of claims that are reported within the first two weeks close within 18 months.
Only 29% of claims that are reported more than a month after the accident close within the same timeframe.

Source: NCCI’s Detailed Claim Information data for Report Years 2010 and 2011 case incurred losses valued as of 18 months after report date; not developed to ultimate.


  
If you’re not currently reporting your claims timely, we strongly encourage you to adopt this “Best Practice” and make it a part of your company’s overall risk management program.  Reporting your claims on a timely basis will get your injured employee the proper treatment quicker, provide your carrier the controls they need to manage the claim effectively, improve your risk profile, and lower your insurance costs.  