Workers’ Comp Claims Handling
Why Conduct A Claims Audit?
In an effort to reduce costs, insurers,
Claims audits should start—not end—
with comparing the program’s claims man-
agement performance against best practices
or so-called “leading industry standards,”
which apply regardless of the industry or the
claims program structure. After all, a claims
program should strive to be the best it can
be, regardless of ownership or form.
Some companies or public entities
underestimate the value of a claims audit,
considering it to be an expense that does not
provide a direct benefit or cost savings, or a
task that can be performed by the internal
audit department. Others are resistant to
claims auditing because it is incorrectly
viewed as fault-finding and punitive rather
than being a springboard to better claims
outcomes. A claims audit, however, not only
determines whether the claims administrator is managing claims as it should, but also
provides information about the work of
other corporate departments or divisions
that can improve their participation to
achieve better outcomes.
Claims audits provide the following to an
■ Comfort or assurance that the program
is operating as it should, if that is indeed
■ Identification and documentation of
areas of improvement or functions that
could be executed more efficiently.
■ Confirmation to the insurer or TPA that
its client is paying close attention to their
performance and has high expectations, which should in turn yield better
■ Notification to corporate representatives—for example, supervisors, human
resources, safety representatives—that
their participation in the claims process is
also being examined as part of the claims
audit process. For example, the following
questions may be answered as the result
of a claims audit:
• Are corporate representatives properly
handling their supervisory responsibilities and promptly reporting claims?
• Are the supervisors, medical providers,
human resources professionals, and
safety /ergonomics specialists working
cooperatively to arrange modified duty
• Are the safety representatives investigating incidents and reporting findings
and recommendations to the claims
organization so objective input can be
incorporated in the investigation and
company’s overall loss control process?
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InsuranceAutoAuctions.indd 1 8/19/13 6:06PM