CompMonitor: An Experience Modification Reconciliation

CompMonitor is a service of Alliance Insurance Services, LLC

Workers Comp Experience Modifiers

How would you like to reduce your Workers Compensation Experience Modifier, save your company money, increase your revenue, and be eligible for more contracts?

It sounds great doesn't it? If you're like most of the clients we see, it's not a dream either. In fact, the average experience modifiers are over stated by 27%!

Further did you know that these overcharges happen nearly 70% of the time? This overstatement often translates into numerous things including:

    -   Reduced profits
    -   Increasing the overall cost of risk to thousands of firms
    -   Prevent you from landing a contract
    -   Eliminate several insurance carriers from quoting on your policy

4 Ways Experience Modifiers Can Be Overstated

At CompMonitor, we get asked all the time; " How can they be overstated by 27%?" To fully understand the answer, we'll look at four common activities that cause experience modifiers to be so overstated:

  1. Insurance Adjusters Setting Reserve's
    When an injury occurs to an employee, the insurance company adjuster will set a reserve (the maximum amount the claim is expected to cost the insurance company) for the loss. Few claims are settled for the maximum amount, yet it is that overstated reserve that unfairly drives up the experience modifier.
    (Read about Workers Comp Audits)

  2. Not Closing Claims On Time
    Another reason for the inflated worker's compensation experience modifier is the lack of closing a claim before the "Unit Stat" date (the date where claims information is sent into NCCI for calculation of your modifier).

  3. Open Claims and High Reserve's
    When the "Unit Stat" date occurs, it's very common to see claims that have not been closed, and reserve's that have not been brought down from the initial allocated reserve. Either one of these occurring, or often both of them simultaneously, quickly begin to increase the experience modifier.

  4. Data Entry Errors
    Even in an age of incredible technology, data entry errors still occur more often than we all know. This can happen easily at the insurance company level, but also when NCCI workers key the information for the calculations of the worker's compensation experience modifier into their system. Errors at both the insurance companies level, and at NCCI's level can have dramatic impacts on your modifier.

As one can see there are many ways in which an experience modifier can be determined incorrectly. Unless someone knowledgeable is there to protect your interest, a company will more than likely be paying too much for their workers' compensation.

This is where CompMonitor steps in to help.

Our approach is to fully plug the holes that allow worker's compensation experience modifiers to be overstated and thus reduce profits to an organization. Our CompMonitor System is unique in the way that we review the auditing of individual claims as well as ensuring the accuracy of your modifier.

CompMonitor has helped countless companies throughout the country substantially reduce their Workers' Compensation costs. Here's how we can help you do the same:

  1. We assure that claim reserves are set to the proper levels before that claim reaches the point where it must be reported to NCCI. Our experienced personnel work for you by working with insurance company adjusters to insure claims reserves are set at proper levels.

  2. We make sure that our efforts at reducing claim reserves and closing old "open" claims are properly completed prior to the Unit Stat date.

  3. We verify (scrub) the data that goes into the worker's compensation experience modifier so that figures used to calculate the experience modifier is accurate. We have often find one of two things:
    1. Claims are entered incorrectly.
    2. Payroll information derived from worker's compensation audits are incorrectly placed into the formula used to calculate your modifier.

In a nutshell, CompMonitor's experienced staff understands experience modifiers inside and out. We not only help our clients save more money, but we can help them make more money as well. With almost all of our clients, we can do this without us every having an impact to your bottom line.

Try filling out our example boxes and see what you could be saving. Then, send us your contact information, and we'll help you achieve those results.


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