Check my MOD sheet in only 3 steps

So you want to check your MOD Sheet?  Good for you!  You should!

How to quickly check your NCCI Experience MOD Worksheet for accuracy.

Assuming you know the basics of reading your MOD Sheet, if you don’t, please check out MOD Sheet 101, you understand the basic data that goes into the calculation.

You can quickly glance over your experience MOD worksheet and come up with an idea on how accurate it is in just ten minutes.

  1. Glance at the classcodes and payrolls.  Does anything jump out at you?  A classcode you don’t recognize, a year with lower than payrolls that what you’d expect?
  2. Check the claims section. Do you see any losses that look too large or don’t recognize at all?  Is there a small claim that isn’t an injury code 6 for this in ERA states?
  3. Do you have all of the years reported?  How about wrap ups or Owner Controlled Insurance Programs?

A quick check of these three items and you’ll know if you more detail is needed!  You’re still encouraged to talk to your agent or consultant to verify the data and calculation, but this quick check highlights the most commonly found errors in the experience rating!

 

15 Warning Signs of Workers’ Compensation Fraud

For most business owners and risk managers, your gut can tell you pretty quickly when an injury just doesn’t seem right.  If you’re new to workers’ compensation, this guide provided by Zywave, Inc*. gives some insight into situations you may want to discuss with your agent or claims adjuster.

 

The WC (workers’ compensation) insurance system is a no-fault method of paying workers for medical expenses and wage losses due to on-the-job injuries. While the majority of WC claims are truthful, the National Insurance Crime Bureau reports that billions of dollars of false claims are submitted each year. To help you detect possible WC fraud, experience shows a claim may be fraudulent if two or more of the following factors are present:

1.  Monday Morning:  The alleged injury occurs either “first thing Monday morning,” or late on a Friday afternoon but not reported until Monday.

2.  Employment Change:  The reported accident occurs immediately before or after a strike, a layoff, the end of a big project or at the conclusion of seasonal work.

3.  Job Termination:  If an employee files a post-termination claim:

–   Was the alleged injury reported by the employee prior to termination?

–   Did the employee exhaust his/her unemployment benefits prior to claiming workers’ compensation benefits?

4.   History of Changes:  The claimant has a history of frequently changing physicians, addresses and places of employment.

5.  Medical History:  The employee has a pre-existing medical condition that is similar to the alleged work injury.

6.  No Witnesses:  The accident has no witnesses, and the employee’s own description does not logically support the cause of injury.

7.  Conflicting Descriptions:  The employee’s description of the accident conflicts with the medical history or First Report of Injury.

8.  History of Claims:  The claimant has a history of numerous suspicious or litigated claims.

9.  Treatment is Refused:  The claimant refuses a diagnostic procedure to confirm the nature or extent of an injury.

10.  Late Reporting:  The employee delays reporting the claim without a reasonable explanation.

11.  Hard to Reach:  You have difficulty contacting a claimant at home, when he/she is allegedly disabled.

12.  Moonlighting:  Does the employee have another paying job or do volunteer work?

13.  Unusual Coincidence:  There is an unusual coincidence between the employee’s alleged date of injury and his/her need for personal time off.

14.  Financial Problems:  The employee has tried to borrow money from co-workers or the company, or requested pay advances.

15.  Hobbies:  The employee has a hobby that could cause an injury similar to the alleged work injury.

Remember, these warning signs are simply indicators. If you are suspicious of a claim, alert your insurance carrier.

Content © 2007-2010 Zywave, Inc. All rights reserved.

 

*For agents not familiar with Zywave, (www.zywave.com) be sure to check them out!  They provide one of the most comprehensive solutions for insurance agencies, delivering the tools and capabilities to differentiate yourself from the competition.

Zywave Vision Statement:

Zywave’s leading technology solutions are used by more than 6,000 insurance and financial services firms around the world to differentiate from the competition, enhance client services, improve efficiencies and achieve organic growth.

Reading Your MOD Sheet 101

How do I read my NCCI Experience MOD?

You just received your MOD sheet and maybe it’s up, maybe it’s down, or maybe it didn’t change at all.  Just about everyone knows where to find the final rating, but since this post is MOD Sheet 101, I’ve shown an illustration below.

 

Whatever the final number, you want to understand a few key pieces of information from the experience rating worksheet.

Regardless of good or bad, we’re only trying to determine now, what information are they using to determine my rating.  Since I’m only going into the basics of the MOD in this post, we’re not going to look at the details like primary losses, ballast values, etc.

First, what policy years are they referring to?  Your experience MOD typically reflects three policy years worth of data.  There will be times when your MOD sheet will have more than three years worth of data (you changed your renewal date, acquired another company, involved in an OCIP or wrap-up, and more, but this is only an intro into reading the MOD).

Let’s start from the top down!

1. Each of the states you had payroll in should be listed for each year you had payroll in that state.  Rules vary from state to state.  If you have a questions with states and classifications, please ask as there are too many variables to summarize!

2. The next section you’ll see is the classcode and the corresponding payrolls.  (Yes, skipped ELR and D-Ratio)

3. The next section is claim data (or claim number), the Injury Code, and weather or not the claim is open or closed.  (Yes, for the sake of simplicity we’re skipping the expected losses and expected primary losses)

Claim Data: This is your claim number.

Injury Code: Your options here are 1-9

1= Death

2= Permanent Total Disability

3= Major Permanent Partial Disability

4= Minor Permanent Partial Disability

5= Temporary Total or Temporary Partial Disability

6= Medical Only

7= Contract Medical or Hospital Allowed

8= Compromised Death (California Only)

9= Permanent Partial Disability

O F: Quite simply, this column shows if the claim is OPEN or CLOSED.  WAIT!!!  My example has an asterisk!!!!  Yes, the asterisk as shown in the example means you had multiple small claims with the same injury code.  (At the time of this writing a “small” claim is any claim under $5,000.  The rules are changing here with regards to what defines a small claim, but for now, anything under $5,000 is small).  You’ll also see that because there are multiple claims here, the number of claims are listed in the Claim Data section rather than a claim number.  In this instance, there were two small claims and the total for both small claims was $1,459.

ERA States

An ERA State?

A key feature with the experience MOD calculation as well as when employers and risk managers try to determine the cost benefit for return to work and light duty programs is weather or not the state in question has approved and Experienced Rating Adjustment (ERA).  So what is an Experienced Rating Adjustment?

Quite simply, if a state has approved ERA Status, and a workers’ compensation claim is considered “medical-only”, when NCCI calculates your experience MOD, claims which are medical only recieve a 70% reduction when calculating the claim information.  How do you know if a claim is medical only per your MOD Sheet?  Check the IJ (Injury Code) number.  An injury code 6 means the claim is medical only.

So why would NCCI give me a 70% discount on a claim just because it’s medical only?  There are several reasons, but I’ll give you two of the biggest.

By giving a discount for smaller claims (typically those smaller claims are medical only), employers are encouraged to report small claims rather than pay them in house as many do.  In order for the EMR to be as accurate as possible, NCCI has to receive as much claim data as possible.  When claims are paid in house, all legalities aside, the factors used to determine the Discount Ratio (D-Ratio) and Expected Loss Rates (ELR), aren’t as accurate because they aren’t receiving all of the data.  Don’t get me wrong, the actuaries understand not every claim gets turned in and they account for this, but by encouraging companies to submit even the small claims, it helps the accuracy of the calculations.

Why not reward the employers whose employees, when injured, are back to work and returned to full productivity without any indemnity payments or lost work time?  It makes sense to reward those employers who put employee safety as a priority!

You understand what the ERA is, and how it can help your MOD rating, but which states DON”T give an Experience Rating Adjustment?
While I do check the regulatory authorities on the states below prior to posting, things can and do change.  For several of the states that don’t currently allow ERA, many are reviewing, but have not yet adopted.  If you regularily work in one of these states and discover a change before I do, please share so I can verify and update!

Alaska (Pending, but not yet approved)

California

Delaware

Georgia

Iowa

Louisiana

Massachusetts

Missouri

New Jersey

New Mexico

New York

Oregon

Pennsylvania

Texas

 

 

 

You can't manage what you don't understand.