TPA Cost Savings Analysis - Best Practices Claim Administration

The following is a cost/benefit Analysis based on the six claims that are highly profiled beneficiaries of:

Best Practices - Total Gross Savings - $543,581*

Total Savings without Special Funds Issues - $426,295

K******* M****** - Claim # DU*****: The total incurred on this file is $18,990. Of that, $9,580 incurred, is for expense. The first medical report clearly stated this was not a work related injury. This claim should have been continuously denied. Therefore, we estimate the savings on this claim to be 80%. The remainder would be for defense costs or $3,780. Savings: $15,192.

J***** C**** - Claim # D*****14: The total incurred on this file is $192,854. This is a claim that should have reported as a short/long term disability due to the accident description. Claimant alleges occupational disease to his back and shoulder. This should not have been accepted as a Workers Compensation claim. The savings on this claim would be 100% or $192,854.

G***** L***** - Claim # D5*****: The total incurred on this claim is $216,343. This is another claim for occupational disease to the back. The claimant states that this was a slow gradual process. This is another file, which is a short/long term disability claim. This is not a Workers Compensation claim therefore the savings is 100% or $216,343.

G***** H***** - Claim # B0*****: The total incurred is $128,602. A review of the adjuster notes and medical information indicates that the claimant’s injury was pre-existing but Special Funds was not researched. In Texas, the Employer is liable for benefits that would accrue only if the subsequent and not previous injury occurred. The claimant may require a 3rd surgery and is a candidate for lifetime income benefits. If Special Funds were established on this claim then the savings would be the percentage apportioned to the previous injury. Therefore, we conservatively estimate a 50% savings or $64,301.

C**** R*** - Claim # B0*****: The total incurred is $105,969. There is an issue of Special Funds on this claim due to previous motorcycle injury for which the doctor felt contributed to the subsequent workers compensation injury. The adjuster made a determination that there was no Special Funds applicable. Since this was in error, with Special Funds established on this claim, we estimate there would be a 50% savings or $52,985.

The gross cost for the 1999 policy year was $3.2 million plus handling charges of $603,619. The partial savings based on our 111 claim file sampling out of 1,047 claim files is $583,581 or 18%.

Real Clients, Real Cases, Real Money…

* Special Funds are granted on a case by case basis on the medical facts as accepted and the total credits available are subject to the case examiner’s findings and may vary higher or lower affecting our Special Fund case estimated savings higher or lower. Special Fund claims savings have been substantially discounted to maintain a minimum bias and greater objectivity.