It’s challenging to determine appropriate amounts of ultimate liability reserves for the injured worker in catastrophic workers’ compensation cases.

Although these types of cases, including spinal cord injury, severe brain injury, severe burns and severe trauma, constitute a small percentage of workers’ compensation cases, they make up about 20% of ultimate liability.

How does this affect overall claim reserves and an insurer’s ability to serve injured workers?

Because catastrophic workers’ compensation claims are not common, claim representatives are often unfamiliar with the ultimate liability parameters necessary to ensure proper provider care at the right time. This puts insurers at risk of not accurately balancing their claims books and injured workers at risk of delayed or inaccurate treatment.

It is imperative for an organization to have consistent and efficient claim reserve practices in order to effectively help injured workers and their families. This means:
• Having access to physicians and resources that can help case managers understand the specifics of catastrophic injury cases, types of injuries, new treatments, facilities and costs of care.
• Understanding the importance of a good reserve philosophy and how that can affect complex case processing.
• Knowing how quickly and efficiently catastrophic complex cases are reported and treated and implementing practices that enable representatives to more accurately assess reserves while keeping up with the demand.

A greater understanding by catastrophic case managers of the challenges and opportunities unique to this type of injury requires a commitment to consistency and knowledge. Representatives who understand the nature of catastrophic workers’ compensation cases and the types of injuries involved are quicker and more effective in setting appropriate reserves. One possible solution is a segmented claim reserve, which evaluates the progress of treatment, assesses future care and adjusts reserves as needed.

Understanding the role of reserves in the claim process and how catastrophic injury cases may require a unique understanding of injuries and treatments leads to more effective workers’ compensation insurance.

Learn more about Paradigm Outcomes’ holistic approach to catastrophic injury case management by visiting our website as well as our online communities on our blog, Facebook and Twitter.