Timely reporting of a claim is a critical first step in containing the claim’s cost. Failure to report or delay in reporting a claim can have implications that go beyond just the claim’s severity. Failure to report claims also allows for missed opportunity for accident investigation to help prevent future claims.
In an article titled; “Why Is It Important to Report Workers’ Comp Claims Promptly?” the author Thulis, Sandy (2015, June 1). Closer Matters. wrote, “The financial effects of late reporting can be significant, as the average cost of a claim is typically higher if it is reported late.” The article continues by providing reasons why:
• A delay in seeking treatment may cause a deterioration in the employee’s condition that will impede the employee’s recovery time.
• An insurance carrier’s ability to investigate a claim, determine compensability and identify potentially fraudulent claims may be hindered as witnesses may no longer be available or key evidence may not be preserved.
• The ability to deny un-compensable claims can be impacted as many states have regulations that prohibit denial of claims after a specified time period. The ability to deny a claim due to a worker being under the influence of drugs or alcohol can also be impacted by reporting delays.
• The opportunity to direct the initial treatment to an occupational health clinic that specializes in treating workers’ compensation injuries and coordinates with the employer’s Return to Work program may be lost.
• The benefits of using nurse case managers or other managed care initiatives to effectively manage the care of the worker can be limited with late notice.
Furthermore, research has shown that claim delays are shown to significantly increase the claims’ severity. In a study conducted by the Hartford Financial Group, the increase in a claim’s cost attributed to the delayed reporting is truly staggering:
• Two weeks late = 18% higher costs
• Three and four weeks late = 30% higher
• After one month = 45% higher!
ALPHA Fund is such a strong proponent of the effect that on-time claims reporting has on the overall cost of a claim, that Participants can earn a 2% credit on their base rate for reporting claims within 3 days from the employer’s date of knowledge.