Summary
The number of clams reported may have been reduced overall due to the recession. At the same time, the cost of each clam has increased putting pressure on the TPA's to handle more with less.
Analysis
I do agree with the prior article/commentary. In our claims reviews for employers, we have noticed an interesting scenario developing recently.
One area that many insurance personnel and analysts overlook is the increased internal pressure on a TPA's claims staff. In a recession, the number of claims may lessen. According to recent analyses by the NCCI, the dollar value of those claims increases enough to offset the decrease in volume.
The handling of each file intensifies causing most claims staffs to have the same amount of work, but with less claims. With TPA fees decreasing due to volume, how long can a TPA keep the same level of staff to handle the declining volume, but with more complicated and lingering claims?
I have seen where technology has been mentioned as one of the answers to this problem. However, there is only so much technology that can assist the "hands-on" adjusters and support personnel in handling the claim loads.
Usually, I will include an answer to a problem. I am not so sure on this one. Heavily increasing the file loads on the staff is not the answer, but only a quick-fix.
You can easily tell when an adjuster has reached their point of being overloaded. They lose the ability to communicate efficiently on all files and to their supervisors/managers, which causes the TPA's clients to pay more than is necessary on their claims.
James Moore
