There are various times during the lifecycle of a workers’ compensation claim when it should be transferred from a medical only examiner to a lost time/indemnity adjuster. Knowing these signs will assist in the claim handling process to keep it on track and moving in the right direction.
Do you know the difference between a medical only claim and an indemnity claim? A medical only claim occurs when the injured employee gets hurt, seeks medical attention, and is ultimately released to return to work. This is generally the best-case scenario in a workers’ comp claim.
The indemnity claim, or lost time claim, takes much longer. The worker’s injuries are more severe, requiring more than just one doctor’s visit, and they cannot return to work right away as the injuries prevent him/her from doing so. A lost time claim can go on for an extended time, and in some cases, can be permanent.
What is a Lost Time Claim?
The majority of worker’s compensation claims are medical only claims. These claims require less time off work. A medical only claim becomes an indemnity or lost time claim when it keeps the employee out of work for a period of days specified by state waiting periods (usually three to seven days).
Lost time claims result in the majority of loss dollars for insurers — medical only claims only account for 6% of loss dollars despite making up 77.9% of workers’ comp claims — and are handled more thoroughly as a result. This is why they must be passed off to a professional who specializes in these types of claims: the lost time adjuster.
See also: When Does a Medical Only Claim Become a Lost Time Claim? (veritasclaims.com)
Reasons to Escalate a Claim to a Lost Time Adjuster
When handling workers’ comp claims, it’s important to know when to escalate the claims. When a medical only workers’ comp claim becomes a lost time claim, it requires a thorough investigation process and can drag out for a long time.
Normal Reasons to Escalate a Claim to a Lost Time Adjuster
There are signs when a claim should be transferred from a medical only examiner to a lost time/indemnity adjuster. The key to efficient claim handling is seeing these signs and moving it along appropriately in a timely manner.
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There are contradictions between the FROI (first report of injury) and medical history on the medical report.
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The medical treatment has exceeded the guidelines for the injury.
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The medical treatment has exceeded the threshold of the account. Typically, there is a financial limit for a medical only claim which usually ranges from $1,500 to $2,500.
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Surgery is warranted which means lost time will now come into play.
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Occupational disease claims and repetitive trauma claims
A note about occupational disease claims and repetitive trauma claims:
It’s important to note that occupational disease and repetitive trauma claims should always be handled by an indemnity adjuster. Both typically begin with conservative treatment and no lost time, but you still must confirm at the onset that they are work related via an extensive investigation.
See also: 10 Key Factors When Determining Compensability of a Repetitive Trauma Claim (veritasclaims.com)
Reasons to Escalate a Claim that are Red Flags 
The remaining three signs are RED FLAGS. These require reassignment for a complete investigation which includes a recorded statement:
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The claimant has an extensive medical history. The history may appear in a medical report and/or an ISO report.
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The claimant is a repeat offender. This requires an extensive investigation.
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The claim is questionable by the insured.
It’s important to know the red flags in workers’ comp cases as these cases may indicate that there is workers’ compensation fraud, which costs insurers billions of dollars every year and can unnecessarily inflate healthcare costs.
See also: 6 Best Practices When Dealing with the "Repeat Offender" (veritasclaims.com)
Wrapping It Up
Lost time claims result in bigger losses for insurers and must be handled with a full investigation. These claims result in the worker being out of work for a longer period of time — or even permanently, leaving the insurer on the hook for their workers’ compensation checks.
When a claim is identified as a lost time claim, it must be escalated to the appropriate adjuster. It’s important to know when to escalate these claims as they are much more time consuming and must be handled by someone with this type of expertise.
Veritas Administrators specializes in nationwide workers’ compensation claims handling. Customizable to fit your needs, our team can serve as an extension of your organization in a full TPA capacity or specific task work. Schedule a call to learn more about all the ways in which Veritas can take workers’ compensation claims problems off of your desk.
