How many Workers’ Compensation adjusters, in addition to focusing on the loss evaluation and adjustment process are able to also focus on the recovery aspects of the claims assigned to them? Subrogation and Third-Party recovery is definitely an area often missed by over-burdened Workers’ Compensation claim handlers working tirelessly to make sure statutory medical bills and indemnity are paid timely, or argued in front of the WCB. Time management allocation is relegated to determining ANCR (accident, notice and causal relationship) to validate whether an injury is compensable together with making sure all statutory medical and indemnity payments are paid timely, and take precedence over investigating who or what may have been responsible for the employee’s injuries.
First and foremost after ANCR, the Workers’ Compensation adjuster’s duties and responsibilities revolve around determining the extent and potential permanency of the employee’s injuries, proper reserving, working with the treating physicians and facilities to assess rehabilitation, and getting the employee back to work to mitigate the loss to the company. Unfortunately, potential third-party claims are often missed because there isn’t another set of eyes focused on pursuing recovery in the variety of ways available.
It is less likely for a Workers’ Comp adjuster to question whether there was a “Mr. Somebody” responsible for the injuries sustained by the employee or consider possible recovery opportunities unless that adjuster was placed on notice by a third party attorney seeking copies of the medical and indemnity logs. Most Workers’ Compensation adjusters are of the belief that because Workers’ Compensation is statutory, and governed by those statutes in all 50 states, the employee’s third-party counsel would certainly alert them of their representation and pursuit of a third party claim. And said counsel would certainly never settle the case without obtaining consent to do so, thus honoring the lien, so what’s to worry about? They are sure to receive a call from counsel to negotiate the lien followed by the receipt of a check shortly thereafter. And while this may be true in most instances it is not true in all.
It is highly likely that after the existence of claimant/employee third-party counsel is documented in the workers’ compensation file that little or nothing else is done by the Workers’ Compensation adjuster with the exception of sending out a Notice of Lien to counsel. Few if any adjusters confirm that counsel has instituted legal action much less obtain a copy of the Summons & Complaint or the Answer filed by the Defendant(s). Fewer still would consider contacting the adverse carrier to establish a rapport or send that carrier a Notice of Lien. What becomes of the Lien on cases where the claimant counsel, who initially notified the workers’ compensation carrier, drops the case for one reason or another and never files suit? What usually occurs is that time moves on and statutes are lost because no one actually filed suit since claimant counsel has no obligation to advise the Workers’ Compensation carrier they have abandoned the case.
Too many Workers’ Compensation claims with viable recoveries are closed without recovering the Lien, whether by aggressively protecting the Lien by staying on top of claimant counsel and the adverse carrier or by pursuing the at-fault party or adverse carrier directly. The seasoned Workers’ Compensation subrogation representative can absolutely be the solution to what was once a hidden recovery. After reviewing the claim facts, obtaining missing evidence and determining the cause of loss the subrogation rep will be able to monitor the loss payments made, update notices of lien, send Demand Letters to adverse parties and carriers when third-party counsel has not been retained, and either file Special Arbitration or retain the services of good Workers’ Compensation subrogation counsel.
All of the above examples provide a strong case for engaging the services of a subrogation partner with the sole focus of identifying a recovery opportunity and aggressively pursuing it. Each year, 15-20% of paid claim dollars are left behind either because of a failure to identify the recovery opportunity or failure to pursue it. Spartan Recoveries LLC, a provider of subrogation services, has grown to be an indispensable cost containment partner to claim departments nationwide, with technology and subrogation strategies designed to increase recoveries while decreasing cycle time.
Preventing a Work Comp Claim from occurring may not always be possible but understanding the recovery statutes governing the states where employer policyholders conduct business and pursuing recovery opportunities are possible and make a significant contribution to the financial stability of an insurance company.