Zachry and Bloom: Claims Management Skills and Training

Friday, March 24, 2023 | 0

As the claims manager goes, so goes the office.

Bill Zachry

The most important job in a workers’ compensation claim office is the claims manager.  

Most companies strive for consistency and accuracy with regard to benefit provision. They work hard to achieve these results while trying to maintain a low cost of claims administration. To get these results, they establish policies and procedures for claims handling, hiring and promoting staff, and compliance audits. 

Yet within most claims operations (insurance companies, third-party administrators and self-administered employers), the results are usually significantly different in each office. 

Why are the results so different? 

Barry Bloom

Most of the time, the difference in results among claims offices is due to the skill, experience and style of the claims manager. The “culture” of an office has a direct impact on performance and results. Good claims managers always have lower turnover and better results.  

Unfortunately, in today’s world, there is little formal training and even less focus on developing many of the skills required of the claims manager. 

A partial list of skills and duties for the claims manager: 

• Customer relations skills (insureds, self-insureds, insurance brokers, vendor-partners, senior management and different operations within the company are all unique customers requiring unique handling skills). 
•  Expert claims technical skills, including the practical application of the current laws, rules and regulations on all cases — litigated and day-to-day cases as well (often including more than one jurisdiction).
• An in-depth understanding of medicine including diagnosis, treatment and the process of medical-legal evaluations.
• Understanding of how the specialty vendors such as bill review or vocational rehabilitation that is utilized and managed by the company. 
• Process management and analysis including the understanding of how to establish claims workflows, staffing analysis and information management (this allows the manager to determine how to control and manage workloads, including the caseloads for the claims examiners). 
• People skills include hiring, retention, staffing turnover and how to properly motivate the staff. 
• Delegation skills including communication and team building. 
• Knowledge of human resources, including how to reward, hire, fire and discipline employees within the company HR culture (every company has different processes for these activities).
• Knowledge of benefits provision and benefits provided by the company. 
• Vendor management skills, including attorneys, sub-rosa, AOE/COE investigators; photocopy, vocational rehabilitation and Medicare set-aside. The management of the 1099 process (reporting the payments made to the vendors to the franchise tax boards) can be a critical component of vendor management. 
• IT technical skills, including how to maximize the utilization of the company claims system software, as well as hardware technical skills that allow problem-solving for printing issues. An understanding of how to oversee the overall security of the computer systems, including implementing security access for onboarding new employees. 
• Knowledge of local state and federal laws, rules and regulations that are not directly related to claims handling but are applicable to day-to-day processes, such as HIPAA, SAS 70 requirements and federal terrorism reporting requirements. 
• Settlement authority process and management.
• Litigation management, including settlement philosophy and process. 
• An understanding of the subrogation process. 
• An understanding of general insurance issues such as excess insurance retentions and how to deal with other insurance companies. 
• Analytical skills to develop alerts and reports to identify causes for both good and bad trends or results. 
• An understanding of actuarial triangles and an ability to read and utilize an actuarial report. 
• How to identify, report and prosecute internal and external fraud. 
• Negotiations skills. 
• An understanding of contracts and contract law. 
• A keen understanding of the ethical, integrity and honesty principles involved in claims management. 

This is an astonishing list of a wide variety of skills and knowledge. Each of these skills has its place in the day-to-day job of the claims manager. There are very few formal training programs for most of these. 

Usually, the most difficult transition from supervisor to claims manager involves delegation skills. Claims examiners and supervisors are usually successful because they are “control freaks.” They manage every aspect of the claims within their responsibility. 

When they become claims managers, it is hard to abandon the habits and activities that helped with their success. The inexperienced managers want to control every aspect of the office, and usually, they and their staff are frustrated until they learn how to delegate gracefully. Many new claims managers flame out because they did not learn the art and grace of delegation. 

Every organization that has a claims handling component should have a program to develop the claims manager's skills. Use the above list as a template of issues for the training. Companies that understand the importance of claims managers, do succession planning and train their supervisors to be prepared for the next step will have a distinct competitive advantage and get far better claims results.   

Today’s claims managers will become the leaders and executives in the claims industry. To be successful stewards of a system, it is important that insurance companies, TPAs and self-insured claims organizations focus on developing and implementing comprehensive training for their claims managers. 

Now is the time to start.

Bill Zachry is a board member of the California State Compensation Insurance Fund. Barry Bloom is managing partner of The bdb Group.