We often talk about the various stakeholders in risk and claims management, and the necessity of partnerships to attain favorable outcomes, but we have not specifically covered accountability, which is the underlying principle that leads to the need for auditing and metrics.

Accountability Areas

Companies or public entities (entities) may be self-insured or have large deductible programs, and must rely upon a wide range of vendors for successful outcomes. This includes third-party administrators (TPAs), medical management companies (MMCs), automobile or property appraisers, private investigators, independent adjusters, and others. 

In too many cases the entities and vendors do not work together for a successful outcome, not because they are not trying to, but because they have not properly formed the necessary relationships. For example:

Workers’ Compensation: An entity may blame a TPA for increased workers’ compensation costs, but the entity’s supervisors may block attempts to return employees to modified duty. Conversely, an entity may have developed a strong return-to-work (RTW) program, but the TPA adjusters and/or MMCs do not effectively work with the medical providers, employer, and employees to move the employee back to work quickly.

Automobile physical damage and property damage (including buildings): An entity may have developed a preferred auto shop or preferred contractor program, but the adjuster does not inform drivers or claimants of the benefits of working with preferred contractors. Conversely, the adjusters consistently mention the program to drivers or claimants, but find the entity has not informed its own drivers of the program.

These are just two examples of miscommunications gone awry that sometimes result in one party believing the other is not properly participating in the partnership, affecting the success of the programs and possibly destroying the relationship.

Here are three questions that will assist in putting the partnership on more solid ground.

What does accountability mean in claims management?

Accountability means a party will be responsible for a particular service, procedure, or function that the parties believe will help them arrive at a more favorable result than without this service or function. The success of someone’s work may be measured through the evaluation of specific tasks, time or dollars saved, or other measures.  However, the results may become skewed because of variables over which the party has little or no control. 

Who are the parties who must be accountable for their actions? 

Responsibility must be defined for all parties, and accountability should mirror the responsibilities. In claims management, responsibility and accountability should be shared by the entities and their departments as well as all vendors or service providers. Holding one party fully accountable for the outcomes is not reasonable or fair, since other parties could improve or degrade the results through their efforts or omissions. Too often programs are established with inadequate communication and planning between the entities and service providers, or staffing changes or a lack of reinforcement result in previous arrangements no longer being followed. 

How do we structure the program to match responsibilities with accountability?

Entities and their vendors need to align themselves properly for effective and efficient claims management. Some activities required for alignment include:

Identifying and describing the roles and responsibilities. The entity and its vendors should understand and agree on their respective roles relative to a particular component of claims management. Sometimes a deeper analysis, improving a program, or ensuring better execution is required. These should be identified prior to the development of special service instructions, which define expectations and performance.

Documenting the structure

The parties should agree upon and document their roles, responsibilities, and accountabilities throughout the claims management process including:

  • Defining the roles and responsibilities, timing of activities, hand-offs required
  • Including these roles and responsibilities in the special service instructions that will be present for all to see
  • Confirming periodic meetings to discuss enhancements or clarifications that might be required
  • Creating objective measurement and reports, when possible, which measure each party’s performance relative to its responsibilities to establish accountability for each party to track their results.

The entity and its vendors must also ensure that the roles and responsibilities are updated when needed, and that new employees are fully aware of the agreement.