The Situation
A skilled nursing and rehab operator with two facilities, about 260 employees, and roughly $11.8 million in payroll.
The Problem
The operator’s workers’ comp experience modification factor went from 1.12 to 1.34. Its premium rose from $402,000 to $481,000. The carrier and the prior broker both said this was the result of a bad year.
What We Did
We rebuilt the mod worksheet line by line against the loss runs. We found three errors. First, a back-injury claim settled 14 months earlier was still being reported at its original $148,000 reserve instead of the $38,500 actually paid. Second, a $22,000 claim had been reported twice, under two claim numbers. Third, one CNA payroll segment had been put in a higher-rated class code. We documented each error. We asked the carrier to file corrected unit statistical reports, and we filed a mod recalculation request with the rating bureau.
The Outcome
The corrected mod came back at 1.09. The current-year premium was re-rated to $392,600, which is $88,400 less than the billed premium. Because the mod uses three years of data, the corrected figures will also lower premium in each of the next two policy years.
Why It Matters
Most brokers deliver the mod. We audit it.
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Your mission is to provide exceptional care. Ours is to protect it!