Many companies have purchased a general liability insurance program with a large self-insured retention with the goal of maintaining greater cost control and management over their claims handling, whereby they retain a third party administrator or a national advisory counsel to handle the first dollar claims. Then, after the initial “settling in” phase, they notice that their expenses have gone beyond their expectations, or they notice that the claims do not seem to be settled early or fought with a focus on costs. ICA has extensive experience in coordinating the retention of TPA’s and national advisory counsel, in assisting Clients with managing and controlling the relationship, in establishing guidelines to be followed and in critiquing the service intermittently to compare the productivity of the service with other service providers.
ICA’s Audit Service of Third Party Administrator/National Claims Counsel includes the following:
- Assist in evaluating the feasibility of moving from a first dollar liability coverage program to a self-insured retention plan with a TPA or national counsel to handle the claims, through ICA’s Third Party Claims Management and Audit Service.
- Preparing a Request for Proposal for dissemination to various pre-approved TPA’s and national counsel firms, setting out specific reporting procedures, cost controls, billing structures, management of local counsel, investigators or expert witnesses, and establishing performance requirements.
- Recommending various service providers with proven track records, and meeting with the Client and the service providers to interview and discuss the potential working relationship.
- Evaluating the proposals and analyzing and comparing costs and performance levels, level and quality of assigned personnel, and recommending the selection of the service providers to the Client. Once a service provider is retained, ICA will conduct an initial introductory meeting to set the groundwork on how the relationship will flow, and outline specific reporting instructions, billing guidelines, settlement authority, local counsel retention guidelines.
- Determine at the time of retention when and how often the service provider will be audited and critiqued by ICA, preferably at 6 months, one year and two year intervals. The service provider must agree to make claims and billing files available for analysis and audit.
- An ICA audit will uncover any overbilling practices, lack of control or management of local counsel, lack of control over legal billings, mismanaged litigation strategy, any superfluous motions, extensive research and preparation, failure to abide by any procedures outlined at time of retention, or any other performance discrepancy or irregularity.
- Following an audit, ICA will meet with the Client to discuss its findings, then with consultation among the Client, service provider and ICA, determine how to improve or amend any areas requiring attention.
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