For Example:

Assume your employee suffers a broken wrist.

1. Payments are made over a three year period of $ 10,000. per year, settling at $ 30,000.

2. Reserves are set for a total claim value of $ 50,000.

3. The experience modification worksheet will show a total of $ 150,000. over the three years it's reported.

The next chart shows that by auditing the reserves for "Statistical Plan Filing", the carrier changes the reserves to reflect file documentation.

1. In this example the three year total shown on the experience modification worksheet is reduced by $70,000. or a 46% reduction.

The next chart shows the difference between an unaudited  and audited claim over the three year period.

The key, is timing the audit so that the claim is adjusted for "statistical filing" purposes!

Remember, your customer has the right to audit the open reserves!