The state's workers' compensation agency isn't inappropriately denying claims, according to independent reviewers, although several areas within the agency's processes need improving.

Marsh USA Inc. presented its review of claims processes to the Workforce Safety and Insurance during the agency's board meeting Wednesday afternoon. It reviewed 475 claims from between Jan. 1, 2005, and Jan. 1, 2008, representing $6.2 million of claims.

The firm gave WSI a B average for complying with industry standards.Â

"You're on an improving track in certain categories," said Anthony Walker, senior vice president of Marsh. "In some areas, we saw some slippage."

The report took issue with the amount of time before a claimant is personally contacted by an adjuster; only 66 percent of the time were claimants contacted within 24 hours of their claim, according to the report. According to the agency's first quarter operating report, that number is now at 89 percent.

Also at issue were adjusters handling claims that may have been beyond their experience levels, as well as the supervision of claims handlers.

"Consider adjuster experience when they're assigning claims," said Kathleen Dopkeen, another senior vice president with Marsh. Currently, adjusters are matched with employers, leaving little room for more experienced adjusters to handle more complicated claims.

The report also recommended improving lag times for compensability decisions; about 23 percent of claims are still pending beyond 31 days of the claim being filed, according to the agency's fiscal year-to-date 2008 operating report.

Better guidelines on how to collect information on prior work injuries was suggested, as well as recommending physicians for employees who have been injured instead of leaving the decision to the worker.

Further, Marsh suggested the agency's special investigations unit enhance fraud investigations into medical providers and employers, adding that studies show that employee fraud is pretty rare.

"Fraud perpetrated by medical providers or employers is pretty costly," Dopkeen said.

Most denied claims were handled appropriately, according to the report, although there were a handful of claims denied with no documentation for the denial.

The agency's strengths were in its claims processing, timeliness of payments, costs and communication. Initial education and training of the staff was commendable, although continuing training is necessary, the report noted. Its medical staff and accessiblity to resources also was a strength, as was the agency's documentation policies and procedures, its use of staff and its multi-disciplinary approach to claims management.

Its biggest area for improvement, according to the report, was in pursuing claims that may be the responsibility of a party other than the employer, which would reduce costs for the employer and WSI. That score brought WSI's total average score down to 80; a good score, according to Marsh, is at least 85.

Next, the agency will implement an action plan and revisit with Marsh in 90 days. John Halvorson, interim executive director for WSI, commended Marsh on the job and noted that there's room to grow at the agency.Â

The board of directors is scheduled to meet today to review a report from Henry Neal Connolly, which completed a management and human resources review of the agency.

The reviews are a result of pressure from Gov. John Hoeven after a year of turmoil in the agency, which resulted in the termination of the executive director and the resignation of the chair of the board of directors. Total cost of both reviews were not to exceed $310,750.

Click here to view the full text of the report.

(Reach reporter Crystal R. Reid at 250-8261 or at crystal.reid@bismarcktribune.com)