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Last Post 12/09/2007 6:34 PM by  Ray Hall
Productivity Benchmarks for Time & Expense
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jstock
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09/05/2007 11:07 PM

    I recently got scolded by my IA Company for 'over billing' on at Time & Expense sheet. Apparenlty, it took me 30 minutes longer to write an X-page report than some third-party company allows for (I was stupidly billing for the time it actually took me).

    When I asked the IA Company what the acceptable productivity baselines/benchmarks are for writing reports, writing estimates, site visits, etc.), I was told to just keep doing what I'm doing... ???

    Does anybody know what these Productivity Baselines or Benchmarks are (what are the allowable hours per page for reports and estimates, etc.)??

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    Medulus
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    09/06/2007 12:33 AM
    There are a few carriers who have been doing this for awhile. They take every time and expense billing, send it to India or some other outsourcing location. The time and expense is checked according to a standard chart. Then they recommend whether to reduce the bill. This method is used for defense counsel bills as well (You ought to hear the attorneys gripe about it). It's hardly fair to expect you to know what these standards are when they don't give you the charts on which you are being judged. I guarantee that there have been other tasks that you underbilled (again, according to the chart). But you will never hear about these.

    The best thing to do is the right thing, billing for the actual time you spend. It sounds like this is what you are doing already. I advise you to act honorably even if the carrier for which you are working chooses not to be honest. They will, of course, convince themselves that they must review the bills because we are rampantly dishonest and always trying to rip them off. Do the right thing, anyway. You will know the difference. And if they consistently cut your bills when you are charging honestly, then suck it up and take it or work for someone else. There are no other real options because your vendor has chosen to cowtow to the carrier in order to get their business.
    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
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    sbeau4014
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    09/06/2007 8:50 AM
    I don't know of any "guidelines" per se, but a lot of people reviewing IA bills know how long it takes to do certain things. A 4 hr charge for a report that is a formated report that is 1.5 pages long may be too much time. I've looked at a lot of IA bills in my day and you would be amazed the times that are put in some of these time sheets. A person who trys to bill .5 to 1.0 for P/C to insd-N/A LMTC is automatically in my book to watch very closely on all aspects of the claim and to avoid use in the future as if they can't be honest on their time I can't trust them in other areas. If they actually spent that much time for that attempt on the phone call, there is a problem in how he/she works. I would venture to say that everyone adds some "fluff" in the numbers as there are things that are difficult to write up into the timesheets and charge for, or things are done on the file that don't get put in the file notes. A couple are, update file notes, and compute the bill for the insurance carrier. I had a captive adjuster with a large vendor working my claims when Opal hit in 1995 who was notorious for his losses hitting between $10,000 and $10,500 (just over the T&E threshold). I would gusee that 80% or so of his files hit in this range, when probably20% or the overall storm hit in this range. Flag #1. I reviewed the photos of some of his losses, and they didn't support the estimates as written, flag # 2, so a chunk of his files were pulled for reinspection. Most if not all failed with flying colors and it was quite evident at best he was very incompitent, and at worst was committing fraud. I also had a higher then normal amount of complaints on his files from the policyholders on things such as lack of communication, etc. Being a captive adjuster for our carrier he was supposed to be working only our files so I put together a spreadsheet of all the time he charged per day for a period of 4 -5 weeks or so. Keep in mind this only showed the T&E files and there were some fee schedule files he did that weren't included in the #'s. He had 3-5 days in that time frame he billed in excess of 40 hrs per day, probably 10-12 additional days he billed over 24 hrs a day and probably and about another 10-12 hrs his billing was between 18-24 hrs a day. The VP of claims with my carrier was very concerned with this result and wanted to file fraud charges against the IA, who was one of the biggest in the nation. The long and short of it the IA returned a chunk of $ to the carrier for the over billing. The adjuster was fired from our claims and who knows what he did after that. I would think that that IA would never use them again, but you never know. I have always tried to bill my actual time on files and have never had my time 2nd guessed except once. Had an apartment fire of size and billed actual time in the fire and sent into the IA. They told me the fire justified more time in it and wanted to charge more. I told them it was their call on what they billed, they had my worksheet and they could do what they wanted on it. It was billed on a higher amount and they paid me more then I had billed for.
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    rbryanhines
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    09/06/2007 9:19 AM
    I wish whomever is reviewing the fee bills would put that much effort into making sure the actual adjustment is correct and fair. However, we all know why they would rather pick apart the fee bill.
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    Ray Hall
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    09/06/2007 12:56 PM

    A good topic. NFIP in the 70-80's used time and expense billing and it was unfair as big hard to work files would not justify 40 to 80 hours of billing. This is why they went to Fee billing and they also ran spread sheets and found many 40 hour days. The fee bill will always be the fair way to work catastrophe losses or any property losses as it rewards the good file work and the long hours, days away from home.

    Legacy Files- old dog  auto liability claims that have not been resolved for months for some reason and take up file space and the adjusters calander. I have worked many of these type claims for one flat fee per claim #.

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    Dimechimes
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    09/10/2007 6:21 PM

    I've seen several articles like this one lately about carriers using audit services to control Independent adjuster fee bills similar to what many of us who have worked staff used going back to the mid 90's on attorney fee bill reviews:

    http://www.emediawire.com/releases/...528938.htm

    I'm sure it will go over with Independents much the same as it does with attorneys having someone who has never done the job telling you what is and is not a reasonable billing time frame you can use. The comments about Independent adjusters are in the last paragraph of that article. I don't think many adjusters would be agreeable to working time and expense billings subject to such restraints. Speaking of time and expense billings...how many would be willing to work on Citizens of FL 2007 fee schedule of $58.00 per hour on some losses?

    Visit our Adjusters Information Blog
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    Jud G.
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    09/11/2007 1:19 PM

    There's absolutely nothing wrong with billing for a reasonable and customary amount of time on T&E files.  There are plenty of providers that have no problem with this method of billing.  The more experience an adjuster has, the better they are at improving their production.

    That's all I will say about this topic.

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    Medulus
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    09/11/2007 3:16 PM

    The "Catch 22" of Time and Expense is this:

    Presumably a less experienced and/or less efficient adjuster will take more time to do a task than would a more experienced and/or more efficient adjuster.  Therefore, on actual time and expense billing the services of the better adjuster costs less than the services of the lesser adjuster.  A corollary to this is that an experienced and efficient adjuster may very well expend less time than would be reflected in a fee billing.  As an example, the fee billing for a file with an estimate at $9,999.99 may bill for $700.00.  If the same file estimates to $10,000.01 the adjuster may very well add up his/her time and expense and arrive at a billing total of perhaps $550.00.  I can't count the number of times this has happened to me, that by being honest with the billing I shot myself in the foot.  The temptation is, of course, to take out two cents from the estimate and bill at the fee schedule.  The honest thing to do is to leave the two cents in the estimate and take a billing hit of $150.00.  This used to rub me the wrong way, and I would bemoan the cost of honesty.  Now I just accept it and move on to the next claim.  In these cases it is particularly chafing to have my fee bills reviewed.  I rejoice when the fee schedule says something like:  "Time and expense/ minimum $700.00". 

    In order to avoid situations like the ones mentioned above, many vendors have a chart of "reasonable" times for the completion of tasks.  As long as the vendor and the carrier/client are in agreement with this method there is no problem with it.  All parties understand that the billing will be charged at certain rates for certain tasks.  This creates a situation where "billable hours" and real time hours may be divergent.  It does, however, reflect what time an average adjuster will take to perform a task.  A more effective adjuster will likely show more billable hours than the actual time spent, while a less effective adjuster will show less billable hours than actual time spent.  I have worked for firms that use this method, and see no problem with it, as long as it is understood to be the way time and expense is billed.  An expert adjuster working under such a system may well bill what looks to be exorbitant hours in the course of a given day.  The system, however, rewards adjusters based on their expertise. 

    There are also several time components in file handling which are not billed directly in time and expense.  An adjuster who takes the time to create a careful log of the file cannot really bill for creation of their activity log.  The cost of getting lost on your way to the inspection and having to spend an hour figuring out where you went wrong and getting back to the insured location is an expense for which one cannot bill.  Some carriers are loathe to pay for the file set up.  The time taken to create the bill and follow up on payment is also not reflected in the time and expense billing.  Some carriers will not pay for sending faxes, sending letters, or the expenses of phone calls.  If it takes 15 minutes to input the data into the estimating program so one can begin to prepare the estimate, that should be part of the billing for estimate creation because the estimating program will not work until you input the claim data.  The best approach may often be using the concept of billable hours, but I still use actual hours unless there is an agreement to use a reasonable billable hours approach.  The acceptable billable hours should, however, be knowledge shared by all parties, not some secret scheme on the part of the vendor or the carrier (or an offshore fee reviewer/outsource).

    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
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    sbeau4014
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    09/11/2007 7:12 PM
    A lot of the misc items that Steve lists above should be incorporated in tasks charged in one way or another, and I think most file examiners/managers understand that there are some things that go into a task that aren't spelled out in the notes. It's when the file billing is abused that becomes a concern for most reviewers. I am looking at an IA bill on a reinspection for a house that has both flood damage (not covered) and wind damages (covered). the flood damages were not scoped out and agreed as not covered with the PA up front. The revised estimate is 2 integra pages long, has "roof". 'attached carport" and "exterior" rooms, a statement of loss and a roof diagram of a basic gable roof with the carport. Also keep in mind that the est doesn't use r/r costs, but a different line for remove and one for replace. 23 different items on the estimate total. Here are some samples that will catch an examiners eye as excessive.
    rec loss and set up in integra, grid location and prepare to call insured..... 3.5 hrs
    called atty and left message................................................................1.0 hr
    called atty, spoke with receptionist .....................................................1.0 hr
    called again, spoke with atty office, got PA's # .....................................1.0 hr
    called PA, left message to schedule appt to inspect................................1.0 hr
    contact made with PA, appt set for ---------...........................................1.0 hr
    file on diary, sending status report. appt is next week.............................1.0 hr ("report" was a copy of his file notes)
    inspected loss with PA........................................................................5.0 hr (had detail on scope in notes)
    reserve set.......................................................................................1.0 hr (same as 'report" above with a reserve inserted)
    called carrier left message for coverage amouonts...................................1.0 hr
    began writing estimate.......................................................................5.0 hr
    reviewed and continued estimate and reporting.....................................5.0 hr
    completed estimate...........................................................................3.0 hr
    called PA, meft message to discuss estimate..........................................1.0 hr
    spoke with PA, rev est and dep and reached an agreement.....................1.0 hr (as per PA depo there never was an agreement)
    all requirements completed, submit closing for review..............................2.0

    total hrs are 33.5 hrs this adjuster billed on the file, but the vendor themselves cut close to 35% off of that before they approved it and sent it in to the carrier. This is an example of some pretty inflated billing practices, but also as mentioned above, there were photos downloaded and labled/printed not listed and charged, diagram put together, and a couple entries had a lot of detail (inspection was 1/3 of an integra timesheet page and the completed estimate was also about that size) There are times that claims are complicated or convuluted that justify more effort in them, but that needs to be explained in the notes to justify it, and believe me this was not one of them. $35,000 plain vanilla adjustment.

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    Medulus
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    09/13/2007 12:26 AM

    I know some adjusters who talk for an hour every time they get you on the phone, but an hour long "Left Message"?  Really now!  Didn't take rocket science to cut that bill down did it?

    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
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    stormcrow
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    09/13/2007 10:39 AM

    Put on my examiners hat and reviewed (based on what oyu told us). Could justify 13 hours, but would have called the PA to confirm time at site.

    I want to die peacefully in my sleep like my grandfather, not screaming in terror like his passengers.
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    donnyboy
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    09/13/2007 4:32 PM

    From an examiner's point of view here is what the billing should have been, based on the description of the notes, estimate, etc.

     

    rec loss and set up in integra, grid location and prepare to call insured..... 3.5 hrs -------------------------------------------------------------2.0
    called atty and left message................................................................1.0 hr -------------------------------------------------------------------------------.1
    called atty, spoke with receptionist .....................................................1.0 hr ------------------------------------------------------------------------------.2
    called again, spoke with atty office, got PA's # .....................................1.0 hr----------------------------------------------------------------------------.2
    called PA, left message to schedule appt to inspect................................1.0 hr -----------------------------------------------------------------------.2
    contact made with PA, appt set for ---------...........................................1.0 hr -----------------------------------------------------------------------------.5
    file on diary, sending status report. appt is next week.............................1.0 hr ("report" was a copy of his file notes) ----------------------.3
    inspected loss with PA........................................................................5.0 hr (had detail on scope in notes) -------------------------------------2.0
    reserve set.......................................................................................1.0 hr (same as 'report" above with a reserve inserted) ------------------.2
    called carrier left message for coverage amouonts...................................1.0 hr ----------------------------------------------------------------------.1
    began writing estimate.......................................................................5.0 hr ---------------------------------------------------------------------------------.5
    reviewed and continued estimate and reporting.....................................5.0 hr --------------------------------------------------------------------------.5
    completed estimate...........................................................................3.0 hr ----------------------------------------------------------------------------------.5
    called PA, meft message to discuss estimate..........................................1.0 hr ------------------------------------------------------------------------.1
    spoke with PA, rev est and dep and reached an agreement.....................1.0 hr (as per PA depo there never was an agreement)-----.4 
    all requirements completed, submit closing for review..............................2.0 -------------------------------------------------------------------------1.5

    Total is 9.3 hrs.  The work product speakd for itself.  The file, if properly documented and handled could be billed for more; however, from reviewing the wording in the notes this may still be too high. 

    It appears the adjuster's time entries were creative to get to the number he had to justify to cover the flat fee amount of the tier below.  Steve's comments about T & E (minimum $700.00) and billable hours versus actual hours sums this delima up very well. 

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    Tom Toll
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    09/13/2007 4:55 PM

    Write down your start and stop time on everything related to a claim. Charge exactly what you put into it and you will be okay. Make the entries as soon as you finish your time. Don't put it off, as you may forget something you have done. I have always done this on T&E commercial files and make plenty of income.

    Success is not final, failure is not fatal: it is the courage to continue that counts.
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    cowboy26995
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    12/09/2007 10:54 AM

    I agree with Tom . Bill honestly and keep sound records of your activities . There are over 400 different tasks that can be inserted into a file to justify your charges. I'd be happy to share the list if you send me an e mail. Insofar as the fee audits conducted by carriers are concerned even the most experienced adjusters feel discomfort when some bureaucrat second guesses their fee. This armchair quaterbacking underlines the lack of trust and professionalism between the employer and those they have chosen to represent them. I will not work for a carrier that subjects my files to audit. If they don't trust me to be honest upfront why the heck are they hiring me in the first place. After thirty three years in this business it amazes me to see the fees being charged. Citizens offering $58.00 an hour on Time and Expense. Guess what skill level you get for that? The old adage you get what you pay for applies. Pay an adjuster properly and expect proper service. Seems a fairly simple equation to me .

     

    Marc Dubois E.G.A.

    marcd@kingston.net

    Marc Dubois
    Executive General Adjuster
    M.G.D. Claim Services Inc.
    "Your Commercial Claims Solution"
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    Ray Hall
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    12/09/2007 6:34 PM

    On large commercial losses (over 100K) it seems many of the carriers will allow the adjusters to bill one hour for each $10,000 of the damage estimate. Take a flood loss of $500k  is 50 hours times the hourly rate and the NFIP rate is 2.1% of $500K is $10,500.  or $220.00 per hour. Take the fee bill ever time you can if you have the option. Not very many EGA's are getting anything near $220.00 per hour ; except the energy adjusters for the international firms.

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