The new indemnity data call – are you ready?

September 13, 2019 / 9 min read

As the fourth quarter settles in, a big change is lurking around the corner: The National Council on Compensation Insurance’s (NCCI) new indemnity data call.

Introduced last year, this initiative is scheduled to launch in the second quarter of 2020, with the certification and testing process slated to begin in the first quarter of 2020. Under this new process, data reporters will be required to report new indemnity data elements as part of claims processing. The objective is to provide NCCI with more robust source data to better support increased legislative pricing activities concerning indemnity benefits.[1] Long term, NCCI intends to use the new indemnity data call to eventually replace the current Detailed Claim Information (DCI) reporting program.[2]

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The upcoming changes are significant – and now is the time to get prepared. This article provides a general overview of the upcoming changes, how they will impact reporting activities, and how our wcPrism^® service can you help you comply with the new requirements as follows:

Who does this apply to?

The new indemnity data call applies to all affiliate groups that have at least 1% market share in any one applicable NCCI jurisdiction over the last three years (overall average equals 1% or more).[3] The call includes direct workers’ compensation, voluntary compensation plans, and employer liability indemnity claims where the claim’s jurisdiction state is an applicable call state or federal act.[4] The jurisdiction state is the “state or federal workers’ compensation act under which the claimant’s benefits are being paid.”[5] Click here to view a listing of the applicable states per NCCI’s Indemnity Data Call Reporting Guidebook (March 5, 2019). Also, all ten of the independent bureau states are participating in the call, and data reporters in these states should check for applicable state guidance for specific requirements and any deviations from NCCIs standard directives.[6]

Affiliates will be allowed to submit the required data directly to NCCI, authorize a vendor to do so on their behalf or use a combination of both.[7] Regardless of the method selected, the affiliate remains ultimately responsible for the quality and timeliness of the data submitted.[8]

Are there exclusions?

Excluded from the call are “medical only” claims, which NCCI defines as workers’ compensation claims “in which there are no incurred indemnity losses reported and no anticipation of an indemnity payment in the future.”[9]

Also, under NCCI’s “business exclusion option,” an affiliate group participating in the call “may exclude data for claims that represent up to 15% of the gross premium (direct premium gross of deductibles) for all states combined from its reporting requirement.”[10] NCCI indicates this option “may be utilized for small subsidiaries and/or business segments (e.g. coverage providers, branches, and TPAs where it may be difficult for these entities to establish the required reporting infrastructure.”[11] Further, this exclusion must be based on a business segment, not claim type or characteristics.[12] All requests for this option must be presented to NCCI for acceptance.[13]

When do the changes take effect?

The new indemnity date call becomes effective the second quarter of 2020, with required submissions due to be reported to NCCI by the end of the third quarter 2020, regardless of the accident date or policy effective date.[14] Of note, the certification and testing process begins in the first quarter of 2020.[15]

What are the basics?

The call applies to indemnity benefit payments, as well as incurred and paid to date loss information. The following two record layouts will be used: (i) transactional record and (ii) quarterly record.[16] Data reporters will be required to submit indemnity data in standard electronic record layouts as instructed.[17]

What are the reporting triggers?

In general, the triggers prompting the submission of transactional and quarterly records are:

Transactional Reporting – reporting required whenever any of the following occur within a specific quarter based on a transaction date: (i) indemnity payments to the claimant, claimant attorney, vocational rehabilitation, and subrogation recoveries; or (ii) changes that occur to previously reported transactional records (i.e. voids or overpayments).[18]
Quarterly Reporting – reporting required whenever any of the following occur during a reporting period:
- a new claim with incurred indemnity > 0 has been reported to the insurer;
- changes in the jurisdiction state for a previously reported claim when the new jurisdiction state is NOT an applicable Indemnity Data Call (IDC) state;
- a transactional record (original, replacement, or cancellation) record is reported within a quarter; or
- When any of the following amounts change from the prior quarter:
  - indemnity paid to date;
  - incurred indemnity amount total;
  - medical paid to date;
  - incurred medical amount; or
  - allocation loss adjustment expense (ALAE) paid.[19]

Regarding the above triggers, data reporters should consult the current version of NCCI’s Indemnity Data Call Reporting Guidebook (which at the time of this article is the March 5, 2019 version) for further details, definitions, and guidance regarding the above items. Accordingly, data reporters should regularly consult NCCI resources for all additional versions of this guide (and any other applicable resources) which may be released after this article.

What data gets reported?

Most of the data elements are currently reported in the Detail Claim Information and/or Unit Statistical.[20] Overall, the new indemnity data call includes 47 data elements, with 32 elements currently reported in the Detailed Claim Information and/or Unit Statistical, and the remainder being new elements[21]. NCCI indicates that code values for each data element will utilize existing industry standards whenever possible.[22] Click here to view a listing of the current and new data elements as outlined in NCCI’s Circular, Indemnity Data Call Effective Second Quarter 2020, February 8, 2018.

What are the reporting periods and frequency?

Records will be submitted and evaluated every quarter. Submissions will be due by the end of the following quarter. On this latter point, NCCI provides the following example: 3^rd quarter claims/transactions due by the end the of 4^th quarter.[23]

While reporting is required on a quarterly basis, NCCI will allow transactional records to be reported frequently noting that “since transactional records represent benefit payments that can occur at any time throughout the quarter, data providers can choose to report these records daily, weekly, monthly, or quarterly – whichever makes the most sense for the business processes of the data provider.”[24]

Meet new reporting requirements with wcPrism®

wcPrism® is ready to help all data reporters comply with the new indemnity data call. Our Workers’ Comp Service Plan (WCSP) is up to date and ready to accept the required data elements for reporting.

As the data is reported to ISO, we will trigger the required transactional and quarterly records, validate them for data errors, and then submit error-free records to the appropriate data collection organization. Additionally, you will be provided access to view and edit their indemnity data call records online via our wcPrism web application.

Testing is slated to begin early in January of 2020 in preparation for the certification process with each of the applicable data collection organizations. We will be in a position to begin reporting indemnity data call records that reflect second quarter 2020 activity before the end of the third quarter.

Questions?

Please contact the author or Jon Walters at jon.walters@verisk.com if you have any questions or would like to learn more about how we can you help meet the new indemnity data call requirements.

[1] NCCI Circular, Indemnity Data Call Effective Second Quarter 2020, February 8, 2018 (IND-2018-01), p. 1.

[2] Id. at Attachment A.

[3] Id. at p. 1. and NCCI, Indemnity Data Call Reporting Guidebook, March 5, 2019, Part 2, p. 2.

[4] NCCI’s Data Educational Program (January 15-18, 2019), Basics of the Indemnity Data Call, Slide 12 and NCCI, Indemnity Data Call Reporting Guidebook, March 5, 2019, Part 2, p. 1.

[5] NCCI, Indemnity Data Call Reporting Guidebook, March 5, 2019, Part 2, p. 1.

[6] The independent bureau states are California, Delaware, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, and Wisconsin. The author‘s research has identified state-specific guidance from the following independent bureau states: California: Workers’ Compensation Insurance Rating Bureau of California, Bulletin No. 2019-01 (January 11, 2019); Delaware: Delaware Indemnity Data Call Implementation Guide (January 14, 2019); Massachusetts: The Workers’ Compensation Rating Bureau of Massachusetts, Circular Letter No. 2349 (June 14, 2019); Michigan: Compensation Advisory Organization of Michigan, Circular Letter #307 (November 26, 2018); New Jersey: New Jersey Indemnity Data Call Implementation Guide (April 1, 2019); New York: New York Compensation Insurance Rating Board Indemnity Data Call Implementation Guide (February 2019); and Pennsylvania: Pennsylvania Indemnity Data Call Implementation Guide (January 14, 2019).

[7] NCCI Circular, Indemnity Data Call Effective Second Quarter 2020, February 8, 2018 (IND-2018-01), Attachment A.

[8] NCCI, Indemnity Data Call Reporting Guidebook, March 5, 2019, Part 2, p. 2.

[9] Id. at Part 2, p.1

[10] NCCI, Indemnity Data Call Reporting Guidebook, March 5, 2019, Part 2, p. 4.

[11] Id.

[12] Id.

[13] Id.

[14] NCCI, Indemnity Data Call Reporting Guidebook, March 5, 2019, Part 2, p. 1 and Part 2, p. 2.

[15] NCCI Circular, Indemnity Data Call – Certification Readiness, August 30, 2019 (IND-2019-03), p. 1. and NCCI, Indemnity Data Call Reporting Guidebook, March 5, 2019, Part 7, p. 1.

[16] NCCI Circular, Indemnity Data Call Effective Second Quarter 2020, February 8, 2018 (IND-2018-01), p. 1.

[17] Id. at Attachment A. Data Reporters should also consult the most current Indemnity Data Call Reporting Guidebook issued by NCCI. At the time of this article, the current version was issued on March 5, 2019. Data reporters should consult NCCI resources for all additional versions of this guide (and any other applicable resources) which may be released after this article.

[18] NCCI’s Data Educational Program (January 15-18, 2019), Basics of the Indemnity Data Call, Slide 20.

[19] Id. at Slide 23; see also, NCCI Circular, Indemnity Data Call Effective Second Quarter 2020, February 8, 2018 (IND-2018-01), Attachment A and NCCI, Indemnity Data Call Reporting Guidebook, March 5, 2019, Part 4, p. 10.

[20] NCCI Circular, Indemnity Data Call Effective Second Quarter 2020, February 8, 2018 (IND-2018-01), p.1.

[21] Id. at Attachment A.

[22] Id.

[23] Id.

[24] NCCI, Indemnity Data Call Reporting Guidebook, March 5, 2019, Part 2, p. 1 and Part 4, p. 2.