Section I - General Rules/Definitions

A report must be filed for every policy insuring liability under Pennsylvania Workers’ Compensation and Occupational Disease Acts, as well as for every voluntary compensation policy providing coverage in Pennsylvania. All reports must be filed with the Pennsylvania Compensation Rating Bureau, 30 South 17th Street – Suite 1500, Philadelphia, PA 19103-4007.

Carriers may use any method for the recording of statistics, including any type of record format convenient to their statistical and account procedures, and codes other than those set forth in this Plan, only if those statistics can be reported by the carrier within the required time frames using the codes and record format provided in this Plan.

SCHEDULE OF STATISTICAL PLAN FINES

1. Timeliness
   Initial unit statistical data must be valued as of the 18th month after the policy effective date and reported by the end of the 20th month after the policy effective date. Subsequent reports, if applicable, must be valued and reported at successive 12-month intervals up to and including a 10th report, which would be valued as of the 126th month after the policy effective date and reported by the end of the 128th month after the policy effective date.
2. Completeness
   Submissions are expected to contain all required information as detailed in this Plan. Submissions made electronically that contain critical errors as defined in the PCRB edit matrix on our website will not be accepted and will be considered as missing until a complete submission is accepted by PCRB.
3. Quality
   Carriers are notified via email when a unit statistical report contains errors. Carriers are subsequently notified on a weekly basis of any error(s) remaining outstanding critical errors requiring a correction report(s).
   The timely issuance of experience ratings is an important element of the workers compensation pricing process. The PCRB strives to promulgate experience ratings for member carriers and employers 60 days in advance of policy effective dates. Experience ratings can only be calculated in compliance with this objective when unit statistical reports are received in a timely, complete and accurate manner. Unit statistical reports with critical errors that remain uncorrected for extended periods of time will be treated like missing data. “Critical” errors are defined as those errors and/or discrepancies that impact or impede experience rating calculations and/or that may significantly affect loss cost relativities between classifications.
   y action of the Governing Board, effective October 1, 2003, the PCRB began to subject unit statistical report(s) with critical errors remaining uncorrected for an extended period of time and causing a delinquent experience rating(s) to the Schedule of Statistical Plan Fines, as outlined below in Item 4. Assessment Schedule, in accordance with the following procedures.
   PCRB staff will identify unit statistical reports with critical errors that have overdue experience ratings and notify the carrier via certified mail that, despite numerous previous attempts to secure corrections, errors on the unit remain unresolved.
   Carriers will be warned that failure to respond in 30 days may result in fine amounts up to a maximum of $1,000 per unit per month unless a satisfactory response is received. If the error remains uncorrected after the initial 30-day period, the carrier will receive a final warning, which is coincident to Notice 1 on the Assessment Schedule, advising that at the end of the next 30 days the unit statistical report will become subject to the Schedule of Statistical Plan Fines and will appear on statistical reporting listings or invoices unless all critical errors have been resolved. Errors remaining uncorrected after the final warning period will become subject to the Schedule of Statistical Plan Fines and will appear on statistical reporting listings or invoices consistent with that Schedule.
4. Assessment Schedule
   Assessments for missing unit statistical reports, incomplete unit statistical reports and/or critical errors will be charged according to the schedule shown below. This schedule was approved for application to missing unit statistical reports by the Pennsylvania Insurance Department on October 19, 1990 and was approved for application to missing unit statistical reports, incomplete unit statistical reports and/or critical errors on March 9, 2005.

   SCHEDULE OF STATISTICAL PLAN FINES                                                                                           

   Notice	Non-Rated Units	Rated Units
   1st	$0	$0
   2nd	$5	$5
   3rd	$5	$100
   4th	$5	$100
   5th	$15	$250
   6th	$25	$500
   7th	$40	$750
   8th-24th	$50	$1,000

   The assessment schedule will apply for a maximum 24-month period per unit. Thus, a single non-rated unit statistical report that remains outstanding for 24 months will accrue fines totaling $945, and a single rated unit statistical report that remains outstanding for 24 months will accrue fines totaling $18,705.

5. Notification of Missing Units and Assessments
   Companies will receive notices of overdue unit statistical reports to be mailed to the companies by the PCRB at the end of each month when unit statistical reports are due.
   Notices 1 through 24 will be issued in the form of a listing or invoice. A 25th notice will be issued in the form of a PCRB letter detailing the missing unit statistical reports and reminding the carrier of their obligation to provide this data so that it may be included in the summarized data used to establish loss costs for each employer classification in the state, as well as in the individual employer loss experience which is the basis for experience rating and merit rating.
   During the period that assessments are accruing, the PCRB will not initiate additional interim contacts apart from the monthly listings or invoices. It is the carriers’ responsibility to be aware that fines are accruing and a submission is required.
   The PCRB produces listings and provides online access to listings alerting carriers to the unit statistical reports expected to be filed. These listings contain state, policy number, named insured, effective date, and expiration date. Carriers can use these listings to identify which unit statistical reports are due to be reported prior to submission.
6. Appeal of Assessments
   Carriers will have up to 90 days after their receipt of a PCRB invoice to appeal any assessment. Any appeal of fines must be made in writing, must include the invoice number in question and must set forth all factors which the carrier wishes to be considered in the review of the appeal. Appeal must be sent to:

   PCRB
   Statistical Reporting – Appeals
   30 South 17th Street – Suite 1500
   Philadelphia, PA 19103-4007

   Appeals of assessments for missing unit statistical reports should be supported by documentation showing the date(s) the unit statistical reports were submitted to the PCRB. Documentation for the timing of electronic submissions may include copies of electronic submission logs indicating that the submission file in question was received.

Multiple year policies, other than three-year fixed rate policies, shall be considered as made up of separate annual policies for reporting purposes, and reports for each unit of 12 months or less shall be filed at the time all other reports on policies with the same effective date are being filed. Losses shall be valued as of the 18th month after the month in which each unit of experience became effective and at annual periods thereafter.

Examples:

1. The reports on a three-year policy effective January 1, 1996 shall be filed with regular reports on policies effective January 1, 1996, January 1, 1997, and January 1, 1998. First report valuations shall be as of July 1997, July 1998, and July 1999, respectively.
2. The reports on a policy covering the period January 1, 1996 to July 1, 1997, with the first six months considered as a unit, shall be filed with the regular reports on policies effective January 1, 1996 and July 1, 1996. Losses shall be valued as of July 1997 and January 1998, respectively.
3. The reports on a policy covering the period January 1, 1996 to July 1, 1998, with the last six months considered as a unit, shall be filed with the regular reports on policies effective January 1, 1996, January 1, 1997 and January 1, 1998. Losses shall be valued as of July 1997, July 1998 and July 1999, respectively.

All earned premiums, whether collectible or not, shall be reported. Likewise, the corresponding exposure and losses shall be reported.

Experience in connection with Atomic Energy Projects performed for or under the direction of any government agency shall be excluded from the experience reported under this Plan.

The Manual provides that a supplemental rate, subject to the approval of the PCRB, may be applied to operations involving research, manufacturing, handling, transportation, use of or exposure to radioactive materials, where such operations are not performed for or under the direction of any government agency. The payroll to which such supplemental rate is applicable, together with the premium derived from such charge shall be reported under Code 9985. The payroll reported for Code 9985 must not be added to payrolls reported for other Manual classifications in determining the risk payroll total. The payroll, rate and premium must be reported and the premium must be included in the risk total. Similarly, radiation losses on risks where a supplemental loading has been applied must be assigned to Code 9985. If no supplemental radiation loading has been applied, any radiation losses must be assigned to the appropriate classification. Note, however, that any radiation loss, whether reported under Code 9985 or a regular classification, must be identified as a disease loss in the Loss Conditions field.

No deductions shall be made from earned premiums and incurred losses for, or on account of, reinsurance ceded. Premiums earned and losses incurred on account of reinsurance received by the reporting carrier shall be excluded from the experience.

Experience on excess insurance policies must be excluded from the experience reported under this Plan.

The experience of policies written under the National Defense Projects Rating Plan is reported according to the rules of the National Defense Projects Rating Plan and shall not be reported on unit statistical reports.

All coal mining reports should be filed with the Coal Mine Compensation Rating Bureau, Commerce Building, Suite 403, 300 North Second Street, Harrisburg, PA 17101. On policies involving both coal mining and commercial classifications, report the experience under the coal mining classifications to the Coal Mine Compensation Rating Bureau and the experience under commercial classifications to the PCRB.

The PCRB has no jurisdiction over the rating values and classifications for Admiralty or Federal Employers Liability exposure. Admiralty and Federal Employers Liability exposure shall be excluded from the experience reported under this Plan.

1. Occupational Disease Incurred Losses
   1. Disease losses shall be identified in the “Loss Conditions” field by the appropriate code for disease loss according to Section III, Item C.3.
      The total losses reported shall be the total of traumatic losses and disease losses incurred and shall exclude any allocated claim expense but shall include allocated claim expense for Part II Employers Liability Losses.
   2. Dust disease losses incurred in connection with payrolls reported under Codes 0066, 0067 or 0176 shall likewise be assigned to the same code and shall be further identified by the appropriate code for disease loss in the “Loss Conditions” field. These losses shall also be included in the total losses reported.
2. Interest on Awards
   
   Interest on awards for delayed payments of compensation due, for which the carrier is liable and which accrue as benefits to the injured worker or his dependents, shall be chargeable to losses and so reported. No penalties or fines are to be charged to losses.
3. Medical on Compensable Cases
   Medical losses shall include all payments to doctors and hospitals, as well as physical rehabilitation costs and reserves for future payments, but shall not include any claim expenses.
4. Subrogation Claims
   1. For subrogation cases the net liability shall be determined by deducting from the incurred cost prior to recovery the amount recovered through subrogation less any expenses incurred in connection with such recovery. However, in cases where the expenses incurred in connection with such recovery exceed the amount recovered, the net amount of losses reported shall not exceed the gross amount of loss prior to recovery. If specific indemnity and medical recovery amounts are unknown, the net liability incurred shall be apportioned to indemnity and medical in the same proportion as existed in the gross incurred loss.
   2. When a subrogation recovery is received by the carrier subsequent to the first reporting of the claim, correction reports must be filed with the PCRB reducing the incurred loss on the claim by the amount of the subrogation recovery received. Correction reports are required for prior report levels that reflected an amount higher than the incurred cost.
5. Commuted Cases
   When a case involves complete or partial commutation of future payments, report the actual loss payment.
6. Employers Liability Claims
   The rules of this Section apply to Part III employers liability claims except as follows:Part II employers liability losses include allocated loss adjustment expenses as defined herein. The entire amount of losses and allocated loss adjustment expenses shall be reported as incurred losses in the unit statistical report. Part II allocated loss adjustment expenses represent in connection with claim settlements the following expenses of a carrier, which can be directly allocated to a particular claim:
   • Attorney’s fees for claim in suit
   • Court and other specific items of expense such as:
     Medical examination to determine the extent of company’s liability
     Expert medical or other testimony
     Laboratory and x-ray
     Autopsy
     Stenographic
     Witnesses and summonses
     Copies of documents
     The following shall not be included as allocated loss adjustment expenses:
     • Salaries and traveling expenses of company employees (other than amounts allocated as attorney’s fees for claims in suit)
     • Overhead
     • Adjuster’s fees (fees paid to independent adjuster or attorneys for adjusting claims)
7. Correction and Subsequent Reports
   1. Any second, third, fourth, fifth, sixth, seventh, eighth, ninth, tenth or correction report involving:
      1. claim reported “open” on the previous report,
      2. any re-opened claim reported “closed” on the previous report,
      3. any claim previously unreported, or
      4. any other change in the valuation of losses shall show for each claim the amounts previously reported and the revised values. The corresponding total number of claims, total paid and incurred indemnity and total paid and incurred medical as revised shall also be reported.
   2. Correction Reports
      1. A correction report must be filed when any of the following occur between valuation dates, this includes correction report(s) to revise previously submitted data for all report levels:
         • Loss values are found to have been included or excluded through mistake other than error of judgment.
         • The claim, or any part thereof, is declared non-compensable (as defined in the Experience Rating Plan).
         • The carrier or claimant has obtained a subrogation recovery in an action against a third party or has received, or anticipates to receive, reimbursement from a Second Injury or similar type fund.
         • The claim’s catastrophe code values are found to have been included or excluded in error.
         • The claim has been determined to be fraudulent (as defined in Section II.C.).
         • When the exposure previously reported has been changed by reason of an audit, a reaudit, or any other adjustment affecting class codes, exposure, or premiums, a  correction report must be filed.
         • Corrections to the type of injury are required
         • If the claim number changes during the life of the claim
         • If the header/policy information was reported incorrectly
           If the claim was declared non-compensable, a Code “05” must be reported in the Type of Settlement portion of the Loss Conditions field. In the case of recovery against a third party, a Code “03” must be reported in the Type of Recovery portion of the Loss Conditions field, etc. If the claim was declared fraudulent, a Code “01” or Code “02” must be reported in the Fraudulent Claim Code field. (See Section III, Codes)
      2. It shall not be permissible to revise loss values between two valuation dates because of departmental or judicial decision or because of developments in the nature of the injury.
      3. Correction reports as defined above should be forwarded to the PCRB as soon as possible after the changes are known.
8. Medical or Legal Expense
   Medical or legal expenses incurred for the benefit of the carrier to secure evidence for presentation before an official body shall be treated as adjusting expenses and not reported except as respects Part II allocated loss adjustment expense as explained in Item L.7. of this Section.
   The following are a few examples that should be charged to expense rather than to losses:
   1. Medical examination of a claimant on behalf of the carrier to determine compensability
   2. Cost of securing birth and death certificates
   3. Cost of performing autopsies
   4. Impartial examinations by industrial board for the purpose of hearing and determining questions of compensability
   5. Expert testimony of physicians on behalf of the carriers or fees paid to the claimant’s physician called in by the carrier
      NOTE: When the claimant calls in the attending physician to give medical testimony in his behalf, or where the carrier is required to produce the claimant’s physician at the hearing and the employer or the insurance carrier is required to pay such a physician’s fee, the payment of the fee shall be reported as a medical loss.
      When an award to a claimant includes the cost of witness fees, attorney fees and other court costs, the amount so awarded shall be considered as part of the cost of the benefit and shall be included with the indemnity reported. With respect to claims brought by persons against whom an employee has brought a third party common law action, such special costs shall be reported as an indemnity loss whether or not a recovery is made against the third party by the employee.
9. Incurred Losses
   Report the total of all paid and outstanding compensation in the field captioned Indemnity and the total of all paid and outstanding medical in the field captioned Medical. The outstanding costs shall be the company’s individual case estimates of future payments as of the date of valuation.
   All paid compensation and paid medical shall be reported on a gross (first-dollar) basis and shall not be reduced by any amount(s) reimbursed or reimbursable under any applicable deductible program(s).All case estimates of future payments reported as outstanding compensation and medical shall be reported on a gross (first-dollar) basis and shall not be reduced by any amount(s) reimbursed or reimbursable under any applicable deductible program(s).For special instructions regarding the reporting of Employers Liability claims, refer to Item L.7. of this Section.
   1. When a final award has been made, the total incurred compensation must be in agreement with such award, except under the following circumstances:
      1. When a claimant has appealed for a higher award for a compensable claim, the carrier shall report at least the amount of the award but may report a higher amount if, in its judgment, the facts in the case indicate an additional reserve is advisable.
      2. In cases where a claim has been officially declared non-compensable, if the appeal has been taken and is undetermined on the valuation date, the carrier shall report the incurred cost that would have been reported had the claim not been declared non-compensable.
      3. In cases where a claim has been officially declared non-compensable, if the period during which an appeal may be taken has not expired by the valuation date, the carrier may report the incurred cost that would have been reported had there been no declaration of non- compensability. It shall be permissible to eliminate from the report the reserve for the non- compensable claim in any case where the period for taking an appeal has expired subsequent to the date of valuation but prior to the date of filing of the report without an appeal having been taken.
   2. The closing of a claim shall be regarded for the purpose of this rule as the equivalent of a specific official declaration of non-compensability under the following circumstances.
      1. No claim was filed during the period provided by law, and the carrier therefore closes the case.
      2. The carrier has raised the issues of accident, notice or causal relation prior to the valuation date and continues to contest the claim on any such issues; and the claim is officially closed because of the claimant’s non-appearance or failure to prosecute his claim without a ruling on the question of accident, notice or causal relation.
   3. Where the carrier has appealed against an award, it shall report the full amount of such award. Cases on which the carrier has filed a petition to terminate must not be reported as “closed” until the petition has been granted by a referee or the Bureau of Workers’ Compensation of the Department of Labor and Industry.
   4. If the final award has not been made but compensation for the injury is subject to a definite schedule of benefits, the provisions of the Law shall be reflected in the amount of compensation reported. In all other cases the amount reported should reflect the carrier’s estimate of incurred cost in the light of all information available on the date of valuation.
   5. Expenses, any general allowances for contingencies, and any supplemental non-statutory benefits not otherwise provided for in this Plan must be excluded. Precautionary reserves in excess of the amount reported on the final settlement receipt as filed at completion of all compensation payments with the Industrial Commission or other body having jurisdiction over workers compensation claims shall not be included in the amount of losses reported under the Statistical Plan. Vocational rehabilitation costs and reserves for future payments shall be included as part of the amount reported as incurred indemnity.
   6. In all cases where a claim has been determined to be eligible for reimbursement to the carrier from a special fund (such as Second Injury Fund, etc.) the gross incurred cost of the claim (i.e., prior to any reimbursement) shall be reduced by the amount of any paid or anticipated recovery from such fund and the net incurred cost of the claim shall be reported. Anticipated recovery is defined for this purpose as the amount of recovery expected to be recovered from such funds based on the rules governing such funds or a binding agreement between such funds and the carrier on an amount or percentage of the incurred cost to be reimbursed to the carrier on a particular claim.
      When such an anticipated recovery becomes known by the carrier or when a recovery is paid to the carrier subsequent to the first reporting of the claim on the 18th month valuation date of the policy, a correction report must be filed with the PCRB reducing the incurred cost on the claim by the amount of the paid or anticipated recovery. (Refer to Item L.7. of this Section for additional instructions on correction reports.)

1. Three-Year Fixed Rate Policies
   The rules in this Section relate to the reporting of experience incurred under three-year fixed rate policies written in accordance with Section I, Rule XI of the Basic Manual.
   1. Second through tenth reports on three-year fixed rate policies or per capita policies reported in accordance with this Section are not required.
   2. Optional methods of reporting this experience are provided as set forth in Options A and B
   3. The rules of the Pennsylvania Workers Compensation Statistical Plan apply to the reporting of the experience, except:
      1. where the Statistical Plan rules are obviously inappropriate because of the form of reporting for these risks to be described below. (For example, a reporting of Policy Number, Insured, etc., required by Section II may not be applicable.)
      2. as supplemented by the following rules in this Section.
2. Option B. Unit Statistical Report Basis
   1. Form of Report. The complete three-year experience incurred under each policy shall be reported.
   2. Date of Valuation and Filing. Losses included in the reporting of a given policy shall be valued as of the 42nd month after the month in which the policy became effective, and the reports shall be filed not later than 44 months after the month in which the policy became effective. These reportings shall be specifically identified as three-year fixed rate policy experience (this must be done by reporting a code “Y” in the 3 YR. F/R Policy portion of the Policy Conditions field) and shall be segregated and reported independently of the reportings of one-year policies.
   3. Data to be Reported. The data required shall be the data specified under the Statistical Plan. Reporting of the following items shall be optional:
      1. Insured
      2. Address
      3. Location of Risk
      4. Rating Value
         Loss constant premium shall be assigned to Code 0032. Expense constant premium shall be assigned to Code 0900. If the Deposit Premium has been paid in advance, report only the net amount, i.e., the amount of one expense constant; if the premium has been paid in annual installments, report the amount of two expense constants. Cancellation penalty premium shall be assigned to Code 0931.

1. Standard Type of Coverage
   Coverage contemplated by the carrier rating value and classification to which the exposure has been assigned under the provision of Workers Compensation and Employers Liability policy.
2. Voluntary Plan
   A policy written voluntarily by a carrier.
3. Vocational Rehabilitation
   Indemnity losses include non-medical services to restore a disabled employee to suitable employment. Such services may include vocational evaluation, counseling, education, workplace modification and retraining, including on the job training for alternative employment with the same employer and job placement assistance. It shall also include reasonably necessary related expenses such as tuition, books, tools, transportation and additional living expenses.
4. Lump Sum
   A claim settled by the agreement of the insurer and claimant to redeem the liability for compensation by payment from insurer to the claimant of a specified amount representing a discounted or commuted value of a specific award or benefit.
5. Fraudulent Claim
   A claim that has been ruled (or officially declared) fraudulent through a court decision, e.g., criminal conviction or ruling of workers compensation judge/appeals board. Could be declared partially or fully fraudulent.
6. Exposure Coverage / Loss Conditions
   1. State Act or Federal Act Excluding USL&HW and Federal Mine Safety and Health Act. Coverage benefits paid to employees injured as the result of a workplace accident under State Workers’ Compensation Law or Federal Compensation Laws.
   2. USL&HW “F” or USL&HW Coverage on Non “F” Classes. Coverage for benefits paid to employees injured as the result of a workplace accident under the United States Longshore and Harbor Workers Compensation Act.
   3. Federal Mine Safety and Health Act Coverage for benefits paid to employees injured as the result of a workplace accident under the Federal Mine Safety and Health Act.
   4. Federal Mine Safety and Health Act and/or the State Act. Coverage for benefits paid to employees injured as the result of a workplace accident under both Federal Mine Safety and Health Act and the State Act.
7. Loss Conditions
   1. Trauma. An injury caused by a work-related
   2. Occupational Disease. Occupational disease is any abnormal condition caused by repeated exposure extending over a period of time to a disease producing agent or agents present in the workers occupational environment resulting in disability or death, which is not traceable to a definite compensable accident occurring during the employee’s present or past employment.
   3. Cumulative Injury Other than Disease. An injury occurring from repetitive mental or physical traumatic activities extending over a period of time, the combined effect of which caused disability or need for medical treatment (other than disease).
8. Recovery
   1. Second Injury Fund Only. The carrier has received reimbursements from the Second Injury Fund. The Second Injury Fund is a trust established to reimburse carriers when a subsequent injury is caused by or made substantially greater due to the combined effects of physical impairment or previous accident, disease or congenital condition.
   2. Subrogation Only. The carrier has received reimbursements from an entity other than the employer with legal liability due to circumstances for the injury.
   3. Subrogation with Second Injury Fund. The carrier has received reimbursement from both the Second Injury Fund and a third party.
   4. Joint Coverage. Coverage furnished by other than the one policy for which experience is being reported is pertinent to a division of the total incurred loss. Such claims usually result from one of the following causes:
      1. The injured party has co-employers.
      2. Overlapping coverage on the same employer.
      3. Injury developed over an extended period. When a carrier has determined that the loss is chargeable to two or more policies written by such carrier or when two or more carriers have accepted liability for a part of the total incurred loss, it shall be considered the equivalent of a determination by adjudication that the coverage furnished by other than the one policy for which experience is being reported is pertinent to the division of the total incurred loss.
9. Type of Claim
   1. Workers Compensation Only. The entire loss is incurred under provisions of Part I of the Workers Compensation and Employers Liability Insurance Policy.
   2. Employers Liability Only. The entire loss is incurred under provisions of Part II of the Workers Compensation and Employers Liability Insurance Policy.
   3. Workers Compensation and Employers Liability. The loss is incurred under provisions of both Part I and Part II of the Workers Compensation and Employers Liability Insurance Policy.
10. Type of Settlement
    1. Non-compensable Previously Alleged. When the employer provided notification to the insurer that in the employer’s opinion no compensation is payable and the claim was later found to be non- compensable, the insurer is required to reimburse the employer for any additional premium resulting from the use of the claim in the employer’s experience modification. Further, any modification, which reflects a claim, which the employer alleged to be a non-compensable, and which is found to be non-compensable, will be revised.
    2. Stipulated Award (carrier/claimant settlement). An award, which has been drawn up between the carrier and claimant and submitted to the workers compensation, appeals board for review.
    3. Findings and Award (judicial award). An award, which has been issued by a judge based on evidence, presented in the process of litigation.
    4. Dismissal or Take Nothing Non-compensable. The claim will generate no payments or reserves due to one of the following:
       1. Official ruling denying benefits.
       2. Claimant’s failure to file for benefits.
       3. Claimant’s failure to prosecute claim following carrier’s denial of the claim.
    5. Compromise and Release. A settlement over the issues of applicability, extent of injury, or future benefits.
11. Managed Care Organization
    1. HMO. The claim will be administered by HMO (Health Maintenance Organization). Generally restricts employee’s choice of health care providers in exchange for reduced out-of-pocket costs and more extensive preventive care. Generally requires only minimal co-payments and no deductibles. Directs patients to a network of providers and requires authorization for many specialist and hospital services.
    2. PPO. The claim will be administered by PPO (Preferred Provider Organization). Retains many elements of indemnity plans but provides employees with a choice of whether or not to use managed care network providers. Financial incentives are offered for those who receive care from providers selected by employers or insurers.
    3. EPO. The claim will be administered by EPO (Exclusive Provider Organization). A network where coverage is confined to the provider network. If enrollees go outside of the network for care, they get no reimbursement.
    4. IPA. The claim will be administered by IPA (Individual Practice Association). A network of individual physicians who also serve non-network patients covered by other insurance. IPAs contract with a large number of physicians and enrollees represent only a small portion of the physicians’ practices.
    5. CCO. The claim will be administered by CCO (Coordinated Care Organization). An organization licensed in Pennsylvania and certified by the Secretary of Health on the basis of established criteria possessing the capacity to provide medical services to an injured worker on a timely and effective manner.
12. Expenses — Excluded from Losses
    Expenses must be excluded from losses except as noted in 14 below. Medical or legal expenses incurred for the benefit of the carrier shall be treated as loss adjustment expense. For expenses developed for the benefit of the claimant, refer to 14.a.
    1. Allocated Loss Adjustment Allocated Loss Adjustment Expenses encompass the following costs of a carrier, which can be directly allocated to a particular claim:
       1. Fees of attorneys or other authorized representatives where permitted for legal services, whether by outside or staff representative.
       2. Court, Alternate Dispute Resolution and other specific items of expense such as:Medical examinations of a claimant to determine the extent of the carrier’s liability, degree of permanency or length of disability;
          Expert medical or other testimony;
          Autopsy
          Witnesses and summonses;
          Copies of documents such as birth and death certificates, medical treatment records;
          Arbitration fees;
          Surveillance;
          Appeal bond costs and appeal filing fees.
       3. Medical cost containment expenses incurred with respect to a particular claim, whether by an outside vendor or done internally by an employer for the purpose of controlling losses, to ensure that only reasonable and necessary costs of services are paid. The expenses include:
          Bill auditing expenses for any medical or vocational services rendered, including hospital bills (inpatient or outpatient), nursing home bills, physician bills, chiropractic bills, medical equipment charges, pharmacy charges, physical therapy bills, medical or vocational rehabilitation vendor bills.
          Hospital and other treatment utilization reviews, including pre-certification/pre- admission, concurrent or retrospective reviews.
          Preferred provider network/organization expenses.
          Medical fee review panel expenses.
       4. Expenses which are not defined as losses and are directly related to and directly allocated to the handling of a particular claim for services which are required to be performed by statute or regulation.
    2. Unallocated Loss Adjustment Unallocated Loss Adjustment Expenses are loss adjustment expenses that are not defined above. These include but are not limited to:
       1. Carrier employees’ salaries, overhead and traveling expenses, which are considered loss adjustment expense and are not incurred while doing activities previously listed as allocated expenses.
       2. Fees paid to independent claims professionals or attorneys (hired to perform the function of claim investigation normally performed by claim adjusters), for developing and investigating a claim so that a determination can be made of the cause, extent of responsibility for the injury or disease, including evaluation and settlement of covered claims.
13. Expenses — Included in Losses
    1. Medical or Legal Expenses Incurred for the Benefit of the Claimant.        Medical or legal court expenses incurred for the benefit of the claimant or that the carrier is required to produce for the benefit of the claimant shall be reported as either an indemnity or medical loss depending upon the nature of the expense.
    2. Employers Liability Loss Adjustment Expenses. Employers liability losses include allocated loss adjustment expenses as defined above. The entire amount of losses and allocated loss adjustment expenses shall be reported as incurred losses on the unit statistical report.
    3. Impartial Examinations by Industrial Board. Expenses for impartial examinations ordered by an industrial board to determine necessary treatment or to determine the extent or continuation of disability are to be considered as incurred losses and reported on the unit statistical report.
    4. Awards. When an award to a claimant includes the cost of witness fees, attorney fees and other court costs, the amount so awarded shall be considered as part of the cost of benefit and shall be included with the indemnity reported. With respect to claims brought by persons against whom an employee has brought a third party common law action, such special costs shall be reported as an indemnity loss whether or not a recovery is made against the third party by the employee.
    5. Vocational Rehabilitation Evaluation/Testing Expense. Evaluation expenses (which are defined as costs incurred in testing and evaluating the claimant’s ability, aptitude or attitude in determining suitability for vocational rehabilitation or placement) shall be reported as incurred indemnity loss if such evaluation services are purchased from outside vendors.
       Evaluation expenses incurred by carrier personnel may be reported as incurred loss if such expenses are related to the activities of individuals (other than claims supervisors or claims adjusters engaged in efforts to return an injured worker to gainful employment) that, at a minimum, satisfy the qualifications established by the state having jurisdiction over a particular claim.
    6. Physical Rehabilitation Expenses. Expenses incurred by the carrier due to the purchase of physical rehabilitation services from outside vendors shall be reported as incurred medical loss.Expenses incurred by the carrier for physical rehabilitation activities listed below may be included in incurred losses if performed by carrier personnel (other than claims supervisors and claims adjusters engaged in efforts to return an injured worker to gainful employment) who are medically trained:
       1. Various necessary evaluations and therapies including physical, occupational, speech and hearing.
       2. Coordination of services such as necessary medical equipment or special nursing care in a facility or the home.
       3. Necessary consultation(s) with physician(s).
       4. Monitoring the treatment and progress of claimant’s medical condition.
       5. Coordination of family, agency and community services to provide optimal recovery.
          For such expenses associated with the above, the carrier personnel performing the activities must be trained in one of the following disciplines:
          physicians
          licensed registered nurses
          licensed speech therapists
          registered physical therapists
          dentists and dental technicians
          occupational therapists
          chiropractors
          podiatrists
          licensed physician assistants
          licensed cardio-pulmonary technicians