Section VIII - Appendix

The following examples are included in the Appendix:

• Business Exclusion Request Form Example
• Premium Verification Worksheets and Instructions – For use with Premium Determination Methods 1 – 3
• Compensation Data Exchange (CDX) Information
• CDX Insurer User Management Group (UMG) Primary Administrator Application
• NCCI Medical Data Call Place of Service Crosswalk

Participants in the Call are required to submit their basis for exclusion to the PCRB for review. All requests for review must include the output used to demonstrate that the excluded segment(s) will be less than 15% of gross premium. For details on the methods for premium determination and examples, refer to Business Exclusion Option in the General Rules section of this manual.

Date Prepared:
Carrier Group Name:
Carrier Group Number:
Preparer’s Contact Information
Name:
Address:
Phone:
Email:

Exclusions – Complete the following steps:

1. Document the nature and reason for all proposed exclusions.   If more space is needed, please attach a separate page with the explanation(s) to this form.

Note: The exclusion option must be based on business segment, not on claim type or characteristics.

The 15% exclusion does not apply to selection by:

• Medical services provided (pharmacy, hospital fees, negotiated fees, etc.)
• Claim characteristics such as claim status (e.g., open, closed) or deductible programs (e.g., large deductibles)
• Claim types such as specific injury types (medical only, death, permanent total disability, catastrophic, etc.)

2. Document the carriers (by carrier code) and states that are handled by each excluded business segment.

3. For each applicable carrier, provide an estimate of the percentage of paid losses handled by each excluded business segment.

4. If using Premium Determination Methods 1, 2 or 3, complete the corresponding Premium Verification Worksheet. If using Premium Determination Method 3, complete the Gross Premium Estimation Worksheet.

Note: If the methods described are not appropriate for determining the exclusion percentage, contact the PCRB for guidance. The methods are not appropriate if they would not closely approximate prospective premium distribution in the current calendar year (e.g., a significant shift has occurred in a participant’s book(s) of business since the last NAIC reporting or the participant writes a significant number of large deductible policies).

5. Completed requests should be sent to the Pennsylvania Compensation Rating Bureau, 30 S. 17th Street, Suite 1500, Philadelphia, PA 19103 or emailed to medicalcall@pcrb.com.

1.  Worksheet  – Method 1

Use this worksheet to determine if proposed exclusions are less than or equal to 15% of the group’s total written premium when using Premium Determination Method 1. Only include premium from Pennsylvania or Federal Act.

For details on Premium Determination Method 1 and all other premium determination methods, refer to Business Exclusion Option in the General Rules section of this manual.

2.  Worksheet Instructions – Method 1

1. In Column A, list the entities excluded from Pennsylvania.
2. In Column B, enter the Calendar Year Written Premium for Pennsylvania for each excluded entity.
3. In Column B of the Total row, enter the sum of the premium for the excluded entities.
4. In Column C of the Total row, enter the Carrier Group’s Calendar Year Written Premium for Pennsylvania (as reported in the NAIC Annual Statement—Statutory Page 14).
5. In Column D of the Total row, divide Column B by Column C, and enter the result as a percentage.  Round to one decimal. This value must be equal to or less than 15%.

3.  Worksheet  – Method 2

Use this worksheet to determine whether proposed exclusions are less than or equal to 15% of the group’s total written premium when using Premium Determination Method 2.  This method is an option for affiliate carrier groups with Large Deductible Direct Premium greater than 0.3% of their total premium (NAIC Direct Premiums.)  Only include premium from Pennsylvania or Federal Act.

For details on Premium Determination Method 2 and all other premium determination methods, refer to Business Exclusion Option in the General Rules section of this manual.

Premium Verification Worksheet – Method 2

4.  Worksheet Instructions – Method 2

1. Fill in Items A, B and C.
2. Determine the Net Ratio (D).
3. Use the Net Ratio to determine the Gross Ratio (E) from the table.  Refer to Business Exclusion Option in the General Rules section of this manual.
4. Use the formulas to complete the worksheet.
5. If the ratio (G) is 15% or less, the exclusion is acceptable.

5.  Worksheet  – Method 3

Use this worksheet to determine if proposed exclusions are less than or equal to 15% of the group’s total written premium when using Premium Determination Method 3.  This method is an option for affiliate carrier groups with Large Deductible Direct Premium greater than 0.3% of their total premium (NAIC Direct Premiums.)  Only include premium from Pennsylvania or Federal Act.

For details on Premium Determination Method 3 and all other premium determination methods, refer to Business Exclusion Option in the General Rules section of this manual.

Premium Verification Worksheet – Method 3

6.  Worksheet Instructions – Method 3

1. Fill in Items A, B, C. D.
2. Use the formulas to complete the worksheet.
3. If the ratio (I) is 15% or less, the exclusion is acceptable.

7.  Worksheet  – Method 4

Use this worksheet to determine if proposed exclusions are less than or equal to 15% of the group’s total gross premium when using Premium Determination Method 4.  This method uses the gross (of deductible) premium in Unit Statistical data (reported in the Premium Amount field of the Exposure Record).  Calculate the ratio of total gross premium on business to be excluded to total gross premium on all business and compare the excluded premium percentage to the 15% requirement.  Only include premium from Pennsylvania or Federal Act.

8.  Worksheet Instructions – Method 4

1. In Column A, list the entities excluded from the Affiliate Carrier Group.
2. In Column B, enter the gross (of deductible) premium for Pennsylvania or Federal Act for each excluded entity.
3. In Column B of the Total row, enter the sum of the premium for the excluded entities.
4. In Column C of the Total row, enter the Affiliate Carrier Group’s gross premium for Pennsylvania or Federal Act as applicable.
5. In Column D of the Total row, divide Column B by Column C, and enter the result as a percentage.  Round to one decimal.  This value must be equal to or less than 15%.

CDX is a service of Compensation Data Exchange, LLC which is owned by the following data collection organization members.

• Workers’ Compensation Insurance Rating Bureau of California
• Delaware Compensation Rating Bureau, Inc.
• Insurance Services Office, Inc.
• Workers’ Compensation Rating and Inspection Bureau of Massachusetts
• Compensation Advisory Organization of Michigan
• Minnesota Workers’ Compensation Insurers Association, Inc.
• New York Compensation Insurance Rating Board
• North Carolina Rate Bureau
• Pennsylvania Compensation Rating Bureau
• Wisconsin Compensation Rating Bureau

CDX Insurer User Management Group (UMG) Primary Administrator Application

The Insurer User Management Group (UMG) Primary Administrator Application form is a digital (online) form, which is available on the CDX website.  Please visit www.cdxworkcomp.org to complete this application.  For assistance with this application, contact PCRB Central Support at centralsupport@pcrb.com.

The Place of Service Crosswalk is intended for reporting facility and hospital services that are using Form CMS-1450, which does not contain a Place of Service Code field.  With the crosswalk, the Type of Bill on Form CMS-1450 can be mapped to the Place of Service Code on the Medical Data Call, as shown in the following chart.

The Type of Bill, located in Field 4 of the National Uniform Billing Committee (NUBC)-approved UB-04 Claim Form CMS-1450, is a three-digit code (without a leading zero).   Each digit defines a different aspect of the medical bill: Type of Facility, Bill Classification, and Frequency of the Bill.

Some providers report the Type of Bill as a four-digit code, with the first digit being a leading zero.  Data reporters should take that into consideration for accurate mapping to the Place of Service Code.

For more details, refer to the Chart Key directly beneath the Place of Service Crosswalk chart.

*Source: Centers for Medicare and Medicaid Services (www.cms.hhs.gov)

**Place of Service Code 22 should be reported only when the type of outpatient hospital facility is not known or not available.

Note: Place of Service Code 23 – Emergency Room should be reported when the Paid Procedure Code reported in Field 42 (on Form CMS-1450) is equal to Revenue Codes 0450 through 0459 or 0981.

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