Bundling investigations inside a Third-Party Administrator (TPA) or broader claims stack is convenient. However, it often lowers quality, delays action, and hides return on investment (ROI). Unbundling gives self-insured companies direct control over investigative strategy, timing, and deliverables. As a result, they gain faster cycle times, lower allocated loss adjustment expense (ALAE), targeted indemnity reductions, stronger return-to-work (RTW), and defensible settlements.
👉 Learn more about self-insured investigations
The Case for Unbundling in Self-Insured Claims
- Control of strategy & scope: Direct your own hypotheses (concern → impact → options), specify deliverables, and align evidence with key decisions.
- Speed to action: Cut unnecessary handoffs and receive decision-ready packets with timestamps, stills, and chain-of-custody.
- Measurable ROI: Transparent unit pricing and service level agreements (SLAs) make results easier to measure. In short, Value Delivered = Reserve Δ (30-day) + ALAE avoided − Spend.
- Quality & compliance:Enforce neutrality, protect privacy, and ensure admissibility.
- Flexibility & resilience: Build a panel of investigation types such as OSINT, surveillance, canvass, or fieldwork—using the right tool at the right time.
Operating Model for Self-Insured Investigations:
A) Intake (Day 0–2): Define the concern and potential impact, such as TTD eligibility or causation. Craft a targeted plan (OSINT baseline, surveillance, canvass, or earnings checks). Pre-draft “show to doctor” questions.
B) Assignment (Day 1–3): Issue clear scopes with identifiers, timeframes, and expected outcomes. Require neutrality on “no findings.” Set turnaround times (BASIC/OSINT ≤ 6 business days; canvass ≤ 5 days; surveillance summary ≤ 2 days after last activity).
C) Results (Day 3–10): Classify outcomes—contradictory, affirmative, or neutral—and convert to actions: IME addendums, RTW/modified duty, statements, offsets, SIU referrals, or settlement strategy. Reserve changes follow medical corroboration.
D) Feedback Loop (Monthly): Hold 30-minute vendor reviews to assess actionability and SLA performance. Scorecard metrics may include time-to-action, reserve Δ, ALAE avoided, cycle-time reduction, and hit rate by product.
Financial Impact for Self-Insured Employers
Savings in self-insured investigations comes from:
- Indemnity: Earlier RTW/modified duty, offsets from undisclosed earnings, and duration reductions when IMEs confirm capacity.
- Medical: Stopping duplicate therapy, coordinating treatment, and triggering utilization review when needed.
- ALAE: Fewer “fishing” days, targeted depositions, and earlier settlements when leverage is strong.
- Simple model: Value Delivered = Reserve Δ (30 days) + ALAE avoided − Investigation spend.
Governance, Ethics, Compliance in Investigations
-
No pretexting or deceptive friending.
-
Preserve original files, keep metadata, and maintain chain-of-custody with a clear record.
-
Treat the absence of findings as neutral. Do not escalate a case just because nothing was found
-
Justify surveillance through pattern days, contradictions, or milestone timing.
90-Day Implementation Roadmap for Self-Insured Companies
- 0–30 days: Build a vendor panel, standardize templates, and train adjusters on classification.
- 31–60 days: Pilot 10–20 files, enforce time-to-action, and hold case clinics. Calibrate surveillance deployment when triggers are met.
- 61–90 days: Publish the first ROI roll-up, embed templates in the claim system, expand to all units, and set annual targets.
KPIs & Targets
- Time-to-Action (TTA): ≤ 3 business days from evidence to first action.
- Actionability Rate: ≥ 65% of reports drive clear next steps.
- Defect Rate (identity/timestamp errors): < 2% for errors in identity or timestamps.
- “No findings” mis-scoring: 0% (must remain neutral).
- Reserve Δ (30d) & ALAE avoided: Track file-by-file and in quarterly summaries.
Roles & RACI in Self-Insured Investigations
- Risk Owner (Self-Insured): Strategy, vendor panel, SLA oversight, ROI tracking.
- Adjuster: Scope, classification, actions, documentation, reserve memos.
- SIU/Compliance: Set thresholds, ethics, and chain-of-custody rules.
- Medical/IME: Provide opinions on capacity and causation, set RTW parameters.
- Legal/Counsel: Guide depositions, EUO strategies, disclosure, and settlement posture.
Sample Language (RFP/CSI Snippets)
- Deliverables: Decision-ready packet with timestamps, 3–6 stills, and chain-of-custody records.
- Turnaround: BASIC/OSINT ≤ 6 business days; canvass ≤ 5 days; surveillance ≤ 2 days after last activity.
- Neutrality: Lack of records is non-probative.
- Pricing/SLAs: Line-item pricing, service-level credits for missed TATs, quarterly scorecards.
Mini Case Snapshot
Context: L-sprain claim, 12 weeks off work. Unbundled panel deploys two surveillance days; BASIC refresh aligns dates.
Outcome: IME confirms higher capacity, modified duty offered, duplicate therapy stopped. 30-day reserve change: $18,500 saved. Legal claim costs avoided: $1,800. Spend: $2,700. Total value delivered: $17,600.
Conclusion
Unbundling transforms investigations from a bundled commodity into a strategic tool for self-insured companies. With hypothesis-driven scopes, decision-ready deliverables, and clear ROI tracking, self-insureds gain control, speed decisions, and reduce costs—all in a scalable model that can be implemented in 90 days.
Definitions:
- ALAE – allocated loss adjustment expense – all the costs attributable to defending a particular claim. They include legal expenses such as attorney fees, depositions, transcripts, exhibits, printing, shipping and mailing.
- OSINT– open source intelligence
- ROI – return on investment
- RTW – return to work
- SLA– service level agreement
- TAT – Turnaround Time
- TPA – third party administrator of the claims.
- TTD – Temporary Total Disability
Want to Learn More?
Dive deeper into how investigations can help self-insured companies cut costs and manage risk more effectively?
📄Download our Free White Paper:
The Investigator Advantage — 3 Tips to Reduce Claims Costs for Self-Insured Companies
Contact Us Today
Frasco® Investigative Services delivers ethical and efficient solutions tailored to your needs. Have questions or want to discuss your investigative needs further? Contact one of our experienced experts today to find the answers you’re looking for.
Disclaimer: This blog post is for informational purposes only and should not be considered legal advice. Please consult your general counsel for specific legal guidance. Frasco investigators are licensed, and our operations comply with US industry, federal, state, and local laws.