The National Council on Compensation Insurance (NCCI) released a research brief on “Mega Claims” in workers’ comp. These claims account for a very small portion of total claims but rack up major loss costs, mostly due to medical service costs.

A mega claim is defined as a claim for which $10 million or more has been paid or is expected to be paid. For Accident Year 2016 NCCI found ten claims of at least $10 million or more when evaluated at 24 months. This is more than any of the previous 15 accident years at the same claim maturity.

Though 2006 and 2016 had the same number of adjusted mega claims (adjusted for inflation), 2016 had far fewer lost-time claims than 2006 so mega claims make up a larger proportion of total lost-time claims in 2016. Medical makes up 90% of more of mega claims’ costs, and hospital inpatient and home heal care account for more than half of mega claim medical cost. For lost-time claims in general, physician expenses and hospital outpatient costs represent most of the medical costs. Two out of three mega claim patients spend at least three months as a hospital inpatient, and about one in five are in the hospital for over a year.

They also found that motor vehicle accidents and falls from elevation are the leading causes of mega claims, accounting for almost 70% of them. Many result in head, neck and spine injuries. Strains are the leading cause of all lost-time claims. The contracting industry has the greatest share of mega claims, accounting for 44% of the total even though goods and services accounts for almost double the number of total lost-time claims than any other industry group.

NCCI stated that since mega claims are not frequent it is hard to tell whether this uptick is a one-time thing or the beginning of a trend.

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