CDMS Workers' Compensation and Claims Management 2

Question 1

What is the primary purpose of a 'reserve' in a workers' compensation claim?

Accepted Answer

To estimate the total projected cost of the claim for financial reporting

Answer

Reserves are funds set aside by the insurer or self-insured employer to cover the estimated future costs of an open workers' compensation claim.

Question 2

Which term describes a workers' compensation claim that is disputed by the employer or insurer?

Accepted Answer

Controverted or denied claim

Answer

A controverted or denied claim is one where the employer or insurer disputes compensability, causation, or benefits owed.

Question 3

What is subrogation in the context of workers' compensation?

Accepted Answer

The insurer's right to recover money paid from a liable third party

Answer

Subrogation allows the workers' compensation insurer to sue a negligent third party to recover benefits already paid to the injured worker.

Question 4

An injured worker's average weekly wage (AWW) is used to calculate which workers' compensation benefit?

Accepted Answer

Indemnity (wage replacement) benefit amount

Answer

The AWW, typically based on 13–52 weeks of pre-injury earnings, is the basis for calculating the indemnity benefit amount.

Question 5

Which workers' compensation classification applies when a worker can perform some but not all pre-injury job duties?

Accepted Answer

Temporary partial disability (TPD)

Answer

Temporary partial disability (TPD) benefits compensate for wage loss when a worker can perform modified or light duty at reduced earnings.

CDMS - Certified Disability Management Specialist Exam Practice Test