When you apply for different types of insurance, such as medical, property, business, etc., you agree to pay monthly or yearly premiums for the insurance company to cover expenses in an emergency. That means that if anything happens, your insurance company will cover most of the costs.
Sometimes, depending on the insurance type, the insurance company will not cover the total price of the expense, and you will have to pay your part. For example, insurance will cover 80% of the cost, while you will be obligated to pay 20%. This is called cost-sharing, and there are two main types: deductible and co-payment.
Old Method New Method
Usually, you track this data on your insurance claims and other litigation documents, which is easy if you follow one or two papers. It can get tricky if you run an insurance company or have multiple vendors and third parties. Often dates are missed, information is lost or overlooked, cost-sharing is forgotten about, and in case of emergency, it can get pricey.
Luckily, Vendor Cost Control is specially designed software that will never let you forget about cost-sharing because our primary goal is to provide a service that makes cost-sharing as intuitive as logging into your stockbroker or bank website.
How Does It Work?
All financial information related to claims and defense litigation is managed and tracked using Vendor Cost Control software. This collaborative and effective tool gives law firms and insurance companies a practical way to manage funding contracts between carriers, subcontractors, and AI insurers. It also allows them to exercise due diligence for reporting requirements and ongoing communication with the legal community in litigation.
New Case Procedures
VCC case managers created a matrix from copies of all current invoices (paid and unpaid), including all identified insureds, carriers, dates of tender, AI claim numbers, and handling adjusters. On a secure server, invoice copies are kept electronically through JDi Data’s document repository site. Our internal system control is designated to prevent duplicate billing, so you can rest assured that no double or missed bills will be anywhere in sight.
You can submit invoices for fees and cost in the format that works best for you.
The formats include:
- LEDES format
- Email/ File Upload
- PDF Documents
- Mailed Paper Invoices
Allocating Invoices
Concerning invoice shares, carriers are allotted according to their tender dates and invoice settlement dates (or agreed-upon cut-off dates).
VCC will open a bank account and hold any money obtained, in this case, in trust. Per counsel’s instructions, we will draw up a billing matrix to implement the Joint Defense Funding Agreement. If a specific party has accepted extra insured obligations, the one share would be divided proportionally among the participating additional insured carriers.
VCC will ask the primary carrier for a payment ledger to ensure proper credits for any payments already made. Before the final allocations to all carriers, the system will confirm the total amount paid by the primary carrier. VCC will also ask each vendor for a complete invoice history and payment ledger to ensure that all defensive billings are distributed among the involved parties. According to the counsel’s instructions, payments will be sent from the JDi Data trust account to the vendors. In the absence of instructions, the invoices will be paid oldest-first.
The VCC systems allow case managers to INSTANTLY factor in:
- TenderDates
- Cessation Dates
- Exhaustion Dates
- Self-Insured Retentions
- Percentage Allocation
- Settlements
Cost Sharing Methods
Our system can withhold shares of specific invoices or experts from a carrier’s claims. For example, if a carrier has retained their counsel but agrees to share all other invoices, we can accommodate those cost-sharing agreements.
VCC is capable of assigning shared dollar amounts to all participating carriers. It includes setting a “fixed” percentage of costs to carriers and delaying the allocation of shares to a carrier until a deductible or SIR is satisfied.
Interim Allocation Requests
Interim Allocation requests are also included in VCC system features. The requests are created and sent based on case activity, usually monthly.
Dispersing Funds
Attorneys can receive insurer payments through a direct ACH transfer of funds to an approved bank account. In VCC, you can send funds in several different ways depending on your preference:
- ACH Direct Deposit
- Mailed Checks
Reports
VCC system shows several different reports, depending on what you need. The balance summary report is one of the VCC features, which shows all relevant information in one place. It displays the amount of the allocated share, how much has been paid, and the balance due. VCC reports are straightforward, easily understandable
On the other hand, the invoice shares report displays the AI $ and % details.
Vendor Cost Control is a service that enables speedy fixes, allows allocation reconciliation in complex financial litigation settings, and employs our unique algorithm to ensure that all parties are given the appropriate fees and payments. It is flexible enough to meet the needs of your business. Whatever the circumstance, it offers rapid, workable solutions and the tools you need to succeed. Our thorough service will ensure no duplicate payments, invoice activity, or missing customer data.
