The Valuation Date: When Your EMR Numbers Get Locked In
There is a specific day when each claim's dollar value freezes for purposes of your mod. Whatever the file looked like on that day is what enters the calculation, regardless of where the claim later went.
NCCI's experience rating plan freezes each claim's dollar value at a specific point in time called the valuation date, set 18 months from policy inception (which equals six months after policy expiration). The mod calculation uses whatever the claim was worth on that date, regardless of how the claim later developed.
Workers' comp mod calculations don't track claims in real time. There is a specific day, set by NCCI's rules, when the dollar value of each claim freezes for purposes of your mod. Whatever the claim looked like on that day is what enters the calculation, regardless of where the claim later went.
That day is called the valuation date. Most contractors don't know it exists.
What the valuation date is
For each policy year, NCCI (the National Council on Compensation Insurance) sets a single valuation date that captures the value of every claim from that policy period as a snapshot. The date is 18 months from the policy effective date, which equals six months after a one-year policy expires.
For a policy that ran from January 1, 2024 to January 1, 2025, the valuation date is July 1, 2025. Whatever the carrier's claim files show on July 1, 2025 (paid losses plus open reserves) is what gets reported to NCCI for that policy year. The mod calculation that uses that policy year as one of its three input years runs on those numbers, not on where the claims sit today.
Why the formula needs a fixed date
The mod formula compares your actual losses against expected losses across three policy years. For that comparison to be consistent, every claim needs a single value, captured at the same point in each policy's lifecycle. Without a fixed valuation date, the mod calculation would have a moving target every time a claim's reserves or payments changed.
The 18-month convention exists because most short-duration claims have closed or stabilized within 18 months of the policy effective date. Longer claims are still in development, but the formula uses the carrier's best estimate (paid plus reserved) on that day as the working number.
The price of this approach is that the mod calculation reflects an estimate of ultimate claim value, not the final claim value. When estimates were optimistic or pessimistic compared to where the claims actually settled, the mod inherits the difference.
What happens between valuation and policy renewal
The sequence runs like this. Policy year ends. Claims continue to develop for six more months. Valuation date hits, 18 months from inception. Carriers compile unit statistical reports showing each claim's value as of that date and submit them to NCCI. NCCI processes the reports and builds the policy year's contribution to the mod calculation.
This is why the mod you see at renewal reflects claim values from one to three years earlier, not the values your carrier's loss runs show today. Two different views of the same claims, two different dollar numbers.
What develops after the valuation date stays off the worksheet, for now
A claim that settles below its reserve a month after the valuation date doesn't flow to NCCI as part of the next mod calculation. It stays at the higher reserved value for that policy year. A claim that develops upward after the valuation date also stays at its prior value.
This cuts both ways, but the mathematics favor the carrier. Reserves tend to be set conservatively (high) when claims open, and settlements often resolve below reserve. The frozen snapshot tends to lock in inflated values more often than it locks in understated ones, which is one of the structural reasons stale reserves show up so often in mod audits.
When corrections flow retroactively
The valuation date doesn't permanently bar later corrections. When a claim is reclassified (medical-only versus lost-time, for example), when a subrogation recovery is finalized, or when a claim's data was reported in error, the carrier can file a corrected unit statistical report. NCCI recalculates the mod for the affected policy year using the corrected data. The carrier then reissues premium based on the recalculated mod.
The correction window isn't unlimited, but it extends well past the valuation date. The practical answer for most worksheet errors is that they remain correctable for the full three-year experience period and sometimes beyond.
What an audit would check
An audit works against the valuation calendar. For each policy year inside the experience period, it identifies the valuation date that governs the claims for that year, compares what NCCI was told on that date against what the carrier's current records show, and flags the gap. In our reviews of Southeast contractor worksheets, the largest single category of recoverable dollars sits in the gap between valuation-date claim values and current actual claim values, particularly for open claims that have quieted down without closing.
Knowing your valuation date doesn't change your mod by itself. Knowing whether the data captured on that date was correct is what matters, and that requires a worksheet review against the carrier's current loss runs. Send us your NCCI worksheet and we'll show you what was frozen and whether it was right.