Top ten ways employers mess up Workers' Comp claims

Our strategic partner, HR That Works!, recently hosted a webinar by Worklaw® Network attorneys Chelsie Allan and Melissa Stone from the Lindner Marsack firm. Much of the following information is taken from the webinar.

1. Leave the employee out of the internal investigation and reporting process

   Whenever possible, the employee should complete the accident report, including the description of the injury. The employee should also review and agree to the wage data that is submitted as part of the claim. Many employers miss critical information by not involving the employee from the outset. The paper trail starts from day one and the more the employee is involved, the lower the chance of conflict or dispute.

2. Ignore the red flags that may arise during the investigation process

   Employers know the employee best - far better than the adjuster or attorney. Some potential red flags that should be shared are:

   • Employee asked for the day off and did not get it
   • There was a work protocol violation
   • Substance abuse is suspected
   • Conflicting statements are made
   • Employee has conflict with supervisor
   • Employee thinks he/she will be laid off
   • Employee's outside activities involve sports, risky hobbies, etc.
   • There were no witnesses
   • Pre-existing conditions or co-morbidity issues

   Such red flags should not be used as a basis for denying claims, but provide a foundation for the type of surveillance and investigation that should be undertaken.

3. Alienate the injured worker/keeping in the dark

   For most injured employees, this will be the first time they are in the Workers' Comp system and it can be a scary time. Some employees fear that the employer or coworkers will be mad at them, while others feel undervalued and unappreciated when they do not hear from the employer. This often results in a longer healing process and can lead to litigation.

   Staying in touch with the employees, expressing the desire to have them return to work and making them feel part of the team all work to keep the claim on track. Including those who are injured in company perks, such as giving Thanksgiving turkeys to employees, is a gesture well worth making.

   Lindner & Marsack, S.C. suggests a "Bill of Rights" that clearly defines the responsibilities of both employees and employers in working together to achieve a mutually beneficial outcome. It's key that the employee be required to have both telephone and personal contact as well as regularly provide written documentation from the treating physician on the status of the injury.

4. Fail to file the Workers' Comp claim with the carrier or TPA

   Whether or not to pay small medical bills on a Workers' Comp claim rather than submit them to the insurer is an age-old question with no simple answer. There is minimal value in not reporting small claims in states that have approved the Experience Rating Adjustment (ERA) in their Experience Modification formula, but paying small medical claims may seem more attractive for employers in non-ERA states as the impact on the Experience Modification is greater. However, there are several factors to consider. The claim could morph into something much larger and spiral out of control. Unnecessary exposure is created and the investigation is hindered if the injury is not reported. It's been well documented that delayed reporting leads to higher costs - injuries reported after seven days have 17% higher costs. Many states have limitations on time allowed for a claim denial and some states may levy fines if the claim is not reported.

   Overall, proper injury management is a more effective and safer way to control the Experience Mod.

5. Do not accommodate light duty work restrictions

   Return-to-work (RTW) assignments are transitional tasks aimed at returning injured workers to full productivity in accordance with medically-documented abilities. According to a Managed Comp Survey fewer than 10% of work-related injuries should require more than three days out of work for medical reasons. While the current economic realities have created some obstacles for RTW, it remains a viable and critical part of controlling costs by returning employees to work in a timely manner.

   Some key elements to consider in light of today's economic situation:

   • Be proactive with the treating physician. Rather than ask for work restrictions, give a job description to the physician and ask what the injured employee can do. If the physician has insufficient information about the worker's job, or the availability of transitional work, there will be a tendency to take the safe path: send the worker home. As much as 20 percent of lost time from work injuries could be eliminated if the physician was given sufficient information about transitional possibilities.
   • Place a limit on the duration of the assignment based on evidenced-based guidelines for return to work. (Under the ADAAA, it is permissible for an employer to reserve "light-duty" jobs for those with work-related disabilities and these jobs should be distinct from RTW transitional tasks).
   • Clearly convey the consequences if the employee does not accept the transitional assignment.
   • Get supervisors and co-workers onboard. Returning to work from an injury is an adjustment for both the worker and the workplace. While treating people right and providing support seems like a no-brainer, it is easier said than done. An established process with support and engagement for all involved will help ensure its success.

6. Either terminating or not terminating the employee

   Obviously, an employer cannot fire an employee because he/she files a Workers' Comp claim. But there are other considerations: what if the injured employee violates workplace protocol while on transitional duty? Ignores relevant attendance policies? Is abusing alcohol or drugs? Transitional duty does not exempt employees from an employer's termination policy that is executed fairly, consistently and evenly.

   Consideration should also be given to the ongoing costs of the claim and the loss of control that can come with termination. To maintain control of claims, some employers have a policy to "never terminate an employee while they are in the healing period." If a worker does something to warrant immediate termination, he/she is notified that they will be terminated once the healing period is over.

   It is always best to get professional legal guidance in termination cases.

7. Abandoning the claim after a favorable IME

   A favorable IME does not mean the claim has ended. All treatment that is reasonable, necessary, and related to the continuing injury will still be paid. Stay involved until the claim is closed.

8. From soup to nuts: let the carrier handle the entire claim

   Listening to "shop talk," being alert for suspect activity and carefully monitoring progress can prevent a claim from spiraling out of control. Accurate job descriptions or even videos of employees performing work can help both the physician and the adjuster. If using videos, it's important that the filmed subject be the actual person or one with similar physical characteristics. A video depicting a 6-foot, 230-pound person performing a job is not too helpful if the injured person is 5 feet 2 inches and 120 pounds.

9. Refusing to rehire a claimant

   The intersection of Workers' Comp, ADA and FMLA can be an unnerving web and it is best to get professional legal guidance in such cases. Making a reasonable accommodation and rehiring a claimant can often allow an employer to avoid the pitfalls that would exist if they otherwise choose not to.

10. Having an unrealistic expectation about the ultimate disposition of the claim

    It's important to keep emotions out of the process and recognize that these are business decisions that affect both the bottom line and how your injured employee responds to you. Employers who are engaged and have realistic expectations when managing their claims can exercise more control.