How to combat escalating
Workers' Comp costs after an injury occurs
According to the National Council on Compensation Insurance
(NCCI) claims frequency continues to decline in all major industry groups
and almost all occupations. Businesses have done an excellent job at creating
safer work places and providing more and better job training.
While prevention and training have been successfully integrated into loss
control, claims management is often viewed as an administrative rather then
loss control function. Fewer than 10% of work-related injuries should require
employees to take more than three days off work for medical reasons (ManagedComp
Survey), yet, nationally 24% of workplace injuries result in lost time longer
than three days. Sixty to eighty percent of lost time is avoidable.
This means that businesses have a significant opportunity to reduce their
costs by integrating claims management into their loss control program.
As noted in the previous article, “Why costs escalate unexpectedly
in low risk Workers' Compensation claims,” the longer it takes
to resolve a claim, the higher the final costs will be. Therefore, the focus
should be on reducing the duration of lost time.
A study in the September 2007 issue of Journal of Occupational and Environmental
Medicine, “The Impact of Early Workplace-Based Return-to-Work
Strategies on Work Absence Duration: A 6-Month Longitudinal Study Following
an Occupational Musculoskeletal Injury,” found that work accommodation
offered by employers and advice from health care providers on re-injury
prevention are the most significant determinants of shorter work absence
It is often a small percentage of the claims that dramatically affect overall
losses. The majority of these are not catastrophic injuries, but are claims
that have gone astray and can be managed more effectively. Here are eight
steps towards successful claims management that couple employer intervention
with proper medical treatment and oversight:
and designate an employee to coordinate the effort
A common, but erroneous perception is that claims management is strictly
providing information to the insurance company. It is far more than
sharing information; employers need to be proactive and intervene
to improve outcomes.
report all injuries
All claims should be reported within 24 hours; in fact, the goal should
be within 60 minutes of the accident. By getting the wheels in motion
quickly, costs are significantly reduced and employees return to work
faster. (Hartford Study)
trust with employees
While employers may not always be in a position to influence the choice
of care, employees who trust their employers are more likely to look
to their employer for support and guidance. Ninety percentage of all
employees injured in 2006 had no previous job injury record. To the
injured employee, a minor injury can seem like a major occurrence
because the process is unknown. An empathic response from the employer
that includes clear information about the steps the injured employee
needs to take goes a long way in reducing the duration of a claim.
a relationship with the treating physician
Regularly, employers will work through the insurance adjuster and
have very little contact with the treating physician. Yet, the employer
has the most knowledge about the situation and the context in which
the employee is working. The employer's knowledge is much richer
than either the doctor's or the adjuster's, yet the doctor
is making care decisions without it. When there is communication and
dialogue, outcomes improve.
with an occupational physician or clinic that follows Evidenced-Based
Not all physicians are trained in the return-to-work process nor do
they recognize the importance of minimizing time away from work and
the powerful impact of the “disability attitude” that
can set in with injured employees when claims are not treated properly.
Physicians trained in Evidenced-Based Treatment Guidelines determine
the expected disability duration for each injury and apply the proper
treatment protocols. They provide detailed recommendations for transitional
work and resumption of job activity.
estimated time of return to work to injured employee
While communication between the physician and employer is critical
to successful claims management, equally important is communication
with the injured employee. Utilizing the Evidence-Based Treatment
Guidelines, employers and physicians can establish expectations of
the timetable for return to work with the injured employee. If this
is not met, it should trigger immediate assessment of the situation.
an effective early Return-to-Work program
A key part of the employer's role in an employee's recovery
from a job-related related injury is a workplace culture that supports
a timely return to meaningful work and respects the restrictions and
limitations established by the treating physician. Successful Return-to-Work
programs are reported to reduce Workers' Compensation costs
by 30% to 60%.
Although a major obstacle for many employers is identifying meaningful
and productive work for returning employees, WorkComp Advisors have
tools to help identify temporary work assignments that are most relevant
to a particular employee's training, experience and physical
lost time injuries
Lost time injuries are the most expensive injuries, with costs increasing
every day that an injured employee is not able to work. Every injury
does not require the same level of intervention; Evidenced-Based Guidelines
provide the benchmarks by which to determine if a claim has the potential
to spin out of control. Concentrating on the troubled claims will
reduce costs and increase profitability.