Pulling the plug on four unnecessary Workers’ Comp costs

According to the National Safety Council’s 2010 edition of “Injury Facts,” preliminary data showed the number of disabling unintentional injuries reached 3.2 million in 2008, translating into 110 million lost workdays (70 million from injuries) and an estimated total cost of $183 billion. Wage and productivity losses accounted for $88.4 billion, medical costs represented $83.3 billion and administrative expenses were estimated at $37.7 billion. These staggering numbers are even more alarming in light of the 2009 RIMS Benchmark Survey finding that approximately 60% of companies have deficiencies in Workers’ Compensation claims management. Employers are leaving mega dollars on the table.

Unnecessary costs are those borne by an employer that do not improve the outcome for the injured workers. Even employers with early reporting procedures, strong injury management and return to work programs struggle with claims that unravel and result in unnecessary costs.

Litigation
Litigation alone can take a $10,000 claim and make it a $40,000 claim. Mistrust, confusion and uncertainty are breeding grounds for litigation. Two things are important here. First, employees need to believe that if they are injured on the job, they will receive due benefits and be treated fairly. Employers need to convey this promise before injuries occur and deliver on the promise when a legitimate claim occurs. Second, trust means everything in getting the employee back to work. A worker’s satisfaction with the way the claim is handled is the most important single influence on returning to work. Lack of communication, compassion and concern and chronic late payments are two guaranteed drivers to attorneys.

Unnecessary disability duration
A disability duration out of proportion to the severity of the injury or illness can occur when treatment and return to work are delayed simply because a claim becomes snagged in the system. Along the continuum of care, there are many points at which a claim can become sluggish – the time it takes for the first doctor’s visit; getting the reports from the doctor; seeing a specialist and so on. Early reporting, immediate intervention and constant follow up are keys to keeping a claim on track.

Expanded scope of injury
When an accident occurs, be sure that the employer, employee and medical provider carefully document the scope of the injury. Prior to processing for payment, all medical reports and bills should be evaluated against the initial diagnosis by a qualified person for both clerical errors and the scope of treatment. If a new diagnosis appears, this is a red flag to investigate further. New conditions should not automatically be accepted. Seemingly simple work injuries can turn into complex and costly claims, when not properly monitored.

Excessive impairment ratings
Impairment ratings are issued at the point of maximum medical improvement. While the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment is intended to standardize impairment rating best practices, they are not always used and not used consistently. According to an article in the May 2010 HR Magazine,

Dr. Christopher Brigham, an editor of the AMA Guides and chairman of Impairment Resources, LLC, 78% of the more than 5000 cases brought to his company for review over a recent four-year period were erroneous. Impairment ratings are all too often accepted as correct; employers must take the steps to ensure that they are performed accurately.