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What you know can save big dollars

All too often an employer's involvement in a Workers' Comp claim ends when medical treatment begins for an injured employee. It's understandable-employers do not have medical expertise, have a demanding business to run and consider this the responsibility of the insurance carrier.

Yet, an employer can save significant dollars by knowing a few basic facts that invariably lead to excessive costs. Since medical costs for lost-time Workers' Compensation claims continue to grow at a faster pace than the medical consumer price index and according to the National Council on Compensation Insurance represent 58% of the claim cost, it makes sense for employers to pay attention throughout the course of the claim.

1. Know the physicians who drive up costs

A recent study by John Hopkins University found that less than 4% of the physicians involved in claims with reserves from $15,000 to $50,000 accounted for 72% of the costs. According to the study, the practice patterns of physicians have a profound impact on the ultimate cost of the claim. The study called these physicians "cost-intensive providers" or CIPs.

2. Know the types of injuries that are easily abused

Overutilization of benefits or magnification of injuries are abuses of the Workers' Comp system that cost employers big dollars. While many injuries such as lacerations, contusions and broken bones have predictable and established treatments, others, such as back strains and soft tissue injuries, have multiple treatment options. These injuries also give rise to subjective complaints that are difficult to prove or disprove. Injured employees who quickly seek an attorney or undergo extensive treatment for soft tissue injuries are red flags of possible abuse and warrant an immediate conversation with the adjuster.

3. Know if opioids are prescribed

The use of opioids in Workers' Comp is exploding. Some physicians are dispensing the powerful drugs too freely, resulting in dependency and/or delays in return to work. According to Work Comp expert Joe Paduda, over a third of claimants who start using opioids are on them for more than a year; a fifth are on for more than two years; and a seventh are on for more than three years. A claim cannot be closed until the injured worker is off opioids.

A recent study by the California Workers' Compensation Institute (CWCI) found that fewer than 3% of the state's doctors accounted for more than half of the opioid prescriptions for Workers' Comp patients. In addition, almost 50% of the prescriptions were for minor back injuries, although treatment guidelines suggest that drugs are not the best approach.

While not all opioid use is abuse, it's important to work with physicians who understand occupational injuries and provide adequate supervision when drugs are prescribed.

4. Know if the medical care goes beyond reasonable and necessary

Under Workers' Comp, employers are obligated to provide all necessary medical care so that the injured employee can return to full productivity or maximum medical improvement. However, there are fertile grounds for excessive medical costs that go beyond reasonable and necessary.

While it's the adjusters' responsibility to assure that the treatment is reasonable, it's the employer who ultimately pays the bill. Areas to watch are expensive specialized medical devices, home exercise equipment and repeated diagnosis testing or testing of non-injured body parts.

5. Know if your employee is satisfied with your management of the claim

Knowing if injured employees are satisfied with their health care is important, but even more important is knowing if they are satisfied with the employers' treatment. A recent study by Dr. Richard Butler of Brigham Young University and Dr. William Johnson of Arizona State University looked at how a company's human relations policies affect workplace risks by examining occupational back injury claims, both medical-only and indemnity.

The study concluded: "While satisfaction with health care providers significantly improves back pain and functionality at six months, satisfaction with the employer's treatment of the claim is equally important at six months and grows in quantitative importance at one year. Overall, higher satisfaction with claim treatment reduces the likelihood that an injury becomes an indemnity claim and results in almost a 30% reduction in claim costs."

Your response to an injury affects the employee's perception of the injury, their pain and recovery time and ultimately your bottom line.