The Case of the Disappearing
Claims
Insured
This case involves a Southern California fit and finish contractor with
a $1.2 million Workers’ Compensation annual premium. Because of financial
issues, the company does not meet self-insurance requirements.
Situation
In 2003, the company’s Workers’ Compensation claims amounted
to $535,000. Much of the difficulty in managing the claims process resulted
from the fact that the company operated crews in some 50 work sites at any
given time.
Assessment
WorkComp Advisors analyzed the situation and introduced improved claims
management processes in 2004. In addition, the Advisors’ Claim Cost
Coordinator found mistakes on the company’s Experience Modification
worksheet and had them corrected plus reduced filed claims over the last
two years by over $127,000 to lower their new Experience Modification Factor.
Solution
In 2004 the Advisor introduced Post Hire/Pre-Placement processes; Medical
Clinic Selection protocols and a Supervisor Claims Responsibility Management
Program with the support of a trained management process. Supervisors and
a new Workers' Comp Claim Manager were trained in how to control claims
including two critical issues:
1. The supervisors were shown the 2003 claims reports so they could see
what the premium costs were doing to the company’s bottom line. They
understood the message and responded by saying that Workers’ Compensation
claims were costing “30 pick-up trucks a year.”
2. A process was set in place in which the supervisors became responsible
for discipline, reporting all claims within 24 hours, and checking out job
applicants before they were hired to determine the history of job-related
injuries.
The company’s new Work Comp Claim Manager effectively managed claims
and monitored their Early Return-to-Work program.
Result
In 2005, a year after the program was put into place, Workers’ Comp
claims had dropped to $13,000.
The management processes plus the Supervisor Claims Management Responsibility
program was then further enhanced to make certain the dramatic gains would
continue:
• Each supervisor without a claim during a 12-month period receives
a bonus.
• Each year, individual supervisors are given a claims budget and
they must stay within that budget to qualify for the annual bonus.
Even difficult Workers’ Compensation situations such as this one can
be turned around with the proper expertise and installing a process that
changes the culture and delivers continuous results. |