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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 durations.

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:
1 Train 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.
2 Promptly 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)
3 Develop 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.
4 Have 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.
5 Work with an occupational physician or clinic that follows Evidenced-Based Treatment Guidelines
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.
6 Communicate 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.
7 Have 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 capabilities.
8 Monitor 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.