Implementation of comprehensive
Workers’ Compensation program saves Modular Home Manufacturer $5,000
and lowers Experience Mod
Insured
The company is a manufacturer of modular homes with more than 40 employees.
Situation
The company’s Experience Modification Factor had climbed steadily
to 1.07 and management did not understand why.
Assessment
Certified WorkComp Advisors (CWCAs) were called in to review the claims
after one of the owners attended a Workers’ Compensation cost reduction
workshop.
The Advisors discovered that the insurance company had made a coding mistake
with a series of claims relating to knee, shoulder and hand injuries. Some
had been miscoded as indemnity claims instead of medical-only claims. This
company is in one of 38 states where medical-only claims are discounted
70%, while claims involving indemnity and medical are charged at 100%. This
coding error had driven up the company Experience Mod.
Solution
The CWCAs requested that the insurance company inform the rating bureau
of the error and correct both the coding and the Experience Mod.
In addition, the CWCAs developed a Workers' Comp plan for the company, including
regular meetings with management to review Workers' Comp issues, setting
up mandatory safety meetings, coordinating loss control services and claims
monitoring.
In addition, a relationship between the company and an occupational medical
clinic was established for the treatment of job-related injuries. Working
with the clinic, drug testing and return-to-work programs were implemented.
A return-to-work program helps keep the injured employee focused on recovery
at work and assists in reducing both medical expenses and time off the job.
Result
As a result of the work by the CWCAs, the company’s Experience Mod
dropped from 1.07 to 1.00, netting the company a $5,000 annual premium savings,
while the overall Workers’ Comp plan will produce continued cost reductions
over the years. |