Consider putting anti-fraud language on the back of each check that states cashing a check they are not entitled to can result in severe consequences including prison. This puts claimants on notice that misrepresenting their employment status or eligibility to workers’ compensation benefits can have severe penalties. Some states mandate this. But if your state does NOT mandate this, there’s probably no reason you can not include this in your anti-fraud program. Check with your corporate legal counsel to make sure. Ask your TPA if other clients in your state do that — I bet they do!

Rhode island, for example, has a great fraud brochure. The state mandates insurers and self-insured employers notify claimants of the effect of their endorsement of a benefit check by sending the Notice to Employees Regarding the Effect of Endorsement of Benefit Check Form (DWC-32) http://www.dlt.ri.gov/wc/fraud_fraud.htm  Click Report Fraud.  The Rhode Island Fraud Brochure is excellent. 

The Rhode Island language is: “I understand that endorsement hereon or deposit to my accounts constitutes my affirmation that I am receiveng these workers’ compensation benefits pursuant to law, that I have made no false claims or statements or concealed any mateiral act, in order to receive said benefits and that doing so would make me liable for civil and criminal penalties, including jail.” 

The language below is an example of similar language in another state: “By endorsement of this check, the payee, under penalty of fine and/or imprisonment, certifies entitlement to the payment for benefits or services, circumstances affecting such entitlement have not changed and no false statements or representations have been made in support of the claim fo payment. False representation could result in civil or criminal penalties.”

If you are not currently doing this contact your broker, TPA or consultant to ask them how to make this change.

Note: Make sure to check with corporate legal counsel before implementing any changes. State laws vary and this may or may not apply to your situation.

As always, Gould & Lamb appreciates your business and welcomes your feedback and comments. Should you have any questions, please contact us directly at: 866-MSA-FILE (672-3453).

Note: Make sure to obtain independent verification before using this information. All situations are different and may not apply to all companies.

Establishing a cooperative relationship with an occupational clinic convenient to your worksite is very important. Even though not many of your injured workers will ultimately visit the clinic, you as the employer are often in a good “bargaining” position to get the most attention and the best service possible. If the clinic is doing pre-employment physicals, drug testing, etc. your company is a valuable source of revenue.

Next, involve your Medical Director. If your Medical Director is local, he or she should attend the initial meeting to set up the relationship. Establishing a doctor-to-doctor relationship will be an important component of getting injured workers back on the job. A treating physician is more comfortable sending an employee back to the workplace knowing that another physician is also concerned with the worker’s safety. If your Medical Director is not local, he or she should have a phone conversation with the clinic’s Medical Director to establish a good rapport.

In your meeting with the Clinic Manager and Medical Director ahead of time,  make sure that the clinic is aware of whom to contact at your company whenever an employee is treated. It is essential that the employer contact be made before anyone is taken off work.

This should be part of a clear, stated policy with regard to return to work (RTW). Ideally, the work status should be determined by the employer and not by the treating doctor. This is a key point that is often missed. While the treating physician determines the physical restrictions, as long as the workplace can accommodate a worker’s restrictions, it should be up to the company whether or not to bring the worker back. Always involve your legal department in setting up return to work parameters.

One way to reemphasize these key points is to use a Brochure to the Physician like the one in Workers’ Comp Kit — a “leave behind” communication reminding the doctor and clinic employees about the employer’s transitional duty program.

Dr. Dave is happy to answer questions from the comments box below or thorugh his email at MD@WorkersCompKit.com.

David Dubin, MD, will be doing a three-part series on Working with an Occupational Medical Clinic:

Part I:  Before the Visit

Part II: During the Visit

Part III: After the Visit

When developing a workers’ compensation cost containment program, you need to think chronologically about how to work most effectively with your occupational medical clinic. Integrate all steps of your post injury response into the protocol for working with the occupational medical clinics. 

Ask Yourself and the Provider: What needs to be done before the first visit, what needs to occur during the visit and what steps should be done after the visit? 

Dr. Dubin is a long-standing expert in workers’ comp cost containment and serves as Medical Advisor for several companies.

Having a loss allocation system(also called chargeback systems) is one of the most important key cost drivers in workers comp cost containment. The divisions causing the losses must be those paying for the losses.  Here’s one of the ways I like to set up a chargeback system. Incentivize the behaviour you want to encourage; this is a carrot and stick approach. There are 3 components of the Workers Comp Kit Chargeback System: rapid reporting, rapid return to work (RTW) and quick claim closure within 3 months.   

1.  Take the total incurred each month
2.  If the claim was reported within 24 hours of occurrence, a 20 percent refund is applied
3.  If the employee returned to work within 4 days (either transitional or full duty) a 30 percent refund is applied
4.  Calculate 1 - 2 - 3 to get the total charge for the claim for the month, and subtract from any other previous charges. Thus, as the reserves are lowered and an employee has returned to work, the division will begin getting credits on that claim. 

For example:

In May, an employee has an injury and it is reserved for $5,000.  The claim was not called in within three days, however the employee returned to work two days following the accident.  Therefore the charges would be

1. The total incurred = $5,000
2.  Reporting refund = $0
3.  RTW refund = $1,500
4.  Total charges to the unit = $3,500

In June, the adjuster pays the medical bill of $1,000 and reduces the reserves to $3,000

1.  The total incurred is now $4,000
2.  Reporting refund = $0
3.  RTW refund = $1,200
4.  Total charges to the unit = $2,800
5.  Since the unit was charged $3,500 in May, they will receive a $700 credit in June (this is the $3,500 less the $2,800)

In July, the claim closes for a total of $2,000

1.  The total incurred is $2,000
2.  Reporting refund = $0
3.  RTW refund = $600
4.  Total charges to the unit = $1,400
5.  Since the unit had paid $2,800 by the end of June, they will get a $1,400 credit for July

Note:
1.   Make sure you have an automated system!
2.  The system needs to be able to track if the employee returns to work and when the claim was reported.  This is important as in the above example if the employee missed 6 days in July because the condition worsened, the RTW refund should be $0.
3.  The reports need to be dynamic - i.e. state “if all conditions were met, you would have saved an additional $400.”

©2008 Amaxx Risk Solutions, Inc. May be used with permission. Contact Info@WorkersCompKit.com for permission.

Barb Galluppi makes four important suggestions about participating in your company workers’ comp hearings and trials: 

1. Participate! Attend all trials and hearings if possible. Your presence is not only critical for technical and evidentiary reasons; it sends a message to the claimant and the arbitrator/administrative law judge.
2. Help line up employee witnesses. Often you know better how to locate employees and/or ex-employees, so offer that assistance.
3. Communicate with defense counsel. Make sure they know YOUR version of the accident and compensability. Let them know this early on in the process.
4. Testify to the fact that modified duty was offered to the employee. Bring the offer letter, it may be helpful to reiterate the point.

Very helpful information. Thank you Barb!

Questions can be submitted to Barbara Galluppi, CPCU, Area Senior Vice President Claims, Arthur J. Gallagher Risk Management Services in the box below.

Barb Galluppi continues with her series on controlling litigation costs in workers comp suits…

Barb advises to beware of the “billable hours” concept.

1. Monitoring legal fees is the adjuster’s responsibility.
2. Ask the adjuster if they reviewed the bill for the following:  duplicate charges, charges for counsel to re-review the case each time it is picked up, or fees charged for new attorneys to review (this is called churning) the file, etc.
3. Was the arithmatic checked?
4. Does the time spent talking to counsel match what is on the bill? When you talk to defense counsel, record the time spent, so you have a good idea of how much time you spend talking to defense counsel.
5. Ask to see the bills if they appear too high.

Tomorrow Barb will discuss several ways to participate in the defense.

Barbara Galluppi, CPCU, Area Senior Vice President Claims, Arthur J. Gallagher Risk Management Services is an expert is workers’ comp cost containment and many other areas of risk management. Questions may be submitted in the comments box.

More helpful strategies from Barbara Galluppi, CPCU, Senior Vice President Claims, Arthur J. Gallagher Risk Management Services ….

If it has been determined that assignment of defense counsel is needed, it is important to remember the “billable hours” concept by which attorneys are paid and the motive this may represent to over work a file and to prolong litigation. 

Some keys to control litigation costs:

1. There is usually no need to pay attorney’s fees to negotiate. This is the adjuster’s job, although participation in the process may vary somewhat by venue.
2. Adjusters know the case better than the attorney because it was the adjuster who did the up-front investigation and has had much more contact with the players.
3. Adjusters are trained negotiators and negotiate far more cases than attorneys because they handle more cases. Adjusters have motivation to settle, and they know the cases better.
4. Do not let the adjuster abandon the case to counsel because of a heavy workload or other reasons.
5. Request that the adjuster does the investigation and negotiation, even after suit is filed,  rather than paying an attorney to do it.
6. If it is a case to settle — the sooner the better.
7. The value of a case increases with age. It is the perception of the arbitrator (however erroneous) that the longer the claimant is treated, is off work or has to wait for settlement, the more serious the claim.
8. The longer the case continues, the more legal fees and attendant costs are incurred.
9. Make sure the adjuster is held accountable for litigation management and cost containment.
10. The case must not be allowed to drift with counsel. The adjuster should stay active on the case. 
11. Call for case status periodically.

Questions for Barb can be submitted in the box below. Excellent information, Barb. Thank you! Look forward to more tomorrow.

Barb Galluppi notes that once an attorney has entered the picture, you are now in a cost containment - reaction - mode. All is not lost, however. There are many things you can do to assure that litigation and indemnity costs are held to a minimum:

1. Immediately forward the summons and complaint or application for adjustment of claim to the claim administrator. It is a good idea to both fax it and put the original in the mail.
2. Work with the adjuster to formulate a defense plan of action (POA*).
3. Request a defense budget and estimate of expenses UP FRONT.
4. Avoid extraneous discovery. For example, if a deposition or expert analysis does not seem critical - resist having it assigned to an attorney.
5. If it is a case to settle, and notice of attorney’s lien has recently been received, be sure to exhaust settlement avenues before referring out to defense counsel. Often a case can be settled early on, avoiding all defense costs.

To have Barb answer your questions, post them below in the comment box. If you would like to be notified of her responses, sign up for the RSS feed or email notification in the upper right hand corner of the blog.

*Other abbreviations can be found at WC 101: http://www.reduceyourworkerscomp.com/workers-comp-abbreviations.php