Author Karen C. Yotis writes, “When a workers’ compensation maven of Rebecca Shafer’s caliber shares her expertise about implementing cost containment best practices, industry professionals can’t afford to do anything but listen.” She, of course, also continues to say, “risk managers, adjusters, vendors, attorneys, agents and brokers, carriers, and employers can’t afford to do anything but
click here to purchase the book, and start reading.”
We like her.
Yotis explains our book is a roadmap that has sharp teeth and notes that its author, Shafer, has more than 25 years of experience in the industry. “This is NOT an intellectual discussion about workers comp issues and trends, but rather a hands-on practicum written from years of field research with a host of companies.” Yotis writes.
She goes on to review and explain both parts of the manual, An Action-Oriented “How To” Template and Cost Containment from Soup to Nuts noting where updates from previous editions make this the one to buy.
To read her full review, follow the link
here. Or, just click on over
here and get your own copy!
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.
Two-thousand-eleven has been an interesting year in the workers compensation industry. New software has helped many administrators take better control of their costs, studies on safety have led to an increase in preventative measures and legal changes have led to unusual and sometimes controversial administration in some states.
Here at Roundup we asked one of our favorite experts, Curtis Smith, executive vice president of Medcor, Inc., a national on-site health services company, what he thought the top WC issues were for 2011. What follows are his conclusions:
Conflicts of Interest Inherent in the Industry
The very organizations employers depend on to help manage and reduce costs depend on claims for their core revenue – and this can lead to potential conflicts of interest, according to Smith. He offers these examples: contingent commissions for brokers and consultants, TPAs (third-party administrators) and MCOs (managed care organizations) who select network providers and share revenue from provider discounts. Smith also cautions against pharmacy chains that put pharmacies on-site in large worksites for convenience also employ the practitioners who write the prescriptions.
Prescription Drug Abuse
Thousands of people incur illness and injury each year from abuse of prescription medications, especially pain medications. Addictions and overdoses are increasing, as are deaths, Smith wrote. Addictions often arise from treatment after a work-related injuries but the medical community is not policing or restricting doctors who write these prescriptions. What’s more, TPAs are not excluding these unrestricted doctors from networks of approved providers for fear of litigation.
Prescription Drug Costs
The same medication can cost 10 times as much in workers compensation cases as it does in general health applications. Medications’ fee schedules have been negotiated down and controlled in group healthcare far more than in workers comp situations. Consequently, drug companies and others are moving into the comp space to take advantage of increased profitability, Smith said.
Increased Litigation in the Industry
The fundamental premise behind the workers compensation system is falling apart in many states (e.g. California and New York) where an increasing percentage of claims are contested and litigated. Huge settlements out of proportion to true economic need are forcing employers to be defensive and deny claims; denying and resisting legitimate claims forces employees to seek counsel and litigate. The comp system is turning into a battleground of plaintiff and defense attorneys working the system.
Injury Triage
Smith said he would be remiss if he did not mention injury triage. “This truly is an effective way to reduce unnecessary claims and costs, to identify serious cases, and to provide early intervention for all cases,” he wrote. Financial and health outcomes are improved with the use of triage. “It’s also innovative – wining several U.S. patents — are there any other WC methods that have been patented in the last 10 years? Or ever?” he asks. Thousands of companies are using triage and many competitors have joined the market, providing a variety of service and pricing models. Yet, many employers (even most) still don’t use it and the claims-driven industry still resists it.
Even those who offer injury triage often do so begrudgingly to satisfy their employer-clients, to block another triage provider from taking claims away, or to acquire business – but they are slow to introduce triage to an existing book of businesses, or, once introduced, often let implementation and utilization languish so claims can continue to flow.
In conclusion, look to hear more about these important topics in 2012. Though they may not be resolved in short order, they are certainly going to be on the minds of those of us in the industry in years to come.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.
LexisNexis Workers Compensation Law Community directed by attorney
Robin Kobayashi recently teamed up with Work Comp Roundup to deliver expert opinions on the 10 most critical myths and facts about workers compensation.
The article goes into depth on the following 10 myths, in no particular order:
Myth #1: Large discount networks are the key to success in workers compensation managed care – from
Kenneth F. Martino, president and CEO of Broadspire Services, Inc.
Myth #3: Workers compensation claims improve with age, by
Mark Walls, assistant vice president of claims at Safety National.
Myth #4: Technology will cure all of our ills, from
Robert Wilson, president & CEO of WorkersCompensation.com, LLC.
Myth #5: Because FECA is so different from state workers compensation systems, private sector case management best practices won’t work, contributed by
Marianne Cloeren, MD, MPH, FACOEM, and medical director of Managed Care Advisors, Inc.
Myth #8: Doctors prescribe narcotic pain medications because of concerns they may be sued if they don’t treat pain from
Stuart D. Colburn, Esq., shareholder in Downs Stanford, P.C.
Remember, these are all MYTHS! The
article itself goes into depth explaining why they are not FACTS. Work Comp Roundup considers it required reading for everyone in the field – it’s a great way to start the new year.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contactInfo@ReduceYourWorkersComp.com.
Winter is knocking at the door. The bitter cold, ice and snow is or will be on the doorstep. If the workplace does a lot of inside and outside work, this can lead to increased risk for injury, and it can start as soon as the workers pull in the parking lot. In most jurisdictions, workers comp coverage begins as soon as those tires cross into the lot from the road that runs outside of it.
With the slick conditions, numerous injuries can occur, ranging from minor slips and falls to major injuries such as broken bones. But do not sit around and wait for the injuries to occur. Below we discuss 5 ways to be prepared for the long winter haul. (WCxKit)
1. Get supplies stocked and ready to rock
Before that winter storm dumps a foot of snow on the doorstep, try not to be caught off guard. If the company is responsible for snow removal and salting, stock up on bags of salt and sand and have them ready to use, near the areas to be applied. Inspect the shovels and brooms for wear and tear and make sure they are in good working order. If using a plow truck for the parking lot, be sure the plow is properly installed and lubricated, and perform yearly maintenance on the vehicle to avoid breakdowns or damage. These may seem like no-brainers, but sometimes when it gets busy around the end of the year these tasks get brushed aside for more important duties, and can be easily forgotten. It is better to be safe than sorry, so be ready should that storm come rolling in. Snow can accumulate in a hurry. For employees who work outside, consider providing ice grips for shoes.
2. Inspect the entryways, stairwells, and mats
People have to enter the building somewhere, so be sure the mats are functional. Some employers have special winter mats, made with extra durable material to stand up to the wear and tear of the outside elements. Non-slip bottoms, and rougher fiber mats can brush that outside snow and salt off of boots and shoes so those materials are not dragged into the work areas. Standing water from melted snow posts a dangerous hazard, and is one of the leading causes of slips and falls. Obviously these falls can result in serious injury, so anything to prevent this is worth the cost.
Most stairwells will be covered in an anti-slip coating, so check and make sure that the surfaces are doing the job they are supposed to do. Also check handrails to make sure they are not loose, so if someone grabs them to prevent from falling the rails do not come off the wall. Again it is common sense, but these checkups usually fall to the bottom of the priority list when busy seasons hit.
3. Have an outside vendor perform the plowing and salting
If you do own the lot and maintain the salting and plowing, consider using an outside vendor to take care of this task. These vendors will carry their own liability insurance policy, and if injury occurs it can shift the risk to them instead of to the employer. But make sure that the vendor does not try to "sneak" in a
hold harmless clause in the contract. If this is the case, the employer agrees to waive any liability towards the vendor, shifting the risk back to the employer for priority coverage.
Most vendors keep the contracts open to negotiation, so have the counsel inspect the contract for loopholes or gaps in coverage should an injury occur. Subrogation is a right in most jurisdictions, and an employer should be able to pursue if any injury does occur within certain circumstances. Most vendors will do their best to get that hold-harmless in there, and wager that almost all vendors that perform snow removal have that wording in all of the contracts. This does not mean the vendors are trying to run away from responsibility, but instead do want to not be held responsible should injury or property damage occur.
4. If leasing the space in a building, review the specifications of who is responsible for injury
If you as an employer are a tenant in a building, or leasing the space for the entire building and parking lot, ask the building manager for a copy of the lease contract and see what exactly the responsibilities are and what the building manager’s are. Do not assume right off the bat that just because leasing a suite in an office building, and the worker falls on the way in, that you are 100% responsible for any injury damages. An opportunity to file a subro claim could be missed with the building’s Carrier. Less often than not these building owners will avoid stepping up to say exactly how the lease breaks down and who exactly has coverage for an injury that occurs before the workers gets to the specific suite. Do some research and find out exactly what scenarios are the employer’s responsibility, and what scenarios will fall under the building manager’s coverage.
5. If inclement weather happens, consider cancelling work for the day
If this is within the means, should a major storm come in and drop a ton of snow, consider a snow day for workers. The world is not going to end to halt operations for one day. If the roads are treacherous, some workers may call in anyway depending on the commute. Work is important and most workers will do their best to report for duties, but it certainly is not worth getting into a serious car accident over. Create a telephone call list so workers can relay the message on to others that work is off for the day or notify employees via twitter, and make sure to have an up-to-date recording on the company phone. That way you are not trying to call everyone at 5am to advise that work is canceled for the day. In the end, if doing this saves someone from a major car accident, it is worth it. I am not saying cancel work every time 4” of snow falls, so set up a parameter. If snow accumulations total over 12” or it is raining and freezing on the roadways creating “black ice” situations, then consider it. Be sure all the workers know about the parameters, so they can have a heads up as well. Create a phone line to call, leaving a message on a general machine so workers can call before leaving for work to see if work was indeed canceled or not. (WCxKit) Make sure there are procedures in place for inclement weather cancelations and late start instructions.
Summary
The winter months statistically create more hazards than the summer months. Snow and ice can lead to dangerous conditions both on the commute to work, and within the workplace itself. Be sure to be prepared for these conditions by performing the tasks listed above. It is far more costly to incur a serious injury, than it is to prevent it.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.
Document, Document, Document
Carriers preach the importance of documentation in claim files using this pithy saying: " If it is not documented, it did not happen." The same should be true for every employer. Risk management or safety team members must properly document everything. This includes tracking numbers and incidents, recording safety problems, and keeping a close watch on injuries and incidents on the work floor.
Why record keeping is important
All workers arrive on the job with various physical issues related to their personal life. Perhaps the worker did a lot of yard work over the weekend and is sore. Maybe the employee fell shoveling snow and has a back injury. Maybe personal turmoil is affecting safety and work. Regardless of cause, it is important to keep proper records on everything heard on the job floor. No one can recall every single detail of a day, so writing it down is critical to document the situation.
When talking to employers, I ask the employer how aware they are of an employee’s personal life. Some answer that question by saying little to no social contact with employees. Other employers will report being friends with coworkers and socializing on a regular basis. Some are right in the middle, reporting casual exchanges in the hallway or break room but not really knowing the employee.
The medical worlds of insurance are interwoven between personal injuries and workers compensation injuries. Some workers have a good combination of both. Some workers never take any time off for a medical condition, whereas others will be off of work frequently for some reason or another.
Many HR people have access to personal medical leave papers. The importance of keeping records shows itself when the time comes and they are needed. If an employee had a knee surgery last year then suddenly claims to injure the same knee at work, a review of personnel files may show the alleged knee injury is not work related. But if the records do not exist, then there is no way to question the claim.
When filing the compensation claim for the knee injury, the adjuster calls and probes about any other past injuries. If the employer is only able to give a vague account of a past injury, the adjuster lacks information to judge the claims compensability. If the claimant does not bring it up to the adjuster, and there are no records as to the employee’s medical leave, there is no way to prove a pre-existing knee injury is present. So with any injury, it is important to keep proper records in every personnel file. No matter the reason for the medical leave, documentation with as much information as possible must be gathered at the time of medical leave. This will help in the future should an issue like the one described happen. The impact documentation has on a workers comp claim can be priceless, in that the employer may not pay workers comp benefits.
Document, document, document …. oh, and write it all down.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. www.WCManual.com
Visit www.LowerWC.com for more information for cost saving hints and tips. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Do you ever wonder what your workers compensation adjuster does all day? If you see the adjuster living easy, you may be surprised. The adjuster's day is full of activities, requiring the adjuster to prioritize which actions are needed the most. Some of the daily routine you would see from the adjusters would include the following activities.
So, what will you see during your visit to the claims office?
1-The phone rings constantly
The typical workers comp adjuster has 100 to 125 indemnity files, depending on the jurisdiction and the experience level of the adjuster. Each of those 100 to 125 files has a claimant, one or more medical providers, and an employer. That alone makes for 300 to 375 plus potential parties that will want to speak with the adjuster. On top of that you have plaintiff attorneys, defense attorneys, triage nurses, nurse case managers, surveillance companies and state work comp boards that may call the adjuster. On a slow day the adjuster may only spend half of her time on the telephone. (WCxKit)
2-The e-mails come in fast
In this day where everyone expects instant service, the use of e-mail to convey messages and documents has surpassed paper mail. With attorneys, employers, employees and nurse case managers sending information by e-mail, it is normal for the adjuster to get 50 to 100 e-mails per day. While many of them can be copied right into the claim file, a significant portion of them require a response or other action by the adjuster.
3-The paper mail is voluminous
While the amount of paper mail has declined over the years, a two inch or five inch stack of new mail to be reviewed each day by the adjuster is still the norm. The mail has to be evaluated and the appropriate response taken on each piece of mail. Sometimes the response is only to send it to be scanned into the electronic file, but often a written reply or a phone call is needed.
Included in the paper mail are the faxes that come in each day. While most attorneys and employers are transmitting documents via e-mail, most medical providers are still using paper forms, paper bills and paper reports. These items are often easier for the medical offices to transmit by fax than by e-mail, so receiving numerous faxes each day add to the paper mail stack.
4-The consultations are frequent
A major portion of those telephone calls mentioned above are for the purpose of making decisions on what to do. The adjuster will often gather information by consulting with others. The adjuster will discuss the claim with the nurse case manager, the defense attorney, the employer, and other sources to make a judgment on the best course of action on a particular claim.
When the adjuster is not on the phone discussing a claim or reading the e-mails or reading the paper mail including faxes, the adjuster will often enter into consultations within the claims office. The adjuster will confer either with her supervisor or fellow adjusters on various aspects of a particular claim to gain insight or opinions of other claim professionals that have dealt with a particular situation or set of facts.
5-The decisions are major
The primary reason the adjuster enters into the consultations noted above is because the decisions the adjuster makes can have an impact on the life of the injured employee and all of the decisions have a financial impact on the employer. If the adjuster makes the wrong decision, either the employee or the employer or both will be hurt financially.
6-The appreciation is missing
While you are sitting there observing what the adjuster does all day, you will notice that the adjuster's job often benefits both the employee and the employer. But it is the rare employer or even the rarer injured employee who expresses any appreciation for the work the adjuster does on the work comp claims. The most the adjuster hopes for is the claims supervisor will say “good job” when the claim is concluded. (WCxKit)
7-The adjusters best practices
While the adjuster is in constant modes of communication as noted above, the adjuster has a set of job requirements that have to be met.
1. Making contact with the employee, the employer and the medical provider on every new claim
2. Responding to all the communications noted above in a timely manner
3. Setting and maintaining accurate reserves on all of the assigned files
4. Making sure all indemnity payments are made timely
5. Making sure all medical bills are paid
6. Keeping in touch with the employees, the employers and the medical providers on a regular basis
7. Submitting the appropriate forms to the state work comp boards/industrial commissions
8. Identifying fraudulent claims
9. Pursuing subrogation when a third party is the cause of the employee's injury
10. Attending mediations, either in person or by phone
11. Evaluating settlement opportunities and decisions
If you sit chair side by the adjuster, do not count on the adjuster having any time for chit chat, so just observe. They will have planned for your visit, and will have time to show you through your files. As you can see from the above the adjuster's job fills the entire day, and then some. If you do sit and observe what the adjuster does all day, you will probably leave amazed at the dedication and hard work of the work comp adjusters.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20-50% www.WCManual.com.
Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact RShafer@ReduceYourWorkersComp.com
Workers Compensation Laws change frequently. This is only a summary; a complete copy of the most up-to-date version can be found at: www.WorkCompResearch.com an excellent service.
In Indiana, every employer who has one or more employees, whether full time or part time is required to carry workers compensation insurance. There are some exceptions. Railroad workers, real estate professionals, independent contractors, inmates and volunteers of non-profits are not covered by workers compensation. Employers of casual laborers, household employees, agriculture employees, and migrant farm workers may elect to buy workers compensation insurance. All county and municipal governments, and all school districts must carry workers compensation insurance, but police officers and firefighters may not be covered if they are covered for injury through a pension fund.
Obtaining Coverage
To obtain workers compensation coverage in Indiana, the employer has two options of either
purchasing a workers compensation insurance policy from a state approved insurance company
applying to and being approved for self-insurance status with the Indiana Workers Compensation Board. (WCxKit)
Claim Reporting
The employee must report the injury to the employer as soon as practical after the occurrence. If the injury is reported after 30 days, benefits start as of the date of the notice. If the employee incurs disability of one or more days, the employer is required to report the claim to the Board of Workers Compensation within 7 days. If the employer (insurer) fails to report the claim timely to the board, the employer (insurer) can be fined $500.00.
Medical Benefits
The employer selects the medical provider in Indiana workers compensation claims. The employer is required to provide all reasonable and necessary medical care free of any charges to the employee. There is no time limit on how long medical care can be provided.
In cases involving permanent injury, the Board may order future medical care to limit or reduce the extent of the employee’s injury.
Temporary Total Disability Benefits
The temporary total disability (TTD) benefits are calculated as two-thirds of the employee's average weekly wage over the 52 weeks prior to the date of injury, not counting the week of the injury. The maximum amount of TTD benefits that can be paid is $650.00 per week. There is no automatic cost of living increase. The state minimum weekly benefit is $50.
The first 7 days of disability (the waiting period) is not paid to the injured employee unless the employee is disabled for more than 21 days. TTD benefits can be paid for a maximum of 500 weeks
Temporary Partial Disability Benefits
In Indiana if the employee is able to return to any type of work, but at a lesser rate of pay then the amount the employee was earning prior to the injury, the employee is entitled to temporary partial disability (TPD) benefits. The TPD benefits are paid at two-thirds of the difference between the pre-injury wage and the post-injury wage. The TPD benefits are paid for up to 300 weeks. The TPD benefits plus the post-injury pay rate cannot exceed the state's maximum indemnity benefits rate.
Permanent Partial Impairment
It should be noted that Indiana is one of the few states that does not have a schedule for injuries to limbs, sight, hearing, etc. Instead, the treating physician will assign to the employee a permanent partial impairment rating, with the whole body being considered 100 degrees. Limbs and other body parts are worth so many degrees, and then the number of degrees is multiplied by the percentage of disability. The Board maintains a chart that shows what each degree of injury is worth. Interestingly, with this system, the high wage earner does not receive any more than the low wage number when they have the identical degree of injury. However, if the injured employee has already received in excess of 125 weeks of indemnity compensation, the insurer does receive a partial credit against the PPI award.
Permanent total disability
Indiana permits the employee to collect a maximum of 500 weeks of indemnity benefits for all types of indemnity combined, unless the employee is classified as permanent total disability. If the employee is permanently and totally disability, the state’s second injury fund will pay up to 125 weeks of additional benefits after the insurer has paid for 500 weeks.
Death Benefits
The burial expenses in Indiana are covered for a work-related death up to $7,500. The death benefits for a dependent spouse and children follow the same guidelines as TTD benefits – two-thirds of the average weekly wage – currently a maximum of $650 per week, up to a maximum of 500 weeks, except there is a dollar maximum for death benefits in the amount of $294,000. If the spouse remarries, the spouse receives the lesser of 104 weeks or benefits or the remainder of the 500 weeks. (WCxKit)
Vocational Benefits
The employer is not required to pay for vocational rehabilitation under the Indiana workers compensation act. Injured employees who need vocational rehabilitation can obtain assistance through the Office of Vocational Rehabilitation operated by the State of Indiana.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20-50% www.WCManual.com.
Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
Catastrophic injury claims make up less than 1% of all workers compensation claims, but different studies show they entail approximately 20% of all workers comp costs. For the small employer, one catastrophic injury claim can distort the severity factor in the workers comp premium calculations and have a major impact on the workers compensation premiums for years into the future.
Catastrophic injuries are injuries that disable the employee to the extent the employee can never return to work and significantly alters the employee's life in general. Common examples of catastrophic injuries are: (WCxKit)
1. Brain/brain stem injuries.
2. Severe burns over 50 % or more of the body.
3. Spinal cord injuries.
4. Multiple amputations.
5. Multiple trauma.
6. Total vision loss.
7. Occupational lung diseases. (WCxKit)
The eventual cost of a catastrophic injury is very difficult to establish early in the life of the claim. Even the experienced adjuster does not have a crystal ball to determine if the overall cost of the claim is going to be $500,000 or $5 million when establishing the initial reserves on the claim. With catastrophic claims, as additional medical and rehabilitation information becomes available, the reserves are often adjusted by large amounts (6 figures or more) several years into the claim.
To establish the value of the catastrophic injury claim, there are various factors the adjuster considers. While it is the adjuster's responsibility to establish the reserve, the smart risk manager does not leave it all up to the adjuster. It behooves the employer to review the factors that go into reserving to be sure the adjuster is setting the proper reserve and not taking the easy way out by reserving a nice round number like $1 million.
The factors that go into establishing the value of the catastrophic injury claims can be divided into the three areas: indemnity, medical, and claim related expenses. Look for vendors specializing in
Life Care Planning.
Lifetime cost of the indemnity includes:
1. The employee's average weekly wage and weekly indemnity benefit.
2. The time span of the indemnity; does it last for a set number of weeks, (500 weeks), as it does in about half of the states, or does it last a lifetime, or to a set cut off point in the retirement years?
3. The employee's age and projected life span on the actuarial tables.
4. Does the indemnity rate remain the same for permanent total disability as for temporary total disability, or does the compensation rate change?
4. What is the amount of the offset for social security disability?
Medical factors in establishing the value of the claim:
1. The cost of immediate medical care following the injury.
2. The cost of surgical interventions in the first years following the injury.
3. The on-going cost of medical care on an annual basis after the medical status is stabilized.
4. The cost of modifications to the employee's home and current and future vehicles.
5. The cost of institutional medical care.
6. The cost of durable medical equipment (wheelchairs, artificial limbs, hospital beds, oxygen tents, etc.).
Claim handling expenses for catastrophic claims:
1. Nurse case managers.
2. Rehabilitation specialist.
3. Defense attorneys.
4. Actuarial experts. (WCxKit)
The above items impacting the value of the catastrophic claim are not the only factors to consider when establishing the future claim cost. If the insurance company decides to settle the catastrophic workers comp claim, they work with the Centers for Medicare and Medicaid Services (CMS) to obtain approval of the Medicare Set Aside Agreement (MSA). The value of the settlement has to be high enough that the claimant (in theory) never has any future medical cost paid by CMS.
Another factor impacting the value of the catastrophic injury claim is the availability, in some states, of a Subsequent Injury Trust Fund to cover part of the future cost of the claim. Also consider whether or not the insurance company can resolve the claim with a structured settlement and of the future cost of the claim being sold to another insurance company. (WCxKit)
While it is possible to calculate the value of the catastrophic injury claim, keep in mind a catastrophic injury is a major life altering event for the employee. The catastrophic injury impacts almost every area of the employee's life and family. It is a personal tragedy far beyond the financial cost of the claim.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. Shafer is the author of Workers Compensation Management Program: Reduce Costs 20% to 50%. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
One of the best fraud fighting tools is provided by the Central Index Bureau report, a division of the Insurance Services Office. It is known as a Central Index Bureau report, a CIB report, an ISO, or as a claim index. The terminology varies from insurance company to insurance company. Regardless of the name, the CIB is a basic record of the insurance claims filed by an individual. What makes it effective is it is one of the very few areas where insurance companies share information.
Over 90 percent of all insurance companies are members of the ISO Central Index Bureau. Be sure your insurer is a member too. If not, the insurance company may be paying fraudulent claims which will have an adverse impact on workers compensation insurance premiums. (WCxKit)
When one of the employees files a workers compensation claim, the basic information about the claim and the claimant (employee) is obtained. The CIB report will contain the claimant's name, social security number, maiden names, aliases or former names if known as well as address, former addresses if known, occupation, and date of birth. The CIB report will include the accident location, the date of the accident and the alleged injuries. It will identify the type of injury whether it is automobile bodily injury, general liability bodily injury, automobile medical payments or PIP, workers compensation, homeowner's liability, medical malpractice, or a non-occupational disability claim.
The report will identify the medical provider by name and address as well as the lawyer's name and address if the claimant is represented. The report will also contain the adjuster's name, the name of the insurance company (or third party administrator), the insurance company's address, and even the adjuster's phone number. It identifies who the insured is for the insurance company and the insured's address.
Why is all this information reported to the insurance services office on every insurance claim, including property claims? The reason is to protect the insurance company from paying for a prior injury. The claimant's attorney is not going to tell the insurance adjuster that he has previously represented Mr. Bad Luck on his five previous injuries, two auto accidents, one slip and fall, and two workers compensation claims against five prior insurance companies.
Take the example of Mr. Bad Luck. When the workers compensation adjuster interviewed Mr. Luck, he stated he was in excellent health, had never had a real injury before, but now he severely injures his back. The adjuster is alert. She electronically files the Central Index Bureau report. Within 24 hours she receives an electronic report that lists all the information on Mr. Bad Luck, even though his social security number was changed 3 times and his address four times. Suddenly the claimant has selective memory about previous injuries.
In one claim file audit of governmental pool‘s workers compensation claims, the auditor notices the adjuster has received 18 hits (prior injury claims) on one unfortunate employee. The employee was employed 17 years with the same city government during each of the 18 workers compensation injuries. Of the 18 injuries, 14 of the injuries occurred in the first two weeks of November in fourteen different years. It turns out the claimant is a deer hunter, and deer season is the last two weeks of November. Fortunately the claimant always made a fairly quick recovery from various strains and sprains and was able to return to work on the first Monday of each December. The claimant is committing fraud by taking a two to four week leave of absence each year paid for by workers compensation. The employer knew this, and the adjuster knew it too. Why they did not prosecute the claimant for fraud is unknown.
Please note that most adjusters reviewing a case like this will be aggressive about the claim when the claimant is alleging a new injury to a body part that was part of a prior injury claim. (WCxKit)
Injured employees like Mr. Bad Luck above will often change doctors so that they can tell the doctor they have no previous injuries. The smart adjuster will share the information with the medical providers on the claimant's prior injury by obtaining and providing the relevant medical records from the prior medical providers. Also, there is something about the claimant knowing the adjuster is aware of prior injury claims causing many claimants, even those represented by an attorney, to make a speedy recovery.
Make sure the use of Central Index Bureau submissions is a standard part of best practices and is included in your account handling instructions.
A note on being proactive by Attorney Ted Ronca at
medsearch7@optonline.net :
An employer had a bad experience with a carrier that failed to do many investigations with any vigor. The employer became aware that the attitude resulted in a third of a million dollars in unnecessary claim expenses. After that, the employer got a new carrier and a new attitude.
The employer now takes nothing for granted and informs its new carrier of all known prior illnesses, absences, claims, etc. The new carrier is happy for the knowledge and makes sure that leads are followed up. The employer is beginning to see an entirely changed claims landscape, with many claims settling far earlier.
A CIB/ISO search, following up on a tip, often produces far more prior claims than were known or suspected. Obtaining an old claim file (by subpoena) in turn usually finds further refences to even older claims and disabilities. (Card players have a saying: “One peek is worth a hundred guesses”).
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information.
Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
When a work injury occurs most of the time there is no one to blame other than the worker. This could be from lifting too much at one time, trying to work too fast, or from simply doing too much at one time. These types of claims are typically straightforward and easy to investigate. If a person injures their back from repetitive lifting, the lifting of materials is the cause or mechanism of injury. Right? Maybe not.
But what if the injury happened due to some other outside force? Maybe an outside vendor an employer uses from another company is walking through the halls cleaning or waxing the floor and fails to place signs to not walk in that area. And a worker then falls and fractures an arm. So what to do then? (WCxKit)
There are a lot of varying factors and legal issues in the world of subrogation that vary from state to state. But, still it is worth exploring some sort of recovery that can help recoup medical expenses and wage loss paid. Subrogation should be ruled out in every claim, even if it seems the injury was due to simple “employee operation error.” We discuss some of these scenarios below.
First, what is "subrogation"? Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.
1. Slips and Falls
When I receive a new claim from a slip or fall, the first question I ask is where the accident occurred. Let us say this happened in a parking lot of the employee’s work place. Why did the employee fall? Was it snowing? Was the lot plowed and salted properly if the fall was in the winter? Was it plowed previously then more snow accumulated? Did any other employees fall or notice slippery conditions?
This is most important when having an outside vendor that is hired to maintain the outside premises during winter months. If this is the case, then there may be a subrogation claim to pursue. If the outside vendor had a duty to maintain the premises, and failed to do so, then it can be argued depending on the jurisdiction.
Now say that an employee fell in a hallway or in a bathroom. Was an outside vendor onsite to wax or clean the floors and forgot to wipe up some water that the employee then fell in? Was the area roped properly with warning signs? Where were the signs located? Did anyone else see the signs? Again, if a maintenance contract exists with this company, there is a claim to pursue. Winning one of these subrogation claims can mean that the outside vendor pays the employer back expenses to get the worker back to full duty.
I know of employers that choose to use outside vendors for this specific reason — this way they can possibly shift the risk to an outside vendor. Any failure to properly mark areas as being worked on or being “wet” can result in the pursuit of a subrogation claim. The same goes for parking lots and sidewalks. Some vendors will allow employers to list demands for winter care when the need for salting, sanding, and snow arrives. The employer can be as rigid as preferred (with some vendors) and this way if an injury does occur, the expense shifts to the other carrier rather than incurring the total cost of the medical and wage expenses under the employer’s carrier. Every carrier usually has a subrogation unit to pursue injuries such as these.
2. Tripping over something
Did an employee fall over a mat that was not placed down properly? Did a worker stumble and fall due to a rug or placemat that had holes in it or it was not in proper working/functioning order? Again, using an outside vendor to maintain these areas and rugs can help if an injury occurs. These vendors have a duty to properly place the rugs or mats, and these floor coverings have to be in proper working order. Now it can be asked “How can a rug not be in proper working order?” If a rug is down on the floor, it is in working order. But, maybe these rugs are old and worn out in certain areas, and therefore they are not as productive as they should be. They are ineffective for the purpose. Employers use entry and exit rugs and carpets, relief mats in front of machines, anti-slip strips on steps, etc. If any of these are in disrepair or appear in poor shape, and an injury occurs, it could be a subrogation claim. This vendor may be responsible for failing to replace these worn items, again shifting the risk and expense from you the employer to them.
3. Machinery injuries and Mechanical failures
When I have a claim where a person gets injured while using a machine, the manager I talk to about the accident usually says that the employee was not paying attention when the injury occurred. This may be true, but also these machine manufacturers have a duty to design proper, safe equipment to sell to the employer. Sometimes these machines do have design flaws and can lead a person to injury. Maybe there should be a guard in a certain area where there is not one. Maybe a hand can reach an area it should not be able to reach. Maybe the machine does not turn off all the way, even though the switch is turned fully to the off setting. All of these issues can result in injury, and the company that makes the machine can be held responsible. This will involve the carrier bringing in some sort of machine expert, or engineer, but it can be worth the cost. Especially if the injury is a bad one. Typical machine injuries are laceration or crush injuries, and even worse amputations. So the exposure is there. Do not be so quick to point out operator error as the sole cause to an injury involving a machine. The operator may have made a mistake, but the problem may stem from deeper design issues.
4. Vehicle Accidents
In certain states the driver that causes an accident can be held liable. The worker may have been doing nothing wrong other than driving down the road, when another vehicle slammed into the vehicle from behind. Maybe the vehicle that hit the employee’s vehicle is from another company. Even though the van may not be marked as a commercial van, it still could be a business van used for company purposes. Who owns this vehicle that hit the employee? What was the driver doing? Where were they going, and why did the accident occur? Motor vehicle accidents can be nasty as well. If there is subrogation in a vehicle case, a thorough investigation into is definitely worthwhile.
5. Injuries from other vendors on your premises
If a vendor is on the premises conducting normal business, and an injury happens, there could be subrogation potential. Maybe the cart slid away and hit the employee. Maybe a vehicle or other mode of transportation on the jobsite was being used, lost control and hit another worker. Maybe the vendor was unloading supplies in the back area and while stacking boxes the boxes fell and landed on the employee. The subrogation unit will determine if this vendor is responsible for the injury, and they could have to reimburse you, the employer, for the cost to heal an injured worker. (WCxKit)
Summary
Subrogation investigations and claims can come from injuries where employers least expect. Do not be so quick to chalk the injury up to the employee’s error. There could be a lot of other circumstances that caused the injury. Talk with the carrier about subrogation and if the carrier has a unit dedicated to only subrogation investigations and the pursuit of subrogation claims. It can save a substantial amount of claims expense, especially on those severe injuries. Subrogation should be reviewing every injury to see if a claim can be pursued. And every claim pursued could yield the employer some sort of reimbursement from another carrier.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. Rebecca is the author of Workers Compensation Management Program: Reduce Costs 20% to 50%. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
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