The Weight of Some Workers Comp Injuries

According to a report from CDC, nearly 35 percent of Americans are considered obese.

 

The data goes on to show that the estimated annual medical expense due to obesity nationwide was a staggering $147 billion just six years ago. It turns out that medical costs for individuals who are obese were more than $1,400 greater than those of normal weight.

 

Meantime, a report from Florida-based NCCI Holdings Inc. claims that injuries suffered by obese workers often lead to substantially higher medical care and are more likely to become permanent disabilities than likewise injuries suffered by employees who are not obese.

 

“How Obesity Increases the Risk of Disabling Workplace Injuries,” notes the differences in treatment options between a sample of more than 7,000 claims with obesity as a secondary diagnosis and an added 20,000 claims with almost identical demographic characteristics but lacking an obesity diagnosis.

 

 

Obesity on the Rise

 

While you would think health warnings and just commonsense would be enough to have people monitor their weight, that unfortunately is not the case, both in the U.S. and around the globe.

 

The incidence of obesity is expanding globally.

 

Here in America, the incidence of obesity is the largest of all reporting countries and the trend continues without any indication of slowing down. Intuitively, the implications of this trend for workers comp bode problematic.

 

The various medical treatments, expenses and duration are oftentimes, but not always, greater for obese claimants, researchers discovered.

 

In viewing shoulder and arm sprains, the study reports that the obese claim is much more costly as a wide range of treatments including physical therapy and complex surgery that the non-obese claim did not incur.

 

The report went on to state that “Essentially, the non-obese claim had only an office visit, X-ray and drug treatment the day of the injury and a follow-up office visit the next day. In total, the non-obese claim had four treatments, while the obese claim had more than 75. A major cost driver for the obese claim was complex surgery.”

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Ohio Man Must Pay Back More Than $54K

Trying to cheat the workers compensation system in Ohio has led to a fine of more than $54,000 for one man.

 
The Orient (Pickaway County) male was ordered to pay more than $54,000 in restitution in connection with working while receiving workplace injury benefits. Craig Vance pleaded guilty July 24 in Franklin County Court of Common Pleas to one count of workers comp fraud, a fifth-degree felony.

 
“Thanks to an allegation reported to BWC, tens of thousands of dollars will be returned to the State Insurance Fund,” said Bureau of Workers’ Compensation (BWC) Administrator/CEO Steve Buehrer.

 
BWC’s special investigations unit received an allegation that Vance was working while receiving workers comp benefits.

 

Defendant Had His Own Auto Mechanic Shop

 
Multiple undercover operations were conducted, Vance’s bank records were reviewed and several customers were interviewed; these sources revealed that Vance was operating his own auto mechanic shop from his residence while receiving BWC benefits.

 
Vance was ordered to pay $54,030 to BWC.

 
He was also sentenced to serve 11 months in prison, but the prison sentence was suspended for a five-year term of community control with basic supervision.

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Dollars and Cents of Frequency And Severity Work Comp Premium Impact

It is natural for employers to be overly concerned about serious injury losses.  They recognize that the large incurred values will have effect on the experience modification rates set by the state department of insurance.  At the same time little attention is paid to the multitude of smaller claims including medical only cases.

 

 

Need for Concern:

 

A claim worth $50,000.00 will garner everyone’s attention.  It generally has a better investigation.  Medical management will be a top priority. Much effort may go into rehabilitation and vocational programs.  Great attention is given to reserving. Benefit and medical payments are audited.  Employee compliance is strongly monitored.

 

At the same time 10 claims worth $5,000.00 each are given much less attention. The difference between just one claim and ten claims can be significant.  The following example will demonstrate this.  This assumption is based solely to demonstrate the impact how frequency and severity impacts experience modification calculations and its impact on premium.

 

 

Example:

 

Claim # Total Loss One Year Premium Impact Three Year Premium Impact
Claim 1  $           7,500  $           3,661  $         10,983
Claim 2  $              500  $              352  $           1,056
Claim 3  $           9,000  $           3,768  $         11,304
Claim 4  $           3,345  $           2,331  $           6,993
Claim 5  $           4,125  $           2,874  $           8,622
Total  $         24,470  $         12,986  $         38,958
 

Claim #

 

Total Loss 

 

One Year Premium Impact 

 

Three Year Premium Impact 

Claim 6  $       110,000  $         10,815  $         32,445

 

 

The total three year cost of premium for the largest claim, Claim 6, is $32,445.  The total three year cost of premium for the 5 smaller claims, Claims 1-5, is $38,958.

 

 

Unit Statistical Filing:

 

Experience modification rates are determined from the incurred values of all claims in a policy period. These values are reported on Unit Statistical forms to the state insurance department.  They are due six months prior to policy renewal.

 

As an example a policy with renewal effective date of 4/1/2013 must have Unit Statistical reports filed by 10/1/12.

 

States use statistical data for three policy years to determine the experience modification.    This means our example for the 2013 policy also requires unit stat reports for the policies that expired on 4/1/11 and 4/1/10.

 

The insurance broker or risk manager, should begin a claim review 8/1/12.  This review must be based on loss runs for policy periods 2013, 2012, and 2011.

 

 

Conclusion:

 

The frequency of smaller claims can have as much influence, if not more, than large losses or a shock loss.  Experience modification rates are based on claim values reported during the past three policy years.  A claim review must deal with large or shock losses, but is should also focus on the underlying issues and management of the smaller, more frequent claims.  It is important for an employer to understand these points and their impact on workers compensation costs, particularly in a guaranteed cost program.

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Nova Scotia Turns Up Heat on Summer Injuries

Although summer is moving along quickly as usual, officials in Nova Scotia (Canada) are reminding employers to not take their eyes of summer workplace injuries for youths.

 
With more than 40 percent of all workplace injuries for young workers occurring during the summer months, the Workers Compensation Board of Nova Scotia (WCB) reminds young workers and their employers to focus on workplace safety during this peak time.

 
Young workers are five times more likely to be injured on the job in the first month of work and, in 2013, accounted for about 13 percent of all WCB’s registered claims.

 
According to the WCB, of the 3,150 young worker injuries reported last year, more than 1,300 or 40 percent occurred from June to September. Most of these injuries happened in the accommodation, food and beverage, retail, manufacturing, and construction industries.

 
“Injury or death should not be part of any young person’s summer job,” said Kelly Regan, Minister of Labor and Advanced Education. “We want young workers to remain safe and healthy so they can enjoy their friends and family, have fun and gain valuable experience over the summer. The key to that is safety training and for employers and workers to keep safety a top priority at work.”

 
Throughout the summer the WCB is reaching out to young workers with injury prevention information through social media and at community events to help them come home safe.

 
The WCB will also provide employers with new resources to help make safety an ongoing part of the way they do business.

 
QUICK FACTS

 

• Injuries to backs, shoulders and hands are most common in young workers. The majority of these are related to overexertion caused by repetitive motion, lifting heavy objects or working in an awkward position.

 

• In 2013 there were 3,150 registered claims for workers under the age of 25 years, comprising 13% of all registered claims.

 

• Of that number, 624 young workers were injured seriously enough to require time off work, comprising 10% of all time-loss claims.

• 1,337 injuries occurred between June and September and more than half of those (781) were reported in July and August last year.

 

*Based on WCB stats from 2013.

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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The Death of Workers’ Compensation?

On August 13, 2014, Miami-Dade County Circuit Judge Jorge Cueto issued a declaratory order finding the provision of the Florida workers’ compensation law providing employers with immunity from civil liability in work-related accidents to be unconstitutional. Employees in Miami-Dade County are now free to sue their employers any time they get hurt on the job.

 

 

Florida Judge Ruled Workers Compensation Law Unconstitutional

 
Circuit Judge Cueto (who was elected in 2008 and is currently running unopposed for reelection) reasoning for declaring the Florida worker’s compensation law unconstitutional, in his opinion, the workers’ compensation law was not generous enough to fully compensate all injured workers in all situations.

 

 
While the injured employee utilized a local south Florida attorney, the case had been pursued by two outside interest groups for injured employees, the Florida Worker’s Advocates (FWA) and the Workers’ Injury Law & Advocacy Group (WILG). The FWA is located in Tallahassee, FL over 450 miles from Miami. The WILG is located at 2020 Pennsylvania Avenue, Washington, DC (three blocks from the White House). The FWA’s website states they are “an association of attorneys dedicated to protecting the rights of injured workers in Florida”.

 

 
Case Involved Worker Who Tripped Over Boxes Left On The Floor

 
The FWA and WILG picked an extreme case to test the workers’ compensation statute, in a very liberal jurisdiction. The case before Judge Cueto involved Elsa Padgett, a Miami-Dade County government worker who sustained injuries on January 27, 2012 when she tripped over boxes a co-worker had left on the floor. Ms. Padgett, who was already at retirement age, fell on her hip, but sustained a more serious injury to her shoulder. Ms. Padgett had shoulder replacement surgery, but remained in pain and was eventually ‘forced to retire’.

 

Judge Cueto stated the Florida Workers’ Compensation Act no longer provides adequate benefits to injured workers, and therefore is unconstitutional. Prior to Judge Cueto’s ruling the Florida Workers’ Compensation Act required injured employees to seek benefits under the workers’ compensation system. Per the ruling, the exclusive remedy portion of the workers’ compensation act “is no longer an adequate exclusive replacement remedy in place of common law tort”. The Judge further stated “the benefits in the Act have been so decimated {by changes in the workers’ compensation statutes} “that it no longer providers a reasonable alternative” to civil court.

 
Per the Judge’s opinion, the current benefits provided to injured employees are inadequate and the law deprives the injured employees of any other option for seeking relief. Therefore, the Judge felt the Florida workers’ compensation law was unconstitutional as it violated the due process clause of the Constitution.

 

 
Florida Plaintiff Attorneys Licking Their Chops

 

The plaintiff attorneys in Florida are licking their chops. The idea of turning every workers’ compensation claim into a civil lawsuit has visions of yachts and private jets dancing in their heads. Even in cases where the sole cause of an employee’s injury is the employee’s own negligence, the plaintiff lawyers know they can basically coerce employers and insurers into paying civil damages to avoid monstrous legal fees in defending civil lawsuits.

 

For now, only the Florida Eleventh Circuit Court – Miami and Dade County – will consider the ruling as legal precedent. Further litigation is expected. The Judge’s Order in not yet a final order and a motion for rehearing could be pursued. If the Order does become final, an appeal to the Third District Court of Appeals is expected. The Third District Court of Appeals could rule on the question of the constitutionality of the workers’ compensation statute, or the Third District Court could take a pass, and send the appeal to the Florida Supreme Court.

 
If the Florida Supreme Court was to rule the workers’ compensation statute is unconstitutional, legal chaos will probably result, along with many employers facing impossible workers’ compensation premiums. Such a result would force many small employers out of business.

 

 
NCCI Has Suspended Rate Making In Florida Pending Final Decision

 

The National Council on Compensation Insurance, Inc. (NCCI) has suspended rate making in Florida per spokesperson Lori Lovgren. Per the NCCI spokesperson: “at this point we’re just holding and not pricing (Florida) because we need to see if it will be a final decision or not.”

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Washington State Woman Nabbed in Fraud Scam

For one Washington State woman, trying to get away with workers compensation proved a bad call.

 
The Lynnwood woman must repay Washington State more than $200,000 for workers comp benefits she received fraudulently.

 

Sharon Jean Weaver, 64, had claimed she was too disabled to work while operating an adult family home at the same time. She pleaded guilty in Snohomish County Superior Court recently to one felony count of first-degree theft, according to the Washington Attorney General’s Office.

 

Along with being ordered to repay the money to the Department of Labor & Industries (L&I), she was sentenced to 30 days in jail.

 

Defendant Reported Neck and Back Injuries

 

According to court papers, Weaver was a Department of Social and Health Services (DSHS) caseworker when she fell as she left a client’s home, injuring her neck and back in March 2001. She filed a workers comp claim, and began receiving wage-replacement checks from L&I.

 

Two months later, Weaver began operating an adult family home, known as “Rose Manor,” out of her residence at the time in Edmonds, court documents said.

 

According to an L&I investigative report, she listed herself as president and provided various caregiver duties, including transferring patients between beds and commodes, and bathing and dressing them.

 

Weaver received a total of $203,594 from L&I off and on from March 2001 to August 2010 in wage-replacement checks, vocational rehabilitation services and a disability settlement.

 

At the same time she was operating her business, she was submitting official forms to L&I verifying she wasn’t working, and was incapable of working, because of her on-the-job injuries.

 

A physician had been certifying at the time that Weaver’s injuries were serious enough to warrant receiving wage-replacement payments, but later told an L&I investigator that he wouldn’t have done so had he known she was operating the adult family home.

 

DSHS revoked Weaver’s adult family home license in 2011 for several violations.

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Investigating A Work Comp Claim Can Make All The Difference

Investigating a workers’ compensation claim can make all the difference in the outcome of a case.  Claim handlers have a special role that can help resolve cases in a timely manner and at times may need to rely heavily on an investigation firm.

 

 

Why Should I Investigate?

 

Before a claim handler begins the investigative process, it is important to understand there are reasons why they are looking into the claim.  Determining where you are procedurally can make the investigation more cost effective.

 

  1. Mitigating an accepted claim
  2. Defending a Potential Claim;
  3. Identifying Fraud; and
  4. Determining Other Necessary Parties to an Action

 

 

Determining Witnesses

 

Basic claims investigation will also allow you to determine witnesses.  This will include fact or lay witnesses, as well as expert witnesses that may be necessary.  Types of fact or lay witnesses include the following: managers or other supervisors, co-workers, on-site medical personnel, human resources staff, risk and safety managers and witnesses to the incident or injury.

 

Expert witnesses should be used at the discretion of a claims handler.  Expert witnesses charge a fee for their services and may not be needed in all cases.  Types of expert witnesses in a workers’ compensation claim include IME doctors, vocational experts and labor market surveys.

 

 

Other Sources of Documentary Evidence

 

Obtaining additional information about a claim is typically crucial in the early stages of a claim investigation.  It is also important to know the law of the jurisdiction you are in as this will govern your ability to obtain information.  For example, if an employee reports a work injury, claims management professionals are able to request authorizations for medical records.  On the other hand, when a denial is made, the ability to access that same information may sometimes be only made once after a claim is put into litigation.  State workers’ compensation acts and rules also govern employee statements, and access to other information.

 

Here is a list that claims handlers might want to access during a claims investigation:

 

  1. Authorization to obtain various records: medical, workers’ compensation division records, vocational reports, tax records (self-employment or multiple job wage earners), school records and unemployment records
  2. ISO Claims Bureau Search
  3. Maps and charts
  4. Police records
  5. Court records
  6. Medical records, bills and other expenses
  7. Child support obligations
  8. Internet or Social Media research
  9. Unemployment records

 

 

Other Sources of Information

 

It is also essential that the claims professional learns as much as they can about the employee’s work activities with the employer.  In some cases it may be important to do the following:

 

  1. Videotape job site
  2. Videotape employee’s job (common in repetitive movement-type injuries)
  3. Security camera video

 

 

Questions of Admissibility

 

Just because you are able to find information, does not mean that it will be admissible at a workers’ compensation hearing.  In order for a court to review evidence, it must be admissible.  Rules regarding admissibility vary from state to state.  The basic question most courts will ask is whether the evidence has probative value and is not overly prejudicial.  Most states have relaxed rules of evidence in administrative settings.  It is important to consult with an attorney on issues of evidence and admissibility.

 

 

Conclusions

 

Claims management teams are on the front lines when it comes to investigating a claim.  Before handling any claim, it is important for a claims handler to understand what goals they are trying to accomplish and how to complete the task in an effective and timely manner.

 

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

OSHA Fines Ill. Company, Workers Exposed to Hazards

One of the main goals of employers should be to always enforce safety in the workplace. When that does not happen, the consequences can be troubling.

 
Exposing workers to hazardous chemicals and chemical particles recently resulted in Seeler Industries Inc. being cited by the U.S. Department of Labor’s Occupational Safety and Health Administration for 19- including one willful- safety and health violations.

 
The citations carry proposed penalties of $134,400. OSHA initiated an inspection on Feb. 4, 2014, after receiving a complaint alleging hazards at the company’s 3 Rivers Terminal in Joliet, Ill. which provides storage, transfer and packaging services for bulk liquid and dry chemicals.

 
OSHA’s investigation found Seeler Industries did not provide employees with an effective training program, including information on appropriate handling and safe use of hazardous chemicals. The company’s failure to provide this training resulted in the issuance of the willful citation. A willful violation is one committed with intentional, knowing or voluntary disregard for the law’s requirement, or with plain indifference to employee safety and health.

 

Workers Need to Know About Onsite Chemicals

 
“Workers have the right to know what workplace chemicals they are exposed to and to be protected against exposure, which can have severe health effects,” said Kathy Webb, OSHA’s area director in Calumet City. “Mishandling chemicals can result in catastrophic fires and explosions. It is the employer’s responsibility to protect workers from these hazards.”

 
OSHA’s investigation also found that Seeler Industries did not implement engineering controls to reduce employee exposure and failed to label containers with information that identified and warned of the hazardous chemicals contained inside. Workers were exposed to quantities of chemicals greater than the OSHA permissible exposure limit.

 
Other serious violations were cited for failing to provide fall protection, such as guardrails, and a sanitary work environment; follow respiratory protection, respiratory protection standards; and train workers on confined space requirements, the use of personal protective equipment and proper operation of powered industrial vehicles.

 
Other violations included lack of specific lockout/tagout procedures to protect workers operating dangerous machinery and exposing workers to live electrical parts by failing to shut down equipment during service and maintenance.

 
A serious violation occurs when there is substantial probability that death or serious physical harm could result from a hazard about which the employer knew or should have known.

 
Seeler Industries operates 3 Rivers Terminal, a for-hire chemical terminal facility providing services in blending, on-site laboratory, storage, transfer, packaging and shipping to the chemical industry. The terminal has seven truck loading racks and 42 railcar unloading positions. The facility employs about 60 workers.

 
The company was given 15 business days from receipt of its citations to comply, request an informal conference with OSHA’s area director in Calumet City, or contest the findings before the independent Occupational Safety and Health Review Commission.

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Top 10 Excuses For Not Reducing Work Comp Costs

What are the biggest challenges for small, mid-sized and large businesses nationwide today?

 

Yes, competition is certainly a challenge that many face. For others, it is finding and retaining the best employees to get the job done and meet the satisfaction of customers. Still others find challenges in getting their message out to consumers.

 

With that said, reducing workers compensation costs is something that any business owner of any size should never overlook.  Whether a 30% savings for you equals $3,000 or $300,000, there is no reason a business should be overpaying for workers compensation.

 

Among the Top 10  excuses businesses claim for why they have not implemented a program to reduce their workers compensation costs.

 

 

  1. Too costly, something that in reality is a misperception, referring to the cost containment process;
  2. The business is decentralized and its operating units are in fact autonomous;
  3. The company is centralized, thereby making it unable to have any sort of influence on the operating units’ decision-making;
  4. The business is unionized, therefore the union will forbid it from making the necessary changes (in most cases, this is simply false);
  5. A business that is too large (one with an abundant amount of silos, regulation and inflexibility) or too small (too few resources) can’t decrease costs;
  6. The business simply believes it is unable to have a return to work program;
  7. The company believes it is unable to produce modified or transitional positions in its environment;
  8. The company’s management does not back them (bad take in order to achieve commitment);
  9. In fact, the claimant’s (plaintiff) attorneys are the root of the problem, making it imepossible for the company to improve;
  10.  Those businesses based in other countries with U.S. operations claim there is too much litigation in America.

 

At the end of the day, many businesses simply do not have the wherewithal on how to go about decreasing comp costs.

 

In fact, with a little time and effort, many of the roadblocks to reducing comp costs can be turned aside, despite what seems like overwhelming obstacles at the start of a cost containment program.

 

Pick One Strategy And Get Started

 

The best way to go about it is to break down the process into smaller pieces, making it easier to handle over time.  Pick one simple piece of the puzzle like injury response, or return to work and get started.  As the great Zig Ziglar said, “you don’t have to be great to start, but you do have to start to be great!”

 

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

WORK COMP CALCULATOR:   http://www.LowerWC.com/calculator.php

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SUBSCRIBE: Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Understand Your Options For Medical Cost Containment

Whether you run a business with just a handful of employees or one that employs dozens and dozens to hundreds and hundreds, keeping your overall costs down is critical if you are to be successful.

 

As too many business owners have discovered over time, out of control costs lead to a variety of problems, problems that can ultimately put you out of business.

 

One area that you certainly can’t afford to neglect is what you are handing out in workers compensation expenses. From the smallest of injuries when a claim is turned in to sizable ones, keeping your claim costs down should never be overlooked.

 

 

Overview of Medical Containment Strategies

 

In order to be most effective in not letting the medical expense of workers comp get out of hand, employers and insurers are advised to not limit their medical cost containment efforts to only a single or handful of areas. While state statutes might put a limit or bar the use of some of the methods of controlling expense, the employer or the insurer is best served when they utilize as many medical cost containment strategies as possible.

 

All of the following medical cost containment strategies have demonstrated their ability over time to save expenses for the business owner or the insurer:

 

  1. Top medical provider network – This is a group of doctors, hospitals and other medical providers with whom an insurance provider or a self-insured employer has put in place for medical treatment for employees injured on the job – it offers better outcomes than other providers – including decreased rates on litigation and a quicker return to the workplace;
  2. Nurse triage – This is the first phone call placed (following the one to the supervisor). A worker contacts an RN to go over the severity of injury and what form of treatment is best suited. In the event every workplace injury was called in to the nurse triage unit, the amount of lost time claims can decrease by some 40 percent;
  3. Nurse Case Management – This involves the practice of being to deal with an experienced nurse in order to properly oversee the worker’s medical treatment. The goal here is to make sure all treatment is appropriate and provided in a timely manner, allowing for a faster return to work;
  4. Utilization review – This is where there is a review prior to medical care being provided. There will also be concurrent reviews while the worker is hospitalized or during on-going medical care, along with retrospective reviews to verify the needs for the medical services already undertaken;
  5. Medical bill reviews – These are typically handled by businesses specializing in overseeing the medical bill to make sure of the accuracy of the medical bill diagnostic codes and medical bill charges. The medical bill charges will either be compared to the state fee bill schedule or with what are reasonable and customary charges for the medical services that have been provided. Medical bill reviews will include both the audits of doctor bill and hospital bill auditing;
  6. Pharmacy benefit managers – These are the businesses specializing in managing and maintaining cost control for medications prescribed for the employee. This will include both receiving discounts on medications plus providing drug utilization reviews to prohibit the over use of narcotics and other medications;
  7. Independent medical exams – These take place when the employee is sent to another medical provider for another opinion. In many cases, independent medical examinations are undertaken when the employee’s medical recovery progress is slower than normal;
  8. Peer reviews – This involves transmitting the medical data and diagnostic reports to another medical provider for a review of the medical information. This allows for confirmation of the appropriateness and quality for the medical care being provided;
  9. Analytics - The era of computers has made available the use of technology to receive information that would not otherwise be available. This includes predictive modeling to see which claims will likely be more costly, data mining for identifying high-cost medical providers, and benchmarking to allow you to compare your expense control results to those of other employers or insurance companies.
  10. Field Case Management: A field base nurse case manager is a case management nurse working in the field rather than in an office. The nurse meets with employees in their home, helps to devise treatment plans, early return to work, and case closure.
  11. Medical Advisors & Medical Directors: A medical advisor’s duties include reviewing claim files, clarifying medical information with treating physicians, attending file reviews, and discussing claims with adjusters.  They comment on the nature, mechanism, length, and magnitude of the injury.
  12. Chiropractic Care: A chiropractic phyisician is a spinal health care expert that triages and treat injured workers with neuromusculoskeletal injuries. They can improve workers compensation injury outcomes, reduce the burden of chronic illness and reduce overall health care costs.
  13. Mental Health Registered Nurses: Mental health reviews attempt to improve overall wellness of injured employees where there is a psychological component causing delayed claim resolution.  Nurses look for ways to improve psychological and social functioning of the employee can return to work.
  14. Chronic Pain Programs: Medical professionals review files meeting criteria to determine what can be done to move forward claims with chronic pain.
  15. Durable Medical Equipment: Durable medical equipment is reusable equipment for use in the injured employee’s home.  Having the DME is part of an overall home healthcare plan.
  16. At-Home Recovery Services: At-home recovery costs are a fraction of recovery in a acute care hospital or nursing home.  Home healthcare is a crucial tool in managing severe injury claims.

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

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