Poor Workers’ Comp Claims Handling Costs You Money

Each year you receive your bill for the next workers compensation policy year, and for many of companies, each year the bill is higher than the previous year. As you think about your work comp claims, you realize the claims for the current year were not any worse than they were for last year, or the year before. So why does your workers’ compensation premium bill keep going up and up?

 

When the underwriter at the insurer looks at calculating your premium, they use what is known as an experience modification factor. This factor is a calculation used to raise or lower your premium based on the loss experience your company has had. If the loss experience has improved, the premium charged to your company goes down. If you have had more claims than before or the claim cost has gone up, your premiums go up.

 

The loss experience is based on two factors, frequency and severity. The insurance company does not control frequency of claims, your company controls frequency through how well you manage the safety program. As you think back to the previous years, you think “wait a minute, our safety program is working, the number of claims has declined, so why has my premium gone up?” The answer is the other part of the experience modification factor – the severity of the claims.

 

 

Claim Cost Not Discounted Due to Poor Handling

 

There is one thing your insurance broker and your workers compensation insurer will never tell you about the cost of your workers compensation premium. If they do a poor job handling the claims, and spend more money than necessary due to a failure to properly investigate or to return the employees to work, you get to pay for their incompetence. The underwriting department does not discount the severity factor because the claims office did a poor job.

 

If your next thought is: “I’m no expert on how to handle work comp claims, so how would I know if the claims office is doing a good job?  There are ways you as the employer can gauge the effectiveness of the claims office.

 

 

Report Claim Immediately

 

The first thing the employer can do to reduce the severity of the claims is to report them to the claims office immediately. There have been numerous studies that show the longer the delay between the time of the accident and the adjuster contacting the employee, the higher the overall cost of the claim. By reporting the claim to the claims office immediately, you have reduced the amount of time between the accident and the adjuster contacting the employee.

 

Normally when the adjuster contacts the employee, the adjuster also contacts the employee’s supervisor or manager to verify the facts of the accident. If you have a claims coordinator, have the claims coordinator keep track as to when your company hears back from the work comp adjuster. If you do not have a claims coordinator, have the person who reported the claim to the claims office keep track of when you initially hear back from the adjuster. Same day contact from the claims adjuster is best, next day contact is acceptable.

 

 

Sign Adjuster Not Investigating Claims 

 

If your thought is: “We never hear from the adjuster after we report the accident,” that is a major sign that the adjuster is not investigating the claims. If the adjuster is not properly investigating the claims, you as the employer pay for it in your experience modification factor when claims that should be denied are paid, or claims that are fraudulent are paid.

 

There is a sure-fire way the employer can know if the adjuster was in contact with the employee the day the claim was reported to the claims office (or at least the next day). Pick up the telephone and call the employee. Ask the employee how the initial doctors office visit went and what the doctor thinks the employee’s prognosis will be. Then an “oh, by the way, have you heard from the insurance adjuster yet?” will quickly tell you if the adjuster has made timely contact with the employee. Do this on ten claims in a row and you will soon know if the adjuster is giving your claims the proper initial claims handling. [Bonus – by contacting the employee you show the employee that the employer does care about their well being, which builds rapport with the employee, and diminishes the chances of the employee hiring an attorney].

 

 

Lowest Price Often Precludes Service

 

Another definite tip-off that the adjuster is or is not handling the claims properly is when the adjuster calls your office trying to arrange modified duty so the employee can return to work.  If in the initial contact from the adjuster you are asked what light duty assignment you can provide the employee, you have an adjuster who is thinking about how to get the employee back to work, which lowers the amount of indemnity payments and the overall cost (severity) of the claim. A good adjuster will continue to explore light duty return to work until the employee is back at work. A poor adjuster will never ask about light duty return to work and will just pay the employee indemnity benefits until the doctor states the employee is fully recovered. When you bargain for lower-priced TPA or insurance claims adjusting services, consider that you want the adjusters to have the resources to DO this work, and offering the lowest possible price may preclude that  – no matter what they say at the official presentation.

 

An easy way to get your work comp adjuster(s) on the ball in their claim handling is to ask for a copy of their service standards (Best Practices) for workers compensation. Advise the adjuster(s) that you will be reviewing your files to see if they are complying with the Best Practices. If by chance you are told they do not have a set of service standards, it is time for you to talk to your broker about finding another insurance company who is concerned about doing a quality claims handling job.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Medicaid Recovery Rights – What You Need to Know

It’s been characterized as “almost unintelligible to the uninitiated,”  and it’s about to further complicate things in the workers’ compensation system. As of October 1, state Medicaid programs are allowed to assert a full recovery against all amounts paid to a claimant.

 

We can most likely expect states to ramp up their reimbursement efforts for affected workers’ compensation claims. It means if you haven’t paid much attention to Medicaid’s secondary payer recovery rights, it’s time to start.

 

 

Medicaid

 

Similar to Medicare, Medicaid provides healthcare to certain Americans. But unlike Medicare, Medicaid involves both the federal and state governments — think workers’ compensation with some federal oversight.

 

Here are some of the specifics of Medicaid:

 

  • Expansion. It was created by Congress to provide healthcare to the disabled and those living in poverty, but was expanded under the Patient Protection and Affordable Care Act. Just about anyone under 65 who has a household income under 133 percent of the federal poverty level is now eligible.
  • Quasi-federal/state program. States administer eligibility and claims processing functions, while the federal Centers for Medicare & Medicaid Services (CMS) oversees state compliance with federal Medicaid rules.
  • Voluntary. The voluntary program allows states to determine how to address the needs of their own populations; but they must adhere to rules established by CMS in order to receive some federal funding for the program.
  • Needs based. Unlike Medicare, which is an entitlement program generally available to anyone over 65 and/or disabled, Medicaid is based on a person’s income level.

 

 

Secondary payer

 

Like Medicare, Medicaid is designed to be the payer of last resort and its interests are supposed to be considered in settlements. However, court decisions over the years have limited reimbursement to only the amount designated for medical care, something not typically identified in workers’ compensation claims. That’s made it more difficult for states to go after settlement money. Until now.

 

The October 1 change allows Medicaid programs to go after the entire settlement of program beneficiaries. Just as Medicare has the right to recover conditional payments made from settlement amounts, Medicaid will likewise impact claims resolution. In fact, one of the federal government’s Medicaid requirements has been for states to seek reimbursement from third party sources. The October 1 change simplified that process — at least, for Medicaid agencies.

 

 

Workers’ Compensation

 

Because Medicaid programs are administered by states, every jurisdiction has a different set of laws and regulations — similar to workers’ compensation; and Medicaid recovery rules also vary from state to state. That fact complicates the situation for employers that operate in multiple states, as they try to determine Medicaid’s rights of recovery.

 

What the change will mean for workers’ compensation is something of a mystery at this point, at least in terms of the specific steps to consider Medicaid’s interests in settlements. Many questions need to be answered, such as reporting requirements, compliance and repayment.

 

One issue that further complicates things is the fact that recovery for Medicare and Medicaid are not mutually exclusive; each must be considered at settlement. Estimates are that roughly 20 percent of Medicare beneficiaries also collect benefits from Medicaid programs.

 

In anticipation of the rule change, states began the process of implementing strategies to identify Medicaid beneficiaries who receive workers’ compensation. Many state Medicaid agencies have implemented reporting requirements through data exchange programs and registries.

 

Rhode Island, for example, established the Medical Assistance Intercept System and requires all insurers operating in the state to participate. The program electronically matches Medicaid recipients with liability and workers’ compensation insurance claims. It is designed to intercept payments of $500 or more for reimbursement to the state’s Medicaid program.

 

 

What to Do

 

  1. Proactively monitor developments. Watch for CMS guidance, for example to understand how best to comply with reporting requirements and compliance.
  2. Understand state laws. It’s important to stay abreast of Medicaid recovery statutes and case law in each jurisdiction in which you do business, since each one has a unique system.
  3. Identify Medicaid beneficiaries and those who will be, among your claimants, and report them to your state’s Medicaid agency.
  4. Don’t forget Medicare. The rule change for Medicaid has no bearing on Medicare, so procedures for considering its interests should remain the same.
  5. Carefully read any correspondence you receive from CMS and/or state Medicaid agencies.
  6. Adopt best practices. Work with your attorney(s), carrier and claims managers to develop a plan to consider Medicaid’s interests in claims.

 

 

Conclusion

 

Medicaid has always been a payer of last resort when other sources of funding are involved. The change in language as of October 1 will likely lead states to become more aggressive in seeking recovery in claims involving Medicaid beneficiaries. It’s important to stay up to date on the very latest developments to ensure you are in full compliance.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Selecting the Relationship to Make or Break Your Workers’ Comp Program

 

What do you call the person who graduates at the very bottom of his class in medical school? That question was posed to me by a friend of mine in college, particularly after he didn’t do so well on one of his exams. But he would say Mike, you call that person doctor.

 

 

All Doctors Are Not Created Equal

 

Hello, I’m Michael Stack, CEO of AMAXX and while it’s somewhat of a funny question, the answer is one 100% true. It doesn’t mean that I want to go see that doctor, doesn’t mean that you want to go see that doctor, it doesn’t mean that you want your injured employees to go see that doctor either. There’s a common misconception, particularly among American consumers, that all doctors are created equal. We know with complete certainty that that statement is just not true. The message and the doctors that you’re working with can make or break the success of your work comp program. While there are some states that are employer directed states, other states that are employee directed states, and even now there’s others that are a blend of the two. You need to have this physician relationship that can help drive the success of your program. Drive the success of your return to work program and create those better outcomes for your injured workers, thus costing you significantly less in work comp costs.

 

 

Characteristics of Ideal Company Physician

 

I want to go over some of the characteristics that you want to be looking for in that company physician relationship and also some of the ones that if you currently have them, that you need to think about getting a new physician relationship. Let’s talk about what these characteristics are. First you want that physician to be responsive. You want him or her to be caring, willing to spend extra time with your injured employees, with some of the additional paperwork that’s required in work comp, and of course, you want that person to be highly qualified and versed in the best practices of evidence-based medicine.

 

 

Let’s unravel these a little bit. Talk about the extra time that’s required in Workers’ Comp as compared to group health. There’s some physicians that are just not interested in that. You need to find the ones that are. You need to find the ones that are specialized in occupational medicine and willing to have this responsive and caring attitude towards your injured workers. We know how important trust is, in order to predict the outcome for your injured workers. That’s true with the employer’s site, that’s true at the medical provider level as well. You want that doctor to be able to come out to your employer site. Hold a health fair. Get to know your employees. Build that relationship, build that trust, and also understand those job descriptions.

 

What are the functional requirements of the job, so when that employee goes to see that physician, you can get those medical restrictions and you can make them very specific in order to feed that person right into your transitional duty program, which is so key to the success in the recovery of that injured worker.

 

 

What NOT to Look for in Company Physician

 

Let’s talk about the other side of this coin. One caution that I often see. If you get this highly qualified doctor, well versed in evidence-based medicine, big reputation in the industry, you’re often also going to get an arrogance from that particular doctor. That person will be unresponsive because him or her will have no time and no interest in working with you in your program, providing you the restrictions. Filling out your workability forms, feeding into your return-to-work program and just unwilling to come out to get to know your employees and your organization. It’s such a symptom of this arrogance. They also may have a biased approach and be inflexible in being creative in getting those restrictions and helping your employees get back to work in a timely fashion.

 

This type of physician, and this bias is also a big one, either from the employee side or the employer side as well, because this is how you get the reputation of, “Oh, I’ve got to go see the company doctor and I’m just not going to be treated fairly.” You’ve got that going against you right out of the gate. But if you have that doctor that has that caring attitude, is willing to spend that extra time, you are going to be putting your program on the path to work comp success.

 

Again, I’m Michael Stack, CEO of AMAXX. Remember your work today, and Workers’ Compensation can have a dramatic impact on your company’s bottom line, but it will have a dramatic impact on someone’s life. Be great.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

11 Red Flags of Workers’ Compensation Fraud

As an employer, you must be vigilant in your efforts to protect your company from the few employees who do commit workers compensation fraud.   Adjusters often refer to possible fraud in a workers comp claim as looking for “red flags.” A “red flag” is anything standing out from the ordinary.

Any one of the items on the following list of “red flag” do not prove a workers comp claim is fraudulent. However, if you have several “red flag” on a single claim, it’s a good idea to consult with both the adjuster and the SIU unit about the claim.

 

 

11 Red Flags of Workers’ Compensation Fraud

 

  1. Late Reporting
    1. If an employee is really injured on the job, it is unlikely the employee will wait days or weeks to report the injury.
  2. Accident Details
    1. The accident details are sketchy, vague or fuzzy.
    2. The employee has difficulty in recalling what happened.
    3. The employee changes the description of the accident when inconsistencies are pointed out.
    4. The nature of the injury is not consistent with the nature of the work done by the employee.
    5. The date, time and location of the accident is unknown or forgotten.
    6. The accident details are inconsistent with the employee job duties.
  3. More Than One Version of the Accident
    1. The employee gives completely different versions of the accident to the employer and the adjuster and to the doctor.
    2. The employee keeps modifying the story of what happened.
    3. The employee leaves out pertinent information.
    4. The accidents details vary from medical report to medical report.
  4. Witnesses
    1. There are no witnesses to the accident and the employee normally works around other people.
    2. There are witnesses but their version of the accident differs from the employee’s version of the accident.
    3. The accident occurs at a location away from where the employee would normally be working.
    4. The nature of the injury is unusual for the employee’s line of work.
    5. The employee’s co-workers express doubt that the accident occurred.
  5. Unhappy Employee
    1. The employee is disgruntled about some aspect of his/her job requirements.
    2. The employee was demoted or passed over for a promotion.
    3. The employee is on the list to be laid-off.
    4. The employee is on “positive improvement needed” status and is about to be terminated.
    5. The employee has had numerous prior employers.
    6. The “accident” occurs immediately prior to a strike, plant closing or the end of seasonal employment.
    7. The employee is a new hire.
  6. Monday Morning Claims
    1. The employee has an early Monday morning accident before the supervisor or other employees see him on the job (accident occurred off the job over the weekend).
  7. Injured Worker is Never at Home
    1. The injured employee is not at home during the normal workday.
    2. The employee is always sleeping when the adjuster calls or cannot be disturbed.
    3. The employee’s family member is vague or noncommittal about when you can reach the employee.
    4. The employee is “away” but quickly returns all calls from a cell phone, not the home phone.
    5. The employee uses the address of friends or family members and has no definite address or uses a Post Office box as an address.
    6. The spouse or other family members do not know about the workers comp injury.
  8. Financial Reasons
    1. The employee’s spouse is not working and drawing workers comp indemnity benefits, social security disability payments, welfare or unemployment insurance and the  employee wants the same life style.
    2. The employee inquires about a settlement early in the claim process.
    3. The employee was having prior financial problems.
    4. The employee is nearing retirement age.
    5. The employee files for benefits in a state other than where the accident occurred.
    6. In the states where an employee can collect workers comp indemnity benefits based on the amount of combined wages from both the workers comp employer and a second job employee.
    7. The failure to report other work income while drawing indemnity benefits.
    8. The employee took excessive time off just prior to the injury.
    9. The employee is in the middle of a divorce or other family disturbance.
    10. The social security number used by the employee belongs to someone else.
    11. The employee applies for Social Security benefits before the injury occurs.
    12. Income from workers comp, disability or other sources exceeds the employees prior after tax income.
  9. Medical Care
    1. All the injuries are subjective — pain without trauma, soft-tissue, emotional.
    2. The employee changes doctors frequently “doctor shopping” or changes doctors when released to return to work.
    3. The employee has excessive treatment for soft-tissue injuries.
    4. The medical treatment reported by the employee is different from the medical care stated in the medical reports.
    5. The nature of the medical treatment changes from one body part to another after the employee has been treating for a while.
    6. The employee misses medical appointments.
    7. The employee fails to show up for an independent medical examination.
    8. The employee refuses or delays diagnostic testing.
    9. Whiteouts, corrections, erasures on medical forms submitted by the employee.
    10. Exaggerated pain symptoms.
    11. The employee has a history of multiple workers comp claims and/or reporting subjective claims of injury.
    12. The injury relates to a preexisting medical condition or health problem.
    13. The medical reports provided by the employee appear to be second or third times photocopied.
    14. The length of recovery is excessive for the nature of the injury.
  10. Inconsistent Physical Ability
    1. The employee who has been off work for a while has calluses on hands or grime under the fingernails
    2. The medical reports reflect “muscular” “tanned” or other adjectives to reflect the employee is in good health.
    3. The employee is unable to work due to the injury but is seen painting his/her house, mowing the lawn, carrying heavy objects, etc.
    4. The employee has a high-risk hobby or does other physical exertion activities.
    5. Surveillance reflects physical activity greater than what is reflected in the medical reports.
    6. You learn the employee is working elsewhere while drawing indemnity benefits, especially where the work requirements exceed the capabilities reflected in the employee’s medical reports.
  11. Miscellaneous Red Flags
    1. The employee is unusually pushy to settle the workers comp claim
    2. The employee has extensive medical knowledge but no training in the medical field, or has extensive insurance terminology but no work experience in the insurance field.
    3. The employee was referred by a friend who name he does not know to a particular doctor or attorney.
    4. The employee is a part of a group of employees using the same doctor and the same attorney for their workers comp injuries.
    5. The attorney’s letter of representation is the same day of the injury or even dated before the “injury.”


Summary:

Remember, even if the employee’s claim has every one of these “red flag,” it still does not prove fraud. However, if the work claim has more than one of these “red flag,” you definitely want to bring in a fraud investigator to delve deeper into the claim. The more fraudulent claims you identify and deny, the lower your overall cost will be for workers compensation insurance.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

 

Employers Do Not Save by Skimping on Translation Service

We often don’t focus on translation services until we need one, then it’s too late to shop for one that’s right for you. So, learn a little bit about this type of service now.

 

Language Translation is another expense often overlooked by claims adjusters and/or nurse case managers. Using the services of a translator can drastically improve the claim expense cost, especially on larger work comp claims. Employers do not save money by skimping on translators and here’s why.

 

  • If your company has immigrant farm employees, New York City cab drivers or any other type of worker where English is not the worker’s native language, you can expect your claims adjuster to have a more difficult time handling the work comp claims.

 

  • It is also difficult for medical providers to provide appropriate medical care if the employee is unable to communicate with the medical provider.   If the employee has a relative proficient in English, the relative can act as in interpreter for the employee at the medical appointments.

 

  • If the employee has no one to bring to the medical appointments, a professional interpreter is needed, one who can communicate across both language and cultural barriers. By providing the employee with clear and accurate directions from the medical provider, recovery time is minimized.

 

  • A case can also be made for the employer to control the translating process to be sure information is given and received without a personal interpretation, as might be the case when using a friend or relative.

 

  • An interpreter is needed for the adjuster to conduct a proper investigation of the work comp claim. The interpreter assists the adjuster with the initial interview of the employee, the translation for a recorded statement if needed, the on-going communications with the employee, and if the work comp claim becomes contested, the translation of the deposition.

 

Use a translator/interpreter in these circumstances:

 

  • Translating medical reports for either the employee or the adjuster.

 

  • Translating directions on prescriptions for the employee.

 

  • Letters to or from the employee.

 

  • Communication between the employer’s work comp claims coordinator and the employee.

 

  • Arranging for return to work by the employee to either full duty or modified/light duty.

 

All employees are fearful about the future when they have a work comp claim. The work comp adjuster has a higher hurdle to overcome when unable to communicate with the employee. The use of a professional interpreter can keep the claim under control and the overall cost of the claim down.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

The Most Common Work Comp Mistake to Disincentivize Return to Work

 

Hey there. Michael Stack here, CEO of Amaxx.

 

So, we all make mistakes, right? None of us does everything perfect all the time. I want to share a real quick anecdote story of a mistake that I made, and relate it to how it could work in your work comp program.

 

Set Up For Failure From the Beginning

 

So, about a year ago, my family and I moved up to Maine, and the way the housing worked out, we did a short term rental to allow us time to find and purchase our house. Everything ended up working out great, but the way that we were treated throughout that short term tenancy by the managing brokerage agency as well as the owners of the property was just inappropriate. It’s just not the way you treat people in that situation. We knew based on their behavior that collecting our security deposit, not that it was an overly huge amount of money, we’re talking about $1,000 here, not insignificant but it’s not gonna change the world. But the way that they acted, the principle, was significantly more important than the money.

 

So, there’s certain laws in the state of Maine that they didn’t follow, along with the behaviors that they demonstrated, and I knew it was going be difficult to collect. So, I had to file small claims suits against them to collect that money based primarily on the principle. Come to find out that I made a mistake in filing that claim. I filed it against the brokerage agency as agents of the owners of the property, and according to the judge, I should’ve filed it against the brokerage agency joint and several along with the owners of the property. So, that was my mistake. I was set up for failure right from the beginning of that case.

 

 

‘Grossing Up’ & Wage Continuation Common Mistake

 

Same thing happens all the time in your work comp program, and that may be happening right under your nose without you even realizing it. So, I want to give an example of one of the common mistakes that I see, and this is either grossing up an employee’s salary, an injured worker’s salary, to 100%, or just payment of 100% in lieu.

 

So, let’s see what this exactly looks like. So, let’s say it’s 66 and two thirds in your state, or whatever the specific percentage is. So, instead of that employee getting $663, you gross him up to $1,000, or you don’t even file a claim at all, and you continue to pay them their $1,000 a week salary. The concept there, and the reason that you do this type of policy, is based on a very positive ideal. The fact that you want to take care of your employees.

 

Set Your Work Comp Program Up For Unnecessary Challenges

 

But here’s what’s happening right under your nose and you’re setting yourself up, just as I did, for failure right out of the gates. This $663 is not taxed. It’s work comp indemnity payments, and so when you’re grossing up that employee, they’re making more money being out of work than they are at work. Every one of your employees isn’t gonna be impacted by this type of policy. But certain employees, with certain psychographic financial situations, various things that they have going on, the relationship with the employer, this type of policy will dramatically impact their motivation to return to work. It’s a mistake that I see very often that sets risks managers up for failure right out of the gates, making it just that much more difficult to be successful.

 

So, I encourage you to take a look at your policy. Take a look at what it says in regards to this type of financial arrangement, and if you have something similar, I would take a serious look at changing that policy to be more appropriate to get a better outcome for your injured workers, and then obviously have a much more dramatic and positive effect on your company’s bottom line.

 

Again, I’m Michael Stack, with Amaxx, and remember your work today, it can have a dramatic impact on your company’s bottom line. But it will have a dramatic impact on someone’s life. So, be great.

 

For more detail, check out: How to Avoid 19 Workers’ Comp Mistakes & Loopholes

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Super Spending: Caring for People Whose Needs are Greatest & Other Top News Tidbits

Telehealth Now Offered for CareGuard Members

Ametros has announced their partnership with Kura MD to offer online telehealth services to expedite access to medical care for workers’ compensation injuries. As part of its CareGuard professional administration service, Ametros is now offering its members the opportunity to virtually consult with a physician via a secure video consultation from a Smart Phone. Tablet or PC without having to leave their homes.

 

 

Broadspire’s Erica Fichter Named In Business Insurance 2017 Women to Watch

Business Insurance on Thursday announced the honorees for its 2017 Women to Watch awards.

Business Insurance started the Women to Watch awards program in 2006 to recognize women leaders doing outstanding work in risk management and commercial insurance.

This year, the publication expanded the program to include separate awards for nominees in Europe, the Middle East and Africa. The Women to Watch EMEA winners were announced last week.

 

 

Alleviating the Workers’ Compensation and Disability Management Process

The workers’ compensation and disability management process can be complicated for both employers and their workers. In this Ringler Radio podcast, host Larry Cohen and co-host, Duke Wolpert talk about creating a seamless process with founder and President of Risk Acuity, LLC, Barry Thompson, a leader in workers compensation program improvement and cost containment.

 

 

Super Spending: Caring for People Whose Needs are Greatest

In the most recent edition of our report, Super Spending: U.S. Trends in High-Cost Medication Use, we learned that nearly 0.3% of members in our analysis had annual medication costs at or greater than $50,000 in 2016, a 35% increase from 2014 when we last looked at this population in depth.

Statistically speaking, we’re all on a first-name basis with at least one person who relied on $50,000 or more worth of prescription medications last year. These are our relatives, our friends and our colleagues with complicated illnesses and special treatment needs. The population of people with extraordinarily high medications costs is becoming less rare at a very fast pace.

 

 

New Commercial Repayment Center Contractor on the Horizon; WCRC Contract Protested

A recent press release from the Performant Financial Corporation announced it has been awarded the Commercial Repayment Center (CRC) contract by the Centers for Medicare and Medicaid Services (CMS). Barring a bid protest, we expect a transition to the new CRC contractor over the next few months (CGI Federal’s contract, the outgoing CRC contractor, appears to run through 1/8/2018).

 

 

Ladder Safety on the Job

Falls happen when you lose your balance. Standing on makeshift supports and using ladders incorrectly can cause you to fall. Using the wrong equipment for a task can also increase your chances of being hurt. Watch for hazards: Makeshift supports. Makeshift supports are never quite right for the job. If you stand on top of a trash can or chair instead of a stepstool or ladder, you increase your chances of falling and hurting yourself. You should never make a short ladder taller by putting something under the legs. And you should be careful not to overreach, which can shift your center of gravity and cause you to lose your balance.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

 

16 Red Flags of Violence in the Workplace

While murders in the workplace make the six o’clock news, injuries due to physical assault in the workplace are much more common. Violence in the workplace is not a new issue but continues to be an issue far greater than many employers recognize.

 

Workplace violence is not limited to prison guards and police officers. It can occur in almost any business.   Injuries due to disgruntled employees, mentally unstable employees and aggressive employees can cost the employer significantly in workers’ compensation cost, as well as reducing the morale of the work force.

 

  

Employers & Employees Have Responsibility

 

Both employers and employees need to recognize that a safe work environment is everyone’s responsibility.   Employers need to train their employees on how to recognize an unsafe situation when it relates to their co-workers. Employers should stress to their employees that workplace violence does not “go with job” and they do not have to “put up with it.” Employees need to bring to management’s attention any abnormal behavior of co-workers who threaten to harm, attempt to harm or cause harm to a co-worker, a supervisor or management.

 

Employers and employees need to recognize the red flags of potential workplace violence. Most violent employees behave in a way that cause their co-workers and employer to be concerned prior to a violent act. Some of the red flags employers and co-workers should notice include:

 

  1. Prior history of violent behavior.
  2. Making threats, either verbal or physical.
  3. Unexplained mood changes.
  4. Screaming, yelling or making a fist.
  5. Expressing homicidal or suicidal thoughts.
  6. Holding a grudge against a supervisor or co-workers.
  7. Blaming all things that go wrong on co-workers, supervisors or management.
  8. Expressing a feeling of loss of control within his/her life.
  9. A history of domestic abuse.
  10. Being obsessed with weapons or carrying a weapon (weapons should never be permitted in the workplace).
  11. Being a loner with no involvement with co-workers.
  12. Having paranoid behavior or making statements that reflect paranoid thoughts.
  13. Having an unwanted romantic interest in a co-worker.
  14. Abuse of alcohol, illicit drugs or medications while off the job.
  15. Abuse of alcohol, illicit drugs or medications while on the job (should be grounds within your safety program for immediate termination).
  16. Having extreme financial problems or extreme family problems.

 

 

All Employees Understand Red Flags

 

All employees should know what is considered a red flag for potential violence and should feel free to report their concerns without fear of any reprisal from their supervisor or management. Once a red flag is recognized, proper risk management requires a plan to reduce the potential risk of violence. The employer should assess and document both objective and subjective behavior of the employee who is causing the concern.   If procedures are already in place to deal with the situation, they should be followed.

 

If an employee feels there is a risk of violence, the employee should notify the immediate supervisor at once. The employee’s supervisor should take appropriate action when a red flag for violence is brought to their attention. If the supervisor does not take the appropriate action, then the employee should follow the chain of command until management takes protective measures to ensure employee safety.

 

 

Workplace Violence Not Limited to Employees

 

Workplace violence is not limited to employees. Often estranged domestic partners or estranged lovers will strike out at the partner while the partner is at work. People who deal with the general public like convenience store cashiers can be subjected to violence. Terroristic acts by disgruntled former employees or disgruntled customers can be the cause of workplace violence. In some metropolitan areas gang related activity can invade the workplace.

 

A part of your safety program should address the access to the work site by non-employees. Your employees should know what the protocol is for non-employees to be admitted to the workplace. Any deviation from the established procedure should be immediately brought to the attention of management.

 

Employers can further steps to reduce the potential of violence including the installation of alarm systems; the arrangement of furniture, cubicles or machinery to prevent employees from being trapped; the use of escorts; and, the use of cells phones to request assistance if needed.

 

Your safety program for your company should have a written policy on preventing workplace violence. The written policy should have zero tolerance for workplace violence and zero tolerance for the threat of violence, either verbal or physical. While all workplace violence cannot be eliminated, the employers who have a workplace safety program with a section on preventing violence will achieve a significant reduction in work place injuries due to violence and a reduction in the severity of the injuries due to workplace violence.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

 

 

 

7 Steps to Manage Occupational/Environmental Exposure Claims

You want to make sure your injured workers get the benefits they need to recover and get back to work. At the same time, you don’t want to waste money on a claim unrelated to the workplace. That can be especially tricky when an occupational/environmental exposure is involved.

 

Injuries caused by toxic substances in the worker’s environment may not be immediately apparent to the employee; or the cause may not be easily identified. It’s important to take all necessary steps to determine if, and to what extent your workplace caused the employee’s illness.

 

 

What Are Occupational / Environmental Exposures?

 

Occupational/environmental exposures that pose a risk include chemical, physical and biological substances and can enter the body through breathing, skin exposure or ingestion.

 

Examples are:

 

  • Fumes, such as those from diesel vehicles.
  • Airborne materials such as coal dust.
  • Infectious materials, including those found in the blood or bodily fluids of infected patients.
  • Drugs used in cancer treatment and medical research.
  • Materials used in construction.

 

Workers especially at risk include those in health services, fabricated metal products, rubber and plastics products, textile mills, machinery, transportation equipment, and electrical or electronic equipment.

 

 

Considerations

 

When an employee (or employees) report an illness they believe was caused by exposure to something in the workplace, there are several issues to consider.

 

  1. Safety and risk. First and foremost, you want to get the affected employee(s) out of harm’s way. That may require more or better ventilation or even temporarily moving the employee(s) to a separate area.

 

  1. Number of employees. If multiple employees report similar symptoms, chances are there is a problem that needs to be addressed immediately. For example, if a work area has undergone painting, cleaning or had carpeting installed and multiple employees report breathing problems you need to address the concern ASAP. If a single employee is having issues, there may be something unique about the area where that employee spends time, or substances he works around. He may be having an allergic reaction, or have a low sensitivity threshold. You need to investigate to try and determine the cause.

 

  1. A diagnosis from a medical provider can give you clues to the problem, if there is one. If the employee(s) has seen a physician and has a diagnosis, determine whether the type of exposure associated with it is present in your workplace. If it is, find out if, when and for how long the employee(s) was exposed to it. If personal protective clothing and/or equipment was required, find out whether the employee(s) used it.

 

  1. Investigate. As with any workers’ compensation claim, you need to look into the situation to uncover the facts. With occupational exposure claims you should be even more diligent.

 

– Interview the affected worker(s) and any witnesses. Ask, for example, whether there have been any recent spills of potentially toxic substances.

– Check out the work area for things such as leaks, ventilation issues, or cleaning or renovation work that may have involved toxic chemicals.

– Ask an expert. You may want to consider environmental testing from an outside party.

– Look at your documents regarding exposure; such as safety data sheets for substances used, purchase orders, or disposal logs. Also look at safety reports.

– Be transparent. You want your employees to know you take their symptoms and concerns seriously and are addressing them. Once you’ve investigated the situation and have some answers, let your employees know the results — and what you plan to do about it. Also share the findings with treating physicians to help them.

 

  1. A one-time event can alert you to a problem before others are affected. An ongoing situation may be evidence of something more serious, such as mold growth, which must be taken care of.

 

  1. Past claims. If a worker has reported the same or similar claims in the past, it could be an indication of a past exposure that has developed into something more serious for the worker, such as lead poisoning or lung or hematologic cancer.

 

 

Accept or deny

 

Your investigative efforts may yield no concrete information. At that point, you may want to either accept the claim(s) or pursue denial.

 

  • Accepting the claim. You may decide the expense and time needed to pursue denial is fruitless. If you accept the claim, you still need to address whatever the problem is. If accommodations can be made for the employee(s), consider them. Alternatively, you may need to consider whether the person is a good fit for the work environment, due to a preexisting condition.

 

  • Denying the claim. If you proceed with denying a claim in which causation is questionable even after your investigation, a medical expert should be called. The person should be board certified and have experience with the exposure condition. You should familiarize the expert with the work environment and the employee’s duty, and provide complete medical records.

 

 

Conclusion

 

Occupational/environmental exposures should be taken as seriously as any other workers’ compensation claim, even though the evidence may not be as clear cut. Ignoring them or failing to fully investigate can end up being extremely costly.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

 

7 Ways to Reduce Your Workers’ Comp Prescription Drug Spend

Focusing on generics instead of brand name drugs, and in-network pharmacies instead of third-party billers are among the ways payers can help reduce their workers’ compensation costs while still ensuring quality care. Taking a deeper look into where and how the industry spends money on pharmaceuticals reveals many additional things organizations can do to eliminate unnecessary expenses for medications.

 

A recent report on drug trends within the workers’ compensation system shows, for example, that brand name abuse-deterrent formulations for opioids cost on average $520.85 more per prescription than non-brand abuse deterrent formulations (ADFs). Even though these medications are not typically included in workers’ compensation formularies (unless by client request), they are having an impact, according to the Drug Trends Report from Express Scripts.

 

Steps to eliminate wasteful Rx spending include:

 

  1. Educate providers and patients about the risks and benefits of opioids, and consider alternatives for chronic pain by using evidence-based guidelines.
  2. If an ADF is requested, consider whether the patient is at risk of abuse when considering whether to approve the medication and if they can use a more traditional opioid. Likewise, if  an overdose antidote is requested because of overdose risk, consider less expensive alternatives to Evzio where possible, such as narcan, naltrexone or naloxone.
  3. Look closely at dermatologicals that are prescribed; consider lidocaine rather than the more expensive Lidoderm.
  4. Closely review prescriptions for compound medications to see if they are truly needed for the patient. Likewise, for physician-dispensed drugs.
  5. Educate and encourage providers to use of generics rather than brand name drugs, where possible.
  6. Avoid third-party billers if possible.
  7. Closely review and watch prescriptions of specialty medications.

 

Below is a look at several categories of medications prevalent in the workers’ compensation system and where payers can reduce their costs.

 

 

Opioids

 

These remain the most expensive and most utilized class of drugs in workers’ compensation, despite industry and governmental efforts to stem their abuse. Express Scripts said they accounted for 26.6 percent of per-user-per-year (PUPY) spend and 24.3 percent of PUPY utilization among its clients. The good news is that spending on opioids decreased last year.

 

Still, more than half of injured workers — 50.9 percent had an opioid prescription last year, and 25 percent of injured workers used them for at least 30 days.

 

Patient and provider education is key to reducing utilization and prescribing of these drugs so that they are used according to evidence-based guidelines in the more acute phases of pain, rather than injured workers with chronic pain.

 

The use of ADFs among injured workers increased by 50 percent from 2015 to 2016. Typically, a payer must approve the medication prior to dispensing due to the cost of the drug and the need to assure that it’s appropriate for the injured worker.

 

If you receive a request for an   opioid overdose antidote, look at the specific drug noted. Several versions are on the market, including naloxone; Narcan®, (naloxone); naltrexone; and Evzio, as self-injectable form of naloxone. It is important to note however, “the average cost per prescription for Evzio was $3,380.69 higher than for Narcan, naltrexone and naloxone combined,” according to the Express Scripts report.

 

 

Dermatologicals

 

Of the top 10 drug therapy classes, the total spend per class decreased on 7 of the 10 classes between 2015 and 2016. Among those with an increase were dermatologicals, which had a spending increase of 1.3 percent. The 10 percent increase in the average cost per prescription was moderated by a 9.5 percent decrease in utilization, according to the 2016 Drug Trend Report.

 

Generic versions of Voltaren® gel helped decrease utilization of the brand name drug, and should be considered by payers.

 

Prescriptions of lidocaine decreased, and the average cost per prescription is almost half that of Lidoderm — a lidocaine patch. Even though Lidoderm only had 4.2 percent of market share in 2016, the cost increased nearly 28 percent from the previous year.

 

 

Compounded Medications

 

Spending on these has decreased considerably in recent years, mainly due to a decrease in utilization. However, these are still seen as a significant cost driver in the workers’ compensation system. Medical treatment guidelines generally do not consider these a first line therapy for conditions typical of injured workers. They are excluded from most formularies and require prior authorization.

 

The cost of compounded drugs “averaged $1,966.92 per prescription in 2016 compared to $1,558.14 in 2015,” according to Express Scripts.

 

 

Physician Dispensing

 

These cost “$109.19 more than drugs dispensed by pharmacies,” the Drug Trend Report said. More than 38 percent of physician dispensed drugs are for pain or pain/inflammation.

 

The top physician dispensed drugs in 2016 according to Express Scripts were meloxicam, cyclobenzaprine, gabapentin, tramadol and Mapap® (acetaminophen).

 

 

Generics

 

Generics are identical in effectiveness to brand name drugs. Nevertheless, prescribers may turn to brand name drugs due to “habit, lack of awareness of available alternatives or patient request,” according to Express Scripts. “Injured workers create waste by requesting brand-name drugs instead of generics. Workers’ compensation payers can create unintentional waste when, to limit potential disruption, they fail to adopt programs that encourage the use of equally effective, lower cost options.”

 

 

Network Pharmacies

 

Prescriptions that are filled through third-party billers or out of network pharmacies “incur additional costs, with no additional value,” according to Express Scripts. The company noted that payers using its network pharmacy system spent 15 percent less than through third-party billers.

 

 

Specialty Drugs

 

These account for less than 1 percent of drugs used by injured workers, however the costs for them can add up. Spending on them increased 3.2 percent in 2016 and represented 5.9 percent of total spending, among Express Scripts’ clients.

 

There was a 46.9 percent increase in spending for the HIV drug Truvada® prescribed for pre-exposure prophylaxis; spending on Xyrem® (sodium oxybate) in the therapy class of psychotherapeutic and neurological agents (anticataplectic agents) increased 68.6 percent; and Xolair® (omalizumab), an asthma medication saw a 64.3 percent increase in spending. Client spend on specialty medications varies, largely dependent on the injured worker population covered by the client.

 

Conclusion

 

Ensuring injured workers get the best medical care for optimal outcomes should not be contingent on spending on unnecessary medications. Payers can control their costs for medications and still provide quality care.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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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