MAXCO Story Part II
Design & Development
Each division takes responsibility for customization in accordance with applicable state law and
the manual’s forms and policies are designed as templates for customization by each division.
Basically, while the program requires monitoring and nurturing from the corporate office, it is designed to be implemented and run on an autonomous, on-going basis at each division. The best thing about the program is the employees (many unionized) are supportive of the program because they now receive the best quality care available and they receive it promptly.
A successful example is of one facility (workersxzcompxzkit) in an eastern state, where incurred losses were reduced 79 percent; medical costs were reduced approximately 50 percent; and 90 percent of injured employees returned to work within 10 days.
Another MaxCo division on the west coast reduced incurred losses 84 percent in only one year. After deciding on the importance of putting together an effective cost cutting workers’ compensation plan, Maxco began by following these steps.
Steps in a Well-Designed Plan
Hiring Qualified Employees
The purpose of pre-employment screening is to ensure an applicant is physically and mentally capable of performing the functions of the job applied for and to ensure each employee is suitable for employment at the division. Several methods for screening employees include:
- Pre-employment medical evaluations by division doctors
- Use of detailed employment application forms
- Background checks
- Credential verifications
- Motor vehicle record checks
- Drug screening (at discretion of division)
- Prior workers’ compensation claims check
Author: Robert Elliott, J.D.
Click on these links to try it for yourself.
WC Calculator www.ReduceYourWorkersComp.com/calculator.php
TD Calculator www.ReduceYourWorkersComp.com/transitional-duty-cost-calculator.php
WC 101 www.ReduceYourWorkersComp.com/workers_comp.php
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
The Maxco Story – Part I There are very specific steps a division can and must take to cut workers' compensation costs. This is the story of MaxCo, Inc.*, a multi-divisional, Fortune 500 conglomerate, who successfully took these steps to significantly cut WC costs. (*Name changed for privacy.) Steps in a Well-Designed Plan
- Decide to implement a plan and bring on board all members in every division of the corporation.
- Hire Qualified Employees
- Manage the Claims – Whose in Charge?
- Quick Post-Injury Response
- Early Return-to-Work
- Proper Documentation
- Coordinate Medical Care
- Medical Provider Cost Containment
- Insurance Division Relations
- File Audits
- Investigation and Surveillance
- Safety Management
- Performance Goals
- Workers' Compensation "Helpline"
Introduction: Deciding to Implement a Plan: MaxCo's program to control its workers' compensation costs is one of the most comprehensive in the industry, being a practical, "how-to" program any corporation can implement. The structure of the program is a radical departure from the old tendency to turn over all claims to the insurance division for handling. At MaxCo, the divisions were taught how to manage their claims internally, returning the employees to work (workersxzcompxzkit) as soon as they were medically able to do so. Each division took charge of each injury so the injured employee goes through an orderly procedure from the time of injury until the time of returning to work. The "old policy" of "no light-duty" jobs is replaced by an active effort to provide modified-duty (transitional duty) jobs for injured workers on a temporary basis until they return to their original jobs at 100 percent capacity. In the program, each division began to actively manage its workers' compensation claims. The Injury Management Program was introduced during a series of day-long seminars around the country. The Injury Management Program Manual, the "tool kit" for the program, consists of explanatory material, form letters, sample procedures and policies. Each division has the tools needed to actively manage workers' compensation claims and control associated costs. Author: Robert Elliott, J.D. Try the WC Cost Calculator to show the REAL COST of work comp. Look at WC 101 for the basics about workers comp. Workers' Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch. Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Physical review of claim files open and closed, is necessary to reveal the quality of file handling in the past and present. Select new claims as well as old; I prefer review of new claims so there is a greater opportunity to have an impact on the outcome of the claim. When a physician reviewer and experienced claim representative review files they will determine whether medical care is well coordinated and of good quality, whether strategies for claim closure have been developed and followed, and whether time out of work is proportionate to the degree of disability. Overlap of other disability policy payments must be ferreted out as well. In general, the reviewer should assess whether file handling is proactive or reactive, and whether it is properly focused on rapid claim closure. Of less importance, but also important is whether medical bills are reviewed for duplication and fee schedule compliance. Leave a file review with a detailed plan of action for each claim. Assign responsibility and completion date for each follow-up item.
Although telephone reviews and online review are fine occasionally, in between physical file reviews, because they are less expensive and faster to set up (no logistics of travel), and they allow review of files that are handled overseas, they do have allow the face to face contact to develop a rapport with the adjusters and supervisors who are responsible for your files. Physical review of the files is an educational opportunity for you to learn about the services your claims administrator offers.
The one party missing most often in a claim review is the MD (medical doctor). When discussing a medical injury and medical treatment, the best person to have to address the validity of the injury, the length of time out of work and therapy, is an MD, yet this is done rarely except by those companies which have medical advisors on staff. The MD will also review whether nurse case management (NCM) has been used timely and has been effective. I find that NCM is often used too late or too early and that protocol for use of NCM has not been integrated with the companies post injury procedures. There are plenty of well-qualified and available MDs who can participate in your claim reviews to read the medical portion of the file. A doctor that is well-versed in the insurance industry is important also.
WC Calculator www.ReduceYourWorkersComp.com/calculator.php
TD Calculator www.ReduceYourWorkersComp.com/transitional-duty-cost-calculator.php
WC 101 www.ReduceYourWorkersComp.com/workers_comp.php
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel or other professionals before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
When I begin a consulting project, I like to have an MD review a sampling of files from each claim office, or 3-4 offices randomly selected from around the country. I have found that having an MD on the file review team gives me a much better idea of the problems with file handling. And, if the files are being handled in an above average manner, I like to know this too.
Here’s what an MD should look for:
1-Over and under-utilization of services such as medical treatment, physical therapy, chiropractic, diagnostic procedures and surgery
2-Effectiveness of medical cost containment services, including Nurse Case Management
3-Completeness of cover letters to Independent Medical Examination Doctors
4-Effectiveness of Independent Medical Exams, including timing and cover letter requesting IME.
5-Doctor cooperation with Return to Work Program and Transitional Duty
6-Accuracy of diagnosis and causal relationship to workplace. Nurses do add a lot to the workers comp claim adjusting team, but I believe only an MD (workersxzcompxzkit) is capable of evaluating accuracy of diagnosis.
7-Recognition of subtle medical language indicating symptom magnification
8-Whether the injury was caused or aggravated by work or whether other possible causes should be explored
9-With older files, additional opportunities for Second Injury Fund reimbursement are found
10-Percentage of claims where length of disability is proportionate to time out of work.
Even though doctors cost more per hour than a nurse, they are the only professional qualified to make the above determinations. And use of an MD is more cost effective overall, normally saving 4$ for every 1$ paid in fees. In every project for the last 20 years, I have used an MD to review files. It may make the difference of saving 20% vs 50% of losses.
Try the:
WC Best Practices Quick Check: http://www.workerscompkit.com/intro/
WC Calculator: www.reduceyourworkerscomp.com/calculator.php
TD Calculator: www.ReduceYourWorkersComp.com/transitional-duty-cost-calculator.php
WC 101: www.ReduceYourWorkersComp.com/workers_comp.php
Do not use this information without independent verification.
All state laws vary. Check with your insurance agent or broker about work comp insurance issues.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
What is a Worst-to-Best List?
When assessing your workers’ compensation program using benchmarks is very effective, but it is better if you rank business units from Best-to-Worst. Rankings let you allocate resources appropriately and provides a corporate-wide overview. When calculating the Cost Per Employee, Lost Work Day Totals or other workers’ compensation metrics, make sure to analyze the data BY division, BY operating unit, BY location, etc. to see which operations have the best and worst track record.
For example, when an operation in one city, Los Angeles for example, looks highest, the operation in another city may actually BE the highest when analyzed by manhour, by mile, etc. Then post this data to management from Worst to Best — this is a huge incentive for those on the top of the list to get on board and implement the type of programs cost containment experts have been recommending.
Here’s an example of the Best-to-Worst List from Workers’ Comp Kit® which can be presented as either Best-to-Worst or Worst-to-Best.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
I have had many companies want me to let them use the training programs developed for other companies. There is a reason I do not loan or reuse training materials — it is NOT effective way to train. Each training program is designed based on each company’s specific needs. Often this is determined by a corporate-wide “needs assessment. When you are designing a training program for your company, make sure to do a needs assessment, then design the curriculum and then the training exercises. Validation of learning mastery is also important to ensure participants understand the curriculum.
A training program is designed according to what the “learners” will “do differently” after the training. Contrast a decentralized company with 20 workers’ comp claims coordinators with a training program designed for a centralized company with 1 risk manager and 3 return to work coordinators. These 3 return to work coordinators will do a very different job than the 20 workers’ comp claims coordinators. The later may be more hands-on thus the training program may be a workshop rather than class-room style training.
Curriculum is designed according to the needs of the “learners”. First, we determine what the particpants will “do differently” after the training. For example, will they need to contact an injured worker after the training, or will they need to monitor claims adjusters but make no contact with injured workers? The training needs of these two different participants is very different. Course content will be different. The exercises needed to teach these skills are different. So, the training programs are likely very different.
Your training program will be designed depending on a needs assessment of your company. Take this approach, and you will likely save your company a significant amount of money. Our average cost reduction is 20-50% reduction in loss costs based on year over year figures taken at point-in-time snapshots.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Is intense problem-solving needed: A consultation at times determines that a company requires intense problem-solving and a team approach. I call my solution an Expert Panel Review (EPR). This is a team approach using a multi-disciplinary team of experts to identify obstacles and simultaneously find ways to overcome the obstacles. I have used this technique with many companies including two newspaper/publishing conglomerates.
The Expert Panel Review approach combines an education with an assessment and implementation. It’s a full-court press brainstorming session facilitated by a workers’ compensation expert.
The team can include the following:
1. HR Expert/Attorney
2. Labor Expert if the company has unions
3. Workers Compensation Consultant
4. Claims Expert with expertise in states with operations
5. Account Executive/Insurance Underwriting Expert
Company representatives should include: Workers Comp Manager, Risk Manager, Nurse, Medical Advisor, Benefits, Safety/Loss Control, Legal, Insurance and any other departments involved in workers’ compensation or injuries.
Also, an experienced risk manager with a Best-in-class workers’ comp program can be included as an “independent” expert. You may offer to pay the independent risk manager for his time (actually, you’d be paying his employer.)
The goal of the session is to convene strategic personnel in a planned, directed atmosphere to target critical workers’ compensation issues. Using flip charts, dry erase boards and other workshop tools, participants are lead through cost containment steps and many “what if” scenarios are discussed.
At the end of the session – usually a day-long meeting – an Action Plan is completed with steps defined for the next several months…. it’s the start of implementation of your new Workers’ Comp Program. If you received your National Workers’ Compensation Management Scoreâ„¢ prior to the session, bring the recommendations for improvement to the Expert Panel Review as a starting point for the discussion. These recommendations are prioritized during the EPR.
If you would like more information about the Expert Panel Review, contact RElliott@ReduceYourWorkersComp.com or call 860-553-6604.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com�
Self-evaluation questionnaires are a common method to gather information necessary to assess your workers comp programs if you have multiple locations. Questionnaires can be sent to each location. Questionnaires can be prepared for claim handlers, treatment providers, and attorneys retained to handle workers' compensation cases. Using open-ended questions will encourage more complete responses, but responses are not easily quantified. Advantages: Gathers more information than yes/no questions. Questionnaires can be provided to multiple people at once. Disadvantages: Requires more time for personnel to complete, requires more time to compile results. Nearly impossible to quantify responses. Because of the complexity of responses, there will likely be a lower response rate. Written responses may not be candid since no rapport can be developed with the questioner. Tip: If you are developing your own questionnaires have someone else edit it. You will only ask questions about techniques you already know about, and obviously won't ask questions about techniques that may be used by other companies if you aren't aware of them. So have several peers offer feedback on your questionnaires, if possible. Try the WC Cost Calculator to show the REAL COST of work comp. Look at WC 101 for the basics about workers comp. Learn more about Assessments & Scoring. Workers' Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch. Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
One of the initial issues a risk manager with high workers' comp costs is WHO should do the assessment and what are the benefits of each option. There are many resources available to assess your workers' comp program and tell you why your costs have skyrocketed. Several consididerations are: the cost of each, the availability and timeline of each, the impartiality of each, and the experience level of each. This is one area where you must have experience, and it's best to have experience in several industries. A resource with narrow experience will generally examine a narrow range of issues and options for correction, so a resource with a broader range of experience is generally best. You can discuss having these resources provide an assessment: 1-broker's staff – if your broker has post-loss consulting resources, they may have the type of experience that will be helpful because they may have serviced many types of companies 2- independent consultants – pre-loss, post-loss and experience modification professionals 3- automated systems – online web-based assessment provide uniform assessments across many business units (this is how Workers' Comp Kit operates) 4- medical doctors – MDs can review injury treatment protocol, over treatment/under treatment, effective use of nurse case managers, and IME process efficiency, among other issues Try the WC Cost Calculator to show the REAL COST of work comp. Look at WC 101 for the basics about workers comp. Workers' Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch. Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
One part of the assessment process which is often overlooked is determining what to do AFTER you've written the assessment report. You've written your report containing numerous recommendations and suggestions. Writing the report is only the first step of the cost containment solution. What is the next step? 1-Prioritize the findings and address low cost/no cost solutions first 2-Assign team lead or WC Manager to manage the cost containment process 3-Use project management tools to move the process forward and to gain momentum 4-Design project tools such as forms, templates, workbooks, pre-work, exercises, etc. 5-Some of the options: class-room training programs, one-on-one mentoring, conferences and webinars Try the WC Cost Calculator to show the REAL COST of work comp. Look at WC 101 for the basics about workers comp. Workers' Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch. Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
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