Does the Firm Have Multi-Jurisdictional Experience?
Continuing with Kevin Quinley’s “how to” tips about improving the quality of defense counsel employer’s use, he suggests several ways to make sure the firm has experience in your jurisdiction. Kevin has years of experience and is an authority in claims management.
Realtors will tell you that, in matters of real estate value, the three most important factors are location, location and location. To a lesser extent, this is also in assessing the value of workers compensation defense counsel. As part of the vetting process, consider the attorney‘s and firm’s multi-jurisdictional experience. For risk or claim managers handling files for more than one state, an attorney’s flexibility is key.
Work compensation defense skill is not necessarily or easily transferred from jurisdiction to jurisdiction. You may find a superb defense attorney in California, but that may do little good when you need a specialist defending claims under the Longshore and Harbor Workers Compensation Act. Does the firm have offices in the states where you are likely to have claims? Are compensation specialists staffed in those other locations?
Having defense counsel with multi-jurisdictional experience can be a plus in various situations. One is if your employees travel locally but in a multi-state area. For example, I live and work in the Washington D.C. area. Employees there often travel daily between Maryland, Virginia and the District of Columbia. Each of these three jurisdictions have materially different benefit structures, making jurisdiction a huge financial factor in workers compensation costs. Having a defense firm steeped in all three jurisdiction’s laws is an asset. Or maybe your CFO is attending a tax conference in California. While showering in his room at the Marriott, he slips and breaks his wrist. Is this compensable and, if so, would California comp benefits apply? Having a firm with multi-jurisdictional experience can help here too.
Location is also a factor in assessing the attorney’s proximity to the workers compensation venue: How close is the lawyer to the courthouse or commission office holding work comp hearings? If the attorney must travel long distances, the client may pay dearly in costs. Attorneys close to the courthouse can also often more easily keep tabs on the pulse of the compensation system: what arguments succeed and which fail, the likes, dislikes, personalities and idiosyncrasies of the Hearing Commissioners along with courthouse scuttlebutt that may be useful in workers compensation claim defense.
Kevin Quinley CPCU, AIC, ARM is a noted claims consultant, trainer, speaker and expert witness. He is the author of ten books on various aspects of claims management. He is a contributing author to the IIA textbook for the Associate in Claims courses, Principles of Workers Compensation Claims (Second Edition) 1998. You can reach Kevin at kquinley@cox.net, by phoning (703) 239-1694 or via his website, www.kevinquinley.com
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
How cost-efficient is the attorney and firm? You want to look at hourly rates but also not mistake them as the biggest factor in managing costs. Law firms can quote a lower hourly rate but manage to “bill with a heavy pencil” on tasks to compensate for the low rate. Conversely, a worker’s compensation defense attorney with a lofty rate may be a bargain if, due to her experience, she can do the same task in half the time it would take the average lawyer to accomplish it. By all means, ask for a fee schedule but do not be beguiled or seduced by a low hourly rate.
Avoid approaching workers compensation legal services with a gasoline price war mentality. This week I drove behind a lawn service truck bearing the following message, “The bitterness of a poor job lingers long past the sweetness of a low price.” If you hire a “cheap” lawyer with a low hourly rate and he ends up botching a winnable contested comp case, the boss will not console you with the fact that you saved $10 per hour on the lawyer’s hourly rate. This is being penny-wise and pound foolish.
In conducting due diligence on workers compensation legal defense costs, dig deeper into the firm’s billing culture. Possible questions include:
- Do your attorneys have annual billing quotas? If so, what are they?
- How heavily are billings factored in associate and partner performance reviews?
- If we pick your firm, can you lock in these rates for a three-year period?
- Can you give us budgets up-front estimating the time and expense of each case?
- Are you willing to consider any alternative to time-and-expense billing?
Focus not just on costs but also on the firm’s value. Does the firm offer any value-added services? For example, some law firms publish a newsletter highlighting changes and implications of the comp laws. Some put on free seminars for adjusters. Some may even send an attorney to your office to do a short in-service presentation on a topic germane to workers compensation defense.
Ask and encourage your firms to offer these!
Kevin Quinley CPCU, AIC, ARM is a claims consultant, trainer, speaker and expert witness. He is the author of ten books on various aspects of claims management. He is a contributing author to the IIA textbook for the Associate in Claims courses, Principles of Workers Compensation Claims (Second Edition) 1998. You can reach Kevin at kquinley@cox.net, by phoning (703) 239-1694 or via his website, www.kevinquinley.com
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
Another way to upgrade your defense counsel is to get references and ask questions about workers compensation experience. Obtain the names, addresses, email addresses and phone numbers of three current clients in the workers compensation arena. CHECK THOSE OUT. Set aside enough time to do this.
Ask these questions:
1- Ask the former or current clients about the lawyer’s strengths and weaknesses?
2- Why do they use this particular firm?
To trim the time that such a laborious process might take, in lieu of a phone call or interview you might design a brief one-page questionnaire that you can mail or send as an email attachment. This is a time-efficient way of getting feedback from other clients. If the latter don’t respond, you are in the quandary of wondering whether they didn’t have anything positive to say or whether they are just too busy.
To be bold, ask the lawyer for names of former clients. Phone them and ask why they no longer use that firm or attorney. Otherwise, a firm can hand-pick three clients who are only going to give you rave — not balanced — reviews.
Kevin Quinley CPCU, AIC, ARM is a claims consultant, trainer, speaker and expert witness. He is the author of ten books on various aspects of claims management. He is a contributing author to the IIA textbook for the Associate in Claims courses, Principles of Workers Compensation Claims (Second Edition) 1998. You can reach Kevin at kquinley@cox.net, by phoning (703) 239-1694 or via his website, www.kevinquinley.com
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
Know this question!
Our last discussion intentionally omitted a key question to pose to any firm or attorney you are considering for handling your contested workers compensation cases because we wanted to handle it separately due to it’s importance.
That question: What is your success ratio in contested workers compensation cases? There is no second place in workers compensation litigation. You want to win! Your attorney should want to win too! His or her skills, plus the claim file, should ideally position the employer or carrier to attain victory.
Whether the issue is one of “arising out of employment,” no causal relationship, employee horseplay, malingering or a bogus injury occurring away from work, the employer and carrier wants to win. Moral victories do not count.
Therefore ask: What is the attorney’s win/loss ratio? Does she keep track? How does the attorney define “win”? In workers compensation, a “win” can be anything from a defeated compensation claim to get 40% permanent partial disability instead of permanent total. Begin the counsel selection process with the end in mind. In contested workers (workersxzcompxzkit) compensation cases, the end is a claim that is either (rightfully) defeated or minimized. Management guru and author Tom Peters says, “That which gets measured gets done.” Does defense counsel keep track of overall workers compensation wins and losses? If so, that’s a good sign – and an even better sign if the win percentage is high!!
Kevin Quinley CPCU, AIC, ARM is a claims consultant, trainer, speaker and expert witness. He is the author of ten books on various aspects of claims management. He is a contributing author to the IIA textbook for the Associate in Claims courses, Principles of Workers Compensation Claims (Second Edition) 1998. You can reach Kevin at kquinley@cox.net, by phoning (703) 239-1694 or via his website, www.kevinquinley.com
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
When you don't know how you compare against the national average you are likely to: 1- Make wrong decisions. 2- Act on emotion rather than on reality, blowing a problem out of proportion. 3- Try to fix problems that don't exist or fix the wrong problem, wasting a lot of money and resources. Here's a true story about a large company I worked with recently … The company called me in because they were very unhappy with their claim administrator which was an insurance company claims handling facility, and planned to "move the business." Actually, I was hired by the broker to try to resolve this emergency situation. I listened to the client's concerns and got to know their company over the next couple of weeks in an effort to determine the source of the problem, and see if there was anything that could be done short of moving their business. Changing from TPA to TPA is a very expensive process for a company and for the broker because it takes time and personnel to all involved. Of course, the TPA isn't happy about losing the business either. The Situation: I did several things including … 1- Reviewed the account instructions – to see what the program parameters were. Which PPO was used, who had settlement authority, etc. 2- Review of Files – Planned a massive file review to include every open file in that claims office office which was a massive and expensive undertaking. Even if all the other benchmarks are met, until you know how the files are handled and whether there is a good outcome (employee back to work quickly, etc.) you really don't know how good a job the TPA is doing. 3- Benchmarking Report – I needed to understand the problem more clearly thus requested the latest benchmarking report. I was told there WAS NO BENCHMARKING REPORT. No problem, just tell me what your Cost Per Employee or Cost Per FTE (full-time equivalent) is. Noone knew. So, I spent a couple days developing the benchmarks for the company. 4- I traveled to Atlanta (location changed to protect the innocent) and visited the claim office, met the supervisor, the adjusters and observed the workflow- to gain an understanding of the situation. During the visit, in a high level meeting, the supervisor indicated she had never met with or spoken to the company risk manager (her client). The client had previously told me she had never met with or spoken to the supervisor. I asked the supervisor if she was aware they were about to lose the business because the company was so upset about how the claims were being handled. She was not aware of this. I let her know there had been meetings with the client and broker and they were intereviewing other TPAs. I suggested she telephone the client and invite her to the office. With her boss in attendance she looked truly shocked. I asked her why she had never spoken with the client and she said "Well, she has never called me." I later asked the client why she had never spoken with the supervisor and she said "Well, she has never called me." I was beginning to realize we had a communication problem rather than a file-handling problem. The Result: The Cost Per FTE was HALF the national average. This meant that basically, the problem with claims handling wasn't as severe as the company perceived it to be, if indeed there was a problem. The files had a 95% excellence score, thus there was not a file handling problem.The team of 7 auditors determined that 89% of the claims were handled in an excellent manner according to the clients account instructions, the carriers best practices and in complaince with state law. The MD made sure all medical conditions were recognized and employees received proper care. The score card indicated in 98% of the claims the employees received excellent quality care. This is key because you can handle all the files exceptionally well from a claim handling standpoint, but IF the claim wasn't compensable because the medical condition wasn't work-related, you've just paid a claim you shouldn't have, and have spent a lot of money unnecessarily. But the root cause is that there is insufficient medical expertise involved in the files on a proactive basis. The Solution: PICK UP THE PHONE AND CALL YOUR CLIENT, YOUR ADJUSTER, THE SUPERVISOR! Things get out of control without communication. Get your benchmarks. Have an MD review your files. For more cost-saving tips go to WC Cost Reduction Tips. Show the REAL cost of workers' comp with the Real Cost Calculator. 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
What ARE "account handling instructions," you ask? Account service instructions (ASIs) also called "account handling instructions" or "special account instructions" are the instructions your insurance adjusters live by.
They tell the adjusters what must be done when handling your claims. So, make sure you have input into the preparation of these instructions. Every insurance company or third-party administrator has them although the names vary. Items you want in your ASIs will vary depending on the carrier or TPAs best practices; ASIs will be developed "around" what they are already providing.
This is a very abbreviated list from Workers Comp Kit's Improvement Plan. The complete list is 10 times this length…
A 16 Point Account Servicing Instruction Checklist:
1. Settlement Authority Who has settlement authority — the company or the adjuster? A "consult" is totally different than "authority." How much authority you get depends on the type of insurance program you have.
2. Selection of Counsel Do you select your own legal counsel? What type of legal counsel does your company utilize – panel counsel or outside counsel?
3. Reporting How often do you receive status reports for open claims from your insurer? Over 30, 60 or 90 days? Even though you may have been provided access to run reports, if you'd prefer to have them run for you, ask for that.
4. Reserves Does the insurer provide a written explanation each time reserves are raised over $10,000 or more? Do reserves set take into consideration the company's aggressive return-to-work program, probably resulting in lower wage loss?
5. Dedicated Adjuster How many adjusters are dedicated to processing claims for your account? One adjuster with a full-time admin can handle more than an adjuster without an admin.
6. Payment/Review of Legal Bills Do you receive copies of bills for legal services?
7. Investigations How do you request investigations? Will you receive copies of the investigation reports and video for review? Are emergency room records/notes obtained for every worker who is treated in the ER? Are drug test required at the clinic after an Emergency Department visit?
8. Structured Settlements & MSA Set-asides Do you consider structured settlements for all cases over $10,000? Are MSA settlements structured? Who handles compliance?
9. Subrogation Are all cases reviewed for subrogation potential? Who closes a file and waives subrogation recovery? Do you want to be consulted before a lien is waived or compromised?
10. Workers Compensation Do you see copies of payments being made on each open file? Do you review checks or a list of all payments made for accuracy? Are statements tape recorded on all claims where compensability is questionable such as heart-attacks, stress claims, unusual injuries, claims where liability is not clear?
11. Referral to Physician Consultant/Medical Advisor How are outside vendor services activated and coordinated? Are all medical records sent to the Medical Advisor before an independent medical examination is conducted? Does the MD write the IME cover letter and make sure timing is appropriate for an IME?
12. Medical Bill Review How and when are medical bills audited? Who will audit the hospital bills? What level of hospital bills are audited? Do you decide if medical case management is warranted? Is there immediate and automatic referral of complex lost-time cases to medical case management?
13. Utilization Review How do you decide which bills and services will be reviewed? Who provides this service?
14. Referral to Vocational Rehabilitation Who decides if vocational rehabilitation is warranted? Do you automatically refer complex lost-time cases to vocational rehabilitation? Will reports be sent to your company?
15. Alternative Dispute Resolution/Mediation Is alternative dispute resolution considered on all claims for all lines? Are you or are subrogating insurance carriers members of the Center for Public Resources (a non-profit organization whose members agree to avoid litigation and try to pursue alternative means of dispute resolution)? If so, is this noted?
16. Miscellaneous Do you have the option to change your account instructions? Do you have the right to review the complete original claim file? Dont be afraid to negotiate for what you want in your account handling instructions. Remember, if you have a large deductible insurance program, its YOUR money!
If you have a guaranteed cost program, you will not have as much leverage as if you are self-insured or in a large deductible program, but don't let that stop you from asking for what you want. Much of the above information applies to litigation managment for product liability claims, etc.
Read the 7 Biggest Mistakes Employers Make when Working with their TPA or insurance company: http://www.reduceyourworkerscomp.com/results-from-your-insurance-company.php
For more cost savings tips go to WC Cost Reduction Tips. I hope this is helpful, and would appreciate your feedback if you have specific examples of where you have been able to use this information. If you need help with your account instructions, I can help you or refer to to another consultant that can.
Author: Rebecca Shafer, J.D. Rebecca is a national expert on workers compensation cost containment and has helped many companies reduce their workers compensation. She is the author of: Manage Your Workers Compensation Program: Reduce Costs 20-50% at www.WCManual.com
RShafer@ReduceYourWorkersComp.com
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment program initiatives.
© Copyrights strictly enforced. 2008-2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Barb Galluppi makes four important suggestions about participating in your company workers' comp hearings and trials:
- Participate! Attend all trials and hearings if possible. Your presence is not only critical for technical and evidentiary reasons; it sends a message to the claimant and the arbitrator/administrative law judge.
- Help line up employee witnesses. Often you know better how to locate employees and/or ex-employees, so offer that assistance.
- Communicate with defense counsel. Make sure they know YOUR version of the accident and compensability. Let them know this early on in the process.
- Testify to the fact that modified duty was offered to the employee. Bring the offer letter, it may be helpful to reiterate the point.
More Information: Barbara Galluppi, CPCU, Area Senior Vice President Claims, Arthur J. Gallagher Risk Management Services at barbara_galluppi@ajg.com.
Barb Galluppi continues with her series on controlling litigation costs in workers comp suits…
Barb advises to beware of the “billable hours” concept.
- Monitoring legal fees is the adjuster’s responsibility.
- Ask the adjuster if they reviewed the bill for the following: duplicate charges, charges for counsel to re-review the case each time it is picked up, or fees charged for new attorneys to review (this is called churning) the file, etc.
- Was the arithmatic checked?
- Does the time spent talking to counsel match what is on the bill? When you talk to defense counsel, record the time spent, so you have a good idea of how much time you spend talking to defense counsel.
- Ask to see the bills if they appear too high.
Tomorrow Barb will discuss several ways to participate in the defense.
Barbara Galluppi, CPCU, Area Senior Vice President Claims, Arthur J. Gallagher Risk Management Services is an expert is workers’ comp cost containment and many other areas of risk management. Questions may be submitted in the comments box. For more information about Barb’s services, click here: http://www.ajg.com/portal/server.pt?open=512&objID=462&PageID=53927&cached=true&mode=2&userID=21938
More helpful strategies from Barbara Galluppi, CPCU, Senior Vice President Claims, Arthur J. Gallagher Risk Management Services ….
If it has been determined that assignment of defense counsel is needed, it is important to remember the “billable hours” concept by which attorneys are paid and the motive this may represent to over work a file and to prolong litigation.
Some keys to control litigation costs:
- There is usually no need to pay attorney’s fees to negotiate. This is the adjuster’s job, although participation in the process may vary somewhat by venue.
- Adjusters know the case better than the attorney because it was the adjuster who did the up-front investigation and has had much more contact with the players.
- Adjusters are trained negotiators and negotiate far more cases than attorneys because they handle more cases. Adjusters have motivation to settle, and they know the cases better.
- Do not let the adjuster abandon the case to counsel because of a heavy workload or other reasons.
- Request that the adjuster does the investigation and negotiation, even after suit is filed, rather than paying an attorney to do it.
- If it is a case to settle — the sooner the better.
- The value of a case increases with age. It is the perception of the arbitrator (however erroneous) that the longer the claimant is treated, is off work or has to wait for settlement, the more serious the claim.
- The longer the case continues, the more legal fees and attendant costs are incurred.
- Make sure the adjuster is held accountable for litigation management and cost containment.
- The case must not be allowed to drift with counsel. The adjuster should stay active on the case.
- Call for case status periodically.
Questions for Barb can be submitted in the box below. Excellent information, Barb. Thank you! Look forward to more tomorrow. For more information about Barb’s services, click here: http://www.ajg.com/portal/server.pt?open=512&objID=462&PageID=53927&cached=true&mode=2&userID=21938
Barb Galluppi notes that once an attorney has entered the picture, you are now in a cost containment – reaction – mode. All is not lost, however. There are many things you can do to assure that litigation and indemnity costs are held to a minimum:
- Immediately forward the summons and complaint or application for adjustment of claim to the claim administrator. It is a good idea to both fax it and put the original in the mail.
- Work with the adjuster to formulate a defense plan of action (POA*).
- Request a defense budget and estimate of expenses UP FRONT.
- Avoid extraneous discovery. For example, if a deposition or expert analysis does not seem critical – resist having it assigned to an attorney.
- If it is a case to settle, and notice of attorney’s lien has recently been received, be sure to exhaust settlement avenues before referring out to defense counsel. Often a case can be settled early on, avoiding all defense costs.
To have Barb answer your questions, post them below in the comment box. If you would like to be notified of her responses, sign up for the RSS feed or email notification in the upper right hand corner of the blog. For more information about Barb’s services, click here: http://www.ajg.com/portal/server.pt?open=512&objID=462&PageID=53927&cached=true&mode=2&userID=21938
*Other abbreviations can be found at WC 101: http://www.reduceyourworkerscomp.com/workers-comp-abbreviations.php
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