What Is Your Workers Compensation Claim Worth?

Risk managers frequently ask “what is the claim worth” when trying to get an idea of the long term cost of a severe injury. A competent workers’ compensation adjuster will only provide a dollar range, not an exact value, as the final cost of a major injury is often not known until the claim is totally concluded, which can be years in the future.

 

 

Factors That Impact Total Cost of Claim

 

There are many factors that come into play when trying to estimate the total cost of a workers’ compensation claim. Factors that always impact the total cost of the claim include:

 

• The nature of the injury

• The extent of the injury

• The skill of the medical provider

• The use of ancillary services – diagnostic, hospitals, therapy, pharmacy, etc.

• The motivation of the injured employee

• The compensation rate (including maximum and minimum amounts, if applicable)

• The length of the disability

• The jurisdiction where the workers’ compensation claim is pursued

• The permanency rating assigned by the medical provider

• The permanency rating assigned by an independent medical examination

 

Other issues or factors that may impact the total cost of the claim include:

 

• The quality of the adjuster’s claim investigation

• The value of potential future medical cost

• The potential for future wage loss

• Death or funeral benefits

• Rehabilitation costs

• Disputes over any aspects of the claim that create legal costs

• Preexisting disability

• Preexisting medical issues

• The ability of the adjuster to recognize the strengths and weaknesses of the claim during settlement negotiations

 

 

Skill of Adjuster & Actions of Employer Have Big Claim Cost Impact

 

While all of the above factors impact what the claim is worth, there are two other aspects of the workers’ compensation claim that have a big impact on the overall cost of the claim. They are:

 

1. The skill of the workers’ compensation adjuster handling the claim

2. The actions of the employer in controlling the cost of the claim

 

 

Adjuster Should Speak Multiple Persons With Knowledge Of The Injury

 

The adjuster’s skill comes into play when the claim is first reported and impact the claim throughout the course of the claim. Upon receiving the claim, the adjuster should immediately contact the employer and interview the person with the most knowledge of the claim—the employee’s supervisor, co-worker(s) present at the time of the injury or the first person the employee reported the claim to. A mistake often made by adjusters is contacting only the person who reported the claim to the claims office, not the supervisor, co-worker or other person who has the most knowledge about the injury.

 

After obtaining the employer’s information first hand, the adjuster should immediately contact the injured employee. A detailed review of the employee’s action right before the injury and a detailed review of how the injury occurred will assist the adjuster in determining if further investigation is needed, in determining the compensability of the claim, or the subrogation potential.

 

The immediate contact with the injured employee not only allows the adjuster to obtain the most accurate information to handle the claim, it also allows the adjuster to establish rapport with the injured employee and establishes the adjuster as the go-to person for any questions or problems the employee has during the course of the workers’ compensation claim.

 

 

Adjuster Can Prevent Claim From Being Expanded

 

By completing a proper investigation into the claim, the adjuster can prevent the claim from being expanded later to include unrelated prior injuries or health issues of the injured employee. The properly completed investigation also prevents claims of questionable compensability from being accepted.

 

After establishing rapport with the injured employee during the initial contact, the adjuster should maintain on-going contacts with the employee to deal with any problems that develop during the course of the claim. By working with the employee throughout the course of the claim, the odds of the employee retaining an attorney to assist with the claim (and inflating the claim cost) are diminished.

 

 

Employer Plays Significant Role In Workers Comp Cost Containment

 

The employer’s actions also have an impact on the overall cost of the claim. There are many actions an employer can take to reduce the cost of the claim, including:

 

• Protective clothing and gear that reduces the severity of an injury (or better yet prevents the injury from occurring)

• Immediate arrangement for medical treatment when the injury occurs

• Advising the initial medical provider of the availability of modified duty work when there is any possibility that the injured employee could do any type of sedentary work

• Immediate reporting of the claim to the claims office

• Same day as the injury follow up with the employee, after the initial medical treatment, to arrange for modified duty work, if appropriate

• On-going contact with the employee until the medical treatment has concluded and the employee has returned to unrestricted work

 

The experienced adjuster will combine all the above factors to provide an estimated range as to what the claim will cost. At that point, the adjuster will be able to answer with a reasonable degree of certainty what the claim is worth.

 

 

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

 

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

 

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

 

Why A Simple Slip And Fall Claim Is Not So Simple

I think a lot of adjusters believe that a slip and fall injury is an open/closed kind of case. The worker was ambling along during work duties and then slip/fell and was injured. Pretty easy!

 

There is a lot more to the story. Many claims professionals who do not thoroughly investigate a slip and fall are losing out on a potential subrogation chance. They are also potentially accepting a claim that they do not have to, depending on the jurisdiction.

 

 

 

Double Check Legal Defense Options

 

In some states, you have an idiopathic fall claim defense, loosely meaning that if you fell because you are clumsy then that is not exactly in the course and scope of your employment. There is no mechanism that caused the injury, such as water on the floor or a coworker that bumped in to you. This defense does not fly in all states, so be sure to check with local legal Counsel before accepting a claim where a worker just fell and has no idea how or why they fell.

 

What kind of shoes or boots were they wearing? Did the worker have the proper approved footwear for the workstation or area that they were working in? If not, this could be a company policy violation or a safety violation. This also is not applicable in all states so confirm with Counsel again if there are issues in this area that contributed to the fall.

 

 

 

Subrogation Options

 

 

Did Floor Cleaning Company Post Adequate Signage?

 

Did the worker fall due to the negligence of a vendor that was on premises at the time? If so, you have a clear subrogation case to pursue. For example, if a floor cleaning company was in the area and did not properly rope the area off or they failed to adequately post proper signage that the floors were wet, this is an issue. If that is the case, the vendor has a duty to properly protect and advise other workers in the area that they are cleaning and that floors are wet. Failure to do so is a pretty big deal and presents an avenue to fight the causal relation of the case in general.

 

 

Did Outside Vendor Properly Maintain Machine That Leaked Fluid?

 

Did a machine leak fluid onto the floor where the worker fell? If so, who maintains the machinery? If you use an outside vendor, you may have another subro case to pursue. If you maintain your own equipment, what caused the failure to begin with? If it is more of an engineering flaw more than a mechanical flaw, you have another way to look in to a subro recovery case to help recoup claims dollars spent.

 

 

Was The Claim Properly Investigated?

 

Did you properly review onsite camera footage to see if the worker fell in the way they described it? If you do not have cameras onsite, this is another chance to thoroughly investigate a claim if there were no direct witnesses to what happened. It may not be a slam dunk every time, but even if you were to prove one case as not being legitimate, then the cameras more than paid for themselves.

 

If there were direct witnesses, did you take a statement from them in regards to what happened? Oftentimes adjusters will ask if a coworker witnessed a fall, then they will fail to follow up on taking a statement. If you do not talk to the witness, why even ask for their names? This is a failure to properly investigate the claim, and overall it is a big no-no in claims investigation 101.

 

Was the worker supposed to be in the area where they fell? If not, this again is a safety violation and a way to dispute the case in general. If workers are not to be inside the yellow-marked lines, then go inside them anyway and get injured, I think that falls in to willful misconduct. If you go somewhere you are not supposed to be, then get hurt, why is that an acceptable work comp case? If you shove your arm in to a machine and it amputates it off, this is really no different. It comes down to the fact that you were doing something you were not supposed to do. If you are breaking safety protocol, that is not exactly being in the course and scope of your employment.

 

Did the employer complete a proper onsite investigation after the injury occurred? If not, then they failed to help themselves. Too many times employers fail to properly investigate their own losses before reporting them to their carrier. This fact is probably the biggest culprit in proper slip/fall investigation, and one that is easily fixable. The employer is right there on the scene, they should be the first people looking to see if there was water or oil on the floor, and why it was there to begin with.

 

 

 

Make Sure All the Facts Make Sense

 

All of these factors come in to play at some point in the proper investigation in to a slip and fall injury work comp claim. All points may not be applicable all at once, but each adjuster has had scenarios where the facts just didn’t make sense, but instead of questioning everything and doing an in-depth investigation, they just accept the claim. This is not acceptable. The job of the claims adjuster is to put the pieces of the puzzle back together. If after doing so the claim just doesn’t add up, then why are they accepting the claim to begin with?

 

 

 

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

 

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

 

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

 

Breakdown in Communication and Expectation Leads to Claim Disasters

Pretend for a second that this is a headline/title of an article in a magazine:

 

“Workers Comp is a broken, maimed, dated system. It is set up to protect employers and insurance companies. It shifts the burden and the blame of occupational accidents to the employees while at the same time protecting employers under exclusive remedy and/or tort recovery.”

 

I hate to admit it but that would get my attention. Not only would I raise an eyebrow at that but I would be chomping at the bit to see what would be coming in the following paragraphs.

 

Now, turn the page and imagine seeing this as the headline that follows:

 

“Workers Comp helps employees with injury recovery, top medical treatment, expedited claims processing, and an allowance of return to full wage work before medically released to perform regular duties.”

 

That doesn’t bait me as much as the other paragraph, but I am still a little interested. The truth is that both of these statements ring correct in some capacity. They also both grossly stereotype workers comp at the same time, depending on which side of the case you are on.

 

 

Workers Comp is a System

 

In my opinion, work comp is a system. It is a system that has been around a long, long time. It has failed to really evolve with the times until recently in some states. It protects employers from tort action and third party pain/suffering lawsuits in exchange for claimants to receive medical treatment and wage recovery. Injured workers also receive free help from nurse case managers, vocational experts, surgeons, therapists, transportation professionals, etc.

 

There are issues with both parties. Employees feel pressure about conforming to the work comp system, and fight to get what they think—or what they heard—or what they Googled–they are entitled to. Employers and Carriers feel pressure to move these claims along to resolution to get claimants back to work as soon as possible. Adjusters have tools to get to the bottom of injuries and to defend their employer client from cases that are not acceptable under applicable comp statutes in the State of jurisdiction.

 

Both sides have made the system what it is: a dysfunctional relationship.

 

 

Clear Communication and Expectations See Successful Results

 

However, this is not the case example with every carrier/adjuster/employer/claimant. In those cases where there is clear communication, clear expectations, and clear examples of patience and of teaching, you see something different. You begin to see a partnership between all parties. The employee that can no longer return as a welder now discovers that he has to turn over a new leaf. With the help of a vocational expert they discover that teaching is the real passion. The adjuster helps to facilitate providing the training program and this partnership results in said worker securing a job with a new employer. The pay is not as much, but clear communication between the adjuster and the claimant showed that settlement of the partial wage loss was the best option for all parties.

 

The jaded reader of this will think the above example is a rarity in the claims world. But I think that every adjuster has had a few successes in their careers. And if every adjuster has had a few of these cases, that means there has been a lot of successes.

 

 

 

Breakdown in Communication and Expectations Leads to Claims Disasters

 

But there are also examples of claims disasters as well. One of the main contributors to a claim disaster is a breakdown in communication and a breakdown of expectations. As soon as this relationship crashes, the rest of it comes crashing down as well. Both parties become suspicious of secondary gain, of breaking the rules, and of skewing the truth. Every adjuster has some examples of these types of cases as well, and there are tons going on right now.

 

Studies have shown that fraudulent claims are not the norm, and that disputed claims are the minority of the claims caseload. I think the number hovers around 10% or less that fall in to this category. So that means the other 90% are legitimate claims. So why is this bad relationship aura so prevalent? Why is the default opinion that the comp adjuster is “Just out to send me back to work. I am hurt–don’t they understand?”

 

The answer is poor communication. We preach about the importance of communication between all parties all of the time including the adjuster, employer, claimant, nurse, and doctor. The adjuster has the job of making sure all parties are communicating. If there is a breakdown in the process, the adjuster has to step in and fix it and then smooth it over with the offended party. Failure to do this makes the adjuster’s job more difficult, sending the claim sliding in to Disaster-ville.

 

It is just another aspect of the profession of the claims adjuster–playing the peacemaker. One of the 9,000 things that adjusters do every day, on every claim, for every client big or small. The better the peacemaker, the better the communicator, the better success for the adjuster.

 

 

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

 

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

 

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SUBSCRIBE: Workers Comp Resource Center Newsletter

 

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

Undocumented Workers Eligible for Workers’ Comp Benefits

In November, 2013 the Iowa Supreme Court ruled in the case of Staff Management v. Jimenez that undocumented workers can receive workers’ compensation benefits. Pascuala Jimenez, an illegal immigrant from Mexico, had two hernias while on a job assignment in 2007 through the temporary employment agency Staff Management. In January 2008, Staff Management fired Jimenez because she did not have authorization to legally work in the United States. In November 2006 the agency was notified through e-Verify, a federal program that verifies employment authorization, that her name and social security number did not match social security records. Jimenez claimed she was terminated because of her injury.

 

 

Undocumented Workers Do Not Preempt Workers Compensation Law

 

In July 2009 Jimenez applied for workers’ compensation claiming that her ongoing health problems stemmed from her initial hernia surgery. A workers’ compensation commissioner ordered Staff Management to pay for her medical expenses and future medical care. Staff Management appealed the ruling, arguing that Jimenez was ineligible for benefits because she was an undocumented worker.

 

The case eventually made its way to the Iowa Supreme Court. That court ruled that an undocumented worker is within the state’s meaning of an employee and that ”an employment contract with an undocumented worker does not inherently have an illegal purpose, and it is not void as illegal merely because the contract is with an undocumented worker.” The court further held that the Immigration Reform and Control Act, which makes it unlawful for employers to hire undocumented workers, does not preempt Iowa workers’ compensation law.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.
Editor Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

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

 

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SUBSCRIBE: Workers Comp Resource Center Newsletter

 

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

 

Selection of New TPA Is One of Most Important Decisions You Can Make

Whether you are just starting your self-insured claims program or have decided it is time for a switch to a new third party administrator (TPA), the selection of the new TPA is one of the most important decisions you can make in the administration of your self-insured program.

 

Employers switching TPAs often ask questions of potential new TPA partners that address the issues they have had with their current TPA. Employers frequently make the mistake of not asking the new potential TPA partner about areas where the current TPA performs well.

 

 

Areas that need to be explored with all potential TPAs before selecting the next TPA include:

 

  • Obtaining a copy of the TPA’s Best Practices to confirm their claim handling standards
  • Obtaining a list of the current clients and former clients to contact for their impression of the TPA’s abilities
  • Verifying the TPA has a claims office in each state where you have business locations
  • In large states, verifying the claims office(s) are located near your business locations
  • Verifying the TPA will assign dedicated adjusters to your account in areas where your claim volume is large enough to occupy all of one or more adjusters, and will assign a designated adjuster to handle all claims in locations where you have inadequate claim volume to keep one adjuster busy
  • Determining the claim reserving authority the adjusters will have
  • Determining the claim settlement authority the adjusters will have
  • Confirming the experience level of each of the dedicated or designated adjusters
  • Determining the frequency of the claim file reviews by the claim supervisors and the extent of the directions and guidance provided by the supervisors
  • Confirming the licensing of each adjuster and each claims office
  • Establishing the claims intake process
  • Establishing the maximum number of claims that will be assigned to each adjuster
  • Establishing who the legal defense firm(s) will be when defense counsel is needed
  • Establishing who the medical triage company will be
  • Establishing who the medical management company will be when medical management is needed
  • Establishing who the pharmacy benefit manager will be
  • Establishing who will provide the medical fee schedule reviews
  • Determining the capabilities of the claims management system used by the TPA
  • Determining whether your claims management system can be integrated with the claims management system of the TPA and who will be responsible for maintaining the systems integration
  • Verifying that the TPAs claim management system will be able to provide all the data and claim management reports needed to manage your claims programs
  • Determining who will be responsible for correction of data errors that occur
  • Determining the security measures the TPA will take to protect the confidentiality of your data and financial information
  • Determining the nature and extent of the financial data available on each claim file
  • Determining if the TPA data system will allow the creation of ad hoc reports
  • Verifying the TPA will allow annual independent claim file audits to verify compliance with Best Practices including the prevention of claim leakage

 

 

This list provides just some of the areas that need to be considered when selecting a new TPA. By addressing these issues during the TPA selection process, further problems with the new TPA can be reduced, if not eliminated.

 

 

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

 

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

 

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SUBSCRIBE: Workers Comp Resource Center Newsletter

 

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

Never Give Up – The Mantra of an All Star Work Comp Adjuster

Too often adjusters will perform a background check, medical record sweep, or run an ISO sweep* early on in a file and then never do it again. Why not?

 

  • * ISO is a service provider offering a variety of products on statistical, actuarial, underwriting, and claims information. Services include being able to check for potential fraudulent claims in a large database of electronically filed claim information from participating insurance companies and third party administrators

 

Some of these cases go on forever. Things change. People move. New circumstances arise. Lots of things can happen during the course of a year. If you have a long drawn out litigated case, and you ran one ISO a month in to the file and you did a criminal/medical record background check a few months in, you are not doing your job.

 

Did you complete a medical sweep, to include hospitals, diagnostic centers, and pharmacies? Did you re-file the ISO every 4-6 months to see if there are any new matches? On those ISO matches you did find, did you talk to anyone at that carrier to see if they will share file details with you?

 

If not, again you are not doing your job. That’s sad, because this part of the job is supposed to be the most interesting. This is where you really sink in to a claim, by doing the background work and discovering new information to help your defense.

 

Here are a few tips to think about:

 

1. Call each carrier on all ISO hits; you never know what you might find. I have seen ISO matches that say “strain” and then I found out the injury was a 2-level spinal fusion. This is because when the claim is setup and the initial ISO is run, a strain may be exactly that. But as we all know, a strain can morph into a monster surgical claim. This is especially true in auto accident cases. There may only be room in the injury description field to write “Arm/shoulder strain”, and not enough room for “Broken leg, shoulder contusion, neck strain, whiplash, and closed head injury.”

 

2. Try to talk with a manager or supervisor to see if they will give you info about the prior claim. If you just send a generic fax or email over asking about injury or claim details, it is going to get deleted. This is because the adjuster doesn’t have the time to help you defend your claim since they are busy with their own claims. But a supervisor or manager may take the time to help you, and glance through the file notes to see if you have any matching dirt on a pre-existing injury. If you cannot reach a manager, try to find a colleague or vendor marketer to help you get in touch with someone that can help you. If you are referred by a mutual party, your chances for success more than triple.

 

3. Go back about 10 years in your background search to find out where your claimant has lived. Maybe they have moved a few times, from MA to CT to MI to TX. Once you establish where they have lived, now you can do your medical sweeps around each location where this person lived, and not just where they are living now. If you come up with some positive matches on medical record sweeps, use the signed medical release you have the claimant sign as your way to get prior medical records. I do not recommend to limit medical releases to something very specific. If it were a shoulder injury, I would try to put “Arm, shoulder, neck” on the medical release because this could help you later on. The claimant probably won’t care, especially if you explain to them that current pain in the shoulder could stem from a number of things, and you want to make sure that you can obtain current medical treatment records later on when they start to treat for other “conditions or allegations”. As we all know, extremity pain can come from a number of places, so try not to limit yourself by being too specific.

 

4. If your file is in litigation, subpoena everything you can. Even if a prior claim or injuries seem like a long shot, you may strike gold in a random primary care doctor medical record. If so, you are going to look like a hero, especially if your claimant talked about “Bilateral knee pain of unknown origin” to their doctor 5 years ago.

 

5. Keep sweeping every 4-6 months, and try different vendors to get a fresh set of eyes. Each adjuster has their favorite vendor for doing medical sweeps, and maybe you work at a carrier/TPA that has SIU services like these in-house. If this is the case, sweep often. If you are striking out, try a different vendor. They may have a different technique or have different database access than your vendor.

 

6. Update your ISO often. Each carrier may have different reporting standards, so don’t quit at just one search at the start of your claim. Plus, I highly doubt your claimant will tell you if they were in an auto accident a month prior to their alleged work injury. Or perhaps they were in what seemed like a fender bender while your claim is currently going on. They are not going to report it to you for fear of their claim being denied, so keep sweeping.

 

Remember your job is to continue to verify that ongoing disability is fully related to this alleged work injury. Just doing a sweep and then giving up is not doing your job. Everyone out there has a history, and the job of an adjuster is to dig up as much of that history as possible. You will not get fantastic results all of the time, but it a great feeling when you discover something that will change the course of the file because of not giving up and continuing to investigate.

 

 

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

 

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

 

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

MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

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

Poor Documentation Makes Claims Handling 100x More Difficult

File notes and goals are becoming extinct.

 

Realistically, the only way to move a file along is to set up goals and a timeline on when to reach them. Every adjuster hates this part of file handling about as much as they hate forecasting reserving for the life of a file, but similar to reserves it has to be done. Nobody said it was going to be a fun job!

 

Turnover is commonplace at Carrier/TPAs. So if you are a new adjuster to a desk, and you inherit 150 files (probably 250 but who is counting) the only way to really sink in to them is to first review the adjuster file notes. What if this prior adjuster was less than stellar at updating file notes?

 

 

 

Poor Documentation Makes Claims Handling 100x More Difficult

 

If this is the case, your job just got 100x more difficult. Everyone is guilty of poor documentation at some point, but there is a way around it. This would be the claim summary, the 60-day report, or whatever your carrier calls their “Claim review/goals/to-do list.”

 

This captioned report contains a history, an outlook, a to-do list, and a timeframe of when to get these goals done. This helps the supervisor when reviewing the file and it helps the adjuster to keep moving the file forward. But to be successful, you have to focus on certain areas. I have listed some of these areas below. If you are not implementing them already, you have to start now. It is going to make your life a lot easier.

 

The injury description and compensability decision—This is where you summarize what happened, why you accepted/denied the file, and the pertinent info on the claimant. This also includes claimant age, height, weight, pre-existing medical conditions, comorbidities, date of injury, hire date, job title, and so on.

 

Injury/treatment to date and what lies ahead—What treatment has been performed to date, and what will be coming in the future. This could be future surgery exposure, DME needs, physical therapy, RX usage, injections, diagnostics, nurse case management, attendant care, referrals to specialists, etc.

 

Issues and concerns or barriers to recovery—This is where you list the pre-existing medical conditions or comorbidities and how they relate/affect the injury. Examples include diabetes, smoking, body weight, prior surgeries, permanent restrictions that could affect the injured worker from returning to their regular job, etc. You can also include likelihood to return to work with light duty or regular duty, claimant attitude, and anything else you can think of that could negatively impact the file.

 

Litigation—Potential for litigation based on claim denial, or status of current ongoing litigation and what your plans are for the defense of the case. You should also include names and contact info of Defense/Plaintiff Counsel, the Judge or Magistrate, and vocational impacts if any.

 

Subrogation—In this field you should discuss if subrogation was ruled out and why. If you are going to pursue subrogation against a third party you need to outline who their carrier is, the response you have had to date, and the overall chances of success to recovery.

 

SIU/Surveillance—If you need these services in the future you should outline the plan of implementation. If you have already attempted SIU this is where you discuss the results and if you plan to order further SIU/surveillance later on in the file with target dates. You should also discuss results and the impact it has on the file defense. Also list the vendor name, contact info, and the dollar cost to date.

 

Long-term RX and medical treatment exposure—For those cases with long term exposure, you need to outline future monthly RX costs, the types of medications being used, if generics are implemented, are you using a Pharmacy vendor, and any other medical treatment needs in the future. This should also include future revision surgeries or more invasive procedures that could come in to play in the future affecting the overall direction of the file and the barriers they could play in file resolution.

 

Strategy for resolution with target dates—This will be your to-do list, and the dates you plan on having these tasks completed. This could be an IME, vocational evaluation, adding a nurse case manager, getting a MSA forecast, having a mediation performed on the file, etc. Include the month you want to have these completed by and what you predict the outcomes to be.

 

Reserves—Here you discuss current reserves for indemnity, medical, and expense and if you need to raise the current amounts to cover future exposure and why.

 

Medicare issues—In those cases with CMS issues, you need to document if you have identified the claimant HICN ID, if CMS has been notified, and the barriers you have to redemption with CMS being involved. Also included would be actual predicted MSA amounts or an MSA estimate from a vendor included in the file. Also if any vendors have been used be sure to list their contact information.

 

Simple use of an outline such as above will make your handling of the file a lot easier. This is because you are laying out the history, current status, and future plans in one document that you can easily modify in the future when the file comes up for review/discussion again. Doing this will not only help you the adjuster, but also your manager, and also if the file gets transferred to another adjuster they can hit the ground running right where you left off.

 

Failing to use an outline in the handling of the file can lead to missed opportunities, missed exposure, missed recovery, and overall poor file handling. This will negatively impact all parties involved in the file, the biggest being your insured account that you are trying to protect.

 

 

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

 

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

 

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

MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

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


©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact mailto:info@reduceyourworkerscomp.com

 

 

 

Your IME Doctor Selection Can Make or Break Your Case

A common error I notice in work comp files are adjusters choosing the wrong IME doctor.

 

Sure this doctor may be a seasoned IME physician, but if you need something strong to stand up in a deposition and this IME doc is a known loaded gun for insurance carriers, then you may be in trouble.

 

 

Best IME Doctor is a Practicing Specialist

 

It’s not to say that this doctor is a bad one, they just may not be the best choice to uphold your defense of the file. For example, if you need a comment on a tough wrist surgery to see if the need for surgery is related to your comp case, using a general orthopedic doctor that no longer performs surgery or is not board certified may not be the best choice. You would want an opinion from a practicing physician that still performs many surgeries, possibly one that only does wrist and hand as a specialty, and is up to date on the latest techniques and practices.

 

This common error is usually due to adjusters not being familiar with their territory. They may be in another state, new to claims, or just have a common habit of letting the IME marketer choose the doctor for them, when the marketer may know nothing about the case. Later on down the road when this claim goes in to litigation, your defense attorney may cringe when they see your choice of IME doctor. This will hurt your own defense on the compensability of the case.

 

If your goal is merely to get a post-op employee back to work and all you need are work restrictions, than many IME doctors would suffice. A lot of times the treating doctor is hesitant to put their post-op patient back to work, based on the verbal history the claimant is giving them while at the appointment. If you have not educated this treating doctor on the light duty program your insured has, then you have little luck at a return to work light duty position. This brings in the need for the IME.

 

An IME is a valuable tool for the adjuster. To get the best outcome, you need to choose the correct one early on and stick with them. Other issues can arise such as MMI or to perhaps comment on other invasive treatment recommendations given by the treating doctor.

 

 

 

Use a Nurse Case Manager When Not Familiar With Area IME Doctors

 

I recommend using a nurse case manager in situations where you are not familiar with the area of the IME doctors. Chances are these nurse case managers have seen a lot of these doctors because that is the territory they work. The nurse is a great tool for not only helping you choose the right IME doc, but to also attend the IME, and to follow up with the IME doctor after the appointment to make sure all of your questions are addressed. Plus if the IME doc has questions about light duty or work duties in general, they can ask the nurse to get something in writing to help them, such as a job description.

 

You may not even need the IME if a nurse is on the file. They can hound the treating doctor with the same information, and get them to comment and save you the IME cost. But, if the treater refuses to comment, then you can come in with your IME and get those work restrictions you need.

 

For whatever reason, some adjusters just are not thinking about what path their file will take in the future. They could be quick to IME with their ultra-aggressive IME doc that they like, because this doctor only does IME exams and basically puts everyone back to work as long as they have a pulse and can physically get to work at their employer.

 

I blame this habit again on time. Adjusters are not taking a step back and really plotting out the future of the claim. They are overloaded with files, and just want their claimant back to work, so they use their IME hatchet doctor.

 

 

The Wrong IME Opinion is Not Worth the Paper It’s Printed On

 

What about 3 months from now when litigation starts, and your IME isn’t worth the paper it is printed on because that IME doctor has zero credibility? If your treating physician on the case is very well respected, and a specialist in the body part they are treating, you are in trouble.

 

I see this all the time. If your IME doc is a general occupational medicine doctor, and they are up against a well-respected specialist, that is not a solid defense. So take the time when you choose that first IME doctor. Look for specialists that still treat, still operate, and still are up to date on current techniques and trends. You will thank yourself later on when you have a solid medical opinion that gives you a real defense. Now you have an expert that can go toe-to-toe with any other treater in that field. That is properly helping to defend your insured against a costly claim they may not responsible for.

 

 

 

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

 

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

 

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

MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter


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

Make Sure Injury Is Work Related Before Approving Treatment

The wise workers’ compensation adjuster during the initial investigation of the claim ties down the nature and extent of the injury. By limiting the medical treatment to the work-related injury that occurred, the adjuster prevents additional medical treatment for preexisting medical problems from being brought into the claim. In doing so, medical treatment is limited to what is necessary and due to the work-related injury.

 

The medical provider will obtain from the injured worker a description of how the accident happened. The medical provider assesses the nature of the injury and makes a determination if the accident caused the particular injury. For workers’ compensation coverage to apply there must be a direct relationship between the description of the injury and the medical diagnosis.

 

 

Second Injury During Recuperation Frequently Contentious Issue

 

The causal relationship between the accident and the injury is seldom a point of contention in workers’ compensation claims. However, when a second medical condition develops after an injury, the causal relationship between the original injury and the second medical condition is frequently a contentious issue that requires a significant amount of medical investigation by the adjuster. The simple fact that the second medical condition developed during the injured employee’s period of recuperation does not make the second medical condition compensable.

 

Examples of causal relationship medical questions that are frequently disputed include:

 

• An employee has an injury to a foot, ankle, leg or knee that creates an alter gait, causing the employee to have back problems

• An employee injures the dominant hand/upper extremity causing the employee to over use the other upper extremity resulting in strain/sprain to the non-injured upper extremity or shoulder

• An employee suffers a torn disc or a spinal herniation, causing pain and later develops fibromyalgia

• An employee suffers a hand fracture, has a very low pain threshold and does not use the injured hand which develops reflex sympathetic dystrophy

• An employee taking a prescription drug due to the injury develops a bad side effect from the medication

 

 

Request An Independent Medical Evaluation For Second Medical Condition

 

Any time a second medical condition is introduced into a workers’ compensation claim and the treating medical provider indicates there is a causal relationship between the original medical condition and the new, second medical condition, the adjuster should request an independent medical evaluation (IME) or peer review.

 

The IME doctor or the peer review doctor will need a significant amount of information to determine whether or not the second medical condition is related to the original medical condition. Included in the information that the IME or peer review doctor will need is:

 

• A detailed description of the accident which caused the injury

• A copy of all prior medical records for this injury

• A copy of all prior medical records, both injuries and diseases, of the employee for 10 years prior to the accident

• A detailed description of the employee’s job duties (never rely on the employee to advise the physician of the job duties)

Along with all documentation provided to the IME or peer review doctor, a list of questions about the causal relationship should be given to the doctor to answer. This includes:

• Is there medical evidence within a reasonable degree of medical certainty to establish a causal relationship between the original injury and the second medical condition?

• What is the medical rationale explaining the relationship between the original injury and the second medical condition?

• Was the second medical condition preexisting? Was it aggravated or accelerated by the original injury?

• Is the second medical condition permanent or temporary?

• Is the IME/peer review provider’s medical opinion conclusive or is there an element of speculation as to the causal relationship?

 

From the adjuster’s standpoint, the IME doctor’s or peer review doctor’s report needs to be conclusive on the causal relationship or lack of relationship between the original injury and the second medical condition. If the IME doctor’s or peer review doctor’s report states “could be related” or “uncertain” as to the causal relationship, the adjuster will be unable to properly accept the second medical condition, and it should be denied.

 

 

Detailed Investigation is Required

 

The determination of the causal relationship of a second medical condition is frequently resolved by the workers’ compensation board or industrial commission. It is imperative for the adjuster to do a detailed investigation into the medical relationship between the original injury and the second medical condition before accepting or denying the additional medical issue. If the employee’s treating doctor and the IME doctor disagree on whether or not there is a causal relationship between the original injury and the second medical condition, another independent medical evaluator agreed to with the injured employee is an alternative approach to a board decision on the issue.

 

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

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

 

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

 

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

MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter


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

Why Train New Hires When They Will Just Quit Anyway?

To date, I have yet to meet anyone that planned on being a claims adjuster. Think about that for a moment. Not one person, over the course of years in this industry, has told me their main goal in life is to handle and investigate claims. Sure some have wanted to be in marketing or sales, or management of a large company, but none have stated specifically that they wanted to be in claims. Even those in the industry are dumbfounded as to why they are still there.

 

The biggest factor is those staying in employment as an adjuster is usually salary; at least in my casual conversations with claims examiners over the years. Second to salary is probably just general job security. Those in the know state that even new hires to the industry usually exit within a year, so it is good job security to be experienced in claims since there will always be an open desk somewhere at some carrier or TPA.

 

 

The Job of Claims Adjusting Is Too Difficult For Many

 

So why exactly does this happen? Sadly there is no one good answer. But there are a ton of general answers as to why so many people leave the industry. For example, the massive amount of phone work can be daunting to those without experience. Couple that up with insane claim loads, confrontations with angry claimants, numerous levels of management, frustration with the lack of authority and accountability with the claims you actually do handle, incompetent supervisors, and the list goes on.

 

In my humble opinion, the lack of effective training and mentoring is the biggest key factor in the revolving door. Having a structured program for green adjusters new to the industry would decrease those leaving the industry. Also to be successful you have to pair that on-the-job education with a real claims mentor that actually cares about the outcome and professional growth of the new adjuster. This is the problem—the training program may be there, but the actual mentoring and follow-through is not. On paper it is present and accounted for—meaning that some adjuster/supervisor is assigned to watch over the new guy—but the incentives to have them succeed is not. This is because the mentoring adjuster/supervisor is swamped with their own work and auditing demands and just doesn’t have the time to babysit the newbie.

 

 

Resources Are Stretched And Training Is Often Inadequate

 

Many organizations face the competing dilemma of a limited pool of experienced adjusters handling important high-exposure files versus the cost of their time and commitment of training the newbies. It is not that the spots are open and can’t be filled—you can always find someone looking for work that is willing to give claims a try. The problem is keeping them employed after you have run them through whatever you call your claims training program.

 

Even when companies raised the educational standard to accepting only new hires with college degrees, it doesn’t matter. The claims world is so niche that no real college classes focus on just doing claims. There are no labs or pretend claims office. No matter what the degree, new hires will always come in expecting the unknown. The mentor is the one that is supposed to bridge the gap between book-training about claims adjusting and actual execution of claims adjusting. If that caring mentor is absent in your organization, your new hire is doomed from the get-go.

 

A structured formal training program by itself is costly and complex, and most carrier/TPA companies have something in place that they think will be good enough to get the newbie off and running. But the decision of how much time, money, effort, and resources to invest into the claims newbie training program is where most executives face this crucial question: How much of their resources should they spend on someone that more than likely will exit the company within 4-6-12 months from their hire date?

 

This is where the vicious circle begins. Companies do not want to spend a lot of time and money on people that will not stay employed with them, and new hires say they leave the industry because they were not adequately trained or mentored.

 

 

More Organizations Need to Make Expensive Investment in Human Capital

 

How is this problem repaired? In a perfect world, organizations will finally realize that the more investment they make in their own human capital from the very start the more they will get out of it in the long run. New hires need to be trained, mentored, and assisted along the way to their own professional growth. This is not a cheap thing to execute. You simply cannot take a new hire totally green to this industry and magically transform them into a perfectly running claims machine in 6 months. This process takes years, and it is one of continued training and growth even after 10 years of being in the industry.

 

But this is not a perfect world. The reality is that the resources are not there, the mentors are not there, and the time is not there. Without those three keys working in harmony, the new adjuster you just hired could be out of your company before the ink dries on their newly updated resume.

 

 

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

 

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

 

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

MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter


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

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