In the never-ending quest to lower business costs, employers must consider using a fully integrated general liability service provider with solutions unique to the business. Fully integrated here means a service that covers everything from property damage to bodily injury to product liability designed for the company, its risk management program and the owners.
Employers must protect their brand by employing these 3 strategies:
1. Thorough investigations.
2. Optimal negotiations.
3. Reduced cost of risk. (WCxKit)
When looking for a general liability service
provider look for one who will design a program unique to your business by becoming completely familiar with what you do, how you do it, the legal issues, and your vision for success. Then expect them to create an integrated claim service team who can meet your company's needs. Select an account manager based on chemistry and experience, supported by a multitalented team of:
1. Claims professionals.
2. Medical professionals.
3. Subject matter experts.
4. Senior risk analysts.
A successful program optimizes the claim process starting with 24/7 intake system, creating a specific path for your claims and your custom escalation protocols. Customer service representatives should be employees of the service company, trained to capture the data you need and the information necessary to allow the claim professionals to act quickly. These professionals must also be appropriately licensed and supported so they can perform thorough investigations.
After analyzing the facts and issues, claim professionals work with physician advisors, subject-matter experts, and supervisors as needed to create a Strategic Plan of Action (SPOA). The
Strategic Plan of Action sets goals and identifies the steps necessary to assist those presenting legitimate claims and protects you from those trying to take advantage of you.
The SPOA prepares for litigation early by employing a multifaceted-litigation management program designed to minimize legal costs and create the optimal outcome. The claims professional creates a proactive litigation plan and budget and is involved in all decisions regarding the case.
Your service provider makes clinical expertise one of your greatest strengths by using medical bill review, physician review services, critical incident review, pharmacy protocols, and review of specials packages to help discover the true value of each claim. Should legal counsel be needed, legal bill review can help ensure defense fees are appropriate and within reason.
Senior risk analysts provide an added tier of expertise. Each analyst typically has more than 25 years of experience and extensive training in handling complex claims. If a claim meets a certain requirement such as a catastrophic loss or high-exposure, it can trigger the senior risk analyst’s involvement. They offer a broader analysis of the claim and advise the claim professional on coverage, reserves, litigation strategy, and proper disposition. Your senior analysts have the ability to take on several advanced roles. They can handle special projects, train your staff, manage inventory, and look for trends within the data to lower overall risk cost. (WCxKit)
Remember, you want a program using tools tailored to your systems, processes, and expertise to complement your needs. If your company experiences a large volume of liability claims, your provider must be able to establish a client-dedicated service team at a centralized location.
5 benefits of having a great provider:
1. Day-to-day communication.
2. Developing expertise specific to your business.
3. Fully operational and technical support.
4. Pricing options.
5. Lower loss costs.
The right result requires the execution of a thoughtful game plan.
©2010 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 more colorful phrases you will hear in the workers compensation claims office is the term “old dogs”. “Old dogs” is a term referring to the large, old paper files that have been around for years. There are two explanations where the term “old dogs” came from. The first explanation is: As the years went by, the corners of the paper file and some of the papers in the file got the corners bent over, the file became dog-eared. The second explanation is: the claim file is like a dog. During the early start of the claim, it can be very active and things happen quickly like a puppy jumping around. But after a few years, the file, like an old dog, just lays around with nothing happening. (And yes, electronic files can become an 'old dog' too, if they hang around long enough).
The primary reason a claim file becomes an old dog file is a lack of aggressive attention to the file by the work comp adjuster. This is not saying the adjuster did not do a good job on the file. The adjuster may have done a great investigation and made several efforts to move the file forward. What happens is the adjuster gets new claims in on a regular basis that need immediate attention, while the file that is becoming an old dog file has nothing happening at the moment. Therefore the adjuster's attention is on the new claims and not the claim she has for a couple of years or more. (WCxKit)
There is often a reason or even several reasons a claim file becomes an "old dog." Easy to handle files with minor injuries do not become old dog files. The old dog file is going to have either a medical treatment issue, a permanent partial disability issue or both. (While claim files where the employee is receiving permanent total disability payments for years or a widow is receiving life time death benefits are both types of old dog files, we are going to address the old dogs files where something can be done to move the files forward to resolution).
The employee's attorney will often steer the employee to a medical provider the attorney knows will keep the employee off work for as long as the employee wants to be off work or the attorney will take other actions to delay the file from being concluded. There are several things the work comp adjuster can do to stop the flow of disability benefits and excessive medical cost in these situations. This includes:
1. An independent medical examination (IME) by a medical provider who is a specialist in the area of medicine covering the employee's injury. The IME will either concur the employee should remain off work and provide recommendations for getting the employee back to work, or the IME will advise the employee is able to return to work either with restrictions or without restrictions, plus will give a disability rating that can be used to settle the indemnity portion of the claim.
2. If the state is a jurisdiction where the number of IMEs is limited, a peer review of the medical records can be requested from a medical specialist. The peer review doctor can advise the adjuster as to the appropriateness of the medical treatment and the expected time frame (if any) for the medical treatment to be completed.
3. Any claim more than a year old, or older, with on-going medical treatment, that does not have a Nurse Case Manager (NCM) assigned to the claim should have a NCM assigned. The NCM can assist the employee and the medical provider in coordinating the best possible medical care while expediting the medical treatment. [Note – If the employee is known to have a serious injury at the time the claim is reported to the claims office, medical management with a nurse case manager should be started at the time the claim is received. When medical management is started timely, the possibility of the claim every becoming an "old"dog" is significantly reduced].
4. If the issue on the claim becomes the ability of the employee to return to work, a vocational rehabilitation expert should be brought in to the claim as soon as it is mentioned that the employee might not be able to return to the previous job. The voc rehab expert will work with the employer and the medical provider on ways to place the employee with a permanent partial disability back at work. The vocational rehab expert can work out the details of what the employee will be able to do and the details of what the employer needs to do to be in compliance with the Americans with Disabilities Act (ADA).
5. A detailed review of the file by the claims supervisor or the claims manager should be completed to see if there are options available on the claim that the adjuster has missed. [Where this is a routine practice in the claims office, many claims that could become and old dog claim never get to be an old dog.] If the claims supervisor and claims manager are both too busy to give the old dog files this type of attention, an independent claims auditor should be brought in to review the files and make recommendations on how to move the old dog file forward to conclusion.
6. An old fashion round table discussion between the claims adjuster, the claims supervisor or the claims manager, and a couple of senior work comp adjusters is often a good way to identify steps that can be taken to move the old dog file. [The old adage: "Two heads (or more) are better than one."] By bringing other work comp experts into the discussion of the file, the claims adjuster may come up with new ideas to resolve the claim.
7. A source of information that the adjuster often does not think about if the work comp claim is not being contested is the defense attorney that normally handles the contested claims. The defense attorney is often willing to take an assignment to review an old dog claim and to make recommendations on how to bring the claim to a conclusion. (WCxKit)
Old dog claims can be difficult to resolve, but most of them can be concluded if a proactive and aggressive approach to doing so is taken. The individual recommendations above should be combined with as many of the other recommendations as needed to resolve the claim.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and Website 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. www.LowerWC.com Contact: RShafer@ReduceYourWorkersComp.com .
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Success Story: A large transportation company thought their claims were not handled aggressively enough and poorly performing adjusters were driving workers up comp costs. The dissatisfaction had grown to such proportions that they put the business out to bid. They did, in fact, change TPAs.
Resolution: One MD and one senior claim analyst reviewed 20 claims in each of three offices (TX, CA and MA) and found there was a problem with the MA office. The adjuster handling their claims in that office was inexperienced and disorganized. There were administrative quality issues such as lack of supervisor oversight, insufficient investigation, untimely 3-point contact, no recorded statements being taken, and claimants were being overpaid because the “average weekly wage” was miscalculated. IME’s were overused and medical causality was not established prior to claim payment. Pre-existing conditions were not recognized by the adjusters or nurses resulting in higher than necessary reserves. Nurse case management was being brought in too late to be effective. The client, however, thought the NCM was "too expensive" but the problem was really that it needed to be brought in earlier.
We set up new triggers so when an employee does not return to work within 2 days a nurse case manager is immediately assigned. The TPA enhanced their training program to ensure nurses were reviewing files for pre-existing conditions and completeness of medical records. The employer retained a part-time medical director to review claims if an employee had not returned to work within two weeks. IME’s were not requested until the medical director reviewed the file, insured complete medical records were obtained and crafted a custom letter requesting specific medical information.
The employer had insufficient staff to monitor or manage the TPA; there were 3,000 claims annually at over 500 locations with only one person, who was not an actual risk manager, assigned to workers compensation. We suggested the company hire a risk manager and select eleven people (one for each region) to serve as WC Managers (WCM) which was quickly done. Onsite training was done for the new WCMs. The TPA participated in the training to meet the WCMs then did a “national rollout” providing new “panel cards” so employees could select network physicians. The TPA met with each location to open communication channels.
We met with the client, TPA and broker on weekly conference calls for the next 52 weeks until all suggestions had been implemented. To keep team members accountable, we sent an “Implementation Action Plan” to each participant following the conference call.
Result: Losses down 25% for past 3 years and continuing.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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. Contact: RShafer@ReduceYourWorkersComp.com
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Q. Assume you are asked to mediate in a situation where the employer expresses serious frustration with claims handling, and where the tensions are very high, possibly leading to non-renewal. How would you go about your assignment? Here are 5 ideas:
1 - Benchmark the Cost per FTE and Cost per Claim to see privately, prior to any meetings whether the insured is more than, less than or at national average to put the situation in perspective as far as whether or not the alleged poor practices are causing financial consequences to the insured.
2 – Have and MD review files to make sure the claims are valid and determine quality of handling by adjusters and vendors. Files should be given numeric scores so improvement can be measured against a baseline.
3 – Tour the claims operation and sit with the adjusters to speak with them about the claims. They often have great ideas, but no forum to offer those ideas.
4 – Set up weekly conference calls with client, TPA, Claims VP at Broker, and me (I work on behalf of the broker normally). All parties should tour the client operations. MD, etc. can be included.
5 – If there are things the insured needs to do (cost allocation, return to work programs, training, etc.) I would use the “RIMS Benchmark Surveys”(2009 and 2010) to show that a high percentage of other companies utilize the techniques we are recommending, e.g. 86% of companies have RTW programs at all or some of their divisions, etc.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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. Contact: RShafer@ReduceYourWorkersComp.com
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
Q. What should be the role, if any, of the broker in preventing/resolving disputes? More pointedly, what are the reasons behind why a broker may fail to serve this function?
Brokers often have the primary role. TPA/Carriers can also play a leadership role. Brokers can do the following:
1 – Facilitate regular, frequent communication of TPA and insured. Weekly calls, monthly meetings are good. Annual stewardship meetings are not enough.
2 – Take clients on a tour of the claims office. Let them sit with each adjuster: intake, med only and lost time, and have them walk you through each step of a few claims. The employer should ask as many questions as they can think of. What’s this, why that, etc.
3 – Set up a “Vendor Day” where all insurer services are described, examples provided and costs established and questions asked. Make it a structured, group brainstorming session and ask the insurer for their suggestions on how the services can be used proactively. Include the adjusters. They often have great ideas. E.g. – Recently, an adjuster mentioned that my client needed to have a written description of how the accident occurred. Great idea, but no forum to mention it to client, so she opened up to me when I was sitting with her.
4 – Basic problem: Employers “don’t know what they don’t know” so they can’t ask for it. The broker may not dedicate the resources (only national accounts get these services) or they may not have the esources to identify and correct the problem. This is NOT the forte of most brokers. This is the reason I developed Workers Comp Kit® so any size company can quickly, easily and cheaply get an assessment and recommendations; and they don’t have to rely on the broker or carrier.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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. Contact: RShafer@ReduceYourWorkersComp.com
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
An Interview with Rebecca Shafer about how to resolve problems with TPAs and Insurance Companies
Rebecca Shafer is a leading industry expert on workers compensation issues and President of Amaxx Risk Solutions. She developed workers compensation cost containment programs for Marsh and Aon to help their clients implement cost reduction strategies. Her clients typically decrease their costs between 20-50% in incurred losses.
Q. Describe a real example of a dispute between an employer and its TPA/insurer involving a claim or group of claims. Was it resolved and how?
Situation: A large theme park located in Florida thought the insurer was:
a) overcharging for nurse case management,
b) using nurse case management when it wasn’t necessary, (WCxKit)
c) using nurse case management service as a profit center at the expense of the insured, and
d) having nurses do “adjuster level” work.
The dissatisfaction had grown to such proportions the theme park was threatening to move the business.
Resolution: A team of 7 including an MD and 6 senior claims experts reviewed all open files and some closed files in the Florida office. The team reviewed special handling instructions, the carrier’s best practices, the carrier’s Litigation Guidelines to establish performance expectations.
The team scored the files: 87% of claims the files were handled according to account specifications, carrier best practices and industry best practices. The MD determined that nurse case management was used effectively and benefited the claim outcome in most cases. Also, 95% of employees were receiving excellent quality medical care.
One problem was many employees were going to non-network providers thus adding to the cost of medical care. Employees had to wait 4 hours at the in-network clinic several miles farther away, so they went to a non-network clinic only one block away where they were treated immediately.
We set up van service to the farther network clinic and corrected the 4-hour wait problem. We also added the closer clinic to the network and established a relationship with that clinic.
Two-hour training sessions were held for all supervisors and managers explaining what to do when an employee is injured, how to get to providers, quality of care standards, etc. We set up the system so the account receive monthly “penetration reports” to monitor improvement.
A quick benchmark report showed the Cost Per Employee (FTE) was one-half the national average. This indicated, statistically, the carrier was performing quite well and the costs were not being negatively impacted, although improvements were made. THIS should have been done before the problem was out of hand, and the broker incurred a huge fee to correct the problem. Had it been done months earlier, they would have known that the company was HALF the industry average — so really, how bad could "the problem" really have been?
I met with the Claims Manager at the initial stages of the project to get her perspective of why the client was so upset, and she told me she had never spoken with the client. I then spoke with the client and asked her what she had told the Claims Manager about the problem. She said she had never spoken with the Claim Manager. I asked the Client why, given that she was so upset with the claim handling, she had never spoken with the Claim Manager and she said “Well, she should call me; I shouldn’t have to call her.”
Although the real problem was lack of communication, nurse case management was perceived as a problem and festered for months getting greatly exaggerated. At the end of the process, we had all adjusters and the Claim Manager visit the theme park to view operations and transitional duty options. We also had the insured visit the claims operation and medical cost containment facility to understand better the process from the inside.
Result: Losses down 43%. Carrier kept account.
Q. Could the disputes noted have been avoided? If so, how?
Yes, these disputes are almost always avoidable. Many are due to lack of communication.
If the broker had benchmarked the employer losses, they would have known that the Cost per Claim and Cost per FTE (full-time employee) for this employer was half the national average in case #1. In Case #2, the costs were twice the national. This puts the situation in perspective – is there really a problem or is it being blown out of proportion from frustration.
Hold monthly roundtable meetings (conference calls) to insure open communication and discussion of “issues” in a constructive way. Initially, I start with weekly calls. Regular calls at a pre-established time let the client know there is a place to discuss issues.
Q. Please summarize.
Often, complaints are not related to a specific claim such as “the reserve on this claim is too high,” but are vague, such as “the claims are poorly handled.” The insured has a feeling things aren’t right, and they are often correct, but they can’t put pinpoint exactly what is wrong until something big happens like a claim is settled that they know is bogus. (WCxKit)
Often their “gut” feeling is accurate, but they feel silly or trivial speaking to their broker until they have a very clear example, so they wait until things get worse. This is where those operational benchmarks are helpful: it helps employers learn what other companies are doing operationally to control costs. It educates them to “possibilities.”
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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. Contact: RShafer@ReduceYourWorkersComp.com
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
In speaking with Danielle Lisenbey, Chief Operating Officer of Broadspire's Medical Management Services, I learned how important a good pharmacy benefit management program is and what to look for when shopping for a PBM (pharmacy benefit management) program. Lisenby also updated on how the cost of pharmcacy costs has increased.
The 2010 Annual Drug Trends Report for Workers Compensation indicates pharmacy costs in 2009, rose 6.5% with workers taking an average of 11.1 prescriptions per injury.
Employers may want to implement a clinically driven model to reduce pharmacy costs – one targeting these areas: (WCxKit)
1. Delivering appropriate medications to your injured workers.
2. Managing escalating prescription costs.
3. Reducing opioid misuse or abuse.
4. Helping return employees to productivity.
A pharmacy benefit management program uses evidence-based medicine designed to help employers gain more control over costs associated with workers compensation claims. These key points need to be in your program:
1. Utilization management experts assess medications for appropriate use in work related injuries.
2. Examine pharmaceutical data to discover possible misuse or abuse.
3. A clinical review team of nurses and doctors help control prescription costs by working to eliminate:
a. Inappropriate fills.
b. Duplicate prescriptions from multiple providers.
c. Prescription overuse beyond claim guidelines.
d. Multiple prescriptions that counteract or adversely affect one another.
Think in broad terms by giving employees access to multiple pharmacies in a reputable pharmacy management network and mail order service. Look for providers that link to pharmacies in real-time and immediately approve medications at the counter to reduce out-of-pocket expenses for your injured employees. The technology is efficient, with rejected scripts saving employers over 48% of costs in 2009. Look for a provider wtih 24/7 service and toll free access to a pharmacy customer care line. Patient care advocates, bill processors and registered pharmacists should be available to answer any questions that arise. The center also must track orders, prescriptions and other pharmacy program information for every claim. (WCxKit)
A pharmacy program integrates fully with claim, medical bill review and utilization management departments. This close connection helps promote early enrollment for injured workers and allows employers to take greater advantage of the cost saving potentials.
Contributor: Broadspire provided content about their workers compensation medical management services.
For more information, contact Broadspire at 1-866-625-1662 or emailing Broadspire_Info@choosebroadspire.com; www.choosebroadspire.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com
1. Your lack of a safety program is job security for me.
My boss is very much like your boss. If there is not enough work for all of the adjusters, someone is going to get laid off. Fortunately for me (but unfortunately for your employees), you either do not have a safety program or you do not enforce it. Either way, I am guaranteed a lot of extra claims being assigned to our office and I will get my share of them. I know better than to criticize some of the dumb things employers do like not requiring hard hats on construction sites or removing safety guards from machinery. While I may think some of the employers we insure are morons for allowing accidents to happen, I will keep my mouth shut and enjoy the job security.
2. Burnout is a real problem.
This is really a stressful job. Not only am I under numerous time deadlines (the Best Practices guidelines we have impose time limits on almost every step of the claim), the phone is constantly ringing and often I cannot see over the stack of mail on my desk. I have to deal daily with people who are unhappy, whether it is the employer questioning a valid claim, an employee who wants to find a doctor with a better “bedside manner,” or the employee's attorney threatening to file a motion for sanctions because the clerical department sent out an indemnity check a day late. When you have never-ending pressure from many different sources, the stress becomes a motivational killer. We have some real zombie adjusters due to job burnout. (WCxKit)
3. We have a revolving door.
While we have some career claims people in our office, the turnover rate is often 25% to 35% a year in some of the claim offices. There are several reasons adjusters are coming and going constantly. The pay is relatively low for the demands of the job. The claims office often hires adjuster trainees fresh out of college who after a few months or even a couple of years, realize this is not the right field for them. If I can make 10% more money somewhere else, I'm gone. If the office is understaffed (and most are), I have more files than I can handle. If my spouse gets a better job and wants to move to a new city, I'm happy to leave.
4. I never tell you my mistakes.
My loyalties are to my employer, not to the employers we insure. If I do an overall lousy job on your claims, I won't tell you. Unless something really blows up bad, my boss won't tell you either when I goof up. If I fail to contact the employee after the accident, and the employee gets an attorney (which will eventually run up the overall cost of the claim), I won't tell you it is my fault. If I fail to investigate the claim and find out it is a fraudulent claim, while the employee will feel he got away with one, you as the employer will just have an uneasy feeling that something is not right, but we paid the claim anyway. (And yes, your premium will go up because I did not do my job).
5. I am overloaded.
If I work in a state that has few requirements for state form completion, if I am good at what I do, I can handle up to 150 work comp claims at a time. If I move to a state that has a different state mandated form to be completed for everything I do, 125 claims at anyone time is a heavy load. My boss in an effort to keep the cost of doing business down, will let my claim inventory drift up 175 or even 200 claims. There is no way I can properly handle that many claims, but I usually have no say in how many claims get dumped on my desk to handle. It is no wonder we have a revolving door and a lot of burned out adjusters.
6. What supervision?
My supervisor is really a nice person. When I work late, which is often as I am overloaded, the light is still on in my supervisor's office. Ideally, depending on the experience level of the adjusters assigned to my supervisor, she would have four to six adjusters reporting to her. Like me, she is overloaded and often has eight to ten adjusters' work product that she is responsible for, in addition to all her other office responsibilities. Instead of her reviewing my work, she has been assigned an inventory of claims to handle in addition to the supervisory duties. In an ideal world, she would check each of my claims every month, but in reality the norm is she will see my file the first month it is open and again when I am ready to settle the claim.
7. Don't ask me for recommendations.
If you ask me for the name of a defense attorney, I will tell you the name of the defense attorney who takes over a claim from me and quietly does the investigation I failed to do. Or, I will tell you the name of the attorney who happens to be my golfing buddy (but I won't mention that fact), or I will tell you the name of the attorney who throws the best Christmas party. If you ask for the name of a nurse case manager, and we don't have our own, I will give you the name of the nurse case manager who showers the office with post-it notes, ink pens and calendars. If you ask for the name of a surveillance company, I will be glad to share the information on one that I know (as we often go out for drinks after work, but I won't mention that fact).
8. Communication is a two way street.
Yes, our Best Practice guidelines require me to call you within 24 hours of the time the claim is reported to my office, and yes I am required to stay in touch with you throughout the course of the claim (but I seldom do). It is easier for me to forget about keeping the employer in the loop. If you are unconcerned about the employee or about the status of the claim, and never call me, it is easy for me to drop you from the information loop. If you don't make any effort to get the employee back to work on modified duty – it's your money – I will put the disability checks on automatic pilot and they will keep going out until you call me to tell me the employee is back to work (which you may forget to do as we have not been communicating throughout the course of the claim).
9. You make my life miserable.
Between your lack of a safety program and your lack of a return to work program, you create a lot of unnecessary work for me. When you fail to report the claim timely, you alienate the employee and whether or not the employee gets an attorney, your failure to report the claim on time creates a lot of extra phone calls, and makes the claim cost more to resolve. When you have no drug testing policy, no fraud prevention policy, no medical management program and no organized approach to handling claims, I bear the brunt of your mistakes. (WcxKit)
10. I'm happy to let someone else do it.
Since I am overloaded with work to do, I have no qualms about letting the nurse case manager do all the contacts with all the medical providers. I have no qualms about letting the defense attorney do the investigation I never had time to get around to doing. When my mistakes and goof ups do come to light, I have no qualms about letting the broker deal with your irritation. It is not because I do not want to do a good job, I'm just have too much to deal with – see all of the above things I won't tell you.
This is a tongue in cheek parody; please take it with a grain of salt.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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. www.LowerWC.com Contact: RShafer@ReduceYourWorkersComp.com
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
In school an “A” grade is the standard that everyone wants to meet. Whether you are in elementary school or working on your master's degree, your performance results in a grade being given to the work you complete. To earn an A grade requires having at least 95 percent of the school work done correctly. Following the same basic grading principles – A, B, C, D, F – you can measure the performance of your workers compensation adjuster.
The following is a grading outline you can use to measure the performance of your workers' comp adjuster on each claim. There are ten categories with 10 points each, or 100 points total. When your review your adjuster's file on-line, grade each category against the measurements listed here. [If your Best Practices give the adjuster different time lines then what is given here, use your own Best Practice guidelines in grading your adjuster]. Give the adjuster the number of points (zero to ten) earned in each category. (WCxKit)
Category 1 – Employee Contact:
The adjuster should contact the injured employee within 24 hours of the receipt of the claim (same day contact would be more points than next day contact). True contact entails an exchange of information between the adjuster and the employee, not just leaving a message on voice mail. If the adjuster was unable to reach the employee within 24 hours by telephone (or in person on severe claims), a contact letter should be sent to the employee along with a medical authorization or any state required forms. On any claim involving questionable compensability or subrogation, a recorded statement should be obtained from the employee. You're looking for a "quality contact."
Category 2 – Employer Contact:
The adjuster should easily score all ten points in this category by contacting the employer by phone (in person with extreme employee injuries) within 24 hours of receipt of the claim (same day contact would be better). On any claim involving questionable compensability or subrogation, a recorded statement should be obtained from the employee's supervisor. Also, any witnesses to the accident should be contacted if the injuries are severe.
Category 3 – Medical Provider Contact:
The office of the medical provider should be contacted within 24 hours of the report of the accident to confirm the nature and extent of the accident, and the ability of the employee to return to work on modified duty/light duty. In the jurisdictions that do not require a medical authorization to obtain the medical records on the employee's injury, the medical records should be requested during this initial contact.
Category 4 – Investigation:
If the adjuster has done a quality job in the three contact categories, earning points for completion of the investigation should be rather easy.The investigation should address all issues that impact coverage, the nature and extent of the injuries, the benefits owed, subrogation and subsequent injury fund (where applicable). An ISO Index Bureau search should be filed. If the investigation has been completed properly, the adjuster should be able to make a decision on the compensability of the claim. All of this should be accomplished within the first 14 days the claim file is open.
Category 5 – Average Weekly Wage and Benefits:
To earn points in this category, the adjuster should obtain from the employer the wage records or wage documentation on the proper state approved form. It is not acceptable for the adjuster to take the hourly rate off the Employer's First Report of Injury form and estimate the average weekly wage. The weekly wage and the calculation of the indemnity benefit should be clearly documented in the adjuster's file. In addition to calculation of the indemnity benefits with proper documentation of the wages, if owed, they are issued timely. Also, all medical bills are reviewed and paid timely.
Category 6 – Reserves:
The initial file reserve should be set by the adjuster within 72 hours of the file receipt, but after completion of the three contacts – employer, employee and medical provider. After the adjuster has obtained the initial medical records, within 60 days of file receipt, the reserves should be reviewed for accuracy. Throughout the course of the file the receipt of any information, medical or otherwise, that would impact the files, the reserves should be updated. On severe claims that remain open for an extended period of time, the adjuster should review the reserves every 6 months to verify their accuracy.
Category 7 – On-Going Contact:
A mistake that way too many adjusters make is not staying in contact with the employee, the employer and the medical provider. Consistent and on-going contact with the employee will maintain rapport with employee and eliminate many of the reasons that could delay the progress of the claim.The adjuster should maintain the file on diary to ensure all on-going contacts and necessary follow-up is completed. If the adjuster stays in contact with the employee at least monthly until the claim is resolved, and stays in contact with the employer and medical provider as needed, award all 10 points in this category.
Category 8 – Medical Management:
When the adjuster makes the initial medical provider contact, medical management begins. In the initial contact the adjuster should learn the diagnosis, prognosis, the treatment plan and the return to work status.The adjuster should coordinate with the employer and the medical provider to allow the employee to return to work on modified duty as soon as possible. If the injury is severe enough, the adjuster should provide the medical provider with the information on utilization review and pre-certification, plus a nurse case manager should be assigned to the claim timely. If a medical bill review service is used to audit medical bills, the adjuster should ensure all medical bills are sent to the appropriate audit vendor for review and processing.
Important note: To grade this portion of the score, have an MD review the file to make sure the injury is, in fact, work-related. Also analyze whether all medical reports are in the file, that complex medical language is recognized, and that medical care is appropriate, e.g. that nurse case management made a difference in the file and did not simply replace duties an adjuster should be doing. My view is that the best qualified person to review a medical file is a DOCTOR. Use TPAs that have appropriate MD resources for services such as peer-to-peer. If the nature of a claim is unrecognized or inappropriate, it won't matter how many administrative details are done well, because the claim shouldn't have been paid in the first place. Keep this in mind.
Category 9 – Litigation Management:
Any time a workers' compensation board hearing or a court hearing is requested by the attorney for the employee, a prompt referral to pre-approved defense counsel should be done. The initial referral to defense counsel should outline the status of the claim, request a litigation budget and provide instructions to defense counsel on how the adjuster wants defense counsel to proceed. (If the adjuster does not instruct counsel on what the adjuster wants done, deduct at least 5 points in this category). The adjuster should continue to provide on-going instructions to counsel throughout the course of the claim.
Category 10 – File Documentation:
Every activity completed by the adjuster should have a clear, concise file note stating what was done and how it impacts the claim. All medical reports, reports from defense counsel and any other file development should be outlined in the file notes.
Bonus Points:
Occasionally, their will be other important activity in the file that is not included in the 10 categories noted above. For instance, the adjuster's pursuit of subrogation to recover the cost of the claim deserves 5 or 10 bonus points based on your evaluation of how much extra effort the adjuster put forth to recover the subrogation.
Another area for consideration for bonus points would subsequent injury funds or other offsets. Any effort made by the adjuster to mitigate the cost of the claim should be recognizes by the award of bonus points. (WCxKit)
Overall Grade:
Tally the number of points (from zero to ten) you gave the adjuster in each category. Compile the scores from all the claim files you review. Using the A, B, C, D and F grading system you had in school, does your adjuster deserve an “A”? If not, what category/area(s) did the adjuster consistently fail to earn all ten points? Identify the weak areas and ask your adjuster to strive to comply with your Best Practices in those areas. Some TPA's grade their own adjusters; this can be valuable information for you to learn.
Check our
directory of services or email us to find qualified claim reviewers to grade your files. I have several qualified claims reviewers and MDs I use.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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. Contact: RShafer@ReduceYourWorkersComp.com.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
If you ask any workers' compensation adjuster how to calculate the amount of the temporary total disability check for an injured employee who is unable to return to work, you will get a quick answer like “it is two-thirds of their average weekly wage” or “it is 75% of their after tax income”. {While all states do not use two-thirds of the average weekly wage, for the purpose of this blog, we will} In most cases, the adjuster will be correct, but in a small percentage of the disability checks, the employee is underpaid.
The component of what constitutes “wages” is an area of workers' compensation that has almost as many variations as there are states. While the adjuster normally includes vacation pay and holiday pay in the indemnity calculations, many other type s compensation get overlooked. (WCxKit)
Buried deep in the work comp statutes, or in some cases, court decisions, is a definition of what constitutes wages. For the employee who is paid $15 per hour, and never works anything but a 40 hour week, the adjuster's calculation of a weekly disability benefit of $400 ($15 x 40 x 2/3) is correct, if none of the following exceptions come into play.
1. A Second Job:
In about half of the states, if the employee is working a second job for another employer, the employee is entitled to two-thirds of the income lost from the other job. Let's say the above employee is making $15 an hour from your company and works from 8:00 a.m to 4:30 p.m for your company. When the employee get’s off work, he goes down the street and starts his part-time janitorial job that is from 5:00 p.m to 9:00 p.m where he earns $12 per hour. Due to his part-time job, the adjuster will need to add another $160 ($12 x 20 x 2/3) to the weekly indemnity check. This hypothetical employee would get an indemnity check of $560 ($400 + $160) per week, assuming that the $560 per week is below the state cap for weekly indemnity checks. [I know it doesn't seem right that your work comp coverage is paying for lost income from work at another employer, but that's the law in many states].
2. Training Pay:
Closely kin to the second job compensation is training pay. If the hypothetical employee above did not have a second job, but was attending a night class where he was being paid by your company $75 per week to attend, in some states the lost income is owed if he could no longer attend the class due to his on-the-job injury. The adjuster would need to add $50 ($75 x 2/3) to his week check. If the nightly class had only 4 more weeks to run, then after the fourth week, the adjuster could remove the extra $50 per week from the indemnity check.
3. Freebies:
An area of compensation that a lot of adjusters miss (and for that matter, attorneys representing the injured employee) is the value of freebies. If the employer routinely provides free meals or free housing as part of the compensation (think migrant farm worker in a state where migrant farm workers are covered for workers' comp), and the employer no longer provides the free meals or free housing after the injury, the value of the freebies has to be added to the calculation of the weekly indemnity check.
4. Commissions:
The calculation of the weekly indemnity check for the salesperson would seem to be easy like the calculation of hourly workers indemnity check – two-thirds of the average income over the period of time used to calculate the weekly check. This works if the salesperson income is steady, but not with the new salesperson whose income is steadily increasing each week or month. In most states that is too bad for the salesperson with no projection of future earnings being allowed. However, a few states will allow “equitable estimation” and the work comp boards will award it.
Another area of disputes with salespersons on how much their indemnity check should be occurs when the salesperson earns additional commissions or overrides. If the salesperson who sells over and above X number of units per year gets an additional percentage of commission for exceeding the goal but will come up short of the goal due to on-the-job injury, does the adjuster still owe an indemnity payment on the additional percentage? It varies tremendously from state to state. It will normally take some research on the part of the adjuster to answer that question. The same issues apply when the salesperson receives overrides from recruiting additional salespeople but is unable to recruit due to the on-the-job injury.
5. Bonuses:
Bonuses are another area where the employee often gets shortchanged on the indemnity check. For instance, let's say the employee works in a state where only the previous 13 weeks of income (some states use 26 weeks of income, other states use 1 year's income) is used to calculate the average weekly wage. The employee gets hurt on November 1st, and is still off work at the end of the year when the employer passes out the year end bonuses. If the employer does not have the employee on the payroll, and the employee does not receive the bonus, the work comp adjuster would owe two-thirds of the bonus amount. This is only if the sole reason the employee did not receive the bonus is because the employee was not working due to the injury at the time the bonuses were passed out.
6. Tips & Gratuities:
One area where the employees often receive less money than what they should receive on the indemnity checks is the employees who earn tips and gratuities in addition to their base pay. When the employee is injured, the employer reports the income amount that is on the employer's record. When the adjuster tells the employee what the amount of their indemnity check will be, they often hear from the employee “that's not right, that does not include the tips that I did not report”. When the waiter, bell-hop or taxicab driver tells the adjuster they cheat the government out of tax revenue by under reporting their income, there is nothing the adjuster can do about it. [What the adjuster is thinking but won't say – 'if you are willing to cheat Uncle Sam on your income tax, you are probably willing to cheat the insurance company on your work comp claim'].
7. Benefits:
In some states the employer is allowed to discontinue contributions to 401k plans, health insurance and other benefits when the employee is off work for an extended period of time. If the employee has to pick up the tab for the health insurance or other benefits, some states require the work comp adjuster to consider the value of the lost benefits in the calculation of the weekly indemnity check amount. (WCxKit)
Summary:
The calculation of the indemnity check depends on what the state statutes require. Both the employer and the workers' compensation adjuster need to know the lesser known points of what is considered a part of the employee's compensation in their own state. CHECK YOUR STATE LAW!
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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.
Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
©2010 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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