The above title seems absurd. Why would anyone pay to be disabled? The answer is that far too many people see disability as an investment – especially for retirement or a lump-sum payment at the expense of employers and the workers compensation insurance system paid for by employers.
Disability is currently a vast industry. Workers comp, no-fault, Social Security, and long-term disability are disability programs that have experienced explosive growth in the past 40 years – and have established a firm presence on late night cable stations in the form of lawyer advertisements. (WCxKit)
Amazingly, many people who do not look, act, or feel disabled wish they did; at least in a submitted medical report, in hopes of getting “benefits.” Such reports are not free. They come at a price. Actually, two prices. One price is paid to the doctor for the report. The other price is paid by the patients in ways they never imagined.
Disability is not a hobby. It is a full time job. Furthermore, it is the most expensive job most people will ever have – and they, in the end, pay for these expenses. There simply is no free lunch. When you wish to present yourself as disabled your wish comes true. You begin to act, think, and finally BE disabled, although not entirely physically. One exchanges a full time job for activity of little purpose for less than half your former wages as an able person.
But what is the entry price for becoming disabled? Many doctors charge nearly $1,000 for an exam and a report. If the report is for a negligence claim it is far higher. And you need not fear the report will conclude you are healthy and in good shape. It won't.
Every workers comp lawyer has had a client at one time or another who was a convincing example of the ravages of injury and disability. However, at the time of the modest final settlement, the client will suddenly blurt, “If I had known this was all I would get, I would have gone back to work years ago!” See:
A “successful” disability claim ought never to be measured in weeks, months, years or decades of disability; the goal is return to the prior disability-free life. The monetary payments are a measure of losses, not gains. Consult with your spouse and children before you consider a career change to “disabled.” (WCxKit)
Author Attorney Theodore Ronca is a practicing lawyer from Aquebogue, New York. He is a frequent writer and speaker and has represented employers in the areas of workers compensation, Social Security disability, employee disability plans, and subrogation for over 30 years. Mr. Ronca has 21 years experience in searching and retrieving medical records and many other types of documents for defense of workers compensation claims. Contact
Attorney Ronca at 631-722-2100 or medsearch7@optonline.net.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©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.
There are three types of workers compensation claim offices. They are:
1. The insurance company claims office
2. The third party administrators claims office
3. The in-house claims office of the self insured employer
.
[While their approach to handling the work comp claims may be very similar and all three types of claim offices must abide by the same regulations in their state, the organizational structure of the claims office will differ, sometimes significantly.]
What most people think of when they think about a workers compensation claims office is the claims handling by the insurance company. In the insurance company claims office, you have the typical structure – claims manager, claim supervisors, claims adjusters and support staff. All of the staff are employees of the insurance company who sold the work comp insurance policy to the employer. The insurance company claims office will often have contact with the sales department and the underwriting department, as well as other departments of the insurance company. (WCxKit)
Where the insurance company has enough volume of claims to support having its own staff to handle the claims, they will utilize their own claims offices. However, in the areas where the insurance company has some volume of claims, but not enough to justify the cost of operating their own claims office, they will enter into a contract with a third party administrator (TPA) to handle their claims for them.
The TPA claims office will be set up basically the same as the insurance company claims office. The primary difference between the claims office of the insurance company and the TPA is in the ownership of the claims office. The TPA is a separate company from the insurance company. The TPA claims office will have very limited, if any, contact with underwriting, sales and the other departments of the insurer.
While the claims handling activities are transferred to the TPA, the insurer or the self-insured employer who contracted with the TPA for claim service remains financially liable/obligated to pay the cost of the claims. The insurance company can not contract away its responsibility to its policyholders.
The TPA will handle claims for several different insurance companies and/or self-insured employers at the same time. Through combining the claim volume of claims of several companies, there are enough claims to justify the cost of the claims office.
The reason large employers self-insure their claims are to reduce the cost of workers compensation. Since the self-insured employer does not have an insurance company to handle their claims, they have two choices, utilize a TPA claims office or create their own claims office. The self-insured employer can create an “in-house claims office”. The claim manager, claim supervisors, claims adjusters and support staff are all employees of the self-insured employer. By utilizing their own employees to handle the work comp claims, the employer reduces the operational cost of insurance. The primary drawback of an in-house claims office is the employer usually does not have the expertise necessary to adjust claims and must hire employees with the necessary skills. The in-house claims office is usually unrelated to the primary business field of the self-insured employer.
The states vary in the licensing requirements for insurance company adjusters, TPA adjusters and the self-insured employer's adjusters. Some states require all adjusters to have an adjuster license, while other states will require only the adjusters of TPAs to have a license, while the adjusters who are employees of the insurance company or the self-insured employer will not be required to have an adjusters license. (WCxKit)
The primary reason there are three types of claims offices is the cost of administration of claims. The insurance company claims office is the most cost efficient way for it to handle a large volume of claims. The TPA claims office provides smaller insurers, self-insured employers and large insurers with limited volume in an area, with a lower cost way of administering claims than having their own claims office. The in-house administration of claims is also tied to the ability of the large self-insured employer to handle work comp claims more cost effectively than contracting the claims handling to a TPA.
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. See www.LowerWC.com for more information. Contact:RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©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
Often it is assumed the designated adjuster(s) working on your workers compensation files is a good adjuster. But, you know what “they” say about “assuming.” Use these eight tips to judge your adjuster(s) overall ability and effectiveness.
1. Timely Contact with All Parties
Track how often the adjuster makes timely contacts. If your Best Practices say claimants, medical providers, and the employee's supervisor must be contacted within 24 hours of the first report of an accident, expect your adjuster to be making timely contacts with all parties at least 90% of the time. The higher the percentage, the better. Timely initial contacts go a long ways toward establishing the future tone of your claims and establish the adjuster as the person in charge. (WCxKit)
2. The Accuracy of Reserves
When you look at your loss run and compare what the claim settled for against the claim reserves you gain insight into the ability of the adjuster to evaluate the claim. If you see a lot of reserve changes right before the claim settles, then the adjuster is either inexperienced at evaluating the claim or is indifferent to the impact reserves have on your company. If you see the reserves on the claim were established since the adjuster obtained key medical information on the injured employee, you know the adjuster is looking out for your financial interests.
3. Responsiveness
Does the adjuster always answer the phone when you call, or do you often have to leave messages and wait a few days to hear back? When you send e-mails, do you get a prompt response, or do you forget what the subject of the e-mail was by the time the adjuster responds? A good adjuster tries to keep you informed about your claims and takes the time to respond to your questions and needs. The quicker the response from the adjuster, the better the adjuster.
4. Payments Timely
If your employee complains the TTD or TPD check did not arrive on time, then the adjuster is not organized (or may have too many claims to handle properly). You should expect never to hear from an employee about the indemnity check not arriving. If your employees are receiving dunning notices from their doctors on medical bills, then the adjuster is not processing the bills timely. While any adjuster may occasionally have a medical bill or other missed expense, you or your employees should not be constantly getting reminders on medical bills.
5. The Number of Employees Lost to Attorneys
The good adjuster stays in contact with employees out on workers comp. The great adjuster builds rapport with the employees and the employees make an effort to keep their adjuster informed as to their medical progress and their ability to return to work. The poor adjuster has a higher percentage of employees represented by an attorney then the good adjuster. As the percentage of employees represented by attorneys is impacted by the legal climate in your locale, you must consider the results of your adjuster compared to other adjusters in the same locale.
6. Knowledge of Workers Compensation
When you have a question about workers comp in general, the good adjuster can answer it for you, (or at least get you the answer). If the adjuster does not know the answer, or tells you it would be better for you to talk to a workers comp attorney or the adjuster's supervisor, the adjuster's workers comp knowledge is weaker than it should be. The good adjuster knows all the ins and outs of state statutes and is willing to share that information with the employer.
7. Claim Quality Audit Scores
Often claim offices do not want to talk about their claim quality audit scores. This often arises out of a concern that the employer may not understand that the 100% perfect claim file seldom happens. However, the good workers comp adjuster scores in the 90+ percentile. Ask the adjuster for a copy of the most recent audit score. The good adjuster is glad to share it with you. The weak adjuster probably has reasons why it cannot be shared.
8. Closed Files Reopened
Every adjuster knows the best file is the closed file. However, it is seldom a good idea to close a file prematurely. The good adjuster makes sure all aspects of the claim are resolved, all medical bill paid, all indemnity checks issued, and all expenses paid before closing the file. If you see more than a few reopened files on the loss run report, than the adjuster is closing claims prematurely. (WCxKit)
None of these 8 criteria alone indicate a good or poor adjuster. When the adjuster is strong in all 8 areas, you have a great adjuster working your claims. If the adjuster is weak in most of these areas, it is time to consider requesting another adjuster to handle your workers comp claims. Having a strong adjuster on your claim files makes your life easier and saves money. A few select TPA's DO actually "grade" their adjusters, giving monthly bonuses to those that excel, and get high grades – nearing 100.
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. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©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 recent years, the New York Workers Compensation Board (NY WCB) has begun to enforce rigorously “voluntary withdrawal from labor” as a reason for discontinuing wage loss benefits, even where the worker is found to be permanently partially disabled. But, what if the worker is partially disabled but becomes further disabled from a later condition?
A new decision, Matter of “Bobbitt v Charbonneau Construction,” 2011 NY Slip Op 04790, Decided on June 9, 2011, Appellate Division, Third Department states other medical conditions do not alleviate a worker’s responsibility to continue to seek employment within the worker’s capacities, even though the capacities are diminished. This opinion is uncorrected and subject to revision before publication in the Official Report. (WCxKit)
Therefore, an employer should make sure its carrier/TPA has the means to investigate the effects of unrelated medical conditions to ensure a proper defense can be maintained. At the very least, the carrier should be advised whenever workers are covered by group or individual medical insurance and who the insurers might be. The existence and identity of such plans does not violate principles of privacy or confidentiality. Obtaining the records can be done by lawful means, but only if one knows upon whom to serve the proper papers.
The decision is not, and will not be, an isolated exception. The very workers most likely to become permanently partially disabled are those, especially by reason of age, who are most likely to have other problems. Almost a third of all workers, according to a 1980s federal study, have some form of permanent medical condition. For workers on permanent compensation disability the number well exceeds two thirds.
New York lawyers recently considered every way around the rules for voluntary withdrawal. “Unrelated medical disability” seems to be a possibility. With proper investigation, it need not be. A proper investigation can show many conditions sounding conclusively disabling are, in fact, transitory or do not actually effect work activity.
Every employer has the right to expect its claims to receive proper investigation by its carrier/TPA. A carrier not following up should be alerted to the existence of such decisions as “Bobbitt.” Claimant admitted that he has not worked nor sought employment since shortly after his accident and has failed to participate in vocational and educational services to which he was referred. Thus, substantial evidence supports the Board's determination that claimant's separation from the labor market is voluntary in that it is due to causes other than his compensable injuries. (WCxKit)
Author Attorney Theodore Ronca is a practicing lawyer from Aquebogue, New York. He is a frequent writer and speaker, and has represented employers in the areas of workers compensation, Social Security disability, employee disability plans, and subrogation for over 30 years. Mr. Ronca has 21 years experience in searching and retrieving medical records and many other types of documents for defense of workers compensation claims. Contact
Attorney Ronca at 631-722-2100 or medsearch7@optonline.net.
FREE TOOLS
©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
You are at work. An accident happens. So, you qualify for workers compensation coverage, right? Compensating workplace injuries is why the employer pays for coverage – right? Not so fast, it's not that easy.
Sometimes, the answer is “sometimes.” There is a big difference between an injury happening at work, and the injury being
“work-related.” The golden rule is: the injury has to
“occur within the course and scope of employment” and "arose out of the circumstances of employment." Of course, each jurisdiction states the law slightly differently, so check state law. For more information:
Is the injury compensable.
Here are five common examples of questionable compensable “workplace” injuries.
Note: Coverage can vary by jurisdiction. Always check with your adjuster for any scenarios applicable to your particular workers compensation cases.
Example #1: I hurt my back lifting a box.
Back injuries may be the most common of workers compensation claims. An employee, doing normal work duties, feels back pain. Is it covered? Ask these questions:
1. Was the worker doing normal job duties?
2. Was the injury witnessed?
3. Is this an isolated incident?
4. Did the pain start off slowly, then worsen over time or was it more acute in nature?
5. Was it reported promptly and to the proper person?
6. Does the worker have prior back injury claims or prior surgery to the affected area?
The employer may be on the hook for accepting this claim as a strain. However, if later the worker needs surgical intervention to repair ongoing pain, then the claim may be disputed. Reporting the claim late and/or not receiving treatment right away can affect the compensability of the claim. The importance of prompt injury reporting and proper medical treatment can mean the difference between a “back injury” claim being accepted or denied.
Example #2: My shoulder hurts from doing my normal repetitive job duties.
Repetitive job injuries are quite common. The same employee comes to work day after day, doing the same job on the same machine for months, maybe years. But whether the job actually caused the injury is the main question. Some states are much more restrictive allowing repetitive injuries than others — so check state law!
If the worker reports a repetitive job injury, and an MRI later shows all kinds of arthritis in the shoulder, then this claim may not be accepted. Unless the worker can prove the job duties led to an aggravation of the pre-existing degenerative conditions, the claim may not be covered. The employer may be on the hook for a temporary strain or exacerbation, but once a surgical repair is recommended, this claim could be denied by an IME physician.
Everyone has a different degree of ongoing arthritic issues in their bodies. There are 25-year-old workers with shoulders looking like they have been through the mill. And there are 65-year-old workers with perfectly healthy shoulders. It all depends on genetics, the job being done, and for how long. The physician must be able to differentiate between what is a pre-existing degenerative arthritic condition, and what damage is specifically related to the job tasks.
Example #3: I slipped on water on the floor and twisted my knee, but I don’t need medical treatment.
Watch out for these claims. Some workers do not run to the doctor for every little ache and pain. Some are afraid to miss work for financial reasons. Some are afraid to report a claim because they are afraid of being laid off or moved to another job classification.
The most important thing for the employer to do in these cases is to document the incident internally. Workers must know it is “okay” to report an incident, but if they don’t go to the clinic for treatment they run the risk of their claim being disputed down the road.
The workers comp motto for claims adjusters is: “Workers injured at work go for medical treatment because they are injured.” The reality is some people do not want to get treatment at the time of the injury. They may have heard the workers comp clinic has bad service; or they have to wait for 3 hours before being seen. These issues are detrimental to the claims adjuster, since a worker may have a legitimate injury but due to these outside factors does not get treatment at once. Failure of the worker to get medical care does not mean the worker is not hurt. It means delays in
medical treatment complicate the claim down the road potentially leading to a denial.
Example #4: I was injured in a car accident while driving a work vehicle.
Auto accidents in employer vehicles can be tricky. Every state has its own rules when it comes to these types of accidents. Just because a worker is driving a company vehicle does not mean the claim is automatically accepted. A thorough investigation is required. Questions to ask include:
1. What was the worker doing at the time of the accident? Think distracted driving.
2. Where was the worker heading when the accident occurred?
3. What were the worker’s exact job tasks while in the company vehicle?
4. Who was at fault at the time of the injury?
5. Was there a police report?
6. Did the worker get medical treatment at a hospital?
7. Was a drug/alcohol test done at the hospital?
The answers to these and others questions determine if the claim is accepted or not. Sure, if you are on the way to a job site and an accident occurs, you may be entitled to some benefits but there is no guarantee.
Example #5: I was horsing around with another employee when I fell and injured my hand.
Believe it or not, some states actually cover a degree of “horseplay.” The hard part for the adjuster is determining the degree of horsing around that will lead to the claim being accepted or rejected. Typically, it is common practice for the adjuster to deny this type of claim, but not always. Statutes involving horseplay are usually vague, and open to interpretation. The employer needs to do a detailed investigation involving all parties, and the adjuster should take statements as well to see if they match up. After the investigation, consult an attorney to see if the horseplay act causing the injury would be covered.
Summary
Just because you suffer an injury at work does not mean you have automatic coverage under the Workers Compensation Act. Every scenario is unique, and most injury details are not the same. The employer plays a very important role in the initial investigation of all claims, and the more details provided to the adjuster, the better decision the adjuster can make as to claim compensability – or not.
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. See www.LowerWC.com for more information. Contact:RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©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.
A new report from the Centers for Disease Control and Prevention (CDC) reports that the U.S. is on pace to eliminate tobacco smoke in all public indoor spaces through state laws by 2020, if smoke-free advocates can accelerate progress in the states that still do not have smoke-free laws in effect.
"The progress made during the past decade in enacting comprehensive state smoke-free laws is an extraordinary public-health achievement. In the span of 10 years, smoke-free workplaces, restaurants, and bars went from being relatively rare to being the norm in half of the states and the District of Columbia," the CDC states in an update on smoke-free policies published April 22, 2011 in Morbidity and Mortality Weekly Report. The report is based on data in the CDC's Prevention's State Tobacco Activities Tracking and Evaluation (STATE) System database. (WCxKit)
The number of states with comprehensive smoke-free laws banning smoking in bars, restaurants, and indoor work sites increased from zero to 26 from 2001 through 2010. There are also 10 states with laws that prohibit smoking in one or two but not all three of these types of locations. Eight states have less restrictive laws, such as laws allowing for smoking in designated areas or areas with separate ventilation, and seven states have no statewide smoking restrictions in place for private work sites, restaurants, or bars.
The report points out that no southern state has a comprehensive public indoor smoking ban in place, but a large number of communities in these states have adopted comprehensive local smoke-free laws, so the authors of the CDC report believe "the Healthy People 2020 target of enacting smoke-free indoor air laws that prohibit smoking in public places and work sites in all 50 states and D.C. can be achieved if such laws continue to be adopted at the current pace, and activities are intensified in southern states." (WCxKit)
One of the CDC's Healthy People 2010 objectives unveiled in 2000 called for every state and D.C. to enact laws eliminating smoking in public places and work sites, and this goal has been retained in the Healthy People 2020 goals. The effort picked up steam in 2006 when the Surgeon General concluded that no level of exposure to secondhand smoke is risk-free and that the only effective way to eliminate the risk is to completely eliminate smoking in all indoor areas.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact:Info@ReduceYourWorkersComp.com
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©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
One of the scariest parts of expanding a business into a new state for the self-insured employer is learning the workers compensation laws and state mandates in the way of forms, filings, hearings, etc. While an employer can hire a third party administrator (TPA) to handle claims, or a law firm to guide you through all the steps of workers comp claims handling, it is in your best interest to learn the basics of the workers comp system in the new state quickly. Or, get a good resource that has such information. Ask your TPA what resources they use. Even though they have professional resources, similar resources can be very helpful for the self-insured company.
Self-insured employers have two choices: spend weeks/months learning the new workers comp system or, to borrow a video game phrase, get “cheat sheets” to speed up the learning process. (WCxKit)
Many law firms specializing in insurance defense work sometimes offer “cheat sheets” to new adjusters and potential new clients as a way of building business. Instead of the employer spending “forever” learning the basics of the new state’s workers comp law, the cheat sheets give a synopsis of important information the self-insured employer needs to know.
If you want a jump of learning this information and don't want to rely on free cheat sheets, excellent information – in easy to use tables – is available from
www.workcompresearch.com.
Common cheat sheets/reference tools include:
1. A list or a table of state forms and when each is to be filed.
2. Explanations of state forms and rules associated with each form.
3. Table of temporary total indemnity benefits by calendar or fiscal year.
4. Table of temporary partial indemnity benefits by calendar or fiscal year.
5. Table of permanent partial disability benefits.
6. Table of scheduled injuries.
7. Charts for combining two or more
impairment ratings.
8. Death benefit tables.
9. Table on statutes of limitations on filing claim, appealing claims, etc
10. Calculation of indemnity benefit guidelines.
11. Checklist of defenses to claims.
12. Charts or tables on how the judicial system works.
13. Claim settlement guidelines.
14. Guidelines on the selection of medical providers.
15. Guidelines on posting a panel of physicians
16. Forms for:
· New employees/transferred employees to sign acknowledging the selection of a physician.
· Injured employees to acknowledge the attending physician requirement(s).
· Requesting a new physician.
· Employee to decline medical treatment.
17. Samples of required state notices for posting.
18. Recent changes in the state law.
In addition to the cheat sheets, get a glossary of workers compensation jargon and terms as used in a particular state. This type of glossary also assists you in understanding the abbreviations often used within the state, for example – DOAH (Florida Division of Administrative Hearings), BRC – Benefits Review Conference, or IW – injured worker. (WCxKit)
Summary
A new employer in a state can spend time learning the workers comp system, contact some of the law firms specializing in insurance defense work or consider
www.WorkCompResearch.com as eventually learning the system in the new state definitely has it benefits, but
quickly learning the basics summarized by experts speeds up the learning curve and assists in understanding the workers comp system.
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. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©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.
Whenever a claim quality auditor or actuarial auditor sees numerous small upward changes in the workers’ compensation claims reserves, he knows he has a case of an adjuster stair-stepping the reserves. If you draw a graph of the reserves, it looks like a set of steps—flat, up, flat, up, flat, up
When the adjuster keeps
raising the reserves in relatively small increments to pay medical bills, indemnity or expenses, a basic principle of accounting is ignored. Sound accounting for an insurance company or self-insurer is to set aside money to meet the financial obligation brought on by the claim against the insurance policy. When the adjuster does not establish the correct reserve, the insurer’s financial balance sheet is inaccurate, either overstating or understating its assets. With stair-stepping of reserves, the insurer assets are overstated on the balance sheet, as the liabilities—the claim where the reserves are understated—are incorrect.
The ultimate cost (also known as total cost) of the workers compensation claim is the amount that should be shown on the reserves at all times. When the claim is assigned to the adjuster, all the information needed to establish the ultimate cost of the claim is not known to the adjuster, hence there will often be changes in the amount of reserves over the life expectancy of the file. The initial reserves should be based on the adjuster's experience with similar claims, but as facts change – the employee has surgery, the employee's level of disability is greater or lesser than normal, the claimant has co-morbidity issues that lengthen the recovery process, etc. – the reserves should be raised, or lowered, as needed. However, if the adjuster is raising the reserves to pay for this week's medical treatment, and raising the reserves next month to pay for the next doctor's visit, the adjuster is “stair-stepping the reserves."
The difference between the adjuster who increases the reserves correctly and the adjuster stair-stepping the reserves is the number of reserve changes. A few well-reasoned and carefully thought out reserve changes is the proper way of making reserve changes. Many small reserve changes without any thought as to the ultimate value of the claim is stair-stepping the reserves.
To avoid stai-stepping the reserves, the adjuster needs to know several things including:
1. the expected recovery time for the employee,
2. the average weekly wage and the indemnity rate (as all indemnity calculations flow from these numbers)
3. the ability of the employer to return the employee to work on modified duty or light duty while they recover from their injury
4. the approximate cost of the medical procedures the employee will have for the type of injury incurred,
5. the reputation of the medical provider for returning employees to work or keeping them off work
6. the anticipated level of permanent disability the employee will have
7. the cost of services for medical case management, legal, and other claim associated cost
8. the requirements of the workers compensation statutes where the employee will receive benefits
The claims office will have either an electronic or paper reserve worksheet calculation page where the adjuster can fill in the calculations for each of these items to obtain an accurate projection of the future / ultimate cost of the claim. This will result in the accurate projected value of the claim and the correct amount of money for the adjuster to place in reserve for the claim. When the adjuster skips the reserve worksheet calculation step, they often end up stair stepping the reserves. (WCxKit)
Stair stepping of reserves by adjusters should be avoided, and can easily be done by the utilization of the known information about the medical, indemnity and expenses for the individual claim. Proper reserving keeps the insurers financial balance sheet accurate, while stair stepping reserves understates the insurers liability.
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. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©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
Risk managers have come to realize that proper medical case management can have a major impact on the cost of workers compensation claims. Medical case management from the initial report of the work comp claim to the final conclusion of the claim will impact the overall outcome. An understanding of the various levels will ensure the proper utilization of medical case management.
Medical case management is often broken down into five primary areas (which occasionally overlap). The five areas of medical case management (also sometimes referred to as nurse case management) are: (WCxKit)
1. The triage nurse gets the claim at the time the injury is reported to the employer
2. The senior nurse reviewer (SNR) gets the claim at the time it is reported to the insurer or third party administrators claims office
3. The telephonic case manager (TCM) gets the claim from the adjuster when the claim triggers a predetermined parameter as specified in the account instructions, or in the judgment of the adjuster, is needed
4. The field case manager (FCM) is assigned the claim when the adjuster determines the employee needs in-person medical assistance
5. Complex Case Management is a specialty service where a team of health experts and claim experts move a long-term claim, often over 30 years, to closure.
6. The medical director, a doctor, is involved in the complex medical cases or medical cases where causality is in question.
The triage nurse will review the initial report of injury to determine the immediate medical needs of the employee. The triage nurse will direct the employee to the appropriate medical provider (in the states where the employer selects the medical provider) and arrange for immediate medical care in emergency situations. The triage nurse will evaluate whether or not the employee may need to see a specialist and whether or not the injury may cause the employee to lose time from work.
The initial directions provided to the employee and the triage nurses assessment of the severity of the claim is reported to the work comp adjuster. Many insurers and third party administrators will have the triage nurse follow up with the employee and the medical provider immediately following the initial treatment to determine the medical providers diagnosis and the need for further medical care.
The responsibilities of the senior nurse reviewer are to address the need for medical case management on the unusual or complex medical cases. For example, an airplane pilot flying long distances develops pulmonary emboli (a blood clot from the leg or another part of the body that gets stuck in the pulmonary artery leading to the lungs). The senior nurse reviewer needs to have extensive medical knowledge to assess whether the development of pulmonary emboli is due to the pilots many hours of sitting in the same seat or is due to a medical cause not related to the pilot's occupation.
The TCM nurse is the busiest of the different levels of medical case management. Some employers and insures have a claims handling parameter that a TCM will be immediately involved in any case determined to be an indemnity benefits case. Other employers and insurers allow the adjuster to determine whether or not the TCM is needed. The nurse case managers role in the workers compensation claim will often include:
1. Facilitating the medical rehabilitation of the injured employee
2. In consultation with the treating physician……evaluate the options for the best treatment plan for the injured employee
3. Coordinating the medical care to achieve the best possible medical results in a cost-effective manner
4. Insuring the proper utilization of medical treatment
5. Providing guidance to the adjuster about the medical care needed
6. Monitoring the employees medical progress
7. Acting as a liaison between the physicians, the employee and the insurer
8. Facilitating the communications between the employee, employer and physicians
9. Keeping the adjuster informed of the employees medical status and progress
10. Meeting with the employee and the employer to complete a detailed job evaluation
11. Assisting the employer in identifying the return to work options
12. Coordinating the employees return to work (either modified duty or full duty) with the employer, employee and physician
The Field Case Manager (FCM) has a role similar to TCM with the principal difference being the “hands-on” approach of the FCM. The FCM will normally meet with the employee to discuss their injuries, especially if the employee has been hospitalized. The FCM will also accompany the employee to the various medical appointments. The FCM will normally be involved in the more serious injuries where rehabilitation will be needed or the nature of the injury is such that a permanent disability is expected. (WCxKit) Field Case Management Nurses can also assist with Life Care Planning, assisting with those issues that an injured employee with permanent disability might need to make their environment safer.
The most expensive claims can be almost life-long, long term claims, sometimes 30 years old. For some reason, these claims have been difficult to progress. This medical case managment service assists in removing obstacles the employee has had over a long period of time including medical problems, health challenges, and mental or psycho-social challenges. A team of health professionals work together to determine obstacles and develop a care plan to progress the case forward. These are the claims many risk managers and carriers simply give up on. Call me for a reference to this type of resources, or check in our Directory.
Important: nurse case managers and nurse triage nurses should be URAC Certified which has stringent protocol for education, credentials and training for these services.
The medical director is a doctor who has extensive knowledge and experience in the evaluation of medical conditions and the implementation of appropriate medical care. The medical director will act as a consultant and an adviser to the triage nurses, the senior nurse reviewer, the TCM nurses and the FCM nurses. The medical director can be called on to provide in depth medical reviews and to collaborate with the treating physician on the best course of medical care for the employee. Peer-to-peer doctors should be URAC certified; the best TPAs and carriers are URAC certified. This should be included in your RFP.
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. See www.LowerWC.com for more information. Contact:RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©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
Many injured workers and the public in general often feel it’s “them” against the EMPLOYER. They also think insurance companies live to deny claims – of any type. So, okay – now and then we hear of an insurer who denies claims left and right, but in truth most claims are accepted.
When claims are denied there is usually a good reason. Let’s explore how an adjuster handles fraudulent claims…
The Fraudulent Claim
When the adjuster has questions about a claim it may be denied or suspended pending investigation. Receiving a Notice of Dispute or Suspension of Benefits does not mean the claimant (injured worker) is suspected of fraud, it just means there is an ongoing investigation to determine the validity of the claim- the claim is being substantiated.
Fraud constitutes statements made or injuries claimed that are 100% untrue. Carriers rarely see an outright fraudulent claim in workers compensation even though this is what is so often reported on television. The carrier must prove without a shadow of a doubt that the claimant is lying about the circumstances or statements surrounding the injury claimed. And, even though I use the words "shadow of a doubt" that is not the true legal standard for how much proof the carrier must have. The burden of proof is established by the workers comp laws in each respective state and varies, and is much less than in a criminal case.
Adjusters are always looking for more definitive information from doctors including: past medical records, workers comp injuries or auto accidents, pre-existing conditions, and witness statements to help correlate the injury to the claim details. They will also review photographs of the location where the injury is said to have occured and a handwritten statement from the claimant. A recorded statement is critical for further action against the claimant if the claim is determined to be fraudulent. Good claim investigation takes time. Medical report statements and objective medical evidence are the most solid details to go on.
If a worker claims a knee injury at the workplace, unwitnessed by anyone and has no classic signs of a knee injury, that doesn’t constitute fraud. It just means the claim is weak and may be denied. In such a case, an adjuster may speak with the insured to request surveillance to "see" what degree of disability the claimant is exhibiting in their day-to-day activities.
On the other hand, if the worker claims a knee injury and submits a medical slip created on a home computer, fraud is possible if it is an attempt to submit a piece of evidence for the support of a claim that is a 100% fake. The carrier may initially accept the claim and then discovers through investigative means the medical slip is a fake, completely made up or altered to state there is a higher degree of disability than there really is. The claim will be denied and, in some jurisdictions, the carrier will pursue recovery of payments made to the claimant through legal means.
A claimant has to be very bold, and ready to risk probable legal action from both the carrier and the state were the claim is filed. Filing a fraudulent claim is not very rewarding, and the down side is huge – which is probably why true fraudulent claims are rare. (WCxKit)
A claim under investigation doesn’t mean it is denied due to fraud. It means the adjuster’s investigation is not complete. The most common mistake employers make is not reporting a claim to the adjuster. Even when an employer has a good idea the “injury” is not legit, or doesn’t make sense, report it and let the adjuster decide. If the claim is denied be assured it is done properly and ethically.
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. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©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.
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