Average claim life continues to increase due to the injury severity and increasing medical treatment costs. While employers continue their involvement in processing claims to reduce costs, insurance companies/TPAs also must do all they can to save on the costs of handling and controlling
claims. Here are five ways to reduce WC costs.
1- Do not sign a contract for services with one national company/vendor
In an effort to control cost, insurance companies go to independent medical examinations (IME) or medial case management vendors for bids. The low bidder receives a non-compete contract from the insurance company/TPA for the life of the contract.
Good idea? Unfortunately low service costs are not the only criterion helping to resolve claims. These companies must proactively provide services in handling claims to resolution based on the TPA/insurance company’s criteria. If the vendor has no competition, how hard will they work in assisting you to resolve issues given they have a contract for a year – bought and paid for? (WCxKit)
2- Be aggressive with medical bill cost containment (per jurisdiction)
Bigger TPAs/insurance companies have internal
cost containment departments, otherwise known as “medical bill review” or “medical fee reduction.” Smaller places use an outside vendor for these services. There are a number of good vendors who do utilization review/cost containment at a reasonable cost. Whatever the name, their role is to reduce the costs of medical bills — procedure code by procedure code, depending on the TPA/insurance company’s participating medical network(s).
Often what is missed is some providers/clinics are open to agreeing to a lower fee. If a popular physical therapy clinic in your area nets many of your claimants, it is worth a phone call to negotiate a 10 percent under fee-reduction price in exchange for “preferred provider” status. (Check jurisdiction and legal counsel.) Think long-term. Any reduction is worthwhile especially for the price of a phone call.
3- Stay on top of your claims by being proactive
Some claims remain open due to adjuster laziness. This is especially true when the case is in litigation. By proactively handling the file and using negotiation skills, claims may be resolved months earlier instead of lingering from litigation date to litigation date without any aggressive attempts at resolution. Become involved and stay involved until the case is resolved. Prioritize your files and stay on top of them and before you know it the claim is ready to be closed.
4- Use telephonic nurse case management
When a worker is off work, every day of lost wage is an expense. You want to do everything possible to bring the worker back to the job as quickly as possible. Telephonic nurse case management (TNCM), as opposed to on-site nurse case management (NCM), gets the same result, for a quarter of the price. Cases needing a nurse usually demand more follow-up, easily done by phone. The nurse calls the employer, the claimant, talks to the treating doctor’s nurse, gets hospital records, etc. A TNCM frees the adjuster to work on other tasks the file needs, such as background checks, ISO searches, vendor assignments, etc. (WCxKit)
NOTE: The Utilization Review Accreditation Commission (URAC) is an umbrella organization responsible for certifying Nurse Case Managers (NCM); Triage Nurses (TN); Telephonic Case Management (TCM); Field Case Management (FCM); Utilization Management/Utilization Review (UM/UR); and Peer-to-Peer Review. To maintain quality control all these entities need URAC certification. URAC has stringent protocols for education, credentials, and training for these services.
5- Watch your Leakage
Leakage is the biggest animal in the “reducing claim cost” jungle. Unnecessary costs, expenses, and errors in payments add up to astronomical amounts of money — often unrecoupable. Audit your files, do file reviews, and make sure to resolve leakage when found and stop it from happening.
Summary
Claims costs are up across the board. By implementing a few proactive steps at a time, an employer working with the TPA/insurance company can stop the bleeding and keep costs as low as possible.
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 .
Our WC Cost Reduction Guidebook: www.WCMANUAL.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 claims auditor was brought in because a self-insured employer was seeing an acceleration of the average workers compensation claim cost. The employer was dismayed to know that, in comparison with other employers in their industry, they were paying nearly double the cost on each workers comp claim. The safety consultant had already reviewed their safety program and had made some minor tweaks, but nothing that would have any significant impact on their claims or their claim cost.
By the end of the claims audit’s first day, the claims auditor knew what was driving the cost of the workers comp claims sky high. There was no investigation by the adjusters of any of the claims when they were reported to the third party administrator (TPA). In each claim, the first file note was, “Called employer; they do not question the claim.” That was it. There was no other investigation on the claim.(WCxKit)
A proper claims investigation entails various aspects, far more than confirming with the employer that the claim was reported! The claims investigation has to be much more than asking the employer if the employer is suspicious of the claim.
Each claim is unique. Sure, there will be a lot of similarities with previous claim files, but the facts and circumstances surrounding the injury will vary. The investigation should be started based upon the facts and circumstances reported by the employer. It is the claims adjuster's responsibility to review all the information about the claim to both weed out the claims that should not be paid and to control and manage the claims that are owed.
It is a commonly accepted premise in the insurance industry that good claims handling leads to good results and poor claims handling leads to poor results. This applies to both the claim of questionable authenticity and the valid claim. If a valid claim has poor claims handling, the claim cost will be higher. The first step in the process of having a successful claims management program is a good investigation of each claim.
Immediately upon assignment of the new workers comp claim the adjuster should begin the investigation. Immediately (meaning, in the first few minutes) is not always possible. But the longer the adjuster delays to start an investigation, the poorer the results. If the TPA's published best practices state same-day contact – that is good. If best practices state 24 hour contact – that is acceptable. If best practices have no time limit for making contact with the employee, employer and medical provider, or if the time limit is longer than 24 hours, the TPA is putting their own interest and what is easy and best for themselves ahead of what is best for the employer.
The first investigation step is to contact the employer to review all known information about the claim. The mistake the adjusters made in the claims audit noted above was contacting the wrong person at the employer. They were discussing the claim with the workers comp coordinator for the employer. The person(s) the adjusters should have been contacting was the injured employee's direct supervisor and co-workers who saw the accident. If no one saw the accident, then the adjuster should contact the first person the employee advised of the accident. The reason for this is to establish exactly what happened, the nature of the injury, and the extent of the injury.
It is better for the adjuster to discuss the accident with the employer first, but that is not always possible. If the adjuster is unable to reach the employer, the adjuster should still make immediate contact with the employee. The quality of the adjuster's contact with the employee is key. The contact needs to be thorough with the adjuster learning as much as can be learned about the claimant and the accident. If there is any question about the validity of the accident, or there is the possibility of subrogation, or the injury is severe, the initial interview should be in the form of a recorded statement from the employee.
The adjuster should discuss with the claimant all of these 19 points:
1. The details/facts of how the accident happened.
2. The names of all co-workers who witnessed the accident.
3. The nature of the employee's disability.
4. The extent of the injury and all body parts that were injured.
5. Has the employee previously had an injury to the body part(s) involved in this accident?
6. A review of all prior injuries – work, vehicular, recreational, etc.
7. Verification of all information on the employer's first report of injury.
8. Confirmation of all information to support subrogation.
9. A description of the employee's job duties.
10. The employee's job title.
11. The equipment or tools involved in the work at the time of the injury.
12. The experience level of the employee – how long on the job, and prior experience in the same type of work with other employers.
13. Confirmation of lost time.
14. The availability of modified duty work.
15. The identification of all medical providers for the injury.
16. The type of medical care being provided.
17. The nature of any pre-existing medical conditions – obesity, diabetes, etc.
18. Any concurrent treatment with pre-existing medical conditions.
19. The identification of pre-injury medical providers if pertinent to the claim.
At the conclusion of the interview with the employee, the adjuster should discuss the indemnity benefits that will be provided, the employer's desire to get the employee back to work when the employee is medically capable of doing so, and the need for the adjuster and the employee to stay in contact. The adjuster should arrange for the employee to call the adjuster after each medical appointment to provide an update on the status of the medical treatment and the employee's work status.
Contact with the employee should give the adjuster insight into the claimant's attitude toward:
1. The employer.
2. The medical treatment.
3. The early return to work.
4. The benefits provided by workers comp.
The relationship of the adjuster and the employee should not be an adversarial one, but one of mutual cooperation where the adjuster does whatever can be done facilitate the employee's recovery and return to work.
A timely initial investigation allows the adjuster to better manage the claim. By establishing contact with the employee and discussing thoroughly the aspects of the claim, the adjuster significantly reduces the likelihood of attorney involvement, the treatment of unrelated medical conditions, the inclination of the employee to take extra time off work, and the likelihood of co-workers thinking it is easy to “take a vacation on comp.”(WCxKit)
A proper investigation allows the adjuster to manage the many facets of the claim as it develops. It allows the adjuster to make an early and proper determination of compensability and to pay benefits quickly and correctly. It facilitates the timely involvement of medical management. And, the proper investigation leads to much lower claims cost.
Author Rebecca Shafer
, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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.
We often hear about “best practices” for workers compensation claims-handling by the adjuster. Best practices are guidelines used throughout the insurance industry to provide full benefits to the employees while protecting the insurer and the employer from too much being paid on the claim.
Best practices for the employers work in a similar manner. The following guidelines are designed to assist the employer in controlling the workers comp claims cost while providing the injured employees with all the benefits to which they are entitled.(WCxKit)
There are three areas where best practices for the employer can make a significant difference. The areas are:
1. The pre-injury best practices.
2. The injury best practices.
3. The claim handling best practices.
1. Best Practices Pre-injury
Prior to the time an employee reports an injury, there are many things the employer can do to prevent the claim from ever happening. Among these best practices would be:
1. Have a strong safety program.
2. Have an awards program that provides recognition and prices to the department that has the best safety record.
3. Tie management bonuses, raises, and promotions to the safety record.
4. Train all supervisors/managers on proper procedures for reporting an injury claim.
5. Include an employee accident brochure outlining what the employee needs to do in the case of an injury in the new hire package.
6. Post the injury procedure where all employees will see it.
7. Post state-required posters on workers comp next to the poster reminding all employees that workers comp fraud is a crime and will be prosecuted.
8. Have a medical provider network in place.
9. Post the required medical providers (in the states where the employer selects the medical provider) or the recommended medical providers (in the states where the employee can select the doctor) where all employees will know who to treat with in the case of an injury.
10. Have a written transitional/modified duty program ready for employees who can return to work with restrictions.
2. Best Practices for the Injury Occurrence
For the employer to control cost and to assist the employee, the following best practices are recommended when an injury does occur:
1. Obtain immediate medical assistance for the employee – guide the employee to the appropriate medical facility.
2. Call the medical facility and advise an accident just occurred, the nature of the accident and the type of injury to allow the facility to be ready immediately upon the arrival of the injured employee.
3. Advise the medical facility of the light duty jobs you can offer the employee.
4. Do not allow the macho man to delay treatment of minor injuries – the employee will end up seeking medical care from their family doctor or hospital emergency room, the cost will be higher and the control over when the employee can return to work will be diminished.
5. Have a goal of returning all injured employees to work within 3 days unless the employee is unable to perform any role for the employer.
6. Report the claim immediately to the claims office with full details.
7. Provide all necessary state forms to the claims office or the appropriate department within the state government.
8. Place on your calendar a weekly reminder to contact the employee until the employee is ready to return to work.
3. Best Practices Post Injury
The employer needs to continue to manage the work comp process. The best practices for the employer after the injury include:
1. Contact the claims office to confirm receipt of the first report of injury, wage documentation, and any other information that should have been provided to them with the claims report.
2. Advise the claims adjuster of the employee's prior workers comp claim history, as the approach the adjuster will take on the claim will vary significantly between the employee who has never had an injury and the employee who files his annual summer/hunting season/winter holidays work comp claim.
3. Make the internal arrangements for the injured employee to return to work on modified duty.
4. Arrange for the injured employee's supervisor and co-workers to discuss the claim with the adjuster.
5. Be empathetic with the employee and let the employee know the company cares about the employee.
6. Maintain regular contact with the employee, either weekly or after each medical visit until the employee is released to return to work.
7. Coordinate with the employee, the medical provider and the adjuster the employee's return to work.
8. Monitor the state filings by the adjuster and all claims related paperwork.(WCxKit)
In summary, the above recommended best practices are not meant to be an all inclusive list of the things the employer can do to control workers compensation claims. These suggestions and guidelines should be supplemented by other processes the employer has established to handle their workers' compensation claims.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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.
Nothing in this article is intended as legal advice. Seek the assistance of an attorney in drafting your next TPA contract.
The self-insured employer was livid. In the self-insured employer's eyes, the third-party administrator (TPA), who had
handled their workers compensation claim files for three years, had not lived up to promises made when discussing the claims handling contract. The self-insured employer remembered the TPA had promised “excellent claim service” and “cost control," but the self-insured employer had to deal with
inquiries from the Workers Compensation Board, complaints from unpaid medical providers, and their average claim cost was up almost 50 percent in just
three years.
The self-insured employer wanted to sue the TPA for breach of contract. The attorney the self-insured employer consulted with had a different idea. Instead of suing for a breach of contract, the attorney recommended a lawsuit for the TPA's breach of their fiduciary responsibilities.(WCxKit)
Why? The relationship between a self-insured employer and a TPA of claims is one of trust and faith. The self-insured employer relies on the TPA to act in every instance in a manner that is in the best interest of the self-insured employer. In this case, the self-insured employer was relying on and trusting the TPA to handle their workers compensation claims with the same due diligence and professionalism they would expect from a workers compensation insurance company. As the self-insured employer was paying the TPA to handle the self-insured employer's financial obligations (the payment of workers compensation claims) and trusting the TPA to handle their assets (their money) in a prudent and careful manner, a fiduciary relationship was established between the self-insured employer and the TPA.
The self-insured employer relied on the TPA’s superior workers compensation claims knowledge and claims handling skills in the management of the self-insured employer's workers compensation claims program. The self-insured employer relied on the TPA to put the interest of the self-insured employer ahead of the TPA own interest in every claims handling decision made.
The TPA is in the business of adjusting insurance claims. The self-insured employer is in the business of manufacturing plastics. Therefore, the TPA's knowledge and understanding of workers compensation claims is far superior to that of the self-insure employer. The TPA was being compensated to provide the self-insured employer with claims handling, guidance, counseling and advice on their workers compensation claims. At any point where the TPA saw the self-insured employer making an incorrect decision on a workers compensation claim, the TPA had both a duty and the responsibility of a fiduciary to explain both the ramifications and the probable outcome of an incorrect claims handling decision. The self-insured employer was of the opinion the TPA had repeatedly failed to provide proper guidance.
The self-insured employer was trusting the TPA to handle the self-insured employer’s workers compensation claims in accordance with generally accepted standards (commonly known as best practices) within the insurance industry. The original contract between the self-insured employer and the TPA was silent on the subject of claim quality. Best practices for claims handling had not been incorporated into the contract. The purpose of best practices is to
control claim costs while providing the insured/self insured with a quality claims product. Each time the TPA adjuster, claims supervisor or claims manager failed to follow the generally accepted claims handling standards, they were breaching their fiduciary responsibility to the self-insured employer, but not their contractual requirements.
The original contract between the self-insured employer and the TPA also had not specified the number of claim files each adjuster would be assigned. The adjusters at the TPA were handling an average of 180 workers compensation files each. This number of claims is far above what a claims adjuster can properly handle. The TPA knew or definitely should have known a claims inventory/workload of this size was unrealistic and generally accepted claims handling standards could not be met. Each time the claims supervisor or claims manager assigned a new workers compensation claim to the claims adjuster with a claims inventory of 180 files, the TPA was intentionally breaching their fiduciary responsibility to the self-insured employer.
Any time a self-insured employer and a TPA enter into a claims handling agreement, the self-insured employer should be sure the contract specifies it is a fiduciary agreement. The contract should incorporate the best practices in claims handling. The contract should specify the number of claims files that can be assigned to any one adjuster. The contract should also specify how any damages the self-insured employer incurs due to the TPA's breach of fiduciary responsibilities will be resolved.(WCxKit)
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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.
It seemed like a simple enough claim. The employee, a truck driver, was driving along when a car pulled in front of him from a stop sign. The big Mack knocked the car out of its path, while the truck driver brought the truck to a stop. The truck driver jumped out of the cab and ran over to check on the woman and her children in the car. The ambulance arrived and took the family away. When the police interviewed the truck driver and asked if he was hurt, he said, "No." The next morning the truck driver awoke with a very sore neck and aching back.
It was three weeks to Christmas and the truck driver, having a family to care for, continued to work each day taking heavy doses of Tylenol. By Christmas he was in constant agony and with his wife's encouragement, went to the local emergency room. The doctor diagnosed both back and neck strain, and told him he could not work. The employee reported the claim to the trucking company. The trucking company clerk, whose job it was to report all workers comp claims to the
third party administrator (TPA), noted the accident occurred three weeks prior to being reported. The trucking company's policy with its employees was for all injuries to be reported within five days of the date of injury. When the clerk reported the accident to the TPA, she told the adjuster the claim should be denied, as the police report showed the truck driver was not hurt and failed to report the claim within the employer’s five-day reporting period. (WCxKit)
The adjuster said, “Okay, if that is what you want,” and promptly sent the truck driver a denial of benefits letter. Unfortunately, the state law where the claim occurred, allows the
employee one year from the date of the accident to report the claim. When the truck driver received a denial of benefits letter he immediately hired a lawyer.
The adjuster knew what the law was, but made a wrong decision, by allowing the employer’s reporting policy to prevail over state law. The adjuster should have immediately advised the reporting clerk that the state statutes give the employee a year to report the injury. The adjuster abandoned decision-making on the claim to the employer, even though the adjuster's knowledge of workers comp statutes was greater than the clerk reporting the claim.
Since the adjuster denied the claim based on the employer’s wishes (or the WC clerk), no further action was taken.
Ten things the adjuster failed to do:
1. Make 24-hour three-point contact with the employee, employer, and medical provider.
2. Obtain a recorded statement from the employee regarding the details of the accident and the nature and extent of the employee's injuries.
3. Obtain documentation on the damage to the truck (to reflect the force of the impact suffered by the driver).
4. Obtain information on the woman who caused the accident for the purpose of subrogation.
5. Put the insurance carrier for the other party on notice of the intent to subrogate.
6. Obtain the doctor's diagnosis and prognosis.
7. Obtain wage documentation and in order to calculate the indemnity benefit rate.
8. Establish appropriate reserves for the indemnity and medical cost.
9. Arrange for the employee to return to work on light/modified duty.
10. Provide any type of medical management on the claim.
Now, since employee hired an attorney who expects to earn a fee, when the employee was released to light duty following his first doctor’s visit, the attorney failed to convey that information to the adjuster. The attorney arranged for the employee to see a doctor he referred his client to. This new doctor kept the employee off work until the employee, ignoring the doctor's advice, returned to work on his own.
The attorney waited until the employee was released back to full duty before sending his letter of representation. The attorney-selected doctor gave the employee a small impairment rating from which the attorney would take his fee, plus his percentage of the employee's PPD, for the time the employee was kept off work.
When the defense attorney strongly recommended the claim be settled, the adjuster had nothing to mitigate the damages. As a part of the settlement agreement, the TPA gave up the right to subrogate against the woman who caused the accident, allowing the employee and his attorney to bring a lawsuit for the traffic accident.
The employer and/or the clerk did not know the law or understand the consequences of denying compensation on a legitimate claim, even when reported late. What should have been either a medical-only claim or a very minor indemnity claim became a PPD claim, costing at least five times what it should have, because the adjuster abandon her (or his) responsibilities and allowed the employer to make the decision on compensability. The TPA also had to negotiate away the right of subrogation to get the claim settled. With subrogation rights, the entire amount paid by the TPA on the claim could have been recovered. (WCxKit)
If, as an employer, you do not know all the aspects of the workers compensation statutes in your state, trust the adjuster to make the correct decision. If you question the adjuster's decisions on claims, discuss why they are proceeding in the way they are. Create a partnership with the adjuster in the handling of your claims, but trust the adjuster judgment and knowledge of the law. It is usually a wrong move to handle workers comp claims by what you want rather than by what state statutes require. And, it might be a good idea to train all employees involved in processing workers comp claims to not make suggestions on how a claim ought to be handled.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and 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.
So you want to pursue a career in the insurance industry? It is a good choice; the insurance world is essentially recession-proof and in times of poor economic performance, the insurance industry is booming! Or, maybe you are looking for a promotion or a little more security in the job you have.
When you think about it, everyone needs insurance, whether it is personal lines of insurance (auto, house, boat, etc.) or commercial lines (employer, work comp, premises, liability, etc.) everyone needs an insurance policy of some sort to protect their investments or their businesses.(WCxKit)
Requirements for getting into the claims adjusting field vary by carrier, but below we discuss seven items that are standard requirements. Already working in claims? Try to check off as many of these attributes as you can.
7 Must-Haves to Get (or Keep) a Job in the Insurance Industry
1. You usually need a college degree:
There was a time that a high school diploma would get you a job in claims. But times have changed, and to be considered for a career in claims you must have a bachelor’s degree in an insurance-related field, such as accounting, finance, economics, law enforcement, or human resources. If you can manage going back to school (on-line degrees are becoming easier and more legitimate), consider bumping up your education.
That is not to say if you have a degree in mathematics that you cannot get in, but if your studies included one of the disciplines listed above you have a better chance. Although some would argue with me, more often than not, carriers want someone who has zero experience in the industry. This way, people do not bring in bad habits learned at other carriers. Every carrier has a specific way of handling claims, and if they can train you from the ground up, it is seen as an asset, depending on the job position.
2. You have to have a good credit score:
Since you would be a fiduciary agent for your new employer, you need to carry a decent credit score. This will show your employer you take care of financial obligations in your personal life. Remember, you may be responsible for tens of thousands of dollars that are not yours. You have to represent the company at all times, whether you are working in the office or you are down at the courthouse trying to negotiate a file toward settlement.
The carrier will view your credit score as the way you handle your own financial obligations, and if you can show that you are responsible in your personal life, chances are you will act the same with their money as well. Already have a job? Remember your credit report may be just a Google search away from your boss’s fingertips – stay as clean as you can.
3. It helps to have law enforcement background:
Having a background as a police officer or some other work experience in law enforcement will help put you ahead of other applicants. These fields carry a certain degree of responsibility and investigational skills that transfer over to the insurance field.
Since you will be investigating every claim for compensability, being very experienced at doing detailed investigations is a great asset. Every claim you handle will need some degree of investigation. It also means you complete a thorough and detailed investigation. Investigation is probably the most important task because results deem if a claim will be paid. A particular claim may start as nothing major, but every claim has a chance to morph into a monster potentially worth hundreds of thousands of dollars. Being comfortable doing detailed investigations is something every carrier is looking for.
4. It helps to have a legal background:
Obviously work in claims carries the responsibility to read and interpret the legal system, sometimes in many jurisdictions at the same time. Having a law degree and/or prior work involving the legal system is another great asset you can have that will carry into the insurance field. Every claim will need to be deemed compensable or not, and the basis of your decision will depend on your investigation and how the injury or damage relates to legal statutes within the jurisdiction you are handling.
5. You should be organized and detailed:
Being a claims adjuster requires you to handle several issues at the same time. Every day you would have a list of things to accomplish on certain files. Additionally, you have to accomplish tasks in order of importance. I do not see many adjusters in the business who are not organized or have some system in place to handle files. A typical adjuster has about 150 files, sometimes more, and all of those files are at different stages in the claim. If you are organized and detailed, you will survive. If you are unorganized and do not have a system in place, you will drown in a sea of paperwork, phone calls, and emails.
6. You must pursue an insurance or adjuster’s license
All carriers require you to either be licensed or to secure a claims adjuster license within the first 90 days of hire. This is a comprehensive, state-administered, pass-or-fail test. The test can be quite daunting; especially to those with no experience, but with some studying and hard work it is achievable. Carriers provide you with study materials, and will give you a few tries. Securing your license is a must. If you do not already have one you should plan on getting one as soon as possible as part of your new-hire process.
7. You have to know or pass a HIPAA compliance test
HIPPA stands for the “Health Insurance Portability and Accountability Act of 1996.” Since you will be dealing with medical records, social security numbers, and other personal identifiers, every carrier requires you to pass a HIPPA compliance test. You have to be able to be trusted with your claimants’ personal information. Handling and disposal of those records is very important. Carriers can face fines and penalties if they are caught violating the HIPPA terms, and they are constantly educating you in proper ways to handle personal information. You should be aware of HIPAA, and the overall guidelines contained within before starting work with a carrier.(WCxKit)
In conclusion, a career in the insurance world is very rewarding, and job security within this industry is like no other. With some hard work, organization, and studying there is no doubt you will succeed.
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.
Medical management in workers compensation is the use of claim handling techniques to control the employees medical care and the associated cost for medical treatment and disability. Normally a nurse case manager (NCM) is employed to coordinate the medical treatment of the employee. Medical management also includes the review of medical care to determine the medical necessity of the treatment and the causal relationship of the treatment to the injury being claimed.
Medical management has become a major part of workers compensation claims because the attending physicians feel more comfortable working with a nurse than they do with a work comp adjuster. The adjuster may not be schooled in traumatic injury where as almost all nurse case managers have actively practiced as RN's for at least 3 years. Therefore, the adjuster may lack the ability to converse with a doctor in an intelligent manner. The adjuster may also fail to recognize the underlying pathologies that could impact the claim adversely. However, turning the medical management over to a NCM does not relieve the adjuster of the responsibility for medical monitoring of the claim. The NCM and the adjuster should operate as a team. The NCM should always be in contact with the employer and the adjuster after each doctors visit or contact with employee. (WCxKit)
When the NCM is an employee of the insurer or the third party administrator handling the claim, the NCM can enter his/her activity notes directly into the adjusters claim file. When the NCM is a separate vendor, the NCM should be granted limited access to the adjusters files note for the purpose of documenting the medical management activities as they occur.
The NCM generally consults with the treating physician during the medical treatment period and will attend the medical appointments with the employee. This will give the NCM insight into the employee that the adjuster may never be aware of otherwise.
The NCM should be employed as soon as the claim appears to warrant it. Depending upon the severity of the injury, the NCM may be needed immediately, or they may not be required until the employees medical recovery is unusually long. Also, a NCM maybe employed when some underlying medical issues occur or medical care not related to the injury begins to appear in the claim.
The goal of medical management is to return the employee to gainful employment through appropriate treatment in a timely manner. This will minimize the lost time and disability. The NCM will be instrumental in arranging transitional duty jobs suitable for the disability during the recovery process.
It is imperative that the NCM have a full job description, and in some situations, actually see the job in operation. This will give the NCM the ability to properly discuss the case with the treating physician. If necessary, the NCM should obtain a video of the employees job operation and provide it to the treating physician. It will assist the NCM in obtaining the treating physicians consent for the employee to return to his old job. If modifications or changes in the employees job are needed for the employee to be able to do his job, the NCM will work with the employer to accommodate the employees limitations.
The work comp adjuster also has a role in medical management. The adjuster should verify the employee is not working and can not work due to the medical disability. Before issuing payment of temporary total disability benefits, the adjuster should verify the employee is pursuing curative treatment. The adjuster can do this with direct contact with the employer, the employee, the NCM and the treating physician.
A mistake often made by the adjuster is to place the claim on automatic payment of disability benefits without maintaining regular contact with the employer, employee and NCM. The adjuster should always be knowledgeable of the employees medical condition and the level of activity the treating physician will allow the employee. Without the adjuster involvement, if the claim is on automatic payment of disability benefits, overpayment of benefits will likely occur. If the employee does not later have a claim for permanent disability benefits, the overpayment of temporary disability benefits will be difficult to recover.
In approximately half of the jurisdictions, the employee is given the option of selecting his own attending physician. Often this is not a problem. However, some plaintiff attorney friendly physicians may have a tendency to extend the disability period more than normal. Or, they may begin to treat non-injury related medical problems of the employee. In these situations, it is essential for a NCM to be assigned to the claim.
If the injury is severe or if the recovery time is longer than normal, an independent medical examination (IME) should be considered. The doctor who will perform the IME should be provided a complete copy of the medical records and a full description of the employees job. The IME doctor should never have to rely on the employee for information about the job. The results of the IME will provide the NCM and the adjuster with valuable information for claim management and disposition.
As some jurisdictions impose time limits on when the IME can be performed and imposed restrictions on the number of IMEs that can be completed, the NCM in conjunction with the adjuster should determine the most opportune time for the IME.
A separate area of medical management is the reviewing of the physician's bills for proper charges and the need for the care provided. Almost all companies reviewing medical bills for accuracy are now using computers to do the bill reviews. In the states where usual and customary fees are used, the medical bill review will compare the fee schedule to the provider's bill in order to determine the appropriateness of the billed fees.
A NCM through medical management can bring about a reduction in the amount of time the employee is disabled and have an impact on the medical treatment cost. However, the adjuster needs to be vigilant in managing the NCM. Normally, the NCM is billing an hourly fee plus expenses. The adjuster needs to reviews the billing and the medical status of the employee to verify there is an on-going need for the NCM services. At such point the cost of the NCM begins to equal the savings on the claim, the NCM should be released from further responsibility on the claim. (WCxKit)
Medical management when properly used will lower the cost of the work comp claims. The employer should verify the adjuster is using all medical management techniques noted above.
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
Employees who are subjected to high level of noises on the job without proper hearing protection will eventually lose some or all of their ability to hear. To complicate the amount of hearing loss resulting from the job, everyone loses their ability to hear to some degree as they age. The issue that confronts the workers compensation adjuster is paying the employee for the work related hearing loss, but not compensating the employee for age related hearing loss, or for hearing loss due to non-work related activities like snowmobiling, using a chain saw and hunting/target shooting.
The investigation of a workers compensation hearing loss claim involves the detailed review of the medical records related to the employees hearing. Often obtaining the medical records can be a challenge for the work comp adjuster. When a 60 year old employee files a hearing loss claim, locating and obtaining the hearing test records for employment 30 years earlier is difficult. It becomes even more complicated if the employee worked for a different employer 30 years ago, that is no longer in business. (WCxKit)
The medical record the work comp adjuster is looking for in their search of the employees medical history is called an audiogram. An audiogram is a test conducted in a sound proof room by an audiologist or by an otolaryngologist. The results of the test are displayed on a graph that reflects the ability or inability of the employee to hear various levels of sounds.
The results of the audiogram measure the employees hearing impairment using the American Medical Associations Guides to the Evaluation of Permanent Impairment (in most states, some states use other measuring systems). The employees ability to hear is measured in Hertz (Hz) with a Hz being the measurement of sound waves per second. The ability to hear is normally measured at 500, 1,000, 2,000, 3,000, 4,000, 6,000 and 8,000 Hz.
The work comp adjuster will have the employee tested by an audiologist or otolaryngologist to determine the employees current hearing ability. The results of the current audiogram will be compared to the audiogram previously completed on the employee to ascertain the increased in hearing loss, if any.
If the new audiogram reflects an increase in the employee's hearing loss, the employee will need to be examined by an otolaryngologist to determine if the hearing loss is due to a conductive loss, a perceptive loss or a mixture of the two types. A conductive hearing loss is caused by a defect in the middle ear or external ear due to disease or injury. It is not caused by noise in the work place. A perceptive hearing loss is may be caused by noise in the work place, or aging, or infectious disease. If the otolaryngologist determines the hearing loss is a conductive hearing loss, the claim can be denied. If the otolaryngologist determines the hearing loss is a perceptive hearing loss, or a mixture of the two types of hearing loss, the claim will continue.
In most states the settlement of a hearing loss is done by a schedule of injuries which specifies the amount an employee can be compensated for the loss of hearing in one ear – a monaural hearing loss, or the loss of hearing in both ears – a binaural hearing loss. By comparing the employees prior audiogram(s) with the new audiogram, a percentage loss of hearing can be established which is applied to the schedule of injuries chart.
The most common problem the work comp adjuster will run into in handling the hearing loss claim is locating the previous audiogram(s). If the previous audiogram(s) can not be located, or if there were no previous audiogram(s), the adjuster will be confronted with the employee or the employees attorney claiming all the hearing loss is due to the current job, with assertions that the employee had perfect hearing prior to starting work for the current employer. (But the 60 year old employee won't mention that his favor hobbies are hunting and snowmobiling, and that he never wears any type of hearing protection while hunting or riding his snowmobile).
While the adjuster will prevail on the otolaryngologist to establish the amount of hearing loss that can be connected to the employees job position, there are much better ways of fighting (and winning) the hearing loss claims. Here are some suggestions on what the employer can do to eliminate or at least reduce the size of hearing loss claims:
1. All employees who are constantly exposed to noise or who will sometimes be exposed to excessive noise should have an audiogram completed as a part of their pre-employment hiring requirements. This will provide a baseline in case of a future hearing loss claim. The pre-employment audiogram should be kept as a part of the employees records forever. (Just because the employee leaves your employment does not prevent the employee from filing a hearing loss claim decades later). If the employee does present a hearing loss claim in the future, the audiogram will limit the potential claim payment to the amount of hearing loss that occurred during the employment with your company. [An optional approach is to administer an audiogram to the employee prior to their departure for a new job or retirement, but then you may be buying a bunch of small hearing loss claims.]
2. Know your noise level. Many employers know that their factory, construction site, equipment or machinery creates noise, but do not know how loud it actually is or if the level of noise will harm the employee's hearing. Do a risk assessment by having the decibel level of your work checked. By recording the noise level, the risk manager can determine the best ways to reduce the noise level. Any noise level exceeding 85 decibels should be addressed.
3. If the employee is regularly around lawn mowers, chainsaws, jackhammers, table saws, bulldozers, etc., where they are constantly exposed to noise levels above 85 decibels, an audiogram should be completed yearly. [OSHA is currently reviewing their requirements on sound levels with new recommendations expected in 2011 that may lower the decibel levels requiring hearing protection to 80 decibels].
4. All employees who work in an environment where they are continuously exposed to noise should be required to wear hearing protection. Quality earplugs or earmuffs are much less expensive than paying for a hearing loss claim. Employees annual performance reviews and wage/salary increases should be tied to their compliance with the mandatory use of hearing protection.
5. All employees should be provided with safety materials that emphasis hearing protection. Not only should the safety materials cover hearing protection at work, but also it should cover their away from work activities and the damage loud noises (including loud music in headsets) will do their hearing. (WCxKit)
The use of audiograms is the best way to measure the amount of hearing loss. A program requiring an audiogram of every new hire will reduce the employers exposure to hearing loss claims. The best way to handle hearing loss claims is to prevent them from occurring to began with. The employer who encompasses hearing protection into their safety program will eliminate most hearing loss claims and reduce the cost of the hearing claims that do occur.
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
We often hear the question: How long do we have to file a workers compensation claim? The answer depends on whether you are an employer or an employee. While the time requirements vary from state to state, the time restraints for the employer to file a workers' compensation report are almost always more restrictive than the time limits are for the employee.
For the Employer:
While the employer is technically responsible for reporting the work comp claim to the state workers' compensation board, work comp insurers often perform this function for the employers. A few states insist the employer report the claim, but most states just the want the claim reported timely and do not care who sends in the claim. (WcxKit)
The claim is normally reported on a form called the Employers First Report of Injury, also known as the E1 in some states. When the employer reports the claim to the insurance company, the insurer has the experienced adjusters who know the state requirements for the information required on the Employers First Report of Injury. In the states that require supplement updates, the claims office always will file the additional reports with the state work comp board.
California requires serious injury and death claims to be reported immediately to the Division of Workers' Compensation. Colorado also requires death claims to be reported immediately. Michigan requires death claims, disabilities of 7 days or more and some specific losses to be reported immediately. [No explanation as to how the employers will know immediately the employee will be off work 7 days in the future on minor indemnity claims]. Washington state also requires immediate reporting of death claims and claims involving hospitalization.
Most states give an overall time limit on when the employer must have the Employer First Report of Injury filed with the state. Generally, the time limits vary from 2 days to 15 days. However, a few states give the employer more leeway in reporting the claims. In Georgia, the employer has 21 days to report the claim to the state, while Kansas gives the employer 28 days to report the claim. Missouri gives the employer the most time to report the claim, 30 days.
While a few states (Alabama, Arizona, Colorado, Michigan, North Dakota and West Virginia) do not impose any penalty on the employer for failing to report the claim, most states have the option of imposing a fine on the employer for late reporting. Texas requires indemnity claims to be reported within 8 days. If not, the Texas Division of Workers' Compensation can fine the employer up to $25,000 per day, per offense. [That would only happen to the employer who intentionally and repeatedly failed to report work related injuries]. (WcxKitz)
The maximum fine that can be imposed on the employer for late reporting varies by states. Arkansas has a really strict penalty for not reporting the claim within its 10-day time limit – a $10,000 fine and it is classified as a Class D Felony which can involve imprisonment for the employer! Hawaii, Virginia and Vermont have a maximum fine of $5,000, but no imprisonment. New York and New Hampshire have a maximum fine of $2,500 for late reporting. All the other states have fines of $100 to $1,000.
For the Employee:
While the employee has more latitude in when to file a work comp claim, the employee also has more to gain by filing the claim timely. The employee cannot collect indemnity benefits until the claim is reported.
A few states including Arizona, Arkansas, Connecticut, Hawaii, Washington and West Virginia require the employee to give notice of the claim to the employer “forthwith” or immediately, without delay. However, each of these states give the employee a free pass on the requirement to notify the employer if they have an excusable reason.
Most states have time frames for notifying the employer that vary from 2 days to 30 days, with longer “excusable” times being permitted. Excusable events vary by state, but in reality few insurers ever try to deny a claim because it was not reported timely. Some states require the claim to be in writing to the employer, while other states do not specify the means of reporting the claim to the employer.
Delaware gives the employee up to 90 days to report the claim, after which no compensation is due until the employee does notify the employer. [This doesn't make much sense, as the employer will notice well before the 90th day the employee is not at work. If the employee is at work, then indemnity benefits would not be owed].
Iowa gives the employee 90 days to report the claim to the employer, unless the employer already knows about the injury. Louisiana gives the employee 30 days to notify the employer, unless the employer has not posted the work comp reporting requirements per state law, then the employee has one year to report the claim to the employer. Utah gives the employee a straight 180 days without qualifications. (WcxKit)
If you are an employer – it is absolutely to your advantage to report the claim as soon as possible to the insurer, or the state if the state will not accept the E1 from the insurer. The sooner you report the claim, the quicker the adjuster will be able to start the claim investigation, and the sooner necessary services and benefits can start to flow. If you are the employee – the sooner you report the claim to the employer, the sooner your benefits will start.
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.
Each year you receive your bill for the next workers compensation policy year, and for many of companies, each year the bill is higher than the previous year. As you think about your work comp claims, you realize the claims for the current year were not any worse than they were for last year, or the year before. So why does your workers' compensation premium bill keep going up and up?
When the underwriter at the insurer looks at calculating your premium, they use what is known as an experience modification factor. This factor is a calculation used to raise or lower your premium based on the loss experience your company has had. If the loss experience has improved, the premium charged to your company goes down. If you have had more claims than before or the claim cost has gone up, your premiums go up.
The loss experience is based on two factors, frequency and severity. Now the insurance company does not control frequency of claims, your company controls frequency through how well you manage the safety program. As you think back to the previous years, you think “wait a minute, our safety program is working, the number of claims has declined, so why has my premium gone up?” The answer is the other part of the experience modification factor – the severity of the claims.
There is one thing your insurance broker and your workers compensation insurer will never tell you about the cost of your workers compensation premium. If they do a poor job in handling the claims, and spend more money on the claims than necessary due to a failure to properly investigate the claims or to return the employees to work, you get to pay for their incompetence. The underwriting department does not discount the severity factor because the claims office did a poor job.
If your next thought is: “I'm no expert on how to handle work comp claims, so how would I know if the claims office is doing a good job or overpaying the claims? There are ways you as the employer can gauge the effectiveness of the claims office.
The first thing the employer can do to reduce the severity of the claims is to report them to the claims office immediately. There have been numerous studies that show the longer the delay between the time of the accident and the adjuster contacting the employee, the higher the overall cost of the claim. By reporting the claim to the claims office immediately, you have reduced the amount of time between the accident and the adjuster contacting the employee.
Normally when the adjuster contacts the employee, the adjuster also contacts the employee's supervisor or manager to verify the facts of the accident. If you have a claims coordinator, have the claims coordinator keep track as to when your company hears back from the work comp adjuster. If you do not have a claims coordinator, have the person who reported the claim to the claims office keep track of when you initially hear back from the adjuster. Same day contact from the claims adjuster is best, next day contact is acceptable.
If your thought is: “We never hear from the adjuster after we report the accident,” that is a major sign that the adjuster is not investigating the claims. If the adjuster is not properly investigating the claims, you as the employer pay for it in your experience modification factor when claims that should be denied are paid, or claims that are fraudulent are paid.
There is a sure-fire way the employer can know if the adjuster was in contact with the employee the day the claim was reported to the claims office (or at least the next day). Pick up the telephone and call the employee. Ask the employee how the initial doctors office visit went and what the doctor thinks the employee's prognosis will be. Then an “oh, by the way, have you heard from the insurance adjuster yet?”will quickly tell you if the adjuster has made timely contact with the employee. Do this on ten claims in a row and you will soon know if the adjuster is giving your claims the proper initial claims handling. [Bonus – by contacting the employee you show the employee that the employer does care about their well being, which builds rapport with the employee, and diminishes the chances of the employee hiring an attorney].
If you want to do this on a large scale, the best program I have seen for worker feedback has been developed by Jennifer Christian, M.D., Webility's Distress & Dissatisfaction Detection System (3D's). Contact Doctor Christian at Jennifer.Christian@webility.md and mention you read about it on our blog. This programs helps employers find out early on whether the employee is having a problem and if so they can help fix the problem. Sometimes the problems are with the insurance company handling of the claim. These are easy to fix IF you know about them.
Another definite tip-off that the adjuster is or is not handling the claims properly is when the adjuster calls your office trying to arrange modified duty so the employee can return to work. If in the initial contact from the adjuster you are asked what light duty assignment you can provide the employee, you have an adjuster who is thinking about how to get the employee back to work, which lowers the amount of indemnity payments and the overall cost (severity) of the claim. A good adjuster will continue to explore light duty return to work until the employee is back at work. A poor adjuster will never ask about light duty return to work and will just pay the employee indemnity benefits until the doctor states the employee is fully recovered. When you bargain for lower-priced TPA or insurance claims adjusting services, consider that you want the adjusters to have the resources to DO this work, and offering the lowest possible price may preclude that – no matter what they say at the official presentation.
An easy way to get your work comp adjuster(s) on the ball in their claim handling is to ask for a copy of their service standards (Best Practices) for workers compensation. Advise the adjuster(s) that you will be reviewing your files to see if they are complying with the Best Practices. If by chance you are told they do not have a set of service standards, it is time for you to talk to your broker about finding another insurance company who is concerned about doing a quality claims handling job.
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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