But My Carrier Said So

Comp System States What You Can & Cannot Do

 

Have you ever asked anyone in the comp system – agent, broker, carrier, the Board, attorney – what you can and cannot do before, during, and after a claim? Chances are you have, and chances are you accepted it. Nearly everyone does. But people who handle comp problems for a living come to accept the fact that the simplest questions are answered with a laundry list of conflicting answers.

 

How do the pros handle this? Years ago, your correspondent decided to limit arguing matches by accepting whatever method the other party proposed, as long as it would get us closer to the correct result without dangerous compromise.

 

 

Two Different Answers to Same Question

 

Recently, an employer needed to see information in its work comp files in order to engage in effective cost control. The broker was involved and in the AM stated that the carrier could not release the desired information. A call to the carrier confirmed this.

 

Why couldn’t they release a list of prior claims they had obtained? “It would violate medical privacy laws.” A ten minute call to the carrier showed that they would not budge. But how did the carrier obtaining the info from other carriers NOT violate those same privacy laws? “It just is.” But the carrier agreed to release the info if the worker’s signed release could be obtained. (A bit of work, but doable. OK, well do it.)

 

In the PM, the very same broker forwarded prior claim info to the same employer, but on a different claim.  “What?!” The answer was simple. The second claim had a different carrier who read the law differently. The same two people getting two contradictory results on the same issue. Happens all the time.

 

 

 

Never Assume Rules Are Chiseled in Stone

 

An employer can use this example in many ways, not just in comp. When relying on the statements of others about what can, and cannot, be done NEVER assume that the statements were chiseled in granite and signed with letters of fire. But don’t argue.

 

Check with others. If necessary, call the staff attorney at the comp board. Yes, properly approached (and promised anonymity) they will give an answer. After a while you will get a feel for the range of uncertainty. Then, work with the method closest to your needs.

 

Effective, efficient people seldom win arguments but usually produce results.

 

 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. 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. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 

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

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.


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

Identify Real Cost Drivers in Post Loss Workers Compensation

Best Practices Approach to Post-Loss Costs Containment.

A solid workers’ compensation cost control program requires an employer to first identify the key cost drivers; i.e., those company-specific factors causing workers to stay out of work too long.

Many companies that take a hit or misidentify the causes of their workers’ compensation costs. They start by looking at what their vendors are doing, rather than at their own internal company practices. Employers need to follow a systematic method to diagnose the key real-cost drivers within their company, based on a best practices approach to post-loss (not pre-loss) cost containment. Employers would be wise to write an assessment of their own internal company practices to address post-lost costs containment.

 

Items to Consider Before Writing Your Assessment:

  • What can managers learn from an assessment?
  • What methods could assess a company’s workers’ comp process?
  • What are the benefits of each?
  • What areas should be reviewed?
  • Who should do the assessment and what are the benefits of each?
  • What should a company do AFTER the assessment?

After an assessment, employers need to decide the next steps in reducing workers’ compensation costs.

 

 

Do Not Wait to Take Action

 

Some companies wait until they are in serious trouble before taking action. They think of workers’ compensation as a cost of doing business and do not realize there are things they can do to control costs. Do not to have a perfect system in place before beginning. Often the process of doing the assessment is the start of the process of change.

 

 

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

 

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

WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com

VIEW SAMPLES PAGES

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

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

If You Hate Paying For Workers Comp, You Should Count Your Blessings

 

Early 1900s Railroads Wanted Exemption from Workers Comp
 
In the early 1900s various states were discussing some form of workers’ compensation system. The owners of the large railroad companies did not want to deal with workers’ compensation claims in many states.  The railroad companies lobbied Congress to exempt the railroads from workers’ compensation laws of the various states.  The railroad companies got through Congress a statute where the employee had to prove that the railroad was negligent before the employee could collect any compensation for an injury.  In 1908 Congress passed the Federal Employer’s Liability Act (FELA) exempting railroad companies from state workers’ compensation laws.
 
 
 
FELA Exempted Railroads, Heavily Favored Employers
 
Basically, the FELA law exempted railroad employees from all state workers’ compensation laws and continued the system of tort claims for deciding compensation to an injured employee.  The FELA law in 1908 used contributory negligence and assumption of risk as its guide in determining negligence. If the injured employee could not prove the railroad company was solely at fault for his injury, the employee would not receive any compensation for the injury, even in extreme cases of amputations or death.  If the railroad could prove that 1% of the cause of the injury could be contributed to the employee’s own negligence, the employee was barred from any recovery. 
 
 
1937 Case Brought Major Change
 
In 1937, Eugene Sexton was working for the L&N railroad.  As a part of his job as a switchman he would join together individual railroad cars or strings of railroad cars.  One day as he started to join two railroad cars, the train jerked, hitting him and causing him to fall on the railroad track.  The train rolled over both arms, amputating one arm above the elbow and amputating the other arm below the elbow.  The L&N railroad’s response to the horrendous accident was “too bad, you should have been more careful”.  Mr. Sexton’s and the switchman’s union response was a lawsuit in tort, and a campaign to change the FELA law.  (Mr. Sexton did after several years of litigation receive a life time pension from the railroad).
 
 
The only major change in the FELA law came about as a result of the Sexton case and some other bad injuries and deaths that occurred about the same time.  In 1939 the FELA law was changed removing the defense of assumption of risk and changed the law from contributory negligence to comparative negligence. As a result of 1957 and 1963 Supreme Court decisions, the FELA law now makes it a jury question if the railroad company played any part in causing the injury
 
 
Railroads Still Not Part of Worker Comp, Heavily Favors Employees
 
FELA kept the injury claims of railroad company employees in the tort law system.  Under tort an injured person can recover all their medical bills from the party at fault for their injuries, and can also recovery their full income (not the two-thirds of income as often paid in work comp claims) for both past and future income.  The injured person in tort can also receive compensation for permanent injuries. In addition to being paid for all their medical bills and income loss, the injured person in tort can recover “pain and suffering” compensation from the party at fault. 
 
With comparative negligence and all questions as to the amount of negligence being a jury case, even an employee who negligence was 90% of the cause of the accident could recover 10% of the damages.  The result of this was lawsuits for astronomical amounts of pain and suffering and compromise settlements, even when the injured employee was primarily the cause of his own injuries. Compromise settlements often occur even with minimal or no negligence on the railroad company’s part, as the railroad company knows the jury will see them as the billion dollar corporation and will be sympathetic to the injured employee.
 
The FELA law as it was originally enacted was heavily in favor of the employer and provided very limited benefits to injured workers.  The pendulum now has swung to the other extreme where injured railroad employees’ often obtain substantial settlements for minor injuries. What started out as a law to circumvent workers’ compensation is now an albatross around the financial neck of the railroad companies.
 
 
Legal Liability Crushing for Small Companies
 
The approximate 650 railroad companies in the United States are classified by size into 3 classes.  Class I entails the 7 major railroads serving multiple states.  Class II and III railroads normally serve a single county or multiple counties within a state.  While the major railroads like the CSX and the Burlington Northern have the financial capability to deal with the FELA lawsuits (and pass the cost of the FELA litigation claims on to their customers), the smaller railroad companies are often forced out of business due to a variety of economic circumstances including FELA lawsuits.
 
 
 
Railroad Companies Wish They Had Workers Comp
 
The large railroad companies have been struggling for years to get out from under the FELA burden or to bring it more into balance.  The railroad companies have tried to get FELA repealed and to place their employees’ injury claims in the various state workers’ compensation systems.  The different unions representing various crafts in the railroad industry and the plaintiff attorneys representing injured workers have been able to jointly defeat all attempts to change the current FELA law.
 
The next time you wish your company did not have to have workers’ compensation insurance, stop and think about the smaller railroad companies who, even with liability insurance, are often only one employee injury lawsuit away from being put out of business.
 
 
 

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

 

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

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

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

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Top Workers Comp Cost Culprit Moves From Aging to Obesity

 

Top 10 Obese States
 
While reading through my local paper the other day, I came across an article of the most obese states in the USA.  They are ranked as follows:
 
  1. Mississippi
  2. Louisiana
  3. West Virginia
  4. Alabama
  5. Michigan
  6. Oklahoma
  7. Arkansas
  8. Indiana
  9. South Carolina
  10. Kentucky
 
The comorbidities of obesity are obviously well known, including diabetes, high blood pressure, sleep apnea, arthritis, and more. But how does this play in to work comp cases?
 
 
Top Culprit Moves From Aging to Obesity
 
In the not too distant past, aging was seen as the biggest culprit to a spike in cases.  These workers possibly were on the edge of retirement, now remaining in the workforce because their 401k tanked, their house lost value and was unable to sell, and so on. Workers in the retirement age were unfairly viewed as resistant to new change, resistant to new technology, and resistant to retire.  In addition to all of that, their bodies are riddled with both possibly occupational and certain non-occupational damage. Should an injury occur, the adjuster viewed them as looking for a way to fund their retirement by milking work comp wage loss and medical benefits until they finally filed for their pension.  After that they left the occupational scene in a flurry of litigation looking for high-dollar redemption in exchange for their years of pain and suffering while working for their employer. (WCx)
 
This blanket statement is no longer the top culprit amongst claims professionals.  Obesity has taken over as the top non-occupational factor that leads to adjuster headaches. While not entirely true in every case, the majority of obese individuals come with their own medical baggage, in the form of longer healing times, degenerative arthritic issues, diabetes, and the like. 
 
 
Biggest Medical Issue Non-Occupational Degenerative Condition in Joints
 
The biggest medical issue that comes with obesity are the non-occupational degenerative conditions, mostly seen within joints.  Obese workers may have more wear and tear in their ankles, knees, hips, back, and shoulders, and any injury in this area that is acute in nature will be affected be underlying degenerative arthritis that is exacerbated or accelerated by the mechanism of injury. 
 
 
Difficult to Determine What is Pre-Existing
 
This makes the case difficult for the adjuster, who is trying to weed out what damage is occupational in nature, and what is not.  Even if this worker has no prior record of treatment, the mere existence of arthritis in these joints will complicate any case, extending healing times due to more extensive surgeries. Workers are confused why their claims are denied due to arthritis, when they have never had any treatment for this condition before.  Typically, they do have reason to complain because the adjuster doesn’t take the time to explain to the claimant why their doctor said that some of their injury is work related, and some of it is not. 
 
 
Costs Can Skyrocket During Investigation and Litigation
 
In these situations, the cost of the accrued benefits can continue to climb.  Adjusters will perform an extensive medical background sweep looking for prior medical treatment, even if the claimant states they have never treated for this pain before.  As anyone in the field knows, this will take time.  And while this investigation is ongoing wage loss continues, medical expenses climb, and litigation will usually result. Then when that litigation happens, it will move slowly from one court date to the next, adding attorney expenses to the overall cost of the claim.
 
Every case, however, for an obese worker is not denied.  I have seen cases where the worker’s MRI of their knee looks clean, absent of any arthritic condition except for the meniscus tear that the work injury caused.  Everyone heals differently.  I have seen cases where a worker labeled “obese” has had a quicker turnaround time from injury to return to work post-surgery than someone not only non-obese, but years younger as well.  I credit this to overall personal attitude, genetics, and the dedication to listening to what the doctors and physical therapists are telling them to avoid and what to do instead.  Using proper body mechanics and lifting mechanisms help as well, providing a way for a worker post-surgery to return to gainful employment while on restriction, which gets them up and around and off the couch.  (WCx)
 
 
Every Case is Unique
 
Just because a worker is labeled obese by their physician or by the new media standards,  doesn’t mean their claim is doomed, or at least in certain denial.  It is true that the claim may take more investigation, especially on the medical record end, but when it is all said and done some cases are denied, and some are accepted.  No two cases are exactly the same.  The adjuster has to take the time to explain to the claimant what they need to do, and what records they need to help produce for the adjuster.  If everyone gets on the same page and does what they are supposed to do, then the claim will work itself out, whether it is indeed denied, or accepted as compensable.
 
 

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

 

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

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

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

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Change In Workers Comp Premium Calculation Will Impact Significant Majority of Employers

 

Greater Reward & Higher Punishment for Amount of Claims

 

The National Council on Compensation Insurance (NCCI) is revising the way workers’ compensation insurance premiums are calculated.  The revisions will reward the employers with below average claims with lower rates while increasing the rates for employers who have a higher than an average number of claims.

 

 

Change Will Impact Significant Majority of Country’s Employers

 

Starting January 1, 2013, the method used by NCCI to calculate the workers’ compensation premium for both new policy purchases and policy renewals will be altered.  The change will impact a significant majority of the country’s employers as the NCCI premium calculation method is used in 38 states to set workers’ compensation premium rate.   Every state Department of Insurance has approved the rating change.  [WCx]

Independent rating bureaus in Indiana, Massachusetts, Michigan, Minnesota, New York, North Carolina, Texas and Wisconsin are reviewing their premium calculation method and may, or are, also changing their premium calculations methods following the NCCI lead.  Employers in California, Delaware, New Jersey and Pennsylvania will probably not be impacted as the independent rating bureaus in those 4 states used premium calculation methods significantly different from NCCI.

 

 

Three Factors Go Into Workers Comp Premium

 

There are three factors that go into the calculation of an employer’s workers’ compensation premium.  They are:

 

  1. The rate assigned to each payroll classification in the business
  2. The total amount of payroll for each classification code
  3. The experience modification factor.

 

Your insurance premium is calculated as:

 

     Payroll classification  X  $100 of payroll

  X  experience modification factor = premium

 

The experience modification factor is the only factor that the employer can control without reducing the number of employees.  It is also the part of the calculations where NCCI is reconfiguring how workers’ compensation premiums are calculated.

 

 

Current System Has Been in Place for 20 Years

 

The current system of calculating the experience modification factor has been in use for about 20 years.   To calculate the experience modification factor, every loss is split into two parts, a primary portion and an excess portion, with both the primary losses and excess losses being used to calculate the experience modification factor.  The split point is currently $5,000.  The first $5,000 is referred to as the primary loss.  The amount over $5,000 is the excess loss.  Every loss has a primary loss, but only losses over $5,000 have an excess loss.

 

Both the primary loss and the excess loss are used to calculate the experience modification factor, with the primary loss carrying a heavier weight in the premium calculations. The primary losses are a direct reflection of the frequency of claims. The excess loss measures the severity of claims.  Therefore, the greater the number of claims the employer incurs, the higher the workers’ compensation premium.

 

 

Split Point of Primary and Excess Losses Increased from $5,000 to $10,000

 

Effective January 1, 2013, the split point is being raised to $10,000 in the calculation of the number of primary losses and excess losses.  This will result in a reduction in the number of excess losses.  The work comp claims between $5,000 and $10,000 will no longer have an excess loss.   The split point will change again on January 1, 2014 to $13,500 and will be revised again on January 1, 2015 to $15,000.   Each of these changes will increase the weight of primary losses in the calculation of the experience modification factor. [WCx]

 

 

Recommendations to Minimize Potential Workers Comp Rate Increases

 

The following are recommendations for employers who want to minimize the potential workers’ compensation rate increases;

 

  • Tighten up the work place safety program to lower the frequency of claims.  This will have the greatest positive impact.
  • Invest in loss control to identify potential sources of injury and eliminate those sources.
  • Improve and enforce the return-to-work program to reduce the number of claims that have an excess loss portion.
  • Focus on improving your medical management of claims to reduce the number of claims that have an excess loss portion.

 

The upcoming changes in the calculation of the experience modification factor will penalize the employers who have a greater than average number of claims for their payroll classification code while rewarding those employers who have a better than average loss history.  For assistance on reducing your workers’ compensation cost, please contact us.

 

 

 

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

 

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

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

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

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

What You Need to Know About West Nile Virus and Workers Compensation

 

Summer of 2012 on Track for Most West Nile Cases in 13 years

 

The summer of 2012 is on track to have the most cases of the West Nile Virus since the infection arrived in the United States in 1999.  At the end of July there were only 29 cases of West Nile Virus in the U.S., per the Centers for Disease Control and Prevention (CDC).  As of August 28th, the CDC is reporting 1,590 cases including 66 deaths.  West Nile Virus has been documented in people (it also occurs in animals) in 43 states and the District of Columbia.  Texas is bearing the brunt of the outbreak with 894 cases and 34 deaths. [WCx]

 

 

 

Employers Need to Understand Infection and What Can be Done

 

Employers need to understand the infection and what can be done to protect their employees.  The workers’ compensation exposure to West Nile Virus can be catastrophic.  A Texas jury awarded a Union Pacific employee nearly one million dollars because he claimed he was infected with the West Nile Virus while working.

 

The illness is spread by the bite of mosquitos.  Employers with employees who work outdoors are exposed to workers’ compensation claims arising out of mosquito bites.  This includes landscapers, exterior painters, construction workers, delivery personnel, loggers, forestry workers, plant nurseries, utility linemen and utility repair personnel, amusement park employees and farm workers.

 

 

Only 2 – 3% of People Infected Report Cases

 

It should be noted that the reported cases is estimated to be only 2 percent to 3 percent of the people infected with the West Nile Virus.  It is estimated by the CDC that 80% of the people infected by the mosquito bites develop no symptoms.  In most of the 20% who develop symptoms, the symptoms are usually mild, primarily aches and fever.  Only about one in 150 people infected with the West Nile Virus develop the severe symptoms that require extensive medical care.

 

 

West Nile Fever or Severe West Nile Disease

 

In the 20% of people who develop symptoms, there are two classifications, West Nile fever or severe West Nile disease.  The West Nile fever symptoms include fever, headaches, body aches, tiredness, occasionally a skin rash on the trunk of the body, and swollen lymph glands.  The West Nile fever will last a few days up to several weeks.

 

 

1 in 150 People Develop Severe West Nile Disease

 

In the 1 in 150 people who develop severe West Nile disease (also referred to as neuroinvasive disease which includes West Nile encephalitis or meningitis or West Nile poliomyelitis) the symptoms include headache, high fever, stiffness, stupor, disorientation, coma, tremors, convulsions, muscle weakness and paralysis.  While the severe West Nile disease can occur in anyone, employees over the age of 50 and employees with a compromised immunity system are at the highest risk of becoming severely ill.

 

The issue that employers face with West Nile virus workers’ compensation claims is making a determination as to whether or not the West Nile Virus was contracted during work hours or during the employee’s non-work hours.  Complicating the determination of compensability is the fact that the incubation period from the mosquito bite to the onset of the West Nile fever or the West Nile disease can be as short as 2 days or as long as 15 days.

 

 

Steps Employers Can Take to Reduce Risk

 

Employers cannot eliminate all risk/exposure to West Nile Virus, but there are steps employers can take to reduce the risk of West Nile Virus in their employees working outside. 

 

This includes:

 

  •    Requiring employees to wear long sleeve shirts, long pants and socks whenever possible

 

  • Requiring the work clothing to be loose fitting to help prevent mosquitos from reaching the skin

 

  • Providing and requiring employees to apply insect repellent containing DEET to exposed skin area 

 

  • Providing and requiring employees to treat clothing with permethrin repellents (but it should not be applied to skin).

 

  • Requiring employees to avoid colognes, perfumes, fragrant hair spray, lotions and scented soaps

 

  • Providing protective equipment where possible

 

 

In addition to providing your employees with the above list of ways to protect themselves from mosquito bites and the exposure to West Nile Virus, the employer should educate their employees on how to recognize the symptoms of West Nile fever and West Nile disease.

 

 

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

 

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

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

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

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

Top 10 Ways to Control Your Workers Comp Costs

There are many ways an employer can have a positive impact on workers’ compensation claim cost.  We believe these 10 recommendations will assist you in your efforts to keep the cost of workers’ compensation under control.
 
 
The cost of your workers’ compensation premiums is greatly affected by the frequency of claims.  The easiest and surest way to reduce the frequency of claims is to take the steps necessary to identify potential hazards, and then take the actions necessary to eliminate those hazards. 
 
 
Timely Reporting:
 
All claims should be reported to the claims office immediately following an accident.  The claims office will handle the claim better by starting on the claim quickly.  The information about the injury, the witnesses, and the medical treatment is more readily available and is more accurate than any effort to recall the information at a later date. [Wcx]
 
 
Open Communications:
 
The person or people who report your claims to the claims office need to have open lines of communications with the adjusters.  The establishment of rapport between the employer’s staff and the claims adjuster(s) will facilitate the accurate transfer of information between the parties.
 
 
Your Own Adjuster(s):
 
The employer who has a small number of claims (small being defined as less than the caseload of one adjuster), should requested a designated adjuster for your account (handling all your claims plus claims for other employers).  By having only one adjuster instead of many adjusters handling your claims, the adjuster will become familiar with your return to work program. The designated adjuster will also learn your preferences for medical providers, the nature of your business, and other aspects of your workers’ compensation program.
 
The employer with a large number of workers’ compensation claims should request a dedicated adjuster to handle only your claims, and no claims for any other employer.  If your company has more claims than one adjuster can handle, then multiple dedicated adjusters is appropriate.  A combination of dedicated adjuster(s) and one designated adjuster will cover any number of claims.
 
 
A Return to Work Program:
 
Every employer, regardless of size, should plan ahead on how to accommodate an injured employee’s return to work.  Whether you set up a modified duty job or place the injured employee in a totally different job than the injured employee normally does, it is essential that you accommodate the work restrictions.  A return to work program will keep the employee productive, shorten the recovery time, and lessen the cost of both medical treatment and indemnity benefits.
 
 
Medical Management:
 
In the world of insurance where even simple medical services can quickly become very expensive, medical management is essential.  In the states where the employer has the right to select the medical provider, it is essential to do so.  One of the fastest ways for a work comp claim to get out of control is for the employee to select a medical provider that will be reluctant to let the employee return to work before he has fully recovered.  Or worse yet, is quick to perform surgery where more conservative measures would suffice.  Medical management also includes the use of triage nurses, trained nurse case managers, medical fee bill reviews, utilization review and independent medical examinations.  The use of these various medical cost control techniques will reduce the overall cost of medical care.
 
 
Litigation Management:
 
The control of legal cost does not start when the claimant files for a hearing before the industrial commission.  The control of legal cost starts when the claim is reported. Prompt reporting to the claims office, plus quick, courtesy handling of the claim will eliminate many of the claims that would otherwise go to an attorney.  Employees hire attorneys when they are scared and do not have anyone answering their questions.  The employer who maintains contact with the employee after the injury and works with the employee to resolve their concerns will have far fewer claims where the employee has hired an attorney.
 
 
Subrogation:
 
When a third party is at fault for the injury to the employee, the employer should assist the claims adjuster in gathering as much information as possible to document the liability of the third party. Proving the liability of the third party early on, and putting the third party or their liability insurer on notice of the intent to pursue the claim can make a recovery more viable.  The amount recovered from the third party reduces the overall amount the insurer or self-insured employer pays in workers’ compensation cost.
 
 
Structured Settlements:
 
A structured settlement is basically an annuity or an annuity combined with a cash payment to settle a claim.  A structured settlement reduces the cost of a claim by transferring the cost of the claim into the future, providing the insurer with years of time to grow their investment and cover the claim cost. [Wcx]
 
 
Claim Quality Audits:
 
An area of cost control that is frequently overlooked by risk managers is the claim file audit.  An audit of the claim files by an independent auditor to verify the claim handling is in compliance with Best Practices will assist the employer in knowing where improvements are needed in the claim process.  By eliminating mistakes, leakage is reduced and cost control is better implemented.
 
 

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

 

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

 


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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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Five Ways to Reduce the Legal Expenses of Workers Compensation

 
Should we use legal expense review companies? An attorney I know posted a joke on a Facebook page that is fairly accurate these days. An adjuster hands a new file to her counsel and tells him, “I do not want to pay anything on this file, including legal expenses.” Upon hearing this, the attorney asks why he should be expected to review, handle, and get rid of a new case for free? The adjuster advises, “That is not my problem it is yours. If you want the business, do as I ask.”
 
 
This is a current trend within the insurance business. Insurance companies have long used outside Medical Bill Review (MBR) companies, or they have internal review departments, to review procedure codes in medical bills and reduce charges per jurisdiction guidelines.
 
 
Legal expense review companies have popped up and are growing rapidly. Their purpose is to do the same bill review on legal fees for cases and reduce charges accordingly. This has led to some aggravation on the part of legal firms, who feel their bills are being reduced more and more. It seems like the carriers want more services for less cost. This can be achieved properly, however, if we use a lot of common sense here. Using the most experienced and attentive attorney on files, not the least expensive, is sometimes the best way to go, because one has to take a "TOTAL cost" approach, not a "short term cost reduction" approach. Sometimes it is better to spend more now to reduce overall expenses in the longer term.
 
 
5 Ways to Reduce your Legal Costs OR Prevent Your Charges from Being Reduced
 
 
1.      Firms should use paralegals or legal assistants to review medical notes and establish a file timeline from start to current.
Certain adjusters have always used dedicated counsel — specific attorneys — to handle their cases. Sometimes the dedicated attorney is advised to handle the case from start to finish. The legal firm will use this as a chance to bill the insurance companies for all activity, including file review and setup.
 
 
The hourly charge between the actual attorney doing all tasks, and what they charge for their assistant doing the same tasks, can be very large. Attorney fees can range up to $300+ an hour, whereas legal assistants doing the same work can be billed up to one quarter of that, if not less, depending on the firm and what the insurance company has negotiated for a rate. These are called "negotiated rates."
 
 
The initial legal file setup, timeline construction, and medical records review are usually the most time-consuming tasks, depending on the size of the file and how complex it is. In one million dollar claim and the medical records took up an entire side of the office. The utilization review expert was reviewing each document, finding inaccuracies and reducing the medical expenses accordingly. An RN with 20 years surgical experience was doing this review. There can be significant cost-savings by making sure the assistant does this task, and not the actual attorney. An RN can be quite helpful on these tasks, and many paralegals are excellent.
 
 
2.      Paralegals can attend mediations and initial negotiations.
The first meetings between plaintiff attorney and defense counsel are usually uneventful. Both sides review the case and offer their stance on the file. They point out differences in the case and why there is a difference in opinion. Legal expense reduction companies state the actual attorney should not be present at these hearings, since nothing of significance happens. This way you do not have to pay larger travel costs, and time charges while waiting for plaintiff counsel to show up. This can be a nice savings in your legal budget.
 

CAVEAT: While this is the advice proffered by legal cost reductions companies, some adjusters prefer to use the more expensive upfront strategy, which is to use the MOST qualified person on the team – usually an experienced defense attorney.

 
 
3.      Legal firms should not have large charges for emails and quick phone discussions.
One thing the legal expense review companies see a lot of is overcharging for simple communication with the adjuster. A quick email response or phone call does not need to cost a quarter-hour fee, even though some firms try to sneak in such charges.
 
 
Granted, if discussion is part of a conference on an action plan or overall case review, the attorney can justify charges, and if it is a detailed discussion important to the case, the adjuster should be charged for that time. But, if the question is a simple issue, there is no need to overcharge for the service. Legal firms will often say simple communication is included in their negotiated cost for the opportunity to handle the case, and if such charges are included in their bill the legal expense company will cut the charge down or eliminate it totally.
 
 
4.      Travel time to court should not be billed separately.
If your attorney goes to local court to handle most of their clients’ cases, they should not be able to bill each carrier separately at maximum rate if they were going to travel there anyway on cases for other carriers. Or, if they do, you should be aware of this practice. Most legal firms will bill separately for this reason, but there are some that will isolate each case and bill accordingly at the maximum rate.
 
 
Legal expense review will often ask, if counsel was heading to court to handle a day’s worth of case negotiations for various clients, why should each carrier have to pay a large charge for this travel? Granted, if this is a special trip, or a trip to another jurisdiction especially for your case, then the charge may be justified. But it is the job of the legal firm to handle their bills accordingly for each carrier or the charge will be reduced by the legal expense firm.
 
 
5.      Law firms should be able to justify ALL billing charges on each bill, and they have the obligation to keep proper records for each case and each task they do for each carrier.
There has been a lot of backlash from legal firms about the billing reductions. One attorney said he had to “fire” his client, because their legal bills were getting reduced so much the firm was losing money by handling the case. Obviously, that is counter productive and not in the best interests of the employer, so make sure to rein in the legal bill reviewers so they do not go overboard.
 
 
Due to carrier demands, and the abundance of files for firms to handle, negotiating power is in the carrier's hands. The consensus is, if a firm does not want to reduce fees to what the carrier wants, the carrier will find a firm who will do what they want. This is creating a bad environment for attorneys since most of them have longstanding relationships with certain carriers and adjusters. They do not want to lose the business, but they have no choice.
 
 
Of course there are some carriers who are trying to cut down legal expense as much as possible, sometimes unfairly. By doing this they are trying to take advantage of legal firms to get as much out of them for as little cost as possible. Larger firms can sometimes absorb this possible loss just to keep the carrier’s business. But smaller firms that cannot compete are losing a lot of business.
 
 
In most cases, the relationship between carrier and legal firm can work if they negotiate an hourly rate, and the associated tasks that go along with it. Tasks need to be clearly defined so no confusion comes when the bill arrives. The legal expense review company should also be informed of certain fees and tasks as negotiated between the carrier and firm so no issues arise. The goal should be to maintain that solid relationship between counsel and carrier, and the associated fees that go along with the handling of a litigated case to overall settlement.(WCxKit)
 
 
Legal expense review companies can be a great asset in reducing your overall legal costs when handling litigated files. But the hourly rates and the tasks that go along with it need to be clearly defined between the carrier and the legal firm. Any confusion on any of these issues can lead to a breakdown of the relationship, which benefits no one. By being proactive and establishing clear expectations at the beginning of the lawsuit, both parties can deal fairly with each other. To get good service, you have to pay a fair price.

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.
 

Our WC Book: 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.

WCRI Identifies Policies to Hold Down Pharmacy Costs

pic1Why are prescription costs up to 40 percent lower in Washington state than average?

 

 

According to the Workers Compensation Research Institute (WCRI), the northwestern state implemented policies that kept these costs down.

 

 

Prescription Benchmarks for Washington,” points to these four tools:

  1. A formulary of approved drugs and therapeutic interchange.
  2. Lower-than-typical pharmacy fee schedule.
  3. Mandatory generic substitution.
  4. Infrequent physician dispensing.

 

 

In the study, WCRI looked at 17 other states and found “a wealth of detailed price and utilization statistics that may be useful when debating such issues as: pharmacy fee schedules, physician prescribing patterns, medical cost drivers, and laws that mandate the use of generics.” Other states included in the study were: California, Florida, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin.

 

 

 

“There may be some important lessons for policy makers in other states from the regulatory approaches used by Washington State,” said Dr. Richard A. Victor, WCRI’s executive director.

 

 

Other findings include:

  1. The average prescription cost per claim in Washington was 40 percent lower than the median of the 17 states in the second edition of the WCRI prescription benchmarks—after adjusting for the longer claim duration. Without this duration adjustment, the average prescription cost per claim was 11 percent lower than the 17-state median.
  2. The average price per pill paid to Washington pharmacies was 35 percent lower than the median state as a result of state policies and programs, such as: a formulary of approved drugs and therapeutic interchange, lower than typical pharmacy fee schedule, and mandatory generic substitution. (WCxKit)
  3. Physicians in Washington more often prescribed stronger, Schedule II narcotics, compared to physicians in the other study states.

 

 

More information on this study, available for purchase, can be found here.


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.

 


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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.

 

Curtailing the Somethin’ for Nothin’ Attitude

Nothing is free. There is no free lunch. Someone is paying for it; it just might not be you. There are employees (and people in general) who have an entitlement mentality that has been fostered by politicians and society in general. These people feel they are “owed” something, even if they have not done anything to earn it. This is what my doctor says she sees in her medical practice when I reveal I work “in the workers compensation field.” She goes on to explain that daily people sit across the desk and ask to be put on total disability. She was quite upset by this since she has been working hard for the last 25 years. She welcomes the opportunity to vent about her own experiences.  She says, “We’re a somethin’ for nothin’ society.”

 

Unfortunately, way too many employees have no idea of the cost of workers compensation. Employees often think workers compensation insurance is free, as they do not pay anything for the insurance coverage. While they may vaguely know the employer is paying for the coverage, they do not know the true cost of work comp. (WCxKit)

 

Many an unsophisticated employee will think the employers cost is the hourly rate they receive. The wise employer will educate the employees on their true cost. The employee should know that in addition to their hourly rate, the employer is paying 35% to 40% over the hourly rate to cover the cost of workers compensation, social security, unemployment insurance, medical insurance, dental insurance, life insurance and disability insurance. This is all before the cost of vacations, holidays and sick pay is added to the equation. In addition to all these employer cost, the employer is contributing to a 401k, 403b, or other retirement plans. Plus, there are a few employers who still have defined benefit pension plans where they are funding the employee’s retirement.

 

When an employee, who has the entitlement mentality, is injured on the job, their claim often becomes a much more expensive claim than it should be.  As employees pay nothing for workers compensation (one of the very few things in work comp that is the same across all the states), those employees that have the entitlement mentality of something for nothing will often look for the opportunity to abuse the work comp claim system. My doctor says that she “has one employee in particular” who is looking for another job, and she can’t wait for her to leave because she is unproductive, but the doctor is afraid to fire her or she’ll get sued. What does this say about our society …

 

While some of the employees with the something for nothing attitude will fake an injury, many of the injury claims start out as legitimate claims. When the employee gets comfortable living on the indemnity benefits paid by the work comp insurer, they decide they do not want to go back to work. They see the TV lawyer advertising the fist full of money they can get for their work comp claim. Or, they hear about a friend of a friend who is living a life of ease and will never have to work again due to their work comp injury. While they may not think of it as fraud, they will do anything they can to delay their return to work. This can include everything from exaggerating their pain to the doctor to exaggerating the physical demands of their job when they discuss returning to work with their doctor. My doctor says she never gives total disability slips, but she needs information on these employees original job so she knows they can, in fact, safety return to work.

 

The ‘something for nothing’ employees paid time off work can often be curtailed or even eliminated by an aggressive return to work program offering modified duty. By getting this worker back on the job before he can settle into the life-without-working routine, the employer can save a lot of workers’ compensation cost.

 

While the employer can often identify the employees who have the something for nothing mentality, there are the employees who never thought of abusing the system until they are off work due to an on-the-job injury. They don’t start out faking disability, but do so when neither the employer nor the claims adjuster stays in contact with them. As long as it easy to stay off work, they do. When they start feeling the pressure to return to work by the employer inquiring when they will be back, they end their something for nothing extended time off work.

An experienced work comp adjuster or a knowledgeable claims coordinator with the employer will immediately recognize the “red flag” of the injured employee who states “I don’t want something for nothing”. Usually when an employee states this to the work comp adjuster or the employer, it is because they have already been thinking about getting something for nothing. Employers (and work comp claim adjusters, too) need to be exceptionally diligent with the injury claims from employees with the entitlement mentality. (WCxKit)

One of the best ways to combat the entitlement mentality of the something for nothing employee is to educate all employees on the cost of workers’ compensation. Employees need to know that the employer takes work comp fraud very seriously and will prosecute any employee who commits fraud. All employees should know that the cost of workers compensation insurance has to be paid for by the employer, and the higher the claim cost, the more the employer pays. When all employees understand that anyone who fakes a claim or stays off work longer than necessary is stealing a part of the pay raises and/or bonuses of their co-workers, the something for nothing mentality can be curtailed.

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 .

 

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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.


©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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