10 Adjuster Mistakes Resulting in Unintended Consequences of a Wrong Claim Reporting Decision

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.

 


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©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.

 

10 Reasons Why Workers Comp Benefits are Denied

Sometimes, employers and TPAs must deny benefits. Here’s why.

 

Contrary to the opinions of plaintiff attorneys, there are valid reasons workers compensation benefits should be denied. The following are ten common reasons workers comp benefits may be denied, but there are other justifiable reasons to deny workers comp benefits. This discussion is general in nature and will not apply to all jurisdictions, but generally will apply to most states. It’s important to pay legitiamet claims quickly – these claims are considered “compensable.”  Claims that are not compensable must be denied by law.

 

 

  1. Injury Happens Away From Work

One of the most common types of workers compensation fraud is when an employee alleges an injury happened at work when it actually occurred away from the job. When the employer’s investigation or the claims adjuster’s investigation reflects the injury occurred at a time the employee was not on the job, the workers comp claim should be denied. For an injury to be covered by workers comp, it must occur during the work period and at a location of the employers’ where the employee would be performing the job duties of the employer. (WcxKit)

 

 

  1. Traveling to/from Work

When the employee works at a fixed location, injuries that occur while the employee is traveling to or from work are not normally covered by workers comp. An injury on the way to work or from work can be covered if the employee is in the process of providing a benefit to the employer. For instance, an errand picking up supplies at the office supply store, when an injury occurs. However, if the employee is traveling to or from work for the employee’s own benefit, the workers comp claim will be denied.

 

 

  1. Not Medically Justifiable

When employees reach their maximum medical improvement, they are normally released by the medical provider to return to work, if they have not already returned to work. When the employee does not want to return to work for whatever reason, they may seek to continue their medical treatment. If their treating doctor allows them to remain off work, often an independent medical examination will confirm their continuing to seek medical treatment and to stay off work is not medically justifiable. At this point the adjuster will deny further workers comp benefits.

 

 

  1. Late Notice of Injury

Every state requires the injured employee to give notice to the employer in a timely manner from when the employee is aware of the injury or occupational disease. What is timely varies greatly from “immediately” in Washington State and West Virginia to two years in New Hampshire. (Most states have a longer time frame for latent injuries and occupational diseases like asbestosis). If the employee does not report the injury timely, and does not have an excusable reason, the workers comp claim can be denied.

 

 

  1. Treated with an Unapproved Medical Provider

In approximately half of the states, the employer selects the medical provider for the treatment of the employee’s injuries. When the employee elects to treat at an unapproved medical provider, the workers comp benefits should be denied.

 

 

  1. No Medical Treatment

If an employee calls in to work with an excuse like “I can’t come in to work today, because I hurt my back yesterday on the job,” there are no workers comp benefits when there is no medical treatment. Regardless of how many days the employee claims he stayed home in bed while his back got better, it is not a workers comp claim. There must be medical treatment to verify the nature and extent of the injury, or indemnity benefits will be denied, even when employee remains off work longer than the state’s waiting period.

 

 

  1. Insufficient Documentation the Injury is Work Related

While most non-medically trained people will think injuries like carpal tunnel are always work related, that is not always the case. Carpal tunnel, hearing loss and other progressive injuries are often a function of aging or other non-work related factors… If the medical provider is unable to determine whether the injury occurred as a result of the work done by the employee or is due to non-employment related causes, the workers comp claim will normally be denied. When there is insufficient documentation the injury is work related, the employee will often seek additional medical evaluation until a definite determination of the cause of the injury can be made.

 

 

  1. Pre-existing Condition

Various jurisdictions will not consider the aggravation of a pre-existing condition as a workers comp claim. For instance, the employee has degenerative disc disease of the lumbar spine. The normal activities of the employee’s job aggravates the degenerative disc disease causing the employee to have back pain. If there is no specific event, which causes pain from the pre-existing degenerative disc disease when a workers comp claim is brought, it is denied.

 

 

  1. Intoxicated

Most states allow the workers comp insurer to deny a claim if the employee is intoxicated at the time of the injury and the intoxication was a contributing factor in the accident that caused the injury. A positive drug test or a positive blood alcohol test is needed for the insurer to deny the workers comp claim. If you suspect your employee is under the influence of drugs or alcohol at the time of the accident, request the emergency clinic or other medical provider to perform a drug test and a blood alcohol test in conjunction with their emergency medical care. (WcxKitz)

 

 

  1. Horseplay, Rough Housing and Practical Jokes

When the employee is the perpetrator of horseplay, rough housing or a practical joke, and the horseplay, rough housing or practical joke backfires on the employee and the employee gets hurt, in most jurisdictions there is no workers comp benefits available. Any claim brought by an employee is denied, because the horseplay, rough housing, or practical joke has no benefit to the employer and the employee is not considered as being on the 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. See www.LowerWC.com for more information. Contact:RShafer@ReduceYourWorkersComp.com or 860-553-6604.

 

 

WC IQ TEST:  http://www.workerscompkit.com/intro/

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

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

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

SUBSCRIBE: Workers Comp Resource Center Newsletter

 

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

 

©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

 

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