Insurance Companies Can Help Employers Reduce Medical Costs

Only a few insurance companies help the insured (your company) set up a workers' comp program. Approximately half of the cost of workers' comp is from lost wages, the other half is from medical costs. In order to stay out of work, an employee must receive medical treatment more often. By implementing post-loss programs to bring injured employees back to work quickly, companies can reduce both indemnity costs and medical costs. 1- Tell employers why their workers' comp costs are high – often the insurance company's adjusting team plainly sees what mistakes a company is making but is hesitant to tell them There may not be a discrete process in place to tell a client the things they are doing wrong. 2- Get their National Workers' Compensation Scoreâ„¢ – The National Workers' Compensation Score (NWCS) identifies what best practices (operational steps which reduce workers' comp costs) a company is or is not doing. An insurance company can provide the National Workers' Compensation Scoreâ„¢ (NWCS) to their insureds as a baseline by which a company can measure performance. Insurance companies typically use data not operational best practices to benchmark success. The problem with providing data benchmarks is that they tell whether or not a company is doing well, not WHY they are doing well or not. 3- Give Companies Cost Reduction Tools & Education – Carriers can provide cost containment tools, courses to help a company implement post loss programs. Even the basic tools are better than none. Granted, a carrier shouldn't have to maintain a staff of consultants to help a client with post-loss measures, but they can recommend systems like Workers Comp Kit that are inexpensive and easy to put in place. 4- Provide more input from MD's in day-to-day claim handling practices– I remember when Continental Insurance had physicians review nearly all lost time claims. We've somehow forgotten that the injuries our employees have are just that — MEDICAL INJURIES. Nurse Case Managers (NCM) are fine in some instances, but they don't have the level of expertise an MD does to determine whether there may be another cause of the injury and whether the injury is work-related. Keep in mind, 4 hours of NCM time at $95/hour is more than 1 hour of MD time at $250/hour. 5- Have MD's write IME cover letters. – Approximately 20% of IME's are unnecessary and 30% of IMEs are not as useful as they could be because the medical records are not complete at the time of the IME (independent medical examination) or the IME is being done at a non-opportune time to "get the claim moving." A well-trained MD can make the IME process much better by getting more complete information from the IME doctor. For example, an employee had arthoscopic surgery for impingement syndrome in the shoulder and was taking longer than the disability guidelines suggested to return to work so the adjuster ordered an IME. The MD reviewed the file and saw that underlying arthritis was delaying the healing and counseled the adjuster to wait another 6 weeks. The worker was back to work in 4 weeks — less time than it would have taken to set up and IME and get the report — and the worker's benefits during that time cost less than paying for for the IME. In one company, the MD saved over $134,000 in one year by simply reducing the need for IMEs. 6- Have a Physical Ability Form/Treatment Form for the Claimant to bring to the INITIAL medical visit – Only a few carriers have a form for the worker to bring to the doctor on the first visit to gather medical restrictions so the employer can place them in transitional duty. Don't rely on clinics to provide sufficient detail. Employers SHOULD have such a form, but many do not. They "don't know what they don't know" so insurance companies are in the best position to provide this form to obtain transitional duty (TD) restrictions on the first visit. If you have to wait until the next visit, the person could be off work for 1-2 weeks simply because the employer doesn't have enough information to structure a TD position. For more cost-saving tips go to WC Cost Reduction Tips. Show the REAL cost of workers' comp with the Real Cost Calculator. Workers' Comp Kit^® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It includes 60+ documents, forms, checklists in a step-by-step format Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any aspect of a cost containment program. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact I[email protected]