Recently, the National Council of Compensation Insurance (NCCI) reported that medical costs account for at least two-thirds of all workers compensation costs. A decade ago, indemnity costs accounted for sixty percent of total workers compensation loss costs. Clearly, through a continued focus on return-to-work programs, employers have engineered this dramatic shift.
However, due to the increasing cost of health care, the continual switching to increasingly expensive treatments and the increase in the utilization of services (including drug costs) medical costs exceed the general inflation rate by a healthy margin.
In order to meet this new challenge, employers, in partnership with their claim adjusters must renew efforts to forge stronger relationships with medical providers regarding medical treatment issues.
A return to basics is required and employers can implement some simple but effective tactics:
1-Identify injuries early – when an employee is injured, even if it is initially considered minor, capture data about the injury and the issues and environment that existed at the time the injury occurred.
2-Seek immediate treatment – especially when an employee reports a soft-tissue injury. Having employees receive immediate medical treatment, while disruptive to an operation will be less costly than an employee who fails to report to work at a later date only because they did not receive immediate care.
3- Eliminate lag time reporting claims – studies show that the faster accidents are reported to your claims administrator, the lower the ultimate cost of your workers compensation claims. Communication between the claim adjuster, the employee and the medical care provider is essential to helping the employee recover from an injury, making sure the correct medical treatment is being provided and that the costs incurred to provide both are reasonable and necessary.
While these three basic steps work effectively on each claim, it is equally important to understand the “big-picture” as well. Here are two reasons why accurate information about every accident is vital.
1-Accident data, once converted into useable information can identify trends that allow affirmative, remedial action. For example, one retailer identified a remedy to repetitive motion injuries to the hands and fingers of checkout cashiers. The checkout operation was re-designed to install a carousel for the plastic shopping bags, eliminating the cashiers having to lift the bags that were filled with purchased items. The lifting motion was “turned” over to the customer.
2-Adjuster services – know, understand and measure the performance of your claims adjuster on their effectiveness of reducing your workers compensation loss costs. We tend to focus on the “financial” performance but we need to expand the audits to include behavior. Examples include communication with an injured employee, medical care providers and the employer. Consideration should be given to the quality of the communication in addition to the frequency and consistency.
Michael Ferreira is the President of Safegate Risk Consulting, LLC. He has been in the insurance industry for many years and has expertise in brokerage, underwriting and claims. While in the brokerage industry, he was the client account executive for Walmart. He can be reached at: 917-767-9123
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Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel or other professionals before implementing any cost containment programs.
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