Actions taken by employers (or non-action) can greatly influence the impact of the cost of workers’ compensation claims. Here are eight time-tested tools to consider implementing to reduce your work comp costs.
1. Prompt Reporting: The immediate reporting of all claims to the claims office is essential to the proper handling of the claim. The claims report needs to be both detailed and accurate. The more information you provide to the adjuster, the higher the probability of the claim being handled correctly. Having the necessary information assists the adjuster in the investigation of the facts and the determination of compensability.
2. Early Adjuster Involvement: The faster the adjuster contacts the employee, the higher the potential for a favorable outcome on the claim. Your service standards should require adjuster contact with the employee within 24 hours or less. The adjuster, through contact with the employee, investigates the accident details more completely and verifies compensability quicker. Early involvement puts the adjuster in a better position to control the claim by guiding the employee on what needs to be done, arranging medical management, utilization review, etc.
3. Open communications: Each of your locations reporting injury claims to the claim office(s) should have open lines of communication with the adjuster(s). Timely and accurate transfer of information is required to insure the best possible outcome on your claims.
4. Designated/Dedicated Adjusters: If the overall number of claims for your program is less than the total number of claims one adjuster can handle in each state, you should request a designated adjuster in each claim office. With one designated adjuster handling your claims, the adjuster will know your claims handling program much better than numerous adjusters handling only one claim or a few claims for your company. If you have enough claims in each state to require all the time of at least one adjuster, you should request a dedicated adjuster who works solely on your claims.
5. Litigation Management: The cost of litigation is a significant component in your overall claims cost. Prompt reporting and early intervention reduces the probability of the employee retaining an attorney for representation. However, even with the best adjuster having the claim assigned to them quickly, some employees will obtain an attorney. As a part of your service agreement with the insurer or TPA, you provided the claim office(s) with the list of selected/designated defense counsel to handle your claims, along with the litigation management guidelines they are to follow.
6. Medical Management: In the states where it is permitted, you should have a list of designated treating physicians for the employees to see for their work comp injuries. In all states, as a part of your service contract, your claim office(s) should have a nurse case manager on the staff whose purpose is to coordinate the medical care the employee needs to return to work. In addition to designated providers and nurse case managers, you should also have a program of utilization review to verify the medical treatment is adequate but not overused.
7. Subrogation: The adjuster(s) assigned to your claims program should always consider the subrogation possibilities during the initial investigation of the claim. The proper investigation of the claim has it ready for subrogation at the appropriate time. The adjuster should be the third party on notice of the intent to subrogate early on in the claim. This improves the potential for recovery from the third party or their insurance company.
8. Structured Settlements: While the large majority of work comp claims will never be large enough to justify a structured settlement, when the claim is of sufficient size to have a structured settlement, your service agreement should specify the structured settlement company(s) you wish to use. While all structured settlement companies can provide you with an annuity to cover the future cost of the claim, their pricing will vary. With a big-ticket cost, you want to be selecting the structured settlement company that will provide you with the best overall price to conclude the claim. (workersxzcompxzkit)
9. Claim Audits: The most overlooked area of claim cost control is the independent claims audit. Your service agreement should specify that your company or your company-designated representative would be able to do a claims audit at least annually. The purpose of the claims audit is to ensure the adjuster(s) working on your claims are handling them in accordance to the best practices outlined in your service agreement. There is an old saying within the claim offices . . . “What gets audited, gets done.” Simply, if the insurer or the TPA knows that an outside claims professional will be looking over their shoulder, the adjuster(s) is more prone to be sure the contacts are made timely, the investigation is done completely, the medical management is accomplished, etc. If you do not have the time or the expertise to do your own claims audit, please contact us. We will be glad to arrange a professional claims auditor for you.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: [email protected] or 860-553-6604.
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