15 BEST PRACTICES Picture Perfect Handling of a Workers Comp Claim

From time to time an external claims auditor comes across a workers’ compensation claim approaching perfection in the way it was handled. The following is a synopsis of such a claim profiling the use of Best Practices.

The claim was reported by the employer’s location to the TPA’s local claim office by telephone at 8:00 a.m. when the claims office opened. The accident occurred a couple hours earlier during the “graveyard” shift at a local fertilizer manufacturer. The maintenance employee was working on a leaking coupling in a phosphate slurry line. The employee turned the coupling in the wrong direction allowing the phosphate slurry to spray onto the employee’s legs, causing first, second and third degree chemical burns to both legs. EMS took the employee to the hospital due to the severity of the burns.

The claims office in-take person recognizing the severity of the accident had the designated work comp adjuster for the insured join the telephone report of the claim. The telephone report became a conference call between the insured’s claim coordinator, the employee’s supervisor, the claims office intake person and the claims adjuster.

The adjuster discussed with the employee’s supervisor how the injury occurred. The supervisor confirmed to the adjuster the employee violated established safety procedures. The proper procedure to work on the slurry line was to shut the line down and drain the slurry pipe before working on it. The supervisor advised no one saw the accident, but coworkers heard the employee’s screams and went to his aid. The adjuster obtained the supervisor’s contact information and advised the employer of the Nurse Case Manager being assigned to the claim.

The employer’s claims coordinator provided all the information on the employee, information about the EMS company, the hospital’s name and address, and family contact information for the employee. The claim in-take person requested the employee’s wage statement for calculation of indemnity benefits and the completion of the E1 (Employer’s First Report submitted to the Industrial Commission).

After the telephone report of the claim by the employer, the claims office finished setting up the new claim and entered all the appropriate data into the computer system.

Even though the work comp adjuster handled several claims for the employer’s location previously, the adjuster looked up the coverage information on the employer to confirm the workers’ comp coverage was still in force.

The adjuster contacted the hospital and confirmed the employee was transferred from the emergency room of the hospital to the severe burn unit.

The adjuster contacted the employee’s residence, spoke to a neighbor baby-sitting the children, obtained the wife’s cell phone number and left contact information with the baby-sitter in case the adjuster was unable to reach the employee’s wife. The adjuster contacted the wife who indicated she only had a minute to talk as she was waiting on the burn unit the doctor to talk to her. The adjuster requested the employee’s wife to call back as soon as she could.

The adjuster then contacted the Nurse Case Manager (NCM) and provided the details of the injury, the claimant’s location, the contact information for the spouse and information on the medical management program for the employer.

When the employee’s spouse called the adjuster back, the adjuster obtained the information on the employee’s medical condition, the names of the treating physician and inquired about visiting the employee. The spouse said the employee was sedated. The adjuster advised the employee’s spouse that a NCM was employed to assist her in the coordination of the employee’s medical care and to facilitate the employee’s recovery.

The adjuster then called the NCM with the information learned from the employee’s spouse and had the NCM contact the spouse. After the NCM spoke to the spouse, the NCM made an appointment with the burn unit physician for the NCM and adjuster to meet with the physician, employee and the spouse the following day.

At the meeting the next day with the physician, employee and the spouse, the NCM explained how she coordinate the medical care for the employee. The adjuster was able to speak directly with the employee and confirm the accident details. The NCM explained how she would arrange the transition from hospital burn unit care to home care and for the follow up care with the dermatologist, neurologist and other specialists.

After the meeting with the burn unit physician and the employee, the adjuster discussed future medical care with the NCM. Based on the known medical information and the wage statement from the employer, the adjuster placed a $100,000 medical reserve, a $40,000 indemnity reserve and a $5,000 expense reserve on the claim file. The adjuster reviewed the recommended reserve with the claims supervisor and advised the reserves could be subject further adjustment based on the outcome of the surgical care the employee would need.

The adjuster called the employer and brought the employer’s claims coordinator up to date on what was accomplished on the claim so far. The adjuster recommended to the claims coordinator that she also keep in touch with the employee on a regular basis until the employee was able to return to work. The adjuster then made a diary note of the file for future contacts with the employee, with the NCM and with the insured.

On-Going Contacts started and planned for the future.

Throughout the course of the claim file, the adjuster was in regular contact with the employee, the NCM and the insured.

Based upon the adjuster’s investigation with the insured and with the employee, the adjuster accepted compensability, and filed the appropriate form with the Industrial Commission accepting compensability. Using the wage statement provided by the employer, the adjuster calculated the average weekly wage of the employee and documented that information in the claim file. The adjuster then contacted the employee’s spouse and advised the amount of the temporary total disability weekly check and gave the date the first check would be issued.

Even though there was no question about the validity of the claim, the adjuster reported the claim to the central index bureau. A prior workers’ comp claim for an arm injury eight years earlier was found, but no other claims were identified.

As the claim handling instructions for the employer required a written report on all severe claims, the adjuster completed a caption report covering all the criteria listed in the client’s Best Practices. A copy of the First Report was also sent to the excess insurer due to the nature of the employee’s injuries — third degree burns.

As the claim progressed, the adjuster kept the employer and the excess carrier informed of the progression of the claim and the employee’s medical progress. A status report was completed each month during the first four months and then on a bi-monthly basis after that until the claim was concluded.

After nearly four months the treating physician agreed with the NCM for the employee was ready to attempt a return to work on modified duty. The adjuster arranged a month prior to the expected return for the employer to have a light duty job available for the employee. Although the employer was reluctant to provide light duty, the adjuster explained TTD benefits continued until the employer allowed the employee to come back to work, and the sooner the employee was allowed to return to work, the better the chances of a reasonable settlement of the permanent partial disability claim.

During the initial investigation of the claim, the employer, at the adjuster’s request, shut down the fertilizer slurry line and removed and replaced the coupling. An engineering expert examined the coupling involved in the injury, but concluded it was not defective, just worn out through normal use. Subrogation was not feasible.

As the prior injury identified by the Index report on the employee was not an injury having overlap with the current injury, a second injury fund claim could not be filed.

Due to the frequent contact from the adjuster, the NCM and the employer, the employee always felt his interest were being protected by the people he was dealing with. The employee never thought he had any need for an attorney to represent him.

The adjuster kept the file on a short-term diary throughout the claim and completed all activities listed in the action plan on the schedule the adjuster had set personally.

Every activity undertaken by the adjuster was explained in the file notes. The file notes were concise and complete. Anyone reviewing the claim file would know what the adjuster had completed, what the adjuster had planned and what the obstacles for completion of the claim were. (workersxzcompxzkit)

Full and complete claim handling by the adjuster is necessary for the best results on a claim. When the adjuster closely follows the Best Practices established by your workers’ compensation program, the outcome of the workers’ comp claims are better for both the employer and the employee.

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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