Do YOU Know the Top 5 Solutions to Decrease Workers Compensation Costs

Amaxx Risks Solutions, Inc. is always looking for ways to assist our clients in lowering the cost of workers compensation.   The following are what we consider to be the Top 5 Ways to Lower Workers Compensation Cost.

The number one way to reduce your cost for workers compensation is to have a strong safety program. The safety program reduces both the expense for workers compensation insurance and the hidden costs associated with workers comp (which are significantly higher than the workers comp premiums).

A well managed safety program incorporating safety training, job hazard analysis, work-site evaluations/inspections and a safety specialist/safety committee will eliminate most workers comp claims by removing the causes or sources of injury. The injury that never occurs will lower the experience modification factor used in calculating your workers comp insurance premium. (WCxKit)

The accidents prevented by a strong safety program have much bigger impact on the financial profitability of your business by eliminating the hidden cost of workers comp including:

 

1.     The time lost and the productivity lost by the employee's supervisor and co-workers responding to the accident and providing immediate aid.

2.     The time lost by co-workers distraction—watching the emergency response and/or standing around discussing the accident after the employee has been transported to the medical provider.

3.     A reduction in morale as co-workers realize and think about the risk related to the job.

4.     The continuation of the employee's benefits while the employee is off work due to the accident.

5.     The supervisor's time, management's time and co-worker's (witnesses) time in the reporting and paperwork.

6.     The loss of production from the injured employee.

7.     The expense of rescheduling the work the employee would have performed.

8.     The cost of overtime pay to other employees to do the work the injured employee, or

9.     The cost of hiring and training either a temporary or permanent employee to replace the injured employee.

10.The lower productivity of the replacement employee until the replacement employee is up to speed or the injured employee returns to work.

11.For publicly traded companies, lower profits, resulting in lower stock values.

12.Damage to equipment, tools, machinery or vehicles being used by the employee at the time of the accident.

13.Spoiled work that has to be replaced.

14.Occupational Safety and Health Administration (OSHA) or state imposed penalties and/or fines.

15.Delays in purchasing new equipment or delays in expansion plans due to the lost profits.

 

While most workers compensation claims will be eliminated through a strong safety, when an injury does occur, early intervention by both the employer and the insurer can have a strong positive impact. Nurse Triage is an excellent way to get things off on the right foot. The triage nurse can make sure the employee gets the right level of care. The immediate reporting of every workers comp claim to the claims office lowers the cost of the claim by:

1.     Creating a positive attitude in the employee showing both the employer and the claims adjuster are concerned about the employee’s well-being.

2.     Allowing the adjuster to make prompt/same day contact with the employee.

3.     Promoting a quicker investigation into the accident details determining compensability and/or subrogation.

4.     Preventing the loss of statutory defenses.

5.     Allowing the immediate use of medical case management when needed.

 

The medical providers approved by the employer for emergency medical care should be posted throughout the work site. In the states permitting the employer to select the medical provider, treatment by a medical provider in the preferred provider network should be mandatory. In the states where the employee can select their own medical provider, a list of suggested medical providers should be posted. The triage nurse can provide information on medical providers in the network to injured employees. Some networks have subsets of providers who provide better care, shorter durations of disability, and lower medical care costs overall, plus lower litigation rates.

By directing the employee to a doctor in the preferred provider network, you are insuring the employee obtains medical care by a medical professional experienced in the treatment of work-related injuries. Doctors in a preferred provider network understand the importance of getting the employee back to work as soon as they are medically able to do so. (WCxKit)

Preferred provider network medical facilities are experienced in billing per the state fee schedule and know what is a reasonable and customary charge. The friction or issues occurring between the medical providers and the workers comp claims office are greatly reduced because the medical provider understands the unique requirements of workers comp.

A return to work policy starts before the accident happens. The smart employer has a modified duty or light duty program established with varying job placement options available.

When the injury occurs, the employer should be on the phone with the emergency medical provider advising the employee is on the way to the medical facility for treatment and to advise of the employer's desire to accommodate the employee's return to work with modified duty, if needed.

If the employee is not released to return to work following the first medical treatment, the employer (or nurse case manager when the injuries are severe) should furnish the medical provider with a detailed job description. The employer and the adjuster (or nurse case manager) should plan the employee's return to work by modifying the job requirements to meet the employee's needs.

Numerous studies show the sooner the employee is allowed to return to work, the lower the overall cost of the workers comp claim. A modified duty program allows the employee to remain active, expediting the recovery process. It also allows the employee to be productive, eliminating many of the hidden costs associated with workers comp noted above. Offsite return to work options are a viable alternative for those situations when there are no on-site jobs available.

The primary focus of medical case management is the coordinating and planning of the medical care to expedite the return of the employee to work or to reach the employee's maximum medical improvement. This is accomplished by assigning a nurse case manager (NCM) to the claim to oversee the medical treatment provided to the employee. 

The NCM is normally a registered nurse but in some states insurers and third party administrators use licensed practical nurses and/or nurse practitioners. In order to be effective as a medical case manager, the NCM must have in-depth medical knowledge plus relevant experience working in the medical rehabilitation field (knowledge of workers compensation is a plus). 

Medical Directors or use of MDs to speak with treating physicians, often called “peer-to-peer” is a good way to get medical treatment information and discuss return to work options.

The nurse case manager's role in the workers compensation claim will often include:

1.     Facilitating the medical rehabilitation of the injured employee.

2.     In consultation with the treating physician, evaluate the options for the best treatment plan for the injured employee.

3.     Coordinating the medical care to achieve the best possible medical results in a cost-effective manner.

4.     Insuring the proper utilization of medical treatment.

5.     Providing guidance to the adjuster about the medical care needed.

6.     Monitoring the employee's medical progress.

7.     Acting as a liaison between the physicians, the employee and the insurer.

8.     Facilitating the communications between the employee, employer and physicians.

9.     Keeping the adjuster informed of the employee's medical status and progress.

10.Meeting with the employee and the employer to complete a detailed job evaluation.

11.Assisting the employer in identifying the return to work options. (WCxKit)

12.Coordinating the employee's return to work (either modified duty or full duty) with the employer, employee and physician.

There are many ways an employer can decrease the cost of workers compensation insurance. We believe the top five ways to reduce cost are a strong safety program, early intervention in the claim when an accident does occur, having preferred medical providers, an established return to work program and medical case management to expedite the recovery of the employees who suffer severe injuries.  

Author Rebecca Shafer, JD is President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation for 25 years. She is a writer and speaker and website publisher. Her expertise is working with industry employers to reduce their workers compensation costs. Her client base includes airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: [email protected]  or 860-553-6604.
  
   
WC Group LinkedIn:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/ 
WC Books:  http://www.LowerWC.com/workers-comp-books-manuals.php
WC Calculator:  http://www.LowerWC.com/calculator.php

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.