Notwithstanding conventional wisdom, 80-90% of all workers’ compensation claims are initially accepted. While claims can be later denied, questions arise as to how to properly dispute a claim. It is important for members of the claim management team to take several factors into consideration and avoid making costly mistakes.
All questionable claims need to be reported to a claim handler so a proper investigation can occur
Employers are on the front line of the claims process and generally report workers’ compensation claims to their insurance carriers, or third-party administrators. They know more about the matter and anyone else and can assist the claim handler in obtaining medical records and starting a proper investigation.
Members of the claim management team need to be responsive to the concerns of an employer and flag it for special consideration. Issues to consider include making a timely determination as to compensability, and direction of inquiry. Leakage occurs when this does not take place.
Steps to consider include taking an employee statement, obtaining medical records, prior medical records, and background checks. Taking these steps ensures the claim handler completes the investigation and makes the correct decision in good faith.
Retroactive denials of primary liability and other considerations
Retroactive denials of primary liability can be troublesome. Take for example the admitted low back injury. During the course of investigation, medical records indicate the employee told a doctor they hurt their back over the weekend doing yard work. The claim handler has no way of knowing how bad this injury was based on the timing.
Using nurse triage can reduce the likelihood of this type of claim because the employees speak to a nurse immediately at the time of injury, so there is less room to change a story.
Dealing with injuries that are not proportionate to the work injury
Members of the claim management team should always review medical records and determinate the mechanism of injury. If an injured employee claims a lumbar strain while lifting a 20-pound tote, and the doctor finds objective evidence on exam of severe, and disabling back pain, then something is not right. The lifting of 20 pounds should not have such excessive force that it will herniate multiple lumbar discs. The claim handler should set an IME, and let that IME physician comment on the severity of the symptoms in relation to the stated work injury.
A proactive claim handler should also be on the look-out for false positives. It is likely an average aged individual has degenerative changes in discs without experience symptoms. IN some instances, these changes are not necessarily related to a work injury or activity.
Dealing with the “illegitimate” claim
Members of the claim management team should have an ethical obligation to investigate all claims – even if there is clear evidence from the onset it is not legitimate. In the same manner, employers are required to report all injury claims to their workers’ compensation insurance carrier no matter the circumstances. The claim handler has training and certification, and they are qualified to deny a claim that is alleged to be work-related.
Some jurisdictions can carry heavy penalties for failure to report a work injury to the insurance carrier. The employer pays a premium to the insurance carrier to protect the insured. The employer should gather all the pertinent details, and report the claim promptly. Indicate on the First Report of Injury that the claim is questionable, and then go from there. Follow up with the adjuster, and chances are it will be denied as you suspected.
There are several ways to dispute a questionable claim. But the most important thing to do, as an employer, is to gather all the information you can on the claim, then report it promptly to your carrier and follow it up with a phone call to the adjuster. The more you work together with your Carrier, the better the chance that questionable claims will be denied and not paid.
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.