Cost mitigation is a significant key to a successful workers’ compensation program. While it takes time and effort to implement, adding key components to your program can save money, promote settlement, and increase the ability to resolve cumbersome workers’ compensation claims.
SSDI Permanent Tot I Disability Review
Many workers’ compensation defense attorneys and members of the claim management team over-reserve and often settle cases with permanent total disability (PTD) exposure. This is often found in cases where the injured employee is older or suffered a significant work injury where they would qualify for Social Security Disability Insurance (SSDI). Studies have indicated these claims create barriers to settlement and cause unnecessary problems for claim handlers. Now is the time to change how these claims are reviewed:
- Understand the statutory language for someone to qualify for PTD benefits. This includes an understanding of case law, and the understanding that only in a few jurisdictions does the receipt of SSDI benefits create a statutory rebuttable presumption of being permanently and totally disabled;
- Prevent unnecessary PTD exposure by reviewing cases in terms of the employee’s reasonable functional ability, transferable job skills, compliance with a vocational rehabilitation plan, and job search efforts; and
- Reduce the indemnity costs of a claim through effective return to work efforts.
Clinical Review of Prescription Medications
All claim management teams should scrutinize medical spending on workers’ compensation claims. This includes being proactive when it comes to the use of prescription medications and the dangers of opioid-based drug misuse and abuse. Proactive features to include in any program should consist of the following:
- The effective use of physician-to-physician engagement to ensure treatments and medications are reasonable, necessary, and related to the work injury. It is also important to apply evidence-based medication principles when it comes to treatment involving the use of common pain killers for more than 30 days; and
- Use of clinical reviews when combined with future medical care cost projections that include seeking a physician to sign off on amended future care being recommended by the injured employee’s treating doctor.
Effective Use of Rated Ages
People often think of obtaining a rated age when it comes to preparing a Medicare Set-aside. There are many other important applications to the use of this tool, including mitigation exposures and settling workers’ compensation cases.
- Provides for an opportunity to more realistically calculate an injured employee’s life expectancy with any pre-existing or non-work related conditions; and
- Provides a claim handler or defense attorney with an independent analysis of the injured employee’s need for future medical care and treatment – even outside the context of a Medicare Set-aside.
It is important to have this document available when negotiating a settlement. It only adds to the credibility of your settlement offers.
Use Reverse Offset Provisions When Applicable
A handful of states still allow for the use of reverse offsets when it comes to injured employees receiving wage loss benefits, and SSDI benefits. Without the application of these provisions, people will receive less in SSDI benefits, which gives them an incentive to continue to collect workers’ compensation. Use of the SSDI reverse offset provisions allow the insurance carrier to do the following:
- Find lost dollars that have not been offset against the workers’ compensation claim; and
- Provide parties with a turnkey analysis to produce hard dollar savings without taking up claim handler time and energy.
The following jurisdictions have reverse offset provisions available: Colorado, Florida, Louisiana, Minnesota, Montana, New Jersey, North Dakota, Oregon, Washington, and Wisconsin.
There are my tools interested stakeholders have available at their disposal to mitigate workers’ compensation program costs. These tools can be used on all types of cases, but are especially useful when it comes to pushing claims involving severe or catastrophic injuries toward settlement.
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.
Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/
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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.