Metrics to Consider in Work Comp Litigation

Organizations in workers’ compensation are often drowning in data yet starving for meaning. I often reference the 5 Critical Workers’ Comp Metrics and the Workers’ Comp Cost Driver Matrix.

The key to understanding the WC Cost Driver Matrix is to realize that, like the Russian Doll toy, each driver is a smaller driver to the one above it, ultimately leading to it’s impact on overall workers’ comp costs.

One of the 5 Critical Metrics is Litigation Rate. This article covers more detailed litigation metrics once an organization determines that litigation rate is their area of focused improvement.

Basic Metrics for Work Comp Litigation

There are no set rules for metrics to consider when evaluating one’s workers’ compensation program. The following are general items to consider. Before retaining a defense firm or creating a panel of attorneys, one should review the following items:

• Performance: Litigation in workers’ compensation claims can be unpredictable, given the inherent bias toward the injured employee in many jurisdictions. Instead of focusing on wins and losses, one should evaluate their legal expenses as more important factors. This can include the time to open a file and receive the initial status report, quality and detailed case evaluation, and the thought process put into the case recommendations.

• Time: Defense attorneys are paid on the billable hour. Carefully evaluate legal bills on the amount of time spent on projects. This should also include legal research required for various tasks. Bills should be reviewed monthly and discussed as part of any file review.

• Results: Evaluate the defense counsel’s performance based on their ability to move cases toward the conclusion. This should include time spent on hearing preparation and money allocated to defense experts for independent medical examinations, independent vocational evaluations, and surveillance techniques. Challenge all defense counsel to be creative in how they investigate a claim.

• Litigation Budgets: Require all defense counsel to prepare a litigation budget. Review the budget to ensure it is not just a copy/paste from other files. Always tell the defense counsel to be accountable for the budget and demand a reasonable explanation for why some line items may have cost more. All budgets should be consistent with file handling instructions, and the number of different attorneys or support staff working on a file should be reviewed.

Experienced claim team members should also evaluate their defense attorneys on their ability to analyze a claim and request reasonable settlement authority properly.

Other Aspects of Litigation Management

The goal of every workers’ compensation claim program should be to reduce litigation and seek to close out claims in an ethical manner that places the injured employee at the center. Here are some tips to avoid litigation and foster an environment focused on reducing workers; compensation program costs:

• Communication: Surveys indicate employees retain legal counsel when there is a lack of communication by the claim handler. Help establish a response timeline by changing your voicemail greeting daily and outlining how often emails will be returned. Never let email drive your workflow. An effective claim handler should block time daily to work on files and other segments to respond to messages. Try calling first, as telephone conversations reduce time spent on email.

• Training: Experienced claim managers should train their handlers to work smarter. This includes ensuring new team members have best in class skills, make better decisions (quicker), and a better division of labor within the team. Effective mentorship plays a vital role in this process.

• Focus on Return to Work: This should focus on every claim after an injured employee is stabilized. Develop relationships with employer clients and teach them how to create Return to Work Coordinators within their enterprise. This coordinator should be able to effectuate change and communicate with all interested stakeholders on modified work opportunities. Returning an employee to work is the best step to avoid unnecessary litigation and reduce program costs.

Coaching insureds on how to improve workplace morale is an often-overlooked step. This can include offering an injured employee a ride to receive non-emergency medical care, sending a “get better soon” card, and consistent outreach to employees off work.

Conclusions

Now is the time to avoid unnecessary litigation in the workers’ compensation claim process. The process starts with establishing and monitoring various metrics related to workers’ compensation claims litigation. This can include a variety of factors with an emphasis on returning the employee to work. Now is the time to consider litigation management and metrics as part of your efforts to reduce workers’ compensation program costs.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.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.