“May” vs. “Must”: The Two Words That Decide Who Controls Your Claims

An employer writes a clear instruction: use a specific occupational health clinic for initial treatment. Months later, a claims review shows that many injured employees were treated somewhere else.

No one ignored the instruction. The employer simply didn’t have the authority they assumed they had. This situation is common. It comes down to the difference between two small words: may and must.

Two Very Different Instructions

When an employer tells a claims administrator “you may use this provider,” that’s a consult. The employer recommends, and the claims administrator makes the final decision.

When the instruction says “you must use this provider,” that’s authority. The employer decides, and the claims administrator follows.

Both arrangements can work. Problems start when the employer believes they have authority and the claims administrator believes they’re giving a consult. Expectations drift apart. Frustration builds. Relationships suffer over something that could have been clarified in one conversation.

Your Insurance Structure Sets the Starting Point

How much authority you have depends largely on your insurance structure.

Control generally increases as employers move from guaranteed cost toward large deductible programs and self-insurance. The more of your own money is paying claims, the more say you typically have in how those claims are handled.

In a guaranteed cost program, the carrier is funding the claims and generally keeps the final say on many decisions. That isn’t a reason to disengage. Guaranteed cost employers still control what happens inside their own organization, including:

• Injury reporting
• Communication with injured employees
• Return-to-work opportunities
• Supervisor response

They can also still ask. The answer may be no, but asking clarifies where you stand.

Where the Distinction Matters Most

Several decisions come up repeatedly in account handling instructions. For each one, you should know whether your instructions say may or must:

• Selection of medical providers
• Selection of defense counsel
• Use of investigation or surveillance vendors
• Use of nurse case management and other managed care services
• Whether to pursue subrogation
• Waiver of liens in settlement
• Claim denials

If you can’t answer the question for a category, that’s where to start.

Write It So There Is No Question

Vague wording creates the confusion. Clear wording prevents it.

Vague: “The employer prefers ABC Law Firm for litigated claims.”

Clear consult: “The adjuster will consult with the risk manager before assigning defense counsel. Final selection rests with the claims administrator.”

Clear authority: “All litigated claims will be assigned to ABC Law Firm.”

Either clear version is fine. What matters is that both sides agree on which one is in place.

The Best Time to Ask Is Before You Sign

Timing matters when negotiating decision rights. A carrier or TPA is usually most flexible while trying to win your business. During selection or renewal, terms that would take months to negotiate later are often agreed to quickly. Changing terms later isn’t impossible, but it’s often more difficult.

Before signing, clarify:

Which decisions belong to you
Which decisions require a consult
How disagreements will be escalated
How often the arrangement will be reviewed

Your insurance broker can be a valuable advocate here, especially if they have experience negotiating account instructions with the carrier or TPA involved.

Don’t Ask for Control You Won’t Use

Authority comes with responsibility. If you insist on approving every counsel assignment, you must respond quickly every time you’re asked. Otherwise, the approval step slows the claim down.

A practical approach is to take authority where you have a clear preference and the capacity to act on it. Allow a consult arrangement everywhere else. Control that sits unused doesn’t improve outcomes. It only adds delay.

Review It Together

Decision rights shouldn’t be set once and forgotten. Use your annual stewardship meeting or quarterly business review to confirm which decisions fall into each category. Talk through situations where the arrangement didn’t work as intended, then adjust.

A consult arrangement that has worked well may be fine as is. An area where you’ve repeatedly disagreed with the outcome may be worth renegotiating.

Final Thoughts

Much of the tension between employers and claims administrators comes from unspoken assumptions about who decides. Two words, clearly written, can remove most of it. Know where you have authority. Know where you have a voice. Put both in writing, and review them regularly.

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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