How To Ensure Your Adjuster Is Being All They Can Be

Workers comp adjusterIf you have ever felt an adjuster assigned to one of your workers’ compensation claims was not making a proper effort to investigate a questionable injury claim, you are not alone. Every large claims office has some really good adjusters, some acceptable adjusters and some unmotivated adjusters who are just going through the motions to make it to the next weekend.

 

If you contact an unmotivated adjuster about the status of their claims handling, the adjuster will tell you, that she is doing everything she can on the claim. The reason the adjuster will say that is because the adjuster knows that the employer most often does not know what can be done on the claim. If you want to really shake up the unmotivated adjuster and to get the adjuster moving forward full speed on the investigation of the claim, review the following list of investigation suggestions with the adjuster.

 

Check List of Investigation Tools:

 

  • Employer’s First Report of Injury form
  • Employee’s written report of claim form (in states where it is required)
  • Insurance Services Office filing (formerly known as the Central Index Bureau)
  • Contact with claim adjuster(s) on claimant’s prior work comp claims
  • Contact with prior employer(s) on claimant’s prior work comp claims
  • Medical records from claim files of prior work comp claims
  • Contact with work comp board/industrial commission for their records on prior claims (some states will not cooperate, other states do cooperate)
  • Employee’s detailed recorded statement
  • Recorded statement of any witnesses to the accident
  • Supervisor’s recorded statement
  • Police report on vehicle accidents
  • OSHA reports, whether federal OSHA or a state OSHA
  • Any other government agency records
  • Discussion of the claim with the employee’s attorney, if the employee is represented
  • Contact with any third party involved in the claim – driver of other vehicle in auto accidents, manufacturer of machinery that injured employee, manufacturer of defective product that caused employee’s injury, etc
  • Telephone contact with each medical provider to have the most recent medical report(s) faxed to the adjuster
  • Medical records for all medical appointments
  • Photographs of the accident scene
  • Diagram of the accident scene
  • Having the claimant call the adjuster after each doctor’s appointment to report on medical progress
  • Nurse case manager’s input on serious injury claims
  • Field case manager to meet with the employee and doctor, and to attend medical appointments with the employee
  • Review of claimant’s social media sites – Facebook, Twitter, LinkedIn, etc.
  • Employer’s personnel file on the employee, including job application, new employee forms, disciplinary records, etc.
  • Employer’s safety records for the accident location
  • Employer’s public notice of plant location closing, lay-offs, union issues, etc.
  • Referral of the claim to the Special Investigation Unit (the unmotivated adjuster may be quick to do this, as this passes the buck to someone else to do a complete investigation).
  • Outside Vendor Services (Investigation steps that can be taken, but not normally performed by the adjuster, but overseen by the adjuster).
  • Surveillance
  • Activity check
  • Neighborhood canvass
  • Background check
  • Credit check
  • Public records review / civil records searched
  • Criminal records check
  • Skip tracing
  • Clinic records sweep (checking for medical treatment at all clinics in the area of the employee’s address)
  • Hospital records sweep (checking for medical treatment at all hospitals in the area of the employee’s address)
  • Pharmacy records sweep (checking for prescriptions filled at all drug stores in the area of the employee’s address)
  • Video re-enactments of the accident
  • Examination under oath

 

Unfortunately, there is no central system where an adjuster can check to see if the employee is currently working another job. The use of a private investigator for surveillance can fill this void, but without knowing where an employee might be working, this is often a hit-and/or-miss approach.

 

It would be a very rare claim where it is necessary for the adjuster to take all of the investigation steps listed above. The key to an investigation is for the adjuster to take as many of the investigative steps as needed to verify the validity of the claim, or to disprove the claim.

 

We realize this checklist of the investigation steps your adjuster can take is incomplete. We welcome our readers to contact us with additional investigation techniques they would add to our investigation checklist.

 

 

 

Rebecca ShaferAuthor Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

September 11th Remembered – Tribute To Marsh And AON

Article republished from a previous post.

 

Everyone remembers where they were the when they learned the World Trade Center crumbled to the ground. I was scooping ice cream at the Mansfield Center General Store. Having recently retired from the risk management and insurance industry, I had moved back to the area, built a house in Mansfield Center and worked from my home office. I was helping my family restore and run the General Store.

 

I had an exciting career in risk management and insurance working for two of the best insurance brokers in the industry. BOTH companies had sizeable offices located in the World Trade Center. So, when Bill called and asked me if I was watching TV, did I know a plane flew into the World Trade Center, I was alarmed. Initially I thought he meant it was a small plane, but when I turned on the TV, I could see it was a huge plane and the building was on fire. And then another plane had flown into the other tower.

 

 

We Never Knew How 9/11 Could Affect An Entire Industry

 

Everyone in the risk management field “plans”… we plan for every eventuality, thinking things through. That’s what we do. We help our clients, which are large companies such as The New York Times, Universal Orlando, and USAir, etc. plan how to provide safer workplaces, safer products and safer environments. But we never planned for Sept 11. We never knew how it could affect an entire industry.

 

AON and Marsh are the two largest insurance brokers in the world and I – with a loyal team of consultants – was responsible for development of the workers’ compensation practices at those companies. Workers’ comp insurance is the largest line of insurance coverage – a huge cost to most employers – and I had found the solution to reduce those costs significantly. Helping a wide-variety of types of organizations was gratifying, and there was a new challenge every day. I had written, published, traveled, and worked hard for 25 years, so I looked forward to scaling back.

 

When a retirement opportunity presented itself, I left the workforce to enjoy being a mom. My daughter was 17 and Glastonbury High School had not gone well. Against her will, we had moved her to a private school, and she and I were getting reacquainted during the long drive to and from school in Farmington, CT. Life was good.

 

 

Many Former Employees Went Back To Work

 

It wasn’t part of the plan to go back to work, but two weeks after Sept 11, I went back to AON, filling in for Lisa Ehrlich. Lisa was an outsourced risk manager who worked on-site at a company in Stamford, CT. On 9/11, she had gone into the NY office for a meeting and was killed that day. I was honored to be able to help in some small way. Many former employees went back to work in the intervening years to help the brokers rebuilt their practices. Here is a remembrance of my colleagues.

 

In the 18 years since Sept 11, a new generation has taken over. Some hardly know our industry lost so many that day, key leaders and pioneers in the field of workers’ compensation cost containment. In the intervening years, my nephew, Michael Stack, has taken over a leadership role in my company and become an industry leader in his own right. I am very proud of him for carrying on the legacy and memory of our beloved colleagues lost on that fateful day.

 

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

 

Easy Way To Avoid Attorney Involvement In Your Work Comp Claims

avoid attorney involvementA major mistake made by employers in handling workers’ compensation claims is the failure of the employer to build and maintain rapport with the injured employee. Wikipedia defines rapport as “when two or more people feel that they are in sync or on the same wavelength because they feel similar or relate well to each other”.

 

 

Employer Should Contact Injured Worker To Begin Caring & Trusting Relationship

 

The employer’s workers’ compensation coordinator should be in contact with the injured employee the day of the injury to begin to establish a caring and trusting relationship with the employee. By answering all of the employee’s questions about the workers’ compensation process and by showing the employee that the employee is important to the employer, the employee is much less like to develop animosity toward the employer over the accident.

 

Few employees will openly admit to themselves or to anyone else that it was their own carelessness that caused their injury. When there is no rapport between the employee and the employer, it is much easier for an employee to blame the employer for the injury, rather than to say ‘it was my inattention to what I was doing that caused me to get hurt’. When proper rapport with the claimant is established, the injured employee is much more objective about the cause of their injury.

 

When the workers’ compensation coordinator actively works with the injured employee to schedule medical care, to arrange light duty work, to answer any questions the employee has about the workers’ compensation claim process, and to reassure the employee that the employer has the employee’s best interest at heart, the course of the workers’ compensation claim is much smoother.

 

 

Fear Is Primary Reason An Employee Hires Attorney

 

Fear is the primary reason an employee hires an attorney following an injury. The employee can be fearful of one or more of the following concerns:

 

  • The inability to support or provide for their family during the recovery time of the injury
  • The inability to support or provide for their family in the future
  • Losing their job due to their inability to work
  • Being ostracize for causing the accident and the resulting injury
  • Having a permanent impairment
  • Having to pay the cost of the medical treatment
  • Not knowing what to expect

 

It is often said the easiest way to lose control of the claim is to ignore the injured employee after the injury occurs. When the employer does not maintain rapport with the employee following an accident, the employee will find someone to answer his or her questions about the workers’ compensation claim process. If the person providing the answers to the employee is an overzealous attorney whose primary concern is maximizing the attorney’s income, the answers provided to the employee will be designed to drive a wedge between the employee and the employer. The attorney knows the employee may have some sense of loyalty to the employer, and it is important to the attorney to diminish that sense of loyalty, and to encourage the employee to try to get the maximum amount possible for the injury.

 

 

 

Communication Needs To Be Ongoing

 

Immediately following an injury, most employers reassure the employee that everything will be alright, that every problem will be taken care of. Unfortunately, most employers return to the daily activities of their business the day following a workers’ compensation injury, while the employee continues to deal with the injury aftermath for weeks or even months following the injury occurrence.

 

Rapport is maintained by regular, on-going contact with the injured employee. One of the Best Practice used by professional workers’ compensation coordinators is to request the injured employee to call in after each doctor’s appointment with a status update. This accomplishes several things:

 

  • It keeps the employee in touch with the employer during the medical recovery process.
  • It keeps the employer informed as to the exact medical status of the employee.
  • It reassures the employee that the employer is concerned about the employee’s well-being.
  • It allows the employer to coordinate the modified duty work with the limitations imposed by the medical provider.
  • It keeps a high level of rapport between the employee and the workers’ compensation coordinator
  • It allows the workers’ compensation coordinator to address any issues or concerns of the employee that develop during the course of the claim

 

When the employee has a high level of rapport with the employer’s workers’ compensation coordinator, there is a much lower chance that the claim will be contested. By establishing and maintaining rapport throughout the claim, the employer will experience a better overall outcome of the work comp claim.

 

 

 

Rebecca ShaferAuthor Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Common Mistakes That Get Employers In Trouble on Questionable Claims

Common Mistakes in Workers CompEvery self-insured employer has to contend with the occasional workers’ compensation claim the employer feels is of questionable validity.  The urge is often to ‘fight fire with fire.’  However great the urge is to give the employee ‘a taste of his own medicine,’ the employer must hold itself above taking the low road taken by the employee.  Just as there are laws in every state against insurance fraud, there are also laws in every state that have names such as “unfair claim settlement practices.”

 

Unfair claim practices are any action taken by the self-insured employer that is unfair, discriminatory, deceptive, or misrepresent the facts.  Any inappropriate conduct by the self-insured employer can land the employer in legal trouble.  Also, if a particularly unfair practice is shown to occur with any frequency, the insurance regulatory authority will review their approval of your self-insurance status.

 

 

Common Mistakes That Get Employers In Trouble

 

While there is a wide array of inappropriate actions a self-insured employer can get into trouble for, we will discuss only the most common mistakes an employer might make that would be classified as an unfair claims practice.

 

  • Delaying the processing of a claim – the self-insured employer cannot refuse to process the Employer’s First Report of Injury form or delay sending the required forms to the employee or the required forms to the state agency that oversees workers’ compensation.

 

  • Delaying the necessary investigation of the claim – most states require the claims office to accept or deny the claim within a specific period of time.  If the claim is not accepted or denied timely, in most states the lack of a timely decision is acceptance of the claim.  Worst yet, if the employer does not investigate the claim within the frame specified by the state, the employee’s version of the claim facts is accepted without any rebuttal by the employer.

 

  • Misrepresentation of coverage – the self-insured employer is handling its own claims must provide the employee making an injury claim full information on available medical care and indemnity benefits, if indemnity benefits apply.  For example:  you cannot tell the employee there is a 30 day waiting period for indemnity benefits.  Or, you cannot tell the employee that required medical services are not covered.

 

  • Withholding payment of benefits – the self-insured employer who has accepted a claim, or has received an adverse ruling on a claim, cannot withhold payment of temporary total disability benefits or the payment of medical bills to coerce a quick settlement with the employee.

 

  • Needless duplications – the self-insured employer cannot bombard the injured employee with extra or duplicate claim forms, or have the employee repeat medical procedures that were completed properly.

 

  • Withholding an equitable settlement – if the workers’ compensation regulatory authority has ruled that workers’ compensation coverage must be provided, the employer cannot refuse to make a good faith effort to reach a prompt and fair settlement of the claim, regardless of how the employer views the validity of the claim.

 

  • Appealing all awards – the self-insured employer cannot make it a standard business practice to appeal all awards of workers’ compensation coverage in an effort to compel employees to settle for less than they would otherwise be entitled to.

 

  • Putting forth an unreasonable settlement offer – the employer cannot offer to settle a workers’ compensation claim for permanent partial disability or permanent total disability for less than the requirements of the state statutes.  The settlement offer must be based on the requirements of the law.

 

 

 

Unfair Claims Practices Acts Designed to Protect Employer & Employee

 

The unfair claims practices acts are not designed to compel a self-insured employer to pay fraudulent workers’ compensation claims.  The unfair claims practices act statutes are structured to compel the self-insured employer to investigate thoroughly all claims. These statutes mandate the employer to either accept an employee’s work comp claim or to provide the reasons and the documentation as to why the work comp claim is not owed.

 

When the self-insured employer is confronted with the questionable claim, the employer should investigate the claim completely gathering all information from the employee, the co-workers, witnesses, medical providers, past employers, past medical providers, state agencies, the Insurance Services Office, and all other sources.  A decision on the claim should be made timely, and the decision should be conveyed to the employee and the state agency.

 

By acting in an unbiased and factual manner, the self-insured employer will avoid any violation of the unfair claim settlement practices acts.

 

 

 

Rebecca ShaferAuthor Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Top 5 Misconceptions Surrounding Workers Compensation

Top 5 Workers compensation mythsEveryone has opinions on what workers comp is. Some are correct, but most are misconceptions. The commercials seen on TV about people collecting hundreds of thousands of dollars are not true for the average claim.  When looking at the bottom of the screen it indicates that the people on the commercial are actors, not even the real claimants.  Most of the marketing material surrounds auto and liability accidents, where pain and suffering are translated into a certain dollar amount.  This is not exactly true in workers comp.  There is no pain and suffering payment.  Insurance companies/TPAs are there to provide reasonable and necessary medical treatment and wage loss.  Some states even allow a permanent partial disability payment, or impairment rating, on top of wage loss, but that is it.

 

 

Below we discuss the top 5 misconceptions surrounding the mystery world of workers compensation.  Not all of these will apply exactly to every jurisdiction but are general.  Remember to discuss with the adjuster and counsel any exact questions surrounding certain details regarding.

 

 

  1. Workers Compensation is not Welfare

Compensation is not a free payment a worker is entitled.  Just because you are injured at work, it does not mean a guaranteed payment or coverage for medical/wage benefits.  There are a lot of criteria to meet in order for a claim to be compensable.  Even if the claim is compensable, it also does not mean anything can be done.  Claimants have to play by the rules and do as they are told by the adjuster.  The adjuster must make the effort and take the time to explain to each claimant what the rights are, and what they can and cannot do. The biggest issue is miscommunication between the carrier/TPA and the claimant, so having an open dialogue will end any misconceptions that a claimant may have in regards to what their rights are, and what is covered; if indeed the claim is determined to be compensable.

 

 

  1. Nobody gets rich from Workers Compensation

Depending on the jurisdiction, employees give up the right to sue in civil court in exchange for what are essentially no-fault benefits.  Workers compensation pays lost wages, medical care, and vocational rehabilitation.  Pain and suffering as an additional payment is not available or applicable to a compensation claim.  The amount of money a person receives is a percentage of average gross pay.  There are typically no increases for inflation, and each state has a maximum limit that a person can get per week as workers comp payments.

 

Michigan, for example, has a maximum rate of $921 per week (as of 2019).   So even grossing $2000 per week as an average weekly wage, that amounts to $921 per week in Michigan.  High-wage employees that fall into these criteria are usually not very happy when they find this out, but the rules are the rules.  These statutes are set up within the workers’ compensation system, and they have to be followed by all parties.  Even if a claim is settled for a certain amount of dollars, it is typically not a retirement jackpot.  It may end the exposure for the carrier/TPA, but these claims that settle for very high amounts of money are the result of a very serious, extremely disabling injury.  And even those are few and far between.

 

 

  1. Workers compensation benefits will be stopped if the worker declines reasonable employment.

If the employer offers up a light duty job, within the injured employee’s medical restrictions, a claimant cannot refuse it and still get paid wage loss benefits.  This opens a Pandora ’s Box, because an issue will come up about whether this light duty job is something an injured worker is trained to do or is the job offer seen as an insult to their professional skills, etc.  If there is a welder sitting in a chair staring at a clock for a job, then maybe a case could be made that this work is not a benefit to the company.  For light-duty jobs, they have to be deemed something that the employer gets a “gain” from performing, and almost all jobs within an employment facility can fall within these parameters.  Certainly, if you provide a degrading job that is of no benefit, then you may get into legal trouble.  But in all reality, I do not think any employer would take a risk in stopping a compensable case by trying to make a person sit outside and stare into space.

 

 

The bottom line is any light duty job, that provides a service to the employer, must be performed if it is offered to the injured worker.  If the worker declines, then wage benefits will cease.

 

 

  1. Workers comp fraud is extremely low

Actual workers comp fraud is less than 10% of all claims.  And that number may even be high; I would go as low as 5% or less.  For a case to be deemed as fraudulent, it must meet certain criteria within whatever state statutes are in the jurisdiction.  That is hard to meet, and most cases will not even come close to being worth the pursuit of fraud in a legal court case.  If a certain worker is claiming to be out of work, and you get surveillance of them outside roofing their house, this may not make the case actual “fraud,” it falls more within the injured worker not following their medical restrictions and going outside of their treatment plan as deemed appropriate by their treating doctor.  This will provide the adjuster with the ammo to dispute ongoing benefits, but not exactly to pursue the case as overall fraud.

 

 

Workers comp fraud, as a whole, is not a major problem within the worker comp system.  Sure there are a lot of people that do not follow their medical restrictions, or they may miss doctor appointments, or ignore physical therapy demands, but this provides only a dispute for ongoing medical benefits, not fraud.  There is a difference between the two.  If you think you have an actual fraud case, you need to discuss it right away with the carrier/TPA and counsel before taking any such action to pursue official fraud in a legal venue.

 

 

  1. The vast majority of workers comp claims are paid and do not go to court

Generally, most comp cases are accepted, the injured worker gets treatment, and eventually goes back to work.  The idea that someone stays home and avoids work when they are able to actually work is not the norm.  Sure, there are those people out there who try to do what they can to avoid going back to work, but after an independent medical exam (IME) is performed, or after some surveillance discovers them being active out and about running errands, they are quickly flushed out and denied ongoing benefits.

 

Typically after a denial, and wage loss payments stop, these workers get on the wagon and get their treatment, so they can return to work and have their comp case end.   Some will run to plaintiff counsel and try to get what they feel they are entitled to, and they will file for mediations and hearings, but the litigation usually is settled before a case is tried in front of a judge.  Doctors can disagree on the causal relation of an injury, and this can speed up the case to go into litigation, but these cases are typically settled within 2-6 months.  A low percentage of claims will stay in the litigation system, and go on for months or years, but these cases are usually quite complex and can involve several defendants and several employers, and that contributes to the complexity and the duration of the litigation.  For the most part, on the normal workers’ comp claim that gets disputed and goes into litigation, these cases resolve themselves in the early stages of litigation and the files eventually close. But even those cases are not the common ones.  The common claims are legit injuries, where benefits are paid and the worker returns back to work at full duty within whatever timeframe is needed depending upon the severity of the injury.

 

 

Summary

 

Everyone may have heard of someone that tried to get away with milking the comp system.  Most of these people are caught through a good investigation, and their cases get resolved.  The stereotype of work comp being a total pain can be true in some cases, but for the most part, work comp claims are legit, paid, and the worker returns back to work.  There are always some exceptions, but if all parties communicate, know what their rights are, and know what they can and cannot do, their claims are resolved as quickly as possible and everyone can move on with their respective lives.

 

 

 

Rebecca ShaferAuthor Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

How To Make Unions An Asset To Workers Comp Cost Savings

Workers' comp with unionsMany employers may be suspicious of working with unions, thinking that they support the filing of questionable workers’ comp claims. However, in some cases working with labor unions may lead to decreases in workers’ comp costs. Unions are usually strong supporters of improved safety policies, like following OSHA guidelines, use of safety gear like hard hats and protected eyewear and improved ergonomics. Unions can track workplace accidents and make suggestions over ways to improve safety.

 

 

Workers’ Compensation Policy Planning

 

Bring labor unions into your workers’ compensation policy planning. After all, a good company cares for its employees and wants them to be treated fairly. Leaving unions out of the process creates an “us vs. them” mentality that can drive up long-term costs. Including union input builds buy-in to the company’s workers’ comp process.

 

Here are some suggestions for working with labor unions:

 

  • Talk to union representatives early in the planning process.
  • Ask for the union’s perspective on issues such as how seniority affects injury management and their policies on things such as supplemental pay for the injured worker. Does the union have “collateral source benefits” that are a disincentive to returning to work?
  • Listen to the union’s input on issues such as safety planning and how to return employees to work post-injury.

 

 

Drug Testing

 

One area where unions and employers have disagreed is over the use of drug testing. Unions may object to drug testing as infringing on its members’ privacy rights or question the science behind drug testing. If employers work with the unions to explain how drug testing protects the safety of members, everybody wins. Unions may respond to the employer’s rationale of keeping intoxicated, unsafe workers from endangering the safety of the workforce, provided that the drug testing policy promotes employee treatment rather than termination. Having a written drug testing policy that is fair and equitable can go a long way towards convincing a union that your concern is for safety, not punishment.

 

 

Union Representatives Can Guide Injured Workers through the Workers’ Compensation Process

 

Union stewards or representatives can help guide injured employees through the workers’ compensation process, starting with arranging immediate medical care. This can help reduce costs as the sooner the injured employee is treated, the higher the probability of a quicker recovery. Make sure that communication with the union remains positive and proactive so that a disgruntled union representative does not urge the employee to stay off work longer because the union has some non-related dispute with management. Also, keeping communication positive and flowing can keep the employee from hiring a lawyer out of frustration over miscommunication or unreturned phone calls.

 

 

Complying with Labor Relations’ Laws

 

Make sure that your company complies with all required federal and state labor laws. Employees have the right to join together with co-workers to address issues at work, with or without a union. Most employers are required to post notices advising employees of their rights under the National Labor Relations Act (NLRA). You do not want to give unions ammunition to attack your company by forgetting to do a simple thing such as hanging a poster in the workplace. You can find out more about employers’ obligations under the NLRA at http://www.nlrb.gov/rights-we-protect/whats-law/employers.

 

 

 

Rebecca ShaferAuthor Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

6 Ways Insurance Companies Control Workers’ Comp Claim Leakage

workers comp claim leakageWhen you review your broker’s or insurer’s website, there is one subject in workers compensation that most brokers and insurers never mention – leakage. Leakage in an insurance claim is any payment that is more than the payment should be. Leakage is defined as the difference between what the claims office spent and what they should have spent. Leakage is also been defined as lost opportunities to save money.

 

 

Workers’ Comp Claim Leakage Becomes Employer Expense

 

As workers compensation premiums are directly tied to the frequency and severity of employers’ claims, you will never hear the workers comp insurer say, “We did a poor job controlling the cost of your claims.” Their leakage becomes the employer’s expense through higher insurance premiums.

 

 

5 main causes of workers comp claim leakage:

 

  1. Inadequate claims handling.
  2. Judgmental mistakes.
  3. Poor claim processes.
  4. Overpayments.
  5. Bad customer service.

 

While leakage can be caused by any one of these areas, it is often a combination of them that results in leakage.

 

There are about as many forms of leakage in workers compensation as there are workers comp subjects to be discussed.

 

 

10 examples of workers’ comp claim leakage:

 

  1. Payment of medical bills without adjustment to the fee schedule.
  2. The failure to properly investigate compensability and payment of claims that are not covered.
  3. The failure to pursue subrogation.
  4. The failure to utilize the early return-to-work program of the employer.
  5. The failure to properly manage utilization review opportunities.
  6. The failure to control the selection of the medical provider in those states where the employer controls the medical provider selection.
  7. The selection of inadequate defense counsel.
  8. The failure to pay medical benefits or indemnity benefits timely resulting in fines and/or penalties.
  9. The lack of automation and/or technology in the process where it could be utilized.
  10. The additional management and administration time due to any mistake in the claims handling.

 

The list could go on and on. Any failure to control the insurance claim can result in leakage.

 

 

Leverage Technology to Identify Leakage?

 

Some consultants and insurance brokers who attempt to identify leakage by the use of computer outcome modeling or algorithms. These provide a detailed report reflecting payment areas in which the employer’s claim cost exceed the average for their industry or the employer’s prior lost history. When the employer has thousands of claims, automated methods can identify some possible areas where there is leakage, but will miss many others. When the employer does not have thousands of claims, the cost averages can be influenced by a few outlier claims making the identification of leakage by computer averages less reliable.

 

 

An example of how computers and algorithms fail to identify leakage: A computer average for indemnity paid will not show the failure to contest small claims that should been investigated and denied. Because it is easier for the adjusters to pay numerous small claims rather than contesting them, the behavior looks like superior performance on a computer average, though, in fact, every small claim that was paid but should not have been, is leakage.

 

 

A better way to control leakage is the utilization of these 6 time-proven methods:

 

  1. Having an established set of best practices for workers compensation claims.
  2. Proper education and training of the workers’ comp adjuster including state statutes, customer service, and claims-handling practices.
  3. Excellent education and training of all support staff.
  4. Linking salaries and pay raises to compliance with best practices.
  5. Having an established work-flow process.
  6. Incorporating automation and technology into the claims process.

 

An integrated approach incorporating all of the methods will eliminate most leakage.

 

If you feel like there is leakage in handling your workers compensation claims, there probably is. Identification of various forms of leakage on your claims can be done through a claims audit. An experienced quality assurance auditor will be able to point out where leakage has already occurred and identify situations where mistakes have already been made, but can be corrected before additional money is paid. If you would like to discuss a leakage audit of your insurance claims, please contact us.

 

 

 

Rebecca ShaferAuthor Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

10 Steps Every Adjuster Should Perform In a Workers Comp Claim Investigation

TEN Steps Every Adjuster Should Perform In a Workers Comp Claim InvestigationWhen you go online and read your adjuster’s file notes about your claims, do you know what to look for to be sure the adjuster is performing a quality claim’s investigation on your claim files? If not, read on and learn what the adjuster should be doing to be sure you are being protected from unnecessary workers compensation cost.

 

 

ONE:

The first thing the adjuster should do in the claim investigation is to verify coverage. Before the adjuster accepts the claim, the adjuster should check to be sure there is coverage. The verification of coverage should be the first adjuster’s note in the claim file notes.

 

This would include:

 

 

  1. The policy number.
  2. The policy dates to verify the policy is in enforce for the date of the accident.
  3. The state(s) covered under the given policy number and policy period.
  4. Any endorsements to the policy that would change the coverage.
  5. Any exclusions to the policy that would change the coverage (for example – a particular location of the employer is excluded from the coverage).

 

 

TWO:

Once the adjuster has confirmed there is coverage, the next step in the investigation is to begin the contacts. With workers compensation, the first contact attempt should not be the employee; it should be the employer. The reason for this is the employee will only provide information the employee considers beneficial to himself. The employer will often provide information that will assist the adjuster in the direction of the claim. The employer might advise that no one saw the accident and the claim is highly questionable, or the employer might advise that seven fellow employees saw the injury occur.

 

 

THREE:

The initial contact with the employer should be the same day the accident is reported, or at least within 24 hours of the report of the claim. The adjuster’s file notes should reflect more than “called the employer.” The contact details that should be included in the file notes include:

 

 

  1. The facts of the accident.
  2. The identification of any witnesses.
  3. A discussion of any subrogation issues.
  4. Any knowledge the employer has of a prior claim.
  5. Verification of the information on the Employer’s First Report of Injury.
  6. The disability status of the employee.
  7. A description of the employee’s job duties.
  8. The length of time the employee has worked for the employer.
  9. Confirmation of lost time if the injury was reported after the initial waiting period for indemnity benefits.
  10. The availability of modified duty for the employee.
  11. If applicable, a request by the adjuster to the employer to provide the necessary documentation of the employee’s wage history.

 

 

FOUR:

The initial contact with the employee should immediately follow the initial contact with the employer. The employee contact should also be the same day the accident is reported, or at least within 24 hours of the report of the claim. The file notes should reflect the initial contact with the employee covered:

 

 

  1. The facts of the accident.
  2. The identification of any witnesses.
  3. A discussion of any subrogation issues.
  4. Any prior injury claims of the employee (both workers comp and any other injury claims).
  5. Verification of the information on the Employer’s First Report of Injury.
  6. Any additional information not on the Employer’s First Report of Injury that would be needed to file the ISO index on the employee.
  7. The disability status of the employee including information on the nature of the injury, the treatment and the prognosis.
  8. The employee’s attitude toward the employer and returning to work.
  9. A summary of the explanation of benefits and the future course of action the adjuster will take.

 

 

FIVE:

The investigation should also include the contact of any witnesses. The initial contact with the witness(es) should be the same day the accident is reported, or at least within 24 hours of the report of the claim. The file notes on the contact with the witnesses should reflect the facts of the accident as told by the witness(es). All witnesses should be asked to identify any other witnesses.

 

 

SIX:

The first contacts part of the investigation should also include contact with the office of the medical provider. This allows the adjuster to verify the nature and scope of the injury, the diagnosis, and the prognosis, plus the adjuster can make arrangements for all medical bill and medical reports to be sent to the adjuster. This information on this part of the adjuster’s investigation should also be reflected in the file notes.

 

 

SEVEN:

If the adjuster has any reason to question the compensability of the claim, or if there is the potential for subrogation, or if the employee’s injuries are severe, the adjuster as a part of the, should obtain a recorded statement from the employee during the initial contact. The file notes should reflect a summary of this part of the investigation.

 

 

EIGHT:

The claim investigation encompasses much more than just the initial contacts with the employer, employee, medical provider, and any witnesses. The work comp claim investigation should also include:

 

 

  1. A medical authorization in those states that require one for workers comp.
  2. Obtaining the current medical records.
  3. Obtaining past medical records if the employee has a history of prior injury claims.
  4. A wage statement for the calculation of indemnity benefits.
  5. The filing of the ISO index.
  6. A police report, OSHA report of any other governmental record related to the injury.
  7. A recorded statement from the employee’s supervisor if there is a compensability question.
  8. Engineering report or other documentation to support subrogation when applicable.
  9. Information on any responsible third parties when subrogation is possible.
  10. Any other information that will have an impact on the outcome of the claim.

 

 

NINE:

If the only file notes on the investigation read something like “called employer, no questions about the claim,” the adjuster is not doing a proper investigation. Even if the injury was witnessed by a dozen co-workers, the adjuster who is doing a proper investigation would still cover all the key points noted above. Even in the most valid of claims, the adjuster should still learn the employee’s diagnosis and prognosis, and when the employee will be back on the job. If the adjuster is not asking when the employee can return to work full duty or on modified duty, the claim investigation is incomplete.

 

 

TEN:

All the information obtained during the claim investigation should be summarized in the file notes for your review. If the adjuster is not doing so, ask that the file notes are properly documented. After all, with workers compensation, you will eventually pay the cost of the employee’s claim through your insurance premiums. You should know if you are getting the proper claim investigation that you are paying for.

 

 

 

Rebecca ShaferAuthor Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

 

5 Considerations For Effective Safety Program Incentives

Safety Program IncentivesSafety program incentives are a popular tactic as all good risk managers understand the importance of preventing injuries. From the employers perspective, the buy-in of the employees into the safety program should be a given, as the employer sees the safety program as protecting the employees from injury. However, the employees, especially the ones who have never been hurt on the job, may view the safety program requirements as hindrances in their performance of their work.

 

 

Unintended Consequences of Safety Program Incentives

 

To encourage employee participation in their safety programs, employers often add what they see as incentives for the employee’s to participate. For example, the employer may offer gift cards to local businesses with the size of the gift cards tied to the number of days the employer has gone without a report of a work comp claim. While some employees will view the gift cards as bonus compensation, it may have the unintended consequence of causing an employee with an injury to not report the injury due to peer pressure. If the injury develops complications due to the lack of timely medical care, the injury gets reported late and the cost of the medical benefits is higher than it would have otherwise been.

 

 

Safety program incentives can be used to create employee interest in the safety program and motivate employees (and managers and supervisors) to act and work in a safe manner. But, if the incentives become the focus of the safety program and actual safety is not the focus, then the incentives become interference in obtaining a true safe working environment.

 

 

Train Employees to Work Safely

 

Instead of the emphasis of the safety program being on the incentives, the emphasis should be on training the employee how to work safely. Educating the employee in the proper performance of their job will have a bigger impact on the overall safety record of the employer than an incentive program. If the employees do not know how to work safely, the incentive program will fail.

 

 

A tactic taken by some employers is to tie performance bonuses for managers and supervisors to the number of injuries reported at a work site. If the managers and supervisors are more interested in the bonus then they are their actual safety performance, they can go outside the lines of propriety by pressuring employees to not report claims or by delaying the reporting of claims until their bonus is paid. Any incentive program from managers and supervisors must have built-in safeguards to be sure all claims, big and small, are reported timely.

 

 

The safety program needs to be constructed where the employees are motivated to act in a safe manner and to promote safety with their fellow employees without anyone feeling there will be retribution for reporting an injury. If the employees feel there is retribution or retaliation for reporting an injury, the number of reported injuries may declined slightly, but the actual number of injuries does not decline.

 

 

When safety programs are tied to return to work programs, with only lost time claims being counted by the employer in awarding safety incentives or bonuses, there can be an abuse of the return to work program. There are situations where the employee following an injury is unable to perform any meaningful work for the employer. If the employee is returned to work anyway and sets in the cafeteria or break room all day doing nothing, it will have the unintended consequence of demoralizing other employees who see the injured employee as receiving preferential treatment.

 

 

Progressive Discipline Can Create Morale Problem

 

Some employers have tried tying safety programs to progressive discipline where injured workers are reprimanded for unsafe acts that result in an injury to themselves or others.   The problem of using progressive discipline is it usually has three or four steps including a written warning, probation, suspension and termination. Only the most careless of employees will have three or four safety violations or at-fault injury claims where they can be terminated for repeated violations of the safety program. While the progressive discipline approach can reduce safety violations, it can also create a morale problem, especially if the employee does not feel he/she acted in an unsafe manner.

 

 

For safety programs to be effective there needs to be:

 

  1. A screening program to prevent the hiring of people who are prone to accidents or who have a lax attitude toward safety
  2. A drug testing program that includes pre-hire testing, post-accident testing, random testing and for just-cause testing
  3. A culture of safety before profits or production within the company
  4. An integration of the safety program into the company’s quality control program
  5. A way to quantify risk and measure the results of changes with the work process

 

To prevent problems within the safety program, employers need to keep the focus of the safety program on training the employees, not on incentives for either the employees or the supervisors/managers. Safety program incentives should be used only as a way of obtaining the employee’s interest in the safety program. Properly educating the employees on how to work safely will have a much greater impact on worker safety than any incentive program.

 

 

 

Rebecca Shafer

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

 

The Dangers of Under-Reserving

The Dangers of Under ReservingUnder-reserving in workers’ compensation is a dangerous practice.

 

A basic principle of business solvency is to have an asset to offset each liability. A workers’ compensation claim is a legal obligation – a liability for the company, whether it is a contractually assumed liability through an insurance policy for an insurance company, or a retained liability through self-insurance. A claim reserve is an estimate of what the workers’ compensation claim will cost. When the adjuster handling the work comp claim establishes a reserve on the claim file, it is a definite amount of dollars that are being set aside to pay the future cost of the work comp claim.

 

 

 

Under-Funded Liability Will Eventually Experience Shortfall

 

 

From an accounting standpoint, a claim is an incurred liability, even though it will be paid in the future. When the reserve is established by the adjuster, the company loses the ability to use the amount of money that has been set aside to pay the work comp claim.   Inaccurate reserving, whether the reserves are excessive or inadequate, distorts the company’s financial condition. When the reserves are too high, money the company could use in other aspects of the business is no longer available for use by the company. When the reserves are too low, the company has an underfunded liability. This creates a situation where the company will eventually experience a shortfall.

 

 

While both over-reserving and under-reserving present an inaccurate picture of the company’s financial health, most financial people will argue that under-reserving is worse for the company. The reason for this is simple – the self-insured employer or the insurance company must have adequate reserves to meet their obligations. If the reserves are inadequate, the self-insured employer or the insurance company runs the risk of insolvency.

 

 

When the self-insured employer or insurance company has understated their reserves, they have overstated their assets and have understated their liabilities.   The difference between the amount of assets an insurance company has and the amount of liabilities an insurance company has is referred to as the insurance company’s surplus. An insurance company’s ability to pay claims is evaluated by measuring its surplus in comparison to their outstanding obligations.

 

 

 

Evaluated By Ability To Pay Claims

 

 

Insurance rating firms like A.M. Best measure the financial stability of an insurance company by evaluating their ability to pay their claims. If the insurance company has understated their reserves, they may temporarily increase their financial stability rating, but when the claims come due (are paid) and the available surplus drops, the financial stability rating of the company will be downgraded. A downgrade in an insurance company’s financial stability rating results in fewer potential buyers of their insurance products because doing business with the downgraded insurance company is considered riskier.

 

 

An example of how under-reserving of work comp claims can impact the surplus is as follows (to simplify, the insurer has no other liabilities except claims).

 

 

Total assets               Total Claim Reserves                                   Total surplus

$10,000,000              $8,000,000 (under reserved)                       $2,000,000

$10,000,000              $9,500,000 (properly reserved)                   $500,000

 

 

In this example, when the reserves are understated, it appears the insurance company has a surplus of 20% of assets, but in actuality, the surplus is only 5% of assets.

 

 

 

Reserving Practices Subject to Audits

 

 

All jurisdictions regulate the financial stability of self-insured employers and insurance companies. The reserving practices of the self-insured employers and insurance companies are subject to periodical audits by the state insurance department or other state regulatory agencies. When the self-insurer or the insurance company is audited, if the reserves are inadequate to pay all open claims (and technically, all claims that have been incurred but not yet reported), the state insurance department will require the self-insured employer or insurance company to increase the reserves to cover their obligations on their claims. If the self-insured employer or insurance company does not have the assets available to place in reserve for those claims, the state insurance department will shut the company down.

 

 

Another aspect of under-reserving is the impact on the calculation of future premiums. The reserves on the open claims are a part of the calculations in establishing the loss experience of the company. If the loss experience is understated because the reserves are understated, the insurance company will be charging inadequate premiums, resulting in lower profits for the company, or even pushing the company quicker to insolvency.

 

 

 

Proper Reserving Is Essential

 

To accurately reflect the self-insured employer’s financial position or the insurers financial position, proper reserving for the claims is essential. Under-reserving impacts the financial stability of the company, as the shortfall in reserving will eventually be corrected by taking the shortfall from the company’s surplus. If you have any doubts about the adequacy of the reserves on your workers’ compensation claims, please contact us as we can recommend claim auditors that will verify the adequacy of your claim file reserves.

 

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

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