Rebecca Shafer, J.D. - 2/77 - Work Comp Roundup

Create an Effective Wellness Program with 6 Milestones

November 19, 2018 by Rebecca Shafer, J.D.

Many small and medium-size companies wish to create an effective wellness program like their larger competitors, but due to budget concerns and lack of personnel in the Human Resources Department, have not started their own wellness program. It is not as difficult as one might think.

Here are some guidelines on how to create an effective wellness program:

Management Support of Wellness is Step One

Gaining management support for the implementation of a wellness program is the first step. As senior management is all about the financial success of the company, explaining how the wellness program will improve the company’s financial picture is a good place to start. Read the study on wellness programs completed by the Wellness Council of America. Explain how for every $1 spent on wellness programs, there was a $3 reduction in the cost of the health insurance program. If management is still not sold after learning the wellness program has an ROI of 3 for 1, an article published in Forbes states “According to the Centers for Disease Control, more than 75% of the employers’ health care costs and productivity losses are related to employee lifestyle choices.”

There is a similar correlation in workers compensation cost as healthier employees have fewer accidents, and when they do have an accident, they return to work sooner. This was supported by a combined 56 studies on worksite wellness programs. Per the American Journal of Health Promotion, there was a 32% reduction in workers compensation.

Form a Wellness Committee

After gaining the support and participation of senior management in the creation of a wellness program, form a wellness committee. Whether electing to utilize an outside company that has a wellness program already structured that can be implemented quickly or deciding to build your own company wellness program, the involvement of additional personnel from various departments will expand the ideas and ensures the success of the wellness program. Broad representation of the wellness committee will be drawn from human resources, finance, risk management, safety, union, senior management, and production. You can also invite volunteers from any department within the company. The wider the variety of specialties the better.

Establish Wellness Benchmarks

The goals and objectives of the wellness program should be the first order of business for the wellness committee. By establishing benchmarks, you will be able to measure the success of the wellness program. The primary reason companies abandon wellness programs is the failure to have benchmarks showing the success of the wellness program. Some benchmarks that can be considered include:

absenteeism
health care cost
employee retention rate
employee participation (percentage) in the wellness program
reduction in the number of workers compensation claims
reduction in overall workers compensation cost

Employee Involvement Is Essential

The wellness program should not be based solely on the ideas of the wellness committee. Employee interest and involvement are essential to the success of the wellness program. Obtain the input of the employees themselves in what they want to see in the wellness program. An anonymous survey, whether online or on paper, can be used to obtain employee input. Some categories that can be considered for inclusion in the survey for the wellness program include:

diet and nutrition
weight loss solo and weight loss groups
exercise equipment
walking solo /walking groups
muscle toning
reduction in blood pressure
reduction in cholesterol level
reduction in body mass index (BMI)
cessation of smoking
cessation of illicit drugs
cessation of alcohol abuse
healthier food options in company cafeteria/snack machines
on-site flu shots
hand sanitizers and other sanitizing items in a public area
ergonomics at work and home
seat belt use
safe driving
pamphlets and posters reminding employees of health topics ( pamphlets on cancer screenings)
vision screenings provided on-site (mandatory for all employees who drive on duty)
yoga classes before/after work hours

In addition to these topics, leave three or four blank lines on your survey for the employees to suggest their own wellness topics and concerns they would like to know more about or to have assistance with.

Implement and Promote Wellness Quickly

Once you have established the employees’ wellness program interest, implement and promote quickly to increase your odds of creating a successful wellness program. This can be done in a variety of ways including:

provide non-smokers with a $5 per week credit on their health insurance program
provide employees with a BMI under 30 with a $3 per week credit on their health insurance program
a $6 per week credit for the employees with a BMI under 26
provide pamphlets on wellness topics
have posters on wellness issues
offer “lunch and learn” on wellness topics
organize group walks before work/after work/lunch time
have wellness calendars
schedule on-site flu clinic (ask a nearby medical clinic for a group rate discount or inquire if the health insurance carrier will pay for it)

Give Enough Time to Realize Impact

After implementation of the wellness program, it is important to give the program enough time to have an impact. The above-mentioned benchmarks should be established on the first day of the wellness program, and the results measured after one, two and, three years. Evaluate what has worked and what has not. A repeat survey asking the employees who participated their impression of the wellness program is a good way to get additional feedback. Also, a survey for the employees who have not participated in the wellness program asking why they do not participate can provide insights on ways to improve the wellness program.

By establishing and creating a successful wellness program, you will improve the financial picture of your company, reduce absenteeism, reduce work comp claims, reduce health insurance claims and improve employee morale. It will also reduce your workload if you deal with human resources issues or workers compensation.

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/

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

Filed Under: Wellness Programs and Workers Compensation

8 Steps For A Staffing Agency to Reduce Workers Comp Costs

November 13, 2018 by Rebecca Shafer, J.D.

Imagine trying to calculate your workers’ compensation premium when you do not know the number of employees you will have at any one time or their job classifications. That’s life for the temporary staffing agencies – in their own peculiar world when it comes to workers’ compensation. Temporary staffing agencies often have a difficult time obtaining and maintaining workers’ compensation insurance.

In most jurisdictions, the temporary staffing agency is responsible for the workers’ compensation insurance as the worker is considered an employee of the temporary staffing agency, not an employee of the client.

While the broker for the temporary staffing agency can meet with an employer to get an estimate of the numbers and types of positions the agency may fill, it is only an estimate, or sometimes a” shot in the dark.”

Misclassification of Employees Is Ongoing Problem

The workers’ comp premium classification code system did not have the temporary staffing agency in mind when the system for calculating workers’ comp premiums was created. Misclassification of employee job codes and under-reporting of payroll is an on-going problem for workers’ compensation insurance companies. The workers’ compensation premium audit is definitely necessary at the end of every policy year to get an accurate premium.

Some workers’ compensation insurance companies who do insure temporary staffing agencies take the process a step further. They created what is referred to as “pay as you go program” where the temporary staffing agencies workers’ comp insurance premiums are adjusted monthly or quarterly based on actual payroll data.

Captives or Assigned Risk Pools

National staffing companies in the temporary staffing agency business set-up their own captives to self-insure their workers’ comp claims with the benefit of re-insurance to cap their total loss exposure. Smaller temporary staffing companies have joined “rent-a-captive” insurance programs in their effort to reduce their workers’ comp cost. Temporary staffing agencies with poor claim records (and some with not so bad of claim history) are forced into assigned risk plans or state pools.

In the past workers’ compensation premiums were such a big burden for temporary staffing agencies, some agencies were forced out of business. (For many temporary staffing agencies, the workers’ comp insurance premium is their second largest expense after payroll.) These were the staffing agencies who did not try to control their workers’ comp losses or who did a poor job screening potential employees.

8 Steps For Staffing Agency to Reduce Workers Comp Costs

All temporary staffing agencies regardless of size can take certain steps to reduce overall workers’ comp cost.

Proper vetting and screening of employees you place with your clients. The screening process includes drug testing, background checks, and prior injury history.
Refusing potential clients involved in hazardous or dangerous work.
Testing and verifying the skill sets of employees before they are placed with an employer as improperly or inadequately trained employees are much more prone to injury.
Verifying the employee has the proper safety equipment and protective gear, or the client has the equipment and gear necessary and will provide it to the employee.
Training the staff of each placement office on proper and timely reporting of workers’ comp claims.
Have a workers’ comp claim coordinator who actively follows up on a regular basis with any employee who is off work.
Have a return-to-work program allowing you to place the employees who do get injured back to work at a different client who can accommodate any work restrictions.
Have an insurance broker who is familiar with the temporary staffing agency business and who can place your company with more than one workers’ compensation insurance company.

Temporary staffing agencies can expect to experience periods of fluctuation making it difficult for them to obtain workers’ compensation insurance. The best way to protect your business profits and to be able to purchase future insurance coverage is to actively manage your workers’ comp insurance program now to reduce the number of claims.

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

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

Filed Under: Buying Workers' Comp

18 Items in Your Work Comp Adjuster’s Three-Point Contact

November 8, 2018 by Rebecca Shafer, J.D.

THE MOST IMPORTANT PART of and adjusters initial handling of a workers’ compensation claim is the contacts with the parties involved in the claim. The contacts are often referred to as “three-point contacts” which refers to the three principal players the adjuster is involved within every workers’ comp claim. The three principals are the employee, the employer, and the medical provider.

To successfully handle a workers’ comp claim, it needs to be investigated both timely and thoroughly. The contact with the injured employee, the employee’s supervisor and the employer’s claims coordinator, and the medical provider all provide valuable information to the adjuster in the handling of the workers’ comp claim. Each of the contacts, if properly managed, allows the adjuster to maintain control of the developing claim.

Definition of Contact

A recent audit of a claims office found the definition of “contact” was not spelled out in the claims handling requirements or the company’s Best Practices. The workers’ comp adjusters were sending form letters to the employer and the employee saying “call me” on the day they received the assignment. Their supervisor was accepting the form letters as contact with the employer and employee. The adjusters and supervisor were bending the meaning of contact to their own purposes and not making proper three-point contact.

Three-point contacts are almost always be handled by telephone, except in severe cases where an in-person contact would be justified. With most adults having cell phones, there is no reason for not making voice contact. If the principals cannot be reached by telephone, a contact letter should be sent while continuing the effort to reach the principals by telephone.

The insurers who have quality Best Practices consider voice contact as “the exchange of information between the principals and the adjusters.” Leaving a message on the employer’s or employee’s voice mail is not considered contact in the true meaning of three-point contact.

Timeliness of Three-Point Contact

Each workers’ compensation insurer and each third party administrator (TPA) has set their own time frames as to when three-point contact should be completed. Some insurers are requiring their adjusters or TPA to make three-point contact within 2 hours or 4 hours of the time of the accident. Other insurers and TPAs are being less stringent and requiring the three-point contacts to be completed within 24 hours or 48 hours of the time of the assignment.

Workers’ comp adjusters prefer the 48-hour goal of making three-point contacts as that is a relatively easy goal to make. Various studies, however, have shown that immediate (same day) contact has the most positive influence on the outcome of a case.

While the goal of the adjuster should be to make the three-point contacts the same day as the assignment is received, in reality, the other parties to the claim may not be available. Persistence is an absolute must for the adjuster. If the adjuster has left a voicemail for the employer, employee or medical provider’s office, the adjuster should call again if the other party has not responded by the end of the workday. The persistent adjuster will leave at least two voice mails the day the assignment is received and will follow up with a contact letter if a response is not received. The adjuster should continue to try daily to reach each of the principals of the claim until voice contact is made with them.

Employer Contact

Upon receipt of the new assignment, the workers’ comp adjuster immediately verifies coverage for the insured/employer. If there are no coverage issues or questions, the adjuster’s next step is to make contact with the employer.

The purpose of the employer contact is several fold. The Employer’s First Report of Injury has essential information the adjuster needs but normally does not contain all the information that would be of value to the adjuster in accessing the claim. By discussing the accident with the employer’s claim coordinator, the adjuster can learn additional information that may be helpful in the development and handling of the claim. Some of the information the workers’ comp adjuster can obtain from the claims coordinator includes

Prior claim history of the employee
Verification of the facts on the Employer’s First Report of Injury
The return to work status or the disability status of the employee
Description of job duties
Availability of modified duty or light duty work
Length of employment
Identification of employee’s supervisor and witnesses to the accident
Subrogation potential

If there are any questions about the circumstances of how the claim happened or any issue of any kind, the adjuster will need to also interview the employee’s supervisor about the workers’ comp claim. A recorded statement from the supervisor may be necessary if the facts of the claims are questionable, if the claim appears to be severe, or if there is the potential for subrogation.

If there are still questions about the claim after the adjuster has spoken to the employer’s claims coordinator and the employee’s supervisor, the adjuster should also interview any witnesses to the accident.

Employee Contact

The adjuster’s prompt contact with the employee will build rapport and assist in establishing a non-adversarial working relationship with the employee. When the adjuster establishes early contact with the injured employee, the probability of future attorney involvement is decreased. The adjuster is also in a better position to identify any compensability issues and to make timely payment of benefits, both medical and indemnity. If the claim is severe, the early contact with the employee will allow for immediate medical management.

When the adjuster makes the initial contact with the employee, the adjuster should consider a recorded statement if the accident is severe or there is potential for subrogation. Also, the adjuster should consider a recorded statement if there has already been inappropriate or excessive medical treatment, if there is a pre-existing condition, if the claim is for a serious occupational disease, if there were other employees injured in the same accident or if there any question of compensability. Whether the interview is recorded or not, the initial conversation with the employee should cover:

The facts of the accident
The identity of any witnesses
A description of the employee’s job, including job title, job requirements, equipment utilized, etc.– (this will assist the adjuster in arranging for an early return to work on modified duty or light duty)
The details of the injury and the medical provider’s proposed treatment plan. This should include the medical provider’s diagnosis and prognosis, the employee’s comments about pain, medications, prior injuries, treatment issues, etc.
The employee’s attitude about the employer, the accident, the medical treatment, the willingness to return to work, etc.

The adjuster, during the initial contact with the employee, should advise the employee of all state required forms that will be sent to the employee and in those states that require a medical authorization, advise the employee of the importance of signing and returning the medical authorization immediately. The adjuster should request a copy of any off-work notes from the medical provider. The adjuster should also advise the employee of the actions the adjuster will be taking and encourage the employee to contact the adjuster with any questions, issues or problems.

Medical Provider Contact

The medical provider whether an occupational injury doctor, a hospital emergency room or a walk-in clinic, should be contacted by the adjuster as part of the three-point contact. The adjuster purpose in contacting the medical provider’s office is to obtain the necessary information to determine the process the claim. They would include:

The diagnosis
The prognosis
The estimated length of time before the employee can return to either light duty or full duty work
The date(s) of the next medical appointment(s)
Information on any referral to another medical specialist

The adjuster should advise the medical provider to send to the adjuster the complete medical records including the medical history provided by the employee, the doctor’s notes, the results of any testing and a copy of any off work slips provided to the employee.

Summary

The importance of three-point contact cannot be overstated. Getting the claim file off to a proper start has a major impact on the course of the claim and the adjuster’s ability to handle the claim fully and properly. By completing a timely and a thorough three-point contact, the adjuster sets the tone for the outcome of the claim.

Contact: RShafer@ReduceYourWorkersComp.com.

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

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

Filed Under: Claims Adjuster & Employer Relationship

September 11th Remembered – Tribute To Marsh And AON

September 11, 2018 by Rebecca Shafer, J.D.

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 17 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.

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

Filed Under: Risk Management

5 Steps To Implement a Safety Action Plan

August 21, 2018 by Rebecca Shafer, J.D.

A Safety Action Plan to identify and eliminate physical, ergonomic, biological and chemical exposures will assist the employer in the reduction of the number of work-related injuries and occupational diseases. By having a Safety Action Plan, the employer is taking a proactive approach to providing the employees with a safe place to work.

This article is too limited in space to provide you with a fully operational Safety Program, but we will give you the broad outlines of a Safety Action Plan to assist you in creating or improving your Safety Program.

The 5 Steps of a Safety Action Plan

Identify all the hazards

Establish who is responsible for eliminating each hazard

Plan a course of action to remove the hazards

Take the necessary corrective actions to eliminate the hazards

Establish a system to prevent the hazard from returning

Step 1: Identify all the hazards:

If you have not already compiled a list of potential job hazards that could cause injury or damage to equipment, you should do so. Incorporate the employees into identifying the job hazards. Ask each employee to list the 5 biggest safety hazards in their job. Not only will you see most of the job hazards you have already identified, but you will also learn of potential job hazards of which you were not aware.

Step 2: Establish who is responsible for eliminating each hazard:

Once you have compiled your list of job hazards, place the name of the unit supervisor or department manager, or senior executive who is responsible for the eliminating the hazard. Lower management can correct simple hazards like improper storage of supplies. More complex hazards requiring a revision of the work process or a change in the physical facility structure will necessitate the involvement of senior management.

Step 3: Plan a course of action to remove the hazards:

Once the hazard has been identified, and the person responsible for eliminating or correcting the hazard has been identified, a course of action to accomplish the hazard elimination must be determined. Identifying the hazard will not accomplish anything for the employer if the steps to remove the hazard are not established. By knowing what needs to be done, the process to achieve the elimination of the hazard can move forward. The plan of action should include the completion date to facilitate its timely accomplishment.

Step 4: Take the necessary corrective actions to eliminate the hazards:

Implementation of the plan of action is critical to the success of the Safety Action Plan. Identifying the hazard and determining how to correct it will not matter if the necessary corrective actions are not taken. The employees who have assisted you in identifying the hazards will judge everything in the Safety Program by whether or not management was serious about removing the hazards. When the corrective actions are taken, and the hazards are eliminated, the employees will be more safety conscious as they understand management is serious about their safety.

Step 5: Establish a system to prevent the hazard from returning:

Some safety issues, like cluttered storerooms or spills, have a happy of returning if steps are not taken to prevent the hazard from reoccurring. Management can best address these safety hazards by continuous emphasizing the importance of safety. Each employee should understand safety is not a one-time correction, but a continuous, on-going process.

Contact: RShafer@ReduceYourWorkersComp.com.

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

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

Filed Under: Safety and Loss Control

Proper Claim Management Requires a Strategic Plan of Action

August 15, 2018 by Rebecca Shafer, J.D.

Keeping track of everything the workers’ compensation adjuster needs to do is not easy! Every adjuster will have numerous claims, and each claim will have many things that need to be accomplished to move the claim forward. Proper claim management recognizes the difficulty and the enormity of the task of trying to move all the claims forward at the same time. There are often conflicting demands on the adjuster’s time and resources.

Best Practices Call for a Strategic Plan of Action

To alleviate the burden of keeping track of everything that needs to be done, the insurer’s/ self-insured’s Best Practices provide the adjuster with a roadmap to what needs to be completed. Even then, it is still a challenge to accomplish everything that needs to be done on each claim file. To prioritize the adjuster’s work on each file and to obtain the proper resolution of the claim, Best Practices call for a strategic plan of action.

When an adjuster receives a new claim, Best Practices will require the adjuster to verify coverage; contact the employer, employee and medical provider; and set the initial file reserve all within the first 24 hours of the claim. Once these must-do items are completed on the new claim, the adjuster will review the facts developed and create the initial strategic action plan for the future actions to be completed on the file.

Initial Strategic Action Plan

The initial strategic action plan should contain both the activity to be accomplished and the date it will be accomplished. The action plan can be included in the adjuster’s file notes, or it can be a stand-alone document. The activities to be included in the initial strategic action plan can include:

The next contact with the employee to learn the employee’s medical status, work restrictions and return to work status and a date for completion of this activity

Verification of the receipt of the initial medical report and work restrictions, if any, and a date to complete this activity

The next contact with the employer to establish the availability of modified light duty within the employee’s work restrictions and date to complete this activity

Verification of the receipt of the documentation of the average weekly wage and the date it is to be completed

Completion of any remaining investigation (Best Practices normally dictate the completion of the investigation within 14 days of the claim being reported) and the date the investigation is to be completed

A determination to accept compensability or to deny the claim, and the date the decision must be made

Issuance of the first temporary total disability benefits check and the date it must be completed

Placing a third party on notice of subrogation and the expected completion date

The ISO filing and the date it is to be completed.

The filing of all state forms and the date(s) each form is due

If the claim is reportable to an insurer, excess insurer or any other party, the completion of the report and the date the report is due

The date for the next strategic plan of action (normally 30 days after the first strategic action plan, but the time frame can be longer or shorter depending on the facts and circumstances of the claim)

The strategic plan of action is not static, but constantly evolving. As activities are completed, and additional information is obtained, a new strategic action plan is developed. Over the course of the claim, the one claim file can include numerous strategic action plans. Normally, by the time the second strategic action plan is created, the activities in the initial strategic action plan have been concluded. If there are activities in the first strategic action plan that the adjuster could not accomplish, for any reason, the activities are carried over to the second strategic action plan. This is true for all future strategic action plans with any incomplete activity being carried over to the next strategic action plan. This prevents needed activities from being missed.

Subsequent Strategic Action Plans

Subsequent strategic plans of action after the first action plan will include new steps/activities that need to be taken to move the file forward. These activities and their due dates can include:

Reevaluation of the file reserves

Evaluation of the need for a nurse case manager on the claim, if one is not already assigned

Coordination of return to work full duty or restricted duty

Obtaining and evaluating medical reports of the on-going medical treatment

Regular and on-going follow-ups with the employee, employer and medical provider

Obtaining and evaluating the disability rating

Subsequent reports to insurers, self-insurers or other parties

Subsequent ISO filings

Completion of any additional state forms

Scheduling and obtaining a peer review or independent medical examination

A litigation plan and litigation budget if defense counsel have to be involved

Settlement evaluation, including both the strengths and weaknesses of the proposed settlement

Notification to Centers for Medicare and Medicaid Services if a Medicare Set-Aside Arrangement is needed

Settlement of the claim

Obtaining all required waivers and/or releases

The strategic plans of action keep the adjuster focused on moving the claim to a conclusion. By using the strategic action plan to accomplish all needed activities on the file in a timely manner, the adjuster obtains the best possible outcome for both the injured employee and the employer.

Contact: RShafer@ReduceYourWorkersComp.com.

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

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

Filed Under: Claim Management

19 Points to Cover in a Proper Workers’ Comp Claim Investigation

August 1, 2018 by Rebecca Shafer, J.D.

A claims auditor was brought in because a self-insured employer was seeing an acceleration of the average workers’ compensation claim cost. The employer was dismayed to know that, in comparison with other employers in their industry, they were paying nearly double the cost on each workers comp claim. The safety consultant had already reviewed their safety program and had made some minor tweaks, but nothing that would have any significant impact on their claims or their claim cost.

By the end of the claims audit’s first day, the claims auditor knew what was driving the cost of the workers’ comp claims sky high. There was no investigation by the adjusters of any of the claims when they were reported to the third party administrator (TPA). In each claim, the first file note was, “Called employer; they do not question the claim.” That was it. There was no other investigation on the claim.

A proper claims investigation entails various aspects, far more than confirming with the employer that the claim was reported! The claims investigation has to be much more than asking the employer if the employer is suspicious of the claim.

Start Investigation Based on Facts & Circumstances Reported by Employer

Each claim is unique. Sure, there will be a lot of similarities with previous claim files, but the facts and circumstances surrounding the injury will vary. The investigation should be started based on the facts and circumstances reported by the employer. It is the claims adjuster’s responsibility to review all the information about the claim to both weed out the claims that should not be paid and to control and manage the claims that are owed.

It is a commonly accepted premise in the insurance industry that good claims handling leads to good results and poor claims handling leads to poor results. This applies to both the claim of questionable authenticity and the valid claim. If a valid claim has poor claims handling, the claim cost will be higher. The first step in the process of having a successful claims management program is a good investigation of each claim.

Start Investigation Immediately

Immediately upon assignment of the new workers’ comp claim the adjuster should begin the investigation. Immediately (meaning, in the first few minutes) is not always possible. But the longer the adjuster delays to start an investigation, the poorer the results. If the TPA’s published best practices state same-day contact – that is good. If best practices state 24-hour contact – that is acceptable. If best practices have no time limit for making contact with the employee, employer and medical provider, or if the time limit is longer than 24 hours, the TPA is putting their own interest and what is easy and best for themselves ahead of what is best for the employer.

The first investigation step is to contact the employer to review all known information about the claim. The mistake the adjusters made in the claims audit noted above was contacting the wrong person at the employer. They were discussing the claim with the workers’ comp coordinator for the employer. The person(s) the adjusters should have been contacting was the injured employee’s direct supervisor and co-workers who saw the accident. If no one saw the accident, then the adjuster should contact the first person the employee advised of the accident. The reason for this is to establish exactly what happened, the nature of the injury, and the extent of the injury.

It is better for the adjuster to discuss the accident with the employer first, but that is not always possible. If the adjuster is unable to reach the employer, the adjuster should still make immediate contact with the employee. The quality of the adjuster’s contact with the employee is key. The contact needs to be thorough with the adjuster learning as much as can be learned about the claimant and the accident. If there is any question about the validity of the accident, or there is the possibility of subrogation, or the injury is severe, the initial interview should be in the form of a recorded statement from the employee.

19 Points to Cover in a Proper Workers’ Comp Claim Investigation:

The details/facts of how the accident happened.
The names of aall co-workerswho witnessed the accident.
The nature of the employee’s disability.
The extent of the injury and all body parts that were injured.
Has the employee previously had an injury to the body part(s) involved in this accident?
A review of all prior injuries – work, vehicular, recreational, etc.
Verification of all information on the employer’s first report of injury.
Confirmation of all information to support subrogation.
A description of the employee’s job duties.
The employee’s job title.
The equipment or tools involved in the work at the time of the injury.
The experience level of the employee – how long on the job, and prior experience in the same type of work with other employers.
Confirmation of lost time.
The availability of modified duty work.
The identification of all medical providers for the injury.
The type of medical care being provided.
The nature of any pre-existing medical conditions – obesity, diabetes, etc.
Any concurrent treatment with pre-existing medical conditions.
The identification of pre-injury medical providers if pertinent to the claim.

At the conclusion of the interview with the employee, the adjuster should discuss the indemnity benefits that will be provided, the employer’s desire to get the employee back to work when the employee is medically capable of doing so, and the need for the adjuster and the employee to stay in contact. The adjuster should arrange for the employee to call the adjuster after each medical appointment to provide an update on the status of the medical treatment and the employee’s work status.

Assess Injured Workers’ Attitude

Contact with the employee should give the adjuster insight into the claimant’s attitude toward:

The employer.
The medical treatment.
The early return to work.
The benefits provided by workers comp.

The relationship between the adjuster and the employee should not be an adversarial one, but one of mutual cooperation where the adjuster does whatever can be done to facilitate the employee’s recovery and return to work.

Timely Investigation Allows Adjuster to Better Manage Claim

A timely initial investigation allows the adjuster to better manage the claim. By establishing contact with the employee and discussing thoroughly the aspects of the claim, the adjuster significantly reduces the likelihood of attorney involvement, the treatment of unrelated medical conditions, the inclination of the employee to take extra time off work, and the likelihood of co-workers thinking it is easy to “take a vacation on comp.”

A proper investigation allows the adjuster to manage the many facets of the claim as it develops. It allows the adjuster to make an early and proper determination of compensability and to pay benefits quickly and correctly. It facilitates the timely involvement of medical management. And, the proper investigation leads to much lower claims cost.

Contact: RShafer@ReduceYourWorkersComp.com.

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

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

Filed Under: Claim Audits & File Review

Know Two Types of Functional Capacity Evaluations (FCE)

June 25, 2018 by Rebecca Shafer, J.D.

When a physician is treating an employee for a back injury or other job related injury, the decision on when to return the injured employee to work is often a subjective decision. The physician who is unsure of the employees physical capability will often turn to the physical therapist for an objective opinion of the employees ability for work. The physical therapist will provide a Functional Capacity Evaluation (FCE) by administering various tests to determine the employee’s functional capacities and limitations.

Comprehensive Examination and Evaluation

The FCE is a comprehensive examination and evaluation by the physical therapist that objectively measures the employees level of functioning. The testing will document the employees ability, or the lack of ability, to perform the essential job related task over a specific time frame. The FCE will provide objective information to the physician in several areas:

the employee’s functional abilities and job demands
the disability evaluation
when to return the employee to work
whether or not the employee can return to the job held prior to the injury
the employee’s functional abilities away from the job
to information to design a rehabilitation plan, if needed
the need for other medical intervention and/or treatment

While most workers compensation adjusters and employers will look at a FCE as a way of proving the employee is able to return to work, it serves a much greater function. The results of the FCE will often limit the disability rating of the employee, preventing the physician from assigning a higher disability rating than is justified. Furthermore, the FCE will determine physical limitations the employer will need to know to modify the employee’s job, preventing a needless re-injury of the same body part.

Job Specific & General Purpose FCE

There are two types of FCE, the Job Specific FCE, and the General Purpose FCE. The Job Specific FCE measures the employee’s ability to perform the task and physical demands of a specific job. It can be performed at the physical therapist’s clinic, but the physical therapists can go with the employee to the actual job site and evaluate the employee’s ability to do the essential task of the employee’s job. The job-specific FCE will determine if the employee can safely do his prior job or if modifications of the required work are needed.

The General Purpose FCE is normally used when there is no longer a job for the employee to return to or when the job functions have not been determined. The General Purpose FCE consists of a group of standardized test and measurements that can be used to establish the employee’s overall physical capabilities. The results of the General Purpose FCE can be used to evaluate the employee’s ability to perform specific jobs that may come available to the employee.

Determine Medical Status of Employee

Prior to starting the FCE, the physical therapist will review the medical records of the employee to determine the medical status of the employee. The physical therapist will establish a baseline for the employee based on the known job demands. The job demands of the employee will be characterized per the US Department of Labor’s “Selected Characteristics of Occupations as Defined in the Revised Dictionary of Occupational Titles” as:

sedentary – exerting up to 10 pounds of force occasionally,
light – exerting up to 20 pounds of force occasionally or up to 10 pounds of force frequently
medium – exerting 20 to 50 pounds of force occasionally or 10 to 25 pound of force frequently
heavy – exerting 50 to 100 pounds of force occasionally or 25 to 50 pounds of force frequently
very heavy – exerting in excess of 100 pounds of force occasionally or in excess of 50 pounds of force frequently or in excess of 20 pounds of force constantly

Both the Job Specific FCE and the General Purpose FCE measure the employee’s ability to perform various motions, movements, and skills. The ability to do the accomplish the physical demands of the job will be measured in these areas:

Balancing Carrying Climbing Crawling
Crouching Far vision Feeling Finger dexterity
Fingering Handling Hearing Kneeling
Lifting Manual dexterity Motor coordination Near vision
Pulling Pushing Reaching Sitting
Standing Stooping Talking Walking

Again, using the US Department of Labor guidelines, the employee’s tolerance level during an eight hour work day for the above activities is categorized as:

Not Present (Never) – The activity does not exist in the job (example: Crawling could be classified as Not Present in the job)
Occasionally – The activity exists less than 1/3 of the time (example: Climbing – occasionally)
Frequently – The activity exists from 1/3 to 2/3 of the time (example: Carrying – frequently)
Constantly – The activity exists 2/3 or more of the time (example: Walking – constantly)

Document Evaluation Results

When performing the FCE, the physical therapist is responsible for ensuring the test are appropriate for the employee and the test can be done safely. The physical therapist will review the musculoskeletal condition of the employee as reported by the treating physician. The physical therapist will screen the employee for any underlying medical pathology that would limit or prohibit the employee from participating in the FCE.

Upon completion of the FCE, the physical therapist will document the evaluation results. The FCE report will confirm the employee can return to work without job modifications or will confirm the employee can return to work with specific job modifications, or the need to delay the employee’s return to work. The FCE may also address the need for work hardening or other interventions that would improve the employee’s physical abilities. Properly utilized, a FCE can provide the treating physician with the necessary information to return the employee back to work.

Contact: RShafer@ReduceYourWorkersComp.com.

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

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

Filed Under: Return to Work and Transitional Duty

Seven Sections of Documentation For A Properly Organized Workers’ Comp Claim File

June 14, 2018 by Rebecca Shafer, J.D.

The workers’ compensation claim file should have Seven Sections of documentation that relates to the claim in a properly organized manner.

1- Claim Investigation:

The claim investigation section of the file should contain the adjusters claim file notes on everything that has occurred during the entire course of the claim. This includes a summary of each telephone call and a summary of all medical reports, state forms, letters, attorney reports, etc.

The claim investigation section should also contain either the transcript of the employees recorded statement or the claim file notes should contain a detailed review of the employees recorded statement. If a recorded statement was not obtained, the details of the employee’s initial interview should be summarized in the claim file notes. The claim investigation section should also include the employer’s supervisors recorded statement or a detailed review of the supervisor’s version of the accident.

A copy of the Employers First Report of Injury should be included in the claim investigation section for a comparison of the claimants version of the accident with the insured’s version of the accident.

When there is the potential for subrogation, for example – injuries involving an automobile accident or injuries involving a machine malfunction, documentation to support the subrogation should be included in the file investigation. This can include anything from a police report to a mechanical engineers evaluation of the machine that malfunctioned.

If there is a question of compensability or subrogation, the claim investigation section of the claim file should also include the recorded statement of witnesses or others who have detailed knowledge of the accident or occurrence.

If the claim lingers and there is a question of malingering by the employee, the claim investigation section will also contain the surveillance reports on the employee.

2- Medical Documentation:

The medical documentation section of the claim file should be divided into two categories, medical bills, and medical reports. Each of these two areas should be further divided into medical providers, with all medical bills by each medical provider grouped by date of service, and all medical reports by each medical provider grouped by the date of service.

Miscellaneous medical documentation – ambulance bills, prescriptions, durable medical equipment, etc., should be grouped by the category and organized chronologically.

3- Indemnity Documentation:

The employer’s wage statement reflecting the total compensation (over the state determined pre-injury period for benefits calculations) should be clearly identified in the claim file. Attached to the wage statement should be the calculations used to determine the temporary total disability benefit. If the disability benefit rate for permanent partial disability or permanent total disability is different from the disability rate for temporary total disability, the calculations used to determine the permanent partial disability or the permanent total disability rate should be shown.

Any documentation submitted by the employee to claim a higher rate of indemnity benefits should also be included in this section. This could include W-2 forms, copies of previous bonus checks or commission checks, etc.

4- State Forms:

A copy of every form submitted to the state by the employer, the employee or the insurance company should be included in this section of the claim file. State forms can be organized either numerically by the state form number, alphabetically by the state form name or chronologically by the date the state form was submitted to the workers’ compensation commission/bureau/agency/department, etc.

5- Hearings & Legal:

If any party requests a hearing, trial or other legal determination of benefits, this section would contain the documentation of the legal proceeding. This can include petitions for benefits, request for hearings, discovery documents and transcripts of depositions or transcripts of hearings.

This section of the claim file should also contain all correspondence between the work comp adjuster and the employee’s attorney, all correspondence between the work comp adjuster and the defense attorney, and all correspondence between the employee’s attorney and the defense attorney. If outside experts have been brought into the claim, the correspondence between the outside experts and any other party would be included in this section of the claim file.

6- Medical Management:

The medical management section of the claim file should include all correspondence and communications between the triage nurse and any other party. It should all obtain all reports, correspondence and communications between a nurse case manager assigned to assist the employee and any other party.

7- Vocational Rehabilitation:

The vocational rehabilitation section of the claim file will contain all the reports and activities of the vocational counselor assigned to the employee. This can include a broad range of information from vocational testing results, to available jobs in the community, to vocational retraining of the employee.

Summary:

The properly organized workers’ compensation claim file will prevent mistakes in the claim handling. It will also reduce the amount of time the adjuster works on the claim file by eliminating time spent searching for specific information. When the claim file is complete and well organized, everyone – employee, employer and insurer – benefit by having all aspects of the claim handled and concluded timely and properly.

Contact: RShafer@ReduceYourWorkersComp.com.

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

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

Filed Under: TPA and Claims Administration

3 Questions to Eliminate Return to Work Disincentives

May 31, 2018 by Rebecca Shafer, J.D.

You have implemented a corporate return-to-work program, but your projected workers’ compensation savings haven’t yet materialized. Supervisors are telling you they can’t get employees back to work, and even if they could they don’t WANT them to return to work. We’ve all heard it.

It may be time to examine the impact of collateral resources, often resulting in employees out on workers compensation receiving more income and benefits than they would have if they were working.

Common Disincentives to Returning to Work:

Salary and Wage Continuation: Some companies pay 100% of salary in lieu of having an employee collect workers compensation for injuries of short duration.

Occupational Injury Pay Supplements: Many firms pay supplemental benefits to make up the difference between workers compensation benefits and regular earnings.

Open-Ended Job Return: Instead of holding jobs open indefinitely, employers should hold jobs open for a specific time period, such as six or nine months.

Vacation and Sick Time: Companies frequently allow vacation and sick time to accrue for employees on workers compensation. Some even allow employees to “borrow” more sick time if they need to stay out of work longer.

Short-Term Disability: In some companies, disabled employees receive STD benefits in lieu of salary after six weeks. But the standard definition for disability may differ from workers comp, allowing an employee to collect both.

Perk Continuation: Employers often maintain ancillary benefits and privileges such as car allowances, club and professional dues, company store privileges and periodical subscriptions for employees on disability.

Loan Protection Policies: Individual insurance policies are available to pay mortgages and consumer loans such as car loans and credit card debts in the case of a disability.

Unemployment Compensation: In a few states, an employee receiving workers comp also can qualify for state unemployment benefits.

Pension and Retirement Plans: If these plans do not allow for the offset of workers comp benefits, an employee can receive workers compensation benefits and a full pension.

Product Liability Actions: An employee can file an action against the manufacturer of a product that injured him to collect damages. The employer should seek reimbursement for workers comp payment from any such settlement.

3 Questions to Eliminate Return to Work Disincentives:

What Benefits are Injured Workers Getting By Not Working?

Many companies fail to look closely enough at their internal wage and benefits structure before embarking on programs to reduce workers compensation costs. There are numerous collateral income benefits and sources providing built-in disincentives to remaining injury-free or returning to work as soon as possible.

For example, a major newspaper was considering an expensive incentive program to motivate employees to return to work, but a careful examination of the company’s situation revealed the reason employees were not returning to work was because they earned the equivalent of 115% of their pre-injury earnings when the stayed out of work.

In another case, an injured construction company employee received long-term disability (LTD) payments after 26 weeks of disability, in addition to workers compensation benefits. The total of these benefits exceeded his pre-injury earnings.

And, his childcare and commuting expenses also were greatly reduced while he was home.

Examine Extra Insurance Your Employee May Have

If an employee has purchased credit disability insurance, he or she may have eliminated house and car payments while being unable to work.

As such, he refused his employer’s offer of a transitional duty job at full salary because his LTD and credit disability policies would have terminated the benefits.

Get your Departments to Work Together to Design WC Policies.

In a large company, the directors of human resources, industrial relations, workers comp and employee benefits and compensation must all be involved in designing, administering and maintaining policies. Incentives to remain at and return to work must be built into the management systems. Disincentives must be removed from all direct and indirect sources.

Substantial savings can be achieved when a company coordinates its salary, benefits and compensation programs, so employees don’t earn more by staying out of work. If not properly coordinated, a company’s employee benefit and compensation programs may inadvertently serve to extend workers compensation absences.

Contact: RShafer@ReduceYourWorkersComp.com.

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

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

Filed Under: Return to Work and Transitional Duty