Blog - Work Comp Roundup

Pro-Actively Stop Workers’ Comp Fraud Before It Starts

September 18, 2019 by Michael B. Stack

Large workers’ compensation insurers will have a special investigations unit (SIU) dedicated to fighting fraud and assisting the adjusters with various aspects of an in-depth investigation into work comp claims. Self-insured employers and most medium and small size insurers do not have the claim volume or the expertise to have their own SIU. The self-insured employers and the medium/small insurers know the importance of defeating fraudulent claims and the importance of in-depth investigations (intelligence data) beyond what the adjuster has the expertise (or time) to do. When a need arises for SIU, these employers and insurers will outsource their questionable claims and specialized investigations to a company who can provide the SIU needed.

The SIU company will frequently provide the adjuster with an a la carte selection of services. However, it has become common for SIU companies to partner with the self-insured employer or insurer with the SIU acting as if they were just another department within the self-insured’s or insurer’s company.

The service most often provided by the SIU is surveillance. Unfortunately, the SIU investigator will not always be able to provide documentation the claimant’s disability is not as claimed. The investigator can sometimes be looking for a needle in a haystack, all the while racking up large investigation fees. The practice of ordering surveillance by default is all too common and unnecessarily spikes the cost of claims.

A recommended approach to limiting investigation costs is to pro-actively stop fraud before it starts. The best SIU providers will offer a comprehensive approach by getting involved in the process early and showing significant workers compensation savings. Two areas to work with your SIU provider on this comprehensive approach are in the hiring process and injury response.

Review Your Hiring Process:

Are you using Integrity Testing?
Are initial background checks being performed?
Has the employee had any previous claims?
Do they tend to carry out a claim over a long period of time?
Do you require employment history and are you checking the references?
Are you doing pre-employment physical examinations?
Are you doing pre-employment drug testing?
Are you checking social media for any red flag behavior?

Review Your Injury Response:

Who is reporting the injury?
How is it being reported?
How much investigation, if any, has been performed at the time of injury?
Is there an escalation process in place?
When is your TPA/Carrier involved?

We recommend to not have surveillance set up unless it is certain that the employee will be moving. One of the best times for this is to coordinate with medical appointments. Another time is after bad weather that will cause the employee to move outside to fix damages from snowstorms, windstorms, ice storms, etc.

When an employee maintains they are unable to return to work due to the severity of their injury, the adjuster will request the SIU to do surveillance on the employee. Surveillance is normally done covertly, that is without the employee knowing he/she is being watched. The surveillance is usually done by one investigator, but if the location is complicated or the neighborhood is crowded, multiple investigators may be employed at the same time. Both video surveillance and still photographs are taken whenever the claimant is visible.

Examples of Successful Surveillance:

The claimant maintains he is unable to walk and must use a wheelchair. The investigator obtains video of the claimant using a push lawnmower to mow the yard.
The claimant maintains he is unable to lift more than five pounds. The investigator obtains video of the claimant hand loading concrete blocks on his truck.
The claimant maintains he is unable to work (for any number of reasons). The investigator obtains video of the claimant working full duty for another employer while drawing disability benefits.

Unfortunately, the SIU investigator will not always be able to provide documentation the claimant’s disability is not as claimed. However, there are enough successfully completed surveillance cases that surveillance is standard procedure when there becomes a question in regards to the claimant’s need to be off work.

While surveillance is the most frequent service provided by SIU companies, there are numerous other services SIU companies provide, including:

On-site investigations of severe injuries
- Injured employee’s statement
- Employee’s supervisor statement
- Co-worker’s statements
- Witness’ statements
- Pictures of the accident scene
Medical records searches
- Identifying all medical providers within a specific radius of the claimant’s residence who have treated the claimant prior to the date of the alleged injury
Fraud
- Developing a fraud prevention plan
- Fraud procedures manual
- Identification of “red flags”
New hire assistance
- Integrity testing
- Background checks including criminal records, liens, and judgments, social security number verification, licenses, assets check
- Prior injury history
- Social media checks – Facebook, LinkedIn, Twitter, etc.
- Drug screening assistance
Locating people
- Prior employees who are no longer employed
- Independent witnesses
- Skip tracing
Process Service
Alive and Well Verifications (confirming long term total disability claimants and spousal benefit claimants are still alive and entitled to the benefits they are receiving)

The proper use of SIU will reduce or eliminate leakage on many workers’ compensation claims.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://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: Fight Workers Comp Fraud & Abuse

How Clear And Understood Is Your Return To Work Program?

September 17, 2019 by Michael B. Stack

When an adjuster reserves a file, they focus on probable outcomes. The medical side of the file is usually pretty straightforward. An adjuster can tell based on risk drivers if a person will need surgery, extended rehab, or other procedures based on their medical history.

Return To Work Becomes Complicated When It’s Unclear

What is more difficult is whether or not this worker will return to work should light duty become available. What complicates the process is when the employer is just not sure if light duty work will open, when it will be available, or if they even want the worker to return at all.

Let me explain by using an example. Let’s say a worker needs a back surgery. The employer has light duty positions open, and tells the adjuster that once the worker has restrictions they will place them in work. So, the adjuster will plan to reserve for when the worker is off work post-operatively, and then target a range of when restrictions should be in place and the worker can get back to work.

What will complicate the file is a delay on the employer’s side in getting the worker into light duty. I have reviewed countless files where the employer has stated early on that work is open, but then delayed placing the worker into the light duty work program for weeks or months after restrictions were placed. This not only affects the indemnity costs on the file, but can inhibit the workers overall physical recovery.

Especially with a back surgery, the sooner you get the injured worker off the couch and back to work doing anything the quicker and easier their recovery will be. The last thing you want is the worker sitting around for weeks waiting for the phone to ring. Even worse is when the worker knows light duty in there, and cannot figure out why they can’t return to work.

Claimant Suspicion Can Lead to Higher Claim Dollars

Then the wheels start to turn in the head of the injured party. Maybe they are going to fire me? Why can’t I go back to light duty when I know other workers that returned to work after they had surgeries? Is my employer mad at me because I needed a surgery? Should I get an attorney just in case I get fired because of all of this?

Then when they talk to the adjuster, most adjusters will have no answers for them as to why they can’t return to work as well. After all, the employer told the adjuster that light duty work would be available. Why is this not happening for this claimant? Is the employer not being honest about something in regards to the employment future of said worker? Should I be reserving this file for vocational rehab and start posturing for a potential settlement?

Failure To Communicate

The culprit here, as in many work comp problems, is a failure to communicate. In this example, the employer laid the groundwork for a simple return to work post-op in the light duty work program they have up and running. If there were some political aspects as to why this worker should not or cannot return to work, the adjuster needs to know. Not only for reserve forecasting, but for general return to work forecasting.

Should light duty work not be open for the employee for whatever reason, the adjuster has options to get the worker off the couch and working. The main option is to use an employment vendor that can find transitional light duty work in their own community. This way the worker is still working in some capacity, until they are released to perform full duty work for their own employer. Other options could include work hardening programs, which can be intensive therapy that can help the worker aggressively rehab and get to full duty status faster than traditional therapy methods.

The result of failure to communicate a return to work will result in under-reserving the file. In the end this helps nobody, and the carrier/TPA in general hates to under-reserve anything. It also will make the carrier question the validity of a light duty program in general, and many questions will start to be asked about why this claimant was not able to work light duty when it was promised early-on in the file. Certain carriers will provide discounted premiums based on the existence and use of light duty return to work programs, and if the employer is not delivering on their end of the deal, expect premiums to increase.

It will also create a rift between the worker and their employer. Why was this person singled out to sit at home when others were allowed to return to light duty and make their normal wage? It is almost as if you are penalizing this worker, for whatever reason.

Implement Your Return to Work Program Consistently and Communicate, Communicate, Communicate

At the end of the day, the employer has the option to do what they want with each worker. But the program has to be clear, and applicable to all employees regardless of the injury or surgery that was performed. If you have a light duty program, use it for all of your injured workers fairly. If for whatever reason any particular worker will not be able to return to light duty, make sure the adjuster knows way ahead of time so they can plan other work options accordingly.

Per usual, it all comes down to communication.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://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

Dealing With “Off-Work” Disability Doctor Notes

September 16, 2019 by Michael B. Stack

“Off-Work” disability doctor notes from employees stipulate that employers allow injured workers to stay off work due to a work-related injury. These notes include such things a “work status note,” “off work slip,” “disability note,” or even a “functional capacity worksheet.” While many disability notes are valid, sometimes these notes are vague and unclear why the employee still needs to be off work.

The purpose of disability slips is to advise the employer when the medical provider does not believe the injured employee can do any work in their current medical status or is able to work only in a restricted capacity. Running an effective workers’ compensation program requires employers and other interested stakeholders have clarity, conform to the law, and help get that employee back to work promptly.

Demanding the Basics for Injured Employee Disability

The quality of the disability slips covers the spectrum from telling the employer everything about the injured employee’s injury and disability, to telling them nothing at all. The lack of uniformity can create issues for the employer in tracking the status of the injured employees.

Some jurisdictions have minimum requirements when it comes to disability slips following a work injury. Florida’s Division of Workers Compensation mandates every medical provider use the same Medical Treatment Status Reporting Form, DWC-25. This form serves two purposes. It requires the health care provider to outline the functional status of an injured employee, and report their treatment plan. Even if a jurisdiction does not require a form to be completed, the interested stakeholder can take proactive action to demand it.

Avoid Employee-Determined “Off-Work” Status

When the medical provider does not provide the “off-work” slip, and the employer does not ask, the employee becomes the person determining when the employee will return to work. This is not a good situation for all interested stakeholders and turns workers’ compensation into an entitlement program. Proactive employers should require a disability slip be turned in by the employee after every medical appointment. This information encourages timely return-to-work and holds everyone accountable.

In some jurisdictions, the state department overseeing the workers’ compensation program can help employers obtain this information. In Minnesota, a Health Care Provider Report is required to be completed and returned within 10 days of receipt by a medical provider. The Department of Labor and Industry will follow-up with medical providers when such form is submitted. Failure to respond can result in a penalty being assessed against the medical provider.

Take Charge with the Medical Provider

If the medical provider treating the employee is sending an off-work slip that states “no work until seen by this office again,” with no further information, the employer needs to take charge and advise the medical provider’s office more information needs to be provided. At a minimum, the off-work slip should provide the date of the next office visit and the employee’s current physical limitations. Basic information that should always be included should have the following:

The employee’s name
The date of the office visit
Whether the office visit was work-related
Objective findings
Diagnosis and prognosis
The existence of a pre-existing condition
The specific nature of any functional limitations, for example:
- No bending
- No carrying over ____ pounds
- No climbing
- No kneeling
- No lifting over _____ pounds
- Standing limitation ________
- Sitting limitation _________
- Walking limitation _________
- Other relevant limitations
Date of next office visit
Anticipated full duty date
Anticipated date of Maximum Medical Improvement (MMI)
Date of next appointment
Anticipated treatment plan
Doctor or health care providers signature

Help Me, Help You!

Medical providers are in the business of providing medical care, and often have no knowledge about the employer’s business. It is important for employers to let medical providers know about their business and the employee’s pre-injury position. Relevant information to send can include a job description or video of the work the employee will be expected to perform. This will allow the doctor or health care provider to better understand the employee’s job and its physical requirements.

Conclusions

Employers need to take the lead when it comes to returning employees to work following a work injury. One important step in this process is making sure health care providers are properly completing disability slips with specifies about the employee’s restrictions and/or limitations. By demanding this information, employers can receive a more honest assessment of the employee’s ability to work rather than letting the employee drive their time off work. It will also reduce workers’ compensation program costs in the long run.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://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: Management's Role in Workers Comp

How to Identify EARLY Indicators of Expensive Workers’ Comp Claims

September 12, 2019 by Michael B. Stack

This video is a 12-Minute Preview of the 60-Minute WC Mastery Training Course How to Identify EARLY Indicators of Expensive Workers’ Comp Claims.

Click here to register and receive access to the entire course: https://workerscomptraining.com/registration-early-indicators/

Okay. Hello everyone and welcome to workers’ comp mastery training. My name is Michael Stack and this is going to be a fantastic session. This is an extremely interesting and important topic. It’s actually one that I find quite fascinating. So the title is how to identify early indicators of expensive and problematic claims. So these are the claims that really keep us up at night. These are the ones that you’re like, I can’t believe it got to this place. These are the most frustrating claims. Really. The headline type claims when you’re telling stories, you know by the campfire, you are not going to believe what happened in this one type of thing. And the idea here is to get in front of those, get in front of those claims so that those stories by the campfire never have to happen. Those doozies of claims we can get in front of prevent and get them going in the right direction.

Hindsight is 20-20; Foresight is Priceless

They say that hindsight is 20-20 you look back and you say, Oh man, I wish we would’ve done this if we would’ve done this. And it wouldn’t have caused that, hindsight is 20-20 but foresight, which is what we’re talking about today, is really priceless for the impact that we can have on the individual lives of the injured workers. Because each one of those stories has a person behind it as well as then the costs that are associated with those claims, which we know are significant and major, major drivers of the entire cost of our program. So looking forward to going through this information. We have a tremendous guest, Dr Jake Lazarovic, Dr Jake, welcome to you. Happy to have your expertise on this session.

Well hopefully we’ll, we got your audio going here in just a minute. So let me get through and let me go through our three major points and let me go through the three major topics that we’re going to be covering. So the first topic is going to be talking about the cost and cause of these claims. So what is the cost and what is the cause behind these claims? What does that underlying piece to understand what’s actually happening. Next piece is then we’re going to talking about accurate claim screening techniques, accurate claim screening techniques. And we’re talking 90 to 95% accuracy on getting in front of these claims. One in fact are those techniques. And then the last piece, the third major point is we’re going to talk about those interventions strategies and actually implementing them. So once we understand the drivers, what’s causing them, understanding the techniques and how to identify them, then third pieces is gonna be, then how do you go ahead and implement those as this should feel like a live interactive session.

So we’ve got my computer and the bright behind the big screen right behind the camera here. So go ahead and type in questions, type in comments. This should be interactive. You can get feedback from myself if feedback from Dr Jake as we’re able to do throughout the session. But I do want to encourage you to make this interactive. That’s one of the greatest things about being live here together. All right, so let’s get down into this first major point and actually, oh one more administrative point is the outline for today’s session is in the GotoWebinar interface, so two places you can get that in the final email that I just sent you that said we’re starting now. There’s a link in there that you can download it and it’s also in the GotoWebinar interface so you can follow along. There’s a lot of content we’re going to be talking about today.

Cost & Cause of Expensive Claims

You can download the word document, take notes, write on there as we’re following along. All right, so let’s get down to business and let’s get into this first major point, which is the cost and cause of these really expensive and problematic clans. So firstly you want to talk about is the cost, and I want to put some context kind of behind this and have this really start to resonate. As far as a picture, I don’t want to do as good of a job as they can sort of drawing this. It’s probably not going to be as good as I would like it to be, but it will give us an idea of what we’re talking about. And so if you look at this picture on the board here, it’s a reverse pyramid. So we all sort of know the idea of a pyramid and at the bottom is most of the stuff, and typically at the top is at least, and we’ve seen this a lot of sort of different contexts, you see this and the hierarchy of needs and sort of a lot of different sort of contexts.

5% of Claims Account for 80% of WC Costs

We see this and I want it to present this just kind of visually so we can understand these costs and the drivers of them. We’ve heard so many times that 5% of costs are 5% of claims anyway. I account for 80% of costs, so 5% of work comp claims, I account for 80% of costs. And I’ve seen various statistics on that. That’s not maybe exactly 100% accurate. I’ve seen a lot of different places say, oh, it’s 10% that’s causing 80 to 90% of costs. I see. It’s 10 to 15% I see various references in various different places talking about this. So the numbers, exact numbers don’t exactly matter, but we need to understand the concept that its very few claims, whatever the exact percentage is, five or seven or 10 very few claims are causing the vast majority of the costs. So these are the big ones.

These are the ones we’re talking about today. Now in the middle here or sort of on the bottom or the top of this pyramid, you’re going to see about 80% which is the opposite of this. 80% of claims are only causing about 5% of costs. So the exact opposite of the top of this reverse pyramid is that the vast majority of the clams are pretty simple. Medical only claims, no big deal. Get your stitched up, get you back to work, Bada Bing, Bada boom, you’re rocking and rolling. So most of the claims we’re cranking right through the system and they’re not causing a huge amount of financial burden or much burden on the individual’s life, which is fantastic. And then in the middle here you have, you know about 15% of claims causing 15% of costs. And these are the last time the indemnity claims. No, you guys, these are the ones that you’re out of work for.

Oh, maybe a week, two weeks, something like that. Uh, you get you fixed up and you’re back to work. So visually, again, don’t get too caught up on the actual numbers themselves. But what we need to understand, particularly as we’re going into today’s session and we’re talking about sort of this context of how to address these claims and the importance of addressing these claims and the impact of addressing these claims is that we’re talking about a really big bucket of claims costs in a really small amount of actual planes themselves. And so the trick and what we’re going to be talking about today is figuring out when a claim comes along, you’ve got all these claims on your loss runs, which one of these is going to end up here in which one of them is going to end up here. And so if you’re looking at this huge number of claims, you see him coming in all the time.

Which 1 Claim Out of 14 Will Become Catastrophic?

Which one of these, you know, I’ve got six seven, I’ve got 14 sort of little lines on here, which one is going to be up here? And the trick is finding out that early, we know that late, right? A year later, two years later, we know, oh man. Of those 14 claims, that one was a doozy. That was the doozy. That’s the one that really impacts you both financially and then the life of that and very injured worker. And the trick is finding out which one out of this major group early in this process. And as I said, we talk about hindsight being 2020 if you look at that little couple of lines, which represents your claims, if you knew it was that one in the beginning, you would have done it differently. You would have managed that claim differently. But the problem is oftentimes we don’t know.

We don’t know. And we’re just going along. And a lot of times we treat these claims the same and then all of a sudden we’re surprised when a claim that should’ve been down here escalates its way all the way to up here. So I want to have that visual sort of in your head of what it is we’re talking about and then the impact if we can in fact identify these early [inaudible] what a major, major, major benefit that is for that individual and then a huge, huge impact on our costs. So one more little quick illustration that I want to go over here just to continue to resonate. Sort of the importance of this point are two more quick illustrations to continue to get it to resonate. The importance of this point as far as the costs. And what I want you to do when you leave this session is have this process which we’re going to be talking about today, a part of your process.

Early Screening Needs To Be A Part of Your WC Program

So if it’s not a part of your process, some of these screening techniques, some of this awareness it needs to be, it needs to be part of your best practices in your claims management program. So that is going to be a major takeaway. And the importance of this as far as why this is as to why you want to kind of go over some of this context here. So if you think about that concept of one 5% of claims, and again it could be five, it could be 10 but I just think about this concept. Say it was five each percentage of claims represents a big percentage of dollars. So each percentage is small amount of playing represents a big percentage of dollars. Let’s just go run through this very quick. [inaudible] this is percentage of claims and this is cost. So each percentage is representing roughly 16% of your costs, 48 64 and then 80 so each percentage, and if you think about this sort of contextually, each percentage is representing 3% is representing 48% of your costs.

And just kind of let that sink in for a second as far as what that actually means for your program. So if you say, Hey, want to reduce our costs and you’re looking at your loss, running your total loss costs, and you’re saying, hey, we’d love to get a 30% reduction in our total work comp costs, you got 33% just by a very small amount of your claims. And so again, that major, major financial impact of what that can actually do for your program. In one other exercise that I want to recommend you do because when we talk about some of this concepts, we talk about sort of this conceptually and you’re looking at the reverse pyramid and you’re looking at these numbers and you’re like, God, okay. You know, I’m, maybe I’m with you, maybe you’re not with me, but you can kind of start to think about it.

Identify 5 Most Expensive Claims

But I want you to put this in context, and I’ve done this with several employers and it’s always very illuminating when we do this little exercise. I want you to look at your loss runs and I want you to pull out your five most expensive claims. So look at your loss run. Or if you’re a client service provider, if your insurance broker, you’re advising or consultant to customers, you’re advising your customers, take a look at their loss run, you do this together, you can pull it up on excel, grab your five most expensive, and then calculate what percentage of your total costs is that for you. So what percentage of those five most expensive claims is that for you? And so when you go through this exercise and you pull out these five most expensive claims, you’re like, whoa. Like that’s a big chunk of our costs.

When you start to recognize that, and you can put this into context for yourself and again, if you’re a service provider, tremendous way to introduce some of these concepts to them to get them to buy into this and you say, Hey, I want to look at your program. We want to look at our claims handling process, etc. Let’s put some context on that and when you do that now these 1% and 64% and the reverse pyramid and all that sort of theory that we just talked about becomes very real for that individual person. It’s a great little exercise to do very impactful thing. I’ve done that with several, several employers and every time we do it it’s very illuminating and sheds a lot of light on the importance of recognizing I drew out those little lines, which one or which two of those or in this case the five that we just mentioned are going to now be that impactful. And then the importance of us going through some of the things we’re gonna be talking about today as far as these screening techniques.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://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

September 11th Remembered – Tribute To Marsh And AON

September 11, 2019 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 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.

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

Look to Your Data for Opportunities to Improve Your Workers’ Compensation Program

September 9, 2019 by Courtney DuChene

This Content is Sponsored by the National Workers’ Comp & Disability Conference

With mounds of data at their disposal, workers’ compensation managers and financial executives might find it difficult to know exactly which metrics can help them create programs that both improve financial performance and keep employees safe.

The amount of available data can be so overwhelming that, according to Marsh’s 2019 Excellence in Risk Management survey, only 29% of companies reported using data for strategic planning.

“There’s a huge opportunity curve for organizations to better leverage data for improved outcomes,” said Luke Harrison, senior vice president and central claim consulting practice leader at Marsh.

Digging through all of the different metrics is valuable. It can help companies spot cost drivers early by allowing them to recognize historical trends.

“The best predictor of the future is the past,” Harrison said. “Not understanding your own data and what historically has driven your costs creates gaps in your ability to measure areas of excess leakage or various inflection points during a claim where intervention might be beneficial.”

Data in Action

Using data to understand a company’s past experiences with injuries certainly helped 2017 Teddy Award winner Rochester Regional Health.

They were able to make safety improvements in patient handling — one of the leading causes of injury in the health care industry — because they took the time to understand what “story” their data on safety metrics was telling them, according to Rochester’s senior manager of workers’ compensation Monica Manske.

“Our data confirmed what we already knew about our own organization,” said Manske.

“But with that data, being able to tell the story of how much money and lost work days and possibility of, you know, patient error occurs with how to handle patients. We were able to set the wheels in motion and dramatically reduce our claims reported due to patient handling injuries, and we’ve had up to a 60% reduction in our claims.”

Part of the reason Manske believes their program was so successful is due to their use of internal data, which allowed them to track their progress.

“With the improvement in technology, we really have so much more information available to us to perform a full evaluation of a program. And the data itself can really tell us where we had been over time. So not only benchmark against industry like with OSHA [metrics], but benchmark against yourself,” she said.

“We know what our drivers are over time. We know that cost, lost work days and even the department in shift if necessary. And that provides us a framework for our program development.”

Data Cuts Down Costs

Just as Manske’s company was able to reduce claims and save money by using the data available to them, companies that avoid jumping in and analyzing their data to drive program improvement can face serious financial consequences, too.

Luke Harrison, senior vice president, central zone claim consulting practice leader, Marsh Risk Consulting

In fact, large actuarial adjustments are something that Marsh’s Harrison sees frequently when companies don’t use data and analytics to evaluate and improve their programs.

“As a consultant, I can’t count the number of times I’ve heard from a claims manager that they found out from someone in finance in their company that they recently had a large actuarial adjustment out of nowhere,” Harrison said.

Manske said there are two major reasons why companies struggle to make the best use of their data: The sheer amount of data available and finding the time to analyze it all.

She believes collaboration can help solve these problems.

“I really recommend anybody collaborate with their TPA or churns carrier, because they can really be a great asset in this arena. And really helping you identify what are the best metrics that you should focus on,” she said.

Improvements in data gathering and technology have also made it easier for companies to turn to their data to find actionable solutions in real time.

“If you go back ten years ago we were really looking at Excel loss runs,” Harrison said.

“If you fast forward into 2019, I can say within Marsh we’ve created a new claims platform that provides real time analytic data feed out of your third party administrator or insurer.

“So rather than waiting six months or a year to look at your data for that year in a PowerPoint or in a printed document format, now our clients are able to leverage data on a real time basis,” he said.

At the end of the day, using data to improve workers’ compensation programs is well worth the effort because it provides companies with a way to both help their employees while also saving money and improving company culture.

“The data helps give you a tangible way to make a difference in peoples’ lives. Making things better for the organization and the employee together is a win-win,” Manske said. &

This November, NWCDC will feature two different sessions on using data to improve your workers’ compensation programs. The first is the pre-conference session “The Key Metrics for Understanding Your Workers’ Comp Program” led by Beth Dupre and Luke Harrison both of Marsh. The second session, “Improving Your Culture of Safety Through Analytics & Engagement,” will be led by Monica Manske. Check out the rest of the NWCDC line up here.

About the National Workers’ Compensation and Disability Conference® & Expo:

As the largest National Workers’ Comp and Disability Conference for more than 25 years, NWCDC offers endless opportunities that will propel your workers’ comp and disability management programs forward. With the biggest Expo in the industry, you’ll be able to touch, compare and contrast the newest solutions from leading vendors in every category, and gain knowledge on-the-go at in-depth sponsored sessions on the show floor. Additionally, NWCDC offers valuable networking opportunities so you can make important contacts and share strategies with your peers.

You can also customize your learning experience with breakout sessions in six distinct program tracks: Claims Management, Medical Management, Program Management, Disability Management, Legal/Regulatory, and Technology.

Learn more about NWCDC and special savings for Amaxx, Inc. readers here.

Courtney DuChene is a staff writer at Risk & Insurance. She can be reached at cduchene@lrp.com.

Filed Under: Claim Management

Spot Over-Treatment from Medical Providers

September 9, 2019 by Michael B. Stack

Members of the claim management team need to take control of their files to reduce workers’ compensation costs by spot unscrupulous practices by medical providers. While a vast majority of providers are ethical, never let down your guard, and be proactive in identifying red flags when it comes to over-treatment by medical providers.

The medical records are “template” style or barely exist at all.

A careful review is required when medical records all look the same. It is important to note “template” style records that repeat does not mean you are dealing with a shady doctor. It could just be that the doctor is very poor at note-taking. Great doctors do great analysis and back up opinions with objective medical facts. They arrive at this point by walking through the medical records and creating a great conclusive medical report.

Missing dates of service, or no date labels on the medical notes

Missing dates of services are often paired with “template “style medical records. The doctor uses a fill-in-the-blank system. Typical examples include: Patient came in with complaints of _______ which they attribute to work causing them _____ pain out of 10, with 10 being the worst pain imaginable.

Pay attention to medical records generated by health care providers. If anyone is watching, a physician will not get far by doing this. On the other hand, if nobody is paying attention, thousands of dollars could be paid for unnecessary medical care and treatment. Make sure the notes are clearly labeled, dated, and legible. If not, you need to contact that physician’s office immediately.

Different handwriting or inks on the same dates of service.

Some medical providers are not fully digital when it comes to the preparation of medical records. A nurse or the medical assistant may make notes in a medical record before the doctor attends to the injured employee. However, in some instances, this could mean notes are being manufactured. Carefully review these records.

The medical provider will not send medical records or state that they do not keep medical “records.”

All legitimate medical providers should keep records of patient interactions, including telephone calls and messages. Even the most trivial of companies store records of some sort. As a matter of best practice, refuse to pay any bill ever without a medical record.

The medical notes showed continued high levels of pain.

All legitimate medical care and treatment should provide some relief to an injured employee. If it is two months post-injury and the employee reports a pain level of “10 out of 10,” questions need to be raised as to what care is being provided, and why the injured employee is still suffering from the effects of the injury. If the physician is not doing anything about it, or the person is no better, then you must find out what is going on medically and get that person to a specialist or set up an Independent Medical Exam(IME) to address these ongoing complaints.

Conflicting medical reports or conflicting subjective complaints.

Take the following example: You are reviewing a stack of medical records on a claim. The injured employee states they are in very bad pain, 8/10. It is hard to bend and walk. The next day they show up for therapy, and they tell the therapist they are doing great, and they think treatment is really helping them. Two days later they go back to the doctor and say they feel the same, about 7-8/10 pain. Then the same day they have therapy and tell the therapist they feel great, and are looking back to getting back to work.

Therapy can flare pain up a bit, but over a few weeks, the pain should be gradually lessened. If you start to notice inconsistent pain complaints, and pain out of proportion to the injury, think about getting an IME to better understand what is going on.

Conclusions

All health care providers should have consistent billing practices. They should be using standard billing forms such as a CMS/HCFA-1500 form so the bill can be processed and paid in a timely manner. All medical bills should conform to the medical record that is often required to be attached to the bill. If not, ask immediate questions. It is also important to ask questions if red flags are raised when reviewing medical records. Failure to do so can result in excessive money being spent.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://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: Medical & Pharmacy Management

4 Ways to Control Skyrocketing Workers Compensation Claim Costs

September 4, 2019 by Michael B. Stack

The sky should never be the limit when it comes to workers’ compensation claims. Instead, members of the claim management team and other interested stakeholders should be searching for ways to control program costs, while making sure injured employees receive all the benefits, they are entitlement to after an injury.

Average claim life continues to increase due to the injury severity and increasing medical treatment costs. While employers continue their involvement in processing claims to reduce costs, insurance companies/third-party administrators (TPA) also must do all they can to save on the costs of handling and controlling claims.

Immediate Steps to Reduce Increasing Costs

There are many steps interested stakeholders can take to reduce program costs. Here are some immediate steps to implement to run a better program immediately.

Be aggressive with medical bill cost containment

There are several good service providers who do utilization review/cost containment at a reasonable cost. This includes a review of procedure codes depending on the TPA/insurance company’s participating medical network. Often what is missed is some providers are open to agreeing to a lower fee. If a popular physical therapy clinic in your area nets many, there is an opportunity to negotiate a fee-reduction price in exchange for “preferred provider” status.

Stay on top of your claims – Be proactive

Some claims remain open due to claim handler complacency. By proactively handling the file and using negotiation skills, claims may be resolved months earlier instead of lingering. Prioritize your files and stay on top of them and before you know it the claim is ready to be closed.

Use telephonic nurse case management

When an injured employee is off work, every day of lost wage is an expense. You want to do everything possible to bring the injured employee back to work as quickly as possible. Telephonic nurse case management (TNCM), as opposed to on-site nurse case management (NCM), gets the same result, for a quarter of the price. Cases needing a nurse usually demand more follow-up, easily done by phone. The nurse calls the employer, the injured employee, talks to the treating doctor’s nurse, obtains medical records, and performs other functions that take time and money. A TNCM frees the claim handler to work on other tasks the file needs, such as background checks, ISO searches, and vendor assignments. It also allows the claim handler to focus on case management and strategy, which advances a claim toward settlement.

The Utilization Review Accreditation Commission (URAC) is an umbrella organization responsible for certifying Nurse Case Managers (NCM); Triage Nurses (TN); Telephonic Case Management (TCM); Field Case Management (FCM); Utilization Management/Utilization Review (UM/UR); and Peer-to-Peer Review. To maintain quality control all these entities need URAC certification. URAC has stringent protocols for education, credentials, and training for these services.

Be on the lookout for claim “leakage”

Leakage is the biggest animal in the “reducing claim cost” jungle. Unnecessary costs, expenses, and errors in payments add up to astronomical amounts of money. These are often expenses workers’ compensation program are unable to recover. When reducing file leakage, it is important to audit your files and do so on a regular basis. File reviews are also an important opportunity to identify fraud, waste, and abuse, or stop it from occurring in the first place.

Conclusions

There are many steps one can take when reducing workers’ compensation costs, while at the same time maintaining the structural integrity of a program. It all starts with a willingness to review one’s program and look for opportunities to save money. It also requires all members of the claim management team and employers to be engaged and ready to implement change.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://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

7 Steps to Building Better Work Habits and Employee Cooperation

September 3, 2019 by Michael B. Stack

Now that summer is over; it is time to reevaluate how your company operates. It is a time to set goals, benchmarks, implement new techniques, and purchase new materials. It is also an occasion to focus on being a better team and focus on your company’s most important capital – its employees.

There are many ways interested stakeholders can improve their program and increase workplace morale. Here are some steps that can be taken:

Provide the best tools so employees can perform efficiently.

If you drive cars, this does not mean that all drive a top of the line Cadillac. This is meant more to show how to provide the best output for employees. Ways to do this include making workstations adjustable so employees can perform at the levels they need to. This will increase output and performance, as well as reduce the chance of injury. Extra lighting can provide clarity and precision.

Do not run your company like a prison.

The workplace does not have to run hard-nosed and rigid. Employers should consider flex work hours, rotating job tasks, and allowing hourly breaks to best utilize employees time at work for production. Allowing for job rotation can provide breaks for those that do heavy-duty work day in and day out. It will also reduce injury from heavy, repetitive movements.

Keep an open mind.

This requires an employer to listen and see if suggestions from employees can drive change. Discuss alternative job tasks and how things could be done quicker and easier. If someone knows that you will take the time to listen to them, you may get an idea that you can implement. Not everyone will hit the ball out of the park every time, but you could stumble upon something that can make a difference.

Encourage healthy lifestyles and reward those that make a change.

A healthy body is one that comes ready and able to work. Healthier employees have less sick time away from work and fewer injuries. Companies now offer discounts to local gyms, reduced medical premiums for wellness exams, and smoking cessation programs for free. Be sure to provide incentives for the employees who participate.

Launch a return to work program.

The longer a person is out of work, the harder it is to get them back to productive employment. Older employees also take longer to heal than younger ones, so consider home-based employment. If you provide some light-duty work, employees know that even though they have an injury, they can still work and make a difference. This will help them transition back into full-time work once they are released from medical care.

Establish a mentoring program.

Mentoring programs allow less-experienced employees in gaining valuable skills and knowledge of how a company operates. It also develops relationships that increase company morale and increase productivity. A successful mentorship program should also include on-the-job “shadowing.”

Do not be afraid to hire experienced employees.

There are many benefits to hiring experienced employees. These employees already have sound work habits, years of experience in the field, and the skills the company needs to take you to the next level of competition. These employees also have less out of work distractions, such as needing more time off for childcare or more time off for school commitments. Experienced employees will also add some diversity in workforce, contributing their ideas and experience to the team projects and ideas. If you utilize their assets, the workplace will benefit.

Conclusions

Now is the time to reflect and focus on what you can do better before the end of the year. This requires interested stakeholders to bring veteran employees to the table and generate ideas. Experienced employees are a great untapped resource, and their ideas and work ethics can be beneficial in many ways. Listen to their ideas, and make the management team approachable when someone has an idea about how something may be able to be done better. If you make this one of several things to focus on, accomplishing the rest of the goals could be that much easier.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://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: Communication with Employees

Reducing Work Comp Costs With Field Nurse Case Managers

August 27, 2019 by Michael B. Stack

Interested stakeholders in the workers’ compensation claims process should seek creative methods to reduce workers’ compensation program costs without cutting corners. When looking for ways to reduce costs, the well being of the injured employee is paramount. One step that can be taken is to use field nurse case managers to better direct care, and do so in a cost-effective manner.

It All Starts with the Claim Handler

When a claim handler is faced with a new and severe claim, it requires immediate attention. The injured worker may have a life-altering injury at work requiring emergency surgery before the adjuster even sees the claim. These injuries are crush injuries, severe fractures, spinal injuries, or closed-head injuries. The claim handler should also ask the following questions:

Does the injured employee require an extended hospital stay?

Does the injured employee have adequate in-home medical care or is an outside service provider recommended?

Will the injured employee require more surgery?

These are questions that must be answered, and if the claim handler is unavailable, a Field Nurse Case Manager can be very useful.

What is a Field Nurse Case Manager?

Field Nurse Case Managers are typically a registered nurse who specializes in the coordination of medical care of injured employees in workers compensation cases. They are aware of a variety of resources that manage the claim and bring a high level of medical care to the employee and ensure the proper utilization of services and resources. They can serve as a “go-between” for the various other interested stakeholders – multiple medical facilities, doctors and other specialists, and vocational rehabilitation consultants. They can also serve as a resource for friends and family members of the injured employee by ensuring the injured party receives a high quality of medical care when they are off work for an extended period.

Benefits of Field Nurse Case Managers

There are many benefits to using a Field Nurse Case Manager. Here are some examples of how an employee can receive best in class service, while not requiring the insurance carrier to spend significant amounts of money on a claim.

Help ease the transition from hospital to home and beyond.

Insurance carriers sometimes look at short-term costs, but forget the long-term risks. It can be easily forgotten that employees who sustain serious trauma have virtually every aspect of their life impacted. A Field Nurse Case Manager can assist in the transition by monitoring medical care and educating family members on the needs of the injured employee.

Secure medical records faster than the claim handler.

A claim handler is often burdened with several important tasks that are time-sensitive, and requesting medical records is often a low priority that causes delays. An experienced Field Nurse Case Manager will know where to go in the hospital, and who to speak with to get this much needed information.

Help make a discharge from hospital to home easier.

Employees with severe injuries can receive medical care and treatment in-home. By using a Field Nurse Case Manager, this care can be coordinated to take place by ensuring it is provided correctly, and assist with issues concerning transportation to/from appointments.

Will stay on the case until the injured worker is stabilized.

The Field Nurse Case Manager assists the injured employee’s initial needs of moving from the hospital to home, ongoing medical care, and other issues. They also serve as a point of contact regarding pressing medical concerns and can attend medical appointments with the employee. There is also a benefit to working with a FNCM when it comes to chronic pain or mental health concerns.

Provides the injured worker resources of care.

The Field Nurse Case Manager provides the injured employee a resource with all interested stakeholders. By assigning a FCNM, the employee can better understand what care is best, provide answers to questions, durable medical equipment assistance, arrange in-home medical care, and seek to improve the employee’s daily life.

Conclusions

Field Nurse Case Manager workers have a special job coming to a severely injured worker needing help. They aid in many areas, not only to the injured party but also to the family. The Field Nurse Case Manager helps the carrier by obtaining much needed information about the injury, while at the same time assist the employer by providing updates on the injured employee’s status. Most importantly, the worker gets help to focus on healing with quality service that only a nurse can provide.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://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: Medical & Pharmacy Management

Pro-Actively Stop Workers’ Comp Fraud Before It Starts

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Dealing With “Off-Work” Disability Doctor Notes

How to Identify EARLY Indicators of Expensive Workers’ Comp Claims

September 11th Remembered – Tribute To Marsh And AON

Look to Your Data for Opportunities to Improve Your Workers’ Compensation Program

Data in Action

Data Cuts Down Costs

Spot Over-Treatment from Medical Providers

4 Ways to Control Skyrocketing Workers Compensation Claim Costs

7 Steps to Building Better Work Habits and Employee Cooperation

Reducing Work Comp Costs With Field Nurse Case Managers

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