3 Workers’ Comp Payroll Deductions Most Often Missed by Employers.

3 Workers’ Comp Payroll Deductions Most Often Missed by Employers

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If any of your workers are getting overtime, are those extra dollars included in your workers’ compensation premium calculations? If you answered ‘yes,’ you may be artificially inflating your payroll; i.e., paying higher premiums than is warranted.

 

Overtime, double time, and severance pay are typically allowed as deductions for workers’ compensation premium calculations. Yet companies large and small often overlook these three points. Knowing what deductions are allowed in your jurisdiction(s) and understanding how to apply them can save payers big dollars — immediately.

 

 

Accurate Payroll & Class Codes

 

Injury management is the area where most workers’ compensation cost-cutting strategies are focused, and with good reason. Reining in workers’ compensation costs through safety efforts, effective return-to-work programs, and best practices in medical management are proven to contain overall costs. But risk management is only part of the equation.

 

If you’re not reviewing your payroll (remuneration) and class codes for accuracy, you may be missing significant opportunities to quickly and easily reduce workers’ comp costs. Depending on the jurisdiction, there can also be an opportunity for deductions from uniform allowances, to officer excess and gratuities, to employer-provided perks. Ask your premium auditor or audit manager to reveal deductions you are allowed to take and still have an accurate assessment of your risk.

 

 

The Big 3

 

A majority of jurisdictions allow deductions for

 

  • Overtime pay
  • Double time pay
  • Severance pay

 

Workers’ compensation premiums are designed to assess risk exposures appropriately. But paying someone double time to work on a Sunday, for example, doesn’t double his risk of injury; nor days paying out a golden parachute to a worker who has left the company. Taking allowable deductions can drastically lower your payroll — and your workers’ compensation premium.*

 

*Note: Compared to a guaranteed cost structure, employers in a high-deductible program may not be as greatly impacted by payroll deductions due to the significant latitude carriers possess with adjustments and credits/debits in the premium formula.

 

 

How to Do it

 

Getting the most out of allowable deductions is dependent on accurately presenting your payroll. Your workers’ compensation premium is based on your gross payroll (remuneration) including, for example, salaries, commissions, bonuses, vacation, holiday and sick pay.

 

Overtime and other payments can be excluded. But it’s important to exclude only premium portion greater than the standard rate:

 

Here’s how to figure your payroll with overtime deductions:

 

Say your company pays overtime — time-and-a-half — for someone who works on a Saturday and double time for working on Sunday. A worker who makes $10 per hour would get $15 for working on a Saturday and $20 for working on a Sunday. Let’s say he worked 8 hours both days.

 

To determine accurate payroll, you would deduct the $5-per-hour extra he made on Saturday and the $10-per-hour extra he made on Sunday. To calculate the exclusion:

 

Saturday                                  8 Hours x $5 =   $40

Sunday                                    8 Hours x $10 = $80

 

Total amount excluded from payroll = $120 ($40 for Saturday and $80 for Sunday)

 

You only need to pay premium on the worker’s regular $10-an-hour rate for the extra hours he worked, not the additional dollars.

 

Employers need to maintain payroll records that show the regular rate of pay, the overtime earnings, and a summary by type of operation performed, in order to get credit for the overtime excess.

 

It’s also important to understand that increases in wages are not eligible for exclusion. If you increase a worker’s base wage, that increased amount would need to be included in the payroll.

 

For severance pay, the calculation is easy. You can exclude these dollars paid to someone who no longer worked at the company to the extent it does not include pay for time worked or accrued vacation.

 

While these deductions may not seem significant, they can add up quickly and result in major savings.

 

 

Conclusion

 

You want to make sure your employees are properly covered for any work-related injuries they incur. However, you don’t want to pay any more workers’ compensation premium than necessary.  Knowing and applying allowed deductions can go a long way to dramatically reducing your workers’ compensation premiums while still paying the appropriate amount.

 

 

 

Michael Stack - AmaxxAuthor 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: https://blog.reduceyourworkerscomp.com/

 

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

 

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

5 Ways to Get Started Reducing Workers’ Compensation Risk

5 Ways to Get Started Reducing Workers’ Compensation RiskA lot of employers strive to be a safer, more productive workplace for their employees. Every business would love to reduce costs and increase profit margins. The cost of workers’ compensation claims can have a significant impact on the company bottom line, particularly if you are self-insured or self-administered.

 

So how do you get started? Where do you start, or better yet when do you start? The answer is RIGHT NOW, and here is how:
 

  1. Know Where Your Risk Lies

 

Observe your workplace. Go through department statistics and see how they all compare to each other regarding losses. Perhaps 75 percent of your injuries occur in the shipping department. Go down there and talk with the supervisor. Find out what their issues are and why they think injuries are happening. Then, work together to solve the problem.

 

Another helpful thing to look at is your loss run. Talk to your carrier or adjuster and see if they notice any trends in injuries, or which people are getting injured. Maybe the newer hires account for a lot of the injuries. This may show that a focus needs to be directed towards training and safety right from day one of their employment.

 

Look at your business. What do you do? What are the risks involved? You could have risk in several areas, stretching from workers comp to automotive issues with your fleet and the drivers, to liability risk from customers in your store. Break it all down, and start to track your statistics. Identify issues, and work on thinking of ways you can reduce your injuries or occurrences from happening in the first place.

 

 

  1. Plan Your Attack

 

If you have identified a few areas in which you could improve by reducing injuries or claims reports, what do you do to fix it?

 

The answer lies in the resources you have all around you. The first step is to talk to your carrier. Chances are they have the loss-prevention specialists ready to help you work with what needs to be fixed, and how to fix it. Ergonomic professionals can be brought in to address your workstations, and suggest possible solutions to reduce exposure.

 

Utilize your medical clinic contacts to see if occupational physicians can watch employees doing their work to identify potential issues with certain movements or repetitive motion injuries. Or, maybe it’s time to consider having your own in-house occupational clinic for a proactive strategy. Utilize your local council, and have them come in to explain the risks and costs associated with potentially serious injuries, automotive accidents, failure to drug test your employees, etc. Any or all of these will help you get to your goal of reducing your exposure.

 

 

  1. Implement Your Solution Plan

 

Once you have identified what needs to be fixed, and how it should be fixed, now it is time to fix it. Get rid of that old equipment and bring in new equipment that has better safety features. They cost less to maintain and repair, and they are quicker to operate. Most new machines use less energy than the old ones, reducing your utility bills and creating worker ease of operation. Get some padding on the floor for workers to stand on during work at their workstations (also known as “fatigue mats”). This reduces strain on their feet and legs, and reduces body fatigue, potentially making them more productive after long hours at the workplace.

 

Whatever the fix may be, get it done — out with the old, in with the new.

 

 

  1. Measure Your Success Statistics

 

Once new equipment is installed, and in place, it is time to measure your reductions. Measure your numbers in a two, four, and six-month stretch. Did you see any drop in claim activity? Did claims increase, making your plan backfire? You have to see how you did, and most importantly, you have to give it time. Change is disruptive to employees, but they will get used to it. Give it time, and measure your numbers post-change against the ones you first noticed back when you were figuring out where your risk was coming from.

 

 

  1. Get feedback from your workers

 

After all, you have done, you left out the most important thing: To talk to your staff of workers about the changes. How do they feel it impacted their workday? Were the changes helpful, or did they hurt production? How do they feel at the end of the day? Do they feel less sore or are the new workstations worse than the old ones?

 

Ask as many questions as you can. This makes your staff feel that their input is important, and taken into account. After all who better to talk to about the changes that were implemented than those who were directly affected day after day?

 

 

Summary

 

It is hard to break old habits and accept change. Even though it is hard work to find out what your risks are, how to attack them, implementing your changes, measuring your success, and getting worker feedback, in the end, it will be worth it. Lean into the task; don’t try to tackle it all at once.

 

 

 

Michael Stack - AmaxxAuthor 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: https://blog.reduceyourworkerscomp.com/

 

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

 

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

Understand And Improve Your Experience Modifier

To calculate your workers compensation insurance premium, the insurance company takes into consideration three things – the type of business you are in, the total amount of your company’s payroll and your experience modifier.  The only one of the three things the employer has control over (without reducing payroll) is the experience modifier (also referred to as the experience modification factor).  The experience modifier factor is a calculated adjustment based your company’s loss experience.

 

 

Workers Comp Is A Long Tail Business

 

When the workers’ company insurance company establishes the premium for the employer’s next policy year, it will include in its calculations the results of previous loss experience with the employer.  Workers’ compensation is considered a long tail business, meaning that many workers’ compensation claims are open for an extended period of time.  Therefore, the insurer cannot just use the most recent claim history and claim reserves to calculate the loss experience.

 

The insurance company will look at the employer’s claim history for the three years prior to the current policy year.  For example, on 5-1-15 the insurer starts the premium calculations for the policy year of 7-1-15 through 6-30-16.  As some of the workers’ compensation claims are still open two, three of four years later, the insurer will analyze the claim cost of the three previous policy years not counting the current policy year.  The cost of workers’ compensation claims from 7-1-11 through 6-30-14 is used in calculating the experience modifier.

 

 

E-Mod Considers Both Frequency & Severity Of Claims

 

The experience modifier takes into consideration both the frequency and the severity of claims.  The insurance company places a greater weighting on the frequency of claims than they do on the severity of the claims.  Five workers’ compensation claims costing $5,000 each, or $25,000 total, have a greater impact on the calculation of the experience modifier than one $50,000 claim. The reason for this is frequency of claims is a reflection of the safety practices of the employer, and a high level (number) of claims reflects a lack of management control of safety.

 

The insurer will compare the results calculated for your company with other employers in the same type of business.  If you have an average safety program and an average number of claims – loss experience exactly in the middle of your industry, your experience modifier is 1.0 and your insurance premium will be the average premium for your industry.

 

If you have a good safety program and have had fewer than average claims during the three policy years preceding the current policy year, your experience modifier will be less than 1.0 and your insurance premium will be reduced accordingly.  For instance, your experience modifier is calculated to be 0.75.  With everything else be equal, your workers’ compensation premium will be 75% of the average premium.  The flip side of this is, if your loss experience is poorer than others within your industry, your insurance premium will be higher than average.  For example, your company’s experience modifier is 1.5; you will pay 50% more than the average employer in your industry.

 

A strong safety program where everyone in the company is safety conscious and participates fully in the safety program is the best way to lower your cost of workers’ compensation.  By lowering the frequency of claims you will have greatest impact on the experience modifier.

 

 

Steps The Employer Can Take

 

In addition to controlling the frequency of claims, there are several steps the employer can take to reduce the severity of the claims that do occur.  This includes:

 

  • An established Return to Work program
  • An ergonomics program
  • A best practices claim handling guidelines
  • Best Practices claim file audits
  • A drug testing program including pre-employment, post accident and random.
  • Medical management of claims including
    • Nurse triage
    • Early intervention
    • Medical case management
    • Utilization review
    • Medical fee schedule utilization
    • Medical provider networks

 

By understanding how the insurance company calculates your workers’ compensation premium, you can take the necessary steps to have a positive impact on your loss experience.  This will assist you in lowering your experience modification factor and lowering your work comp insurance premium.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, and founder of COMPClub an interactive training program teaching workers’ comp cost containment best practices.  Through this platform he is in the trenches on a monthly basis with risk managers, brokers, consultants, attorney’s, and adjusters teaching timeless workers’ comp cost containment strategies, as well as working with members to develop new tactics and systems to address the issues facing organizations today. This unique position allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

©2015 Amaxx LLC. All rights reserved under International Copyright Law.

 

Employers/Carriers/TPAs/Brokers/Vendors looking for additional information FREE resources for Workers Comp cost containment best practices are invited to access Amaxx Workers’ Comp Cost Containment Essentials training series

 

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

 

Fight Back! Stop Workers Compensation Rate Increases

It is inevitable. As soon as you congratulate yourself on reducing the frequency of workplace injuries, you get a notice from your insurance broker that your workers’ compensation premium is being increased 10%. Don’t just accept it as another rate increase, fight back.

 

The focus of our company is to assist you in controlling and reducing the cost of workers’ compensation. None of the following recommendations by themselves will give you control over the cost of workers’ compensation, but the recommendations together will give your control in the battle to minimize the cost of workers’ compensation

 

 

Safety Program:

 

The lowest cost workers’ compensation claim is the one that never occurs. The elimination of accidents reduces your cost of workers’ compensation. When the insurer’s underwriter is calculating your annual premium, the underwriter reviews the frequency of accidents and the severity of the accidents that do occur.

 

A strong safety program will incorporate safety training for all employees, a job hazard analysis to identify and eliminate causes of accidents, work-site evaluations and inspections to prevent accidents, and a safety specialist or safety committee to keep safe practices at the fore-front of your work process.

 

 

Return to Work Program:

 

A mandatory, company-wide return to work policy should be implemented if your company does not already have one in place. The return to work policy should be a part of every new employee’s orientation. It should be posted on the employee’s bulletin board and be discussed in staff meetings. All employees should know a job will be available to them as soon as they medically approved to work light duty.

 

The company’s workers’ compensation coordinator should place a call to the medical provider the day of the initial medical treatment to learn the work restrictions provided by the doctor. The workers’ compensation coordinator should advise the doctor of the employer’s willingness to modify the employee’s job duties to comply with the work restrictions.

 

 

Wellness Program:

 

An integrated health and wellness program will reduce the cost of workers’ compensation by reducing the impact of comorbidities on the injured employee’s recovery. By reducing obesity, diabetes, hypertension and physical deconditioning, an injured employee recovers faster from an injury, reducing both the amount paid for medical care and the time lost from work.

 

 

Medical Cost Control Program:

 

Historically, medical expenses make up over half of the total cost of work comp. If your state allows you to designate a specific medical provider or allows you to designate a list of medical providers from which the injured employee must select, be absolutely sure to do so. By directing the injured employee to a doctor with vocational medicine experience who understands the need to get the employee back to work as soon as feasible, you will eliminate unnecessary medical treatment and unnecessary delay in the employee returning to work. If your state does not allow you to designate the medical provider(s), you should post on your employee’s bulletin board a list of recommended medical providers.

 

From the moment of injury until the injured employee has reached maximum medical improvement, the course of the medical care should be managed. Initially, a triage nurse should arrange the immediate medical care and any subsequent medical appointments. If the injury is severe, and the employee is going to be off work, a nurse case manager should take over the coordination and arrangement of medical care.

 

 

Alternatives to Insurance:

 

Larger employers should discuss alternatives with their brokers. Instead of a standard workers’ compensation insurer, large employers should explore the possibilities of setting up their own pure captive insurance company, renting a captive, joining a group captive, joining a pool, joining a risk retention group, joining a purchase group (Texas only) or starting a large deductible program. Each of these alternatives has pluses and minuses, so please research each carefully.

 

For more information on how you can fight back against another rate increase, please give us a call. We will be glad to discuss your specific needs and assist you.

 

 

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

 

©2013 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.


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

How The Alternative Market Can Reduce Your Workers Comp Costs

 

What is the Alternative Market?
 
The Alternative Market or Alternative Risk Transfers (ARTs) are insurance programs that typically keep some part of the risk instead of transferring all of the risk as in a “traditional” insurance policy. The Alternative Market has various types of programs like:
 
·             Self-insurance
 
·             Captives
 
·             Risk Retention and Risk Purchasing Groups (RRGs)
 
·             Rent-A-Captives
 
·             Sponsored Captives
 
·             Insurance pools
 
·             Association Groups
 
 
The purpose of all ART programs is to recoup or retain the underwriting profit. Companies that invest in loss control and maintain tight controls on their claims often have lower losses. In the traditional market, the insurance carrier collects a premium and uses it to pay the losses of the good and the bad companies.
 
 
Self-insurance
 
Some employers self-insure through insurance pools. They set aside funds in anticipation of workers' compensation claims instead of buying insurance. This is a cost-saving method for safety-oriented firms. In states where this is allowed, many large employers self-insure. Many small businesses form groups to insure themselves and decrease risks.

 
Captives
This is an insurance company that is controlled by its owners. A captive usually insures businesses that are related to it through common ownership. The company pays premiums based on its own performance, not the industry’s performance. A captive's insured’s are its shareholders that control underwriting policies, price risks, set investment policies and direct the company. 

 

 
 
Risk Retention and Risk Purchasing Groups (RRGs)
 
These are captives that write only liability coverage.  An RRG with a federal charter can write liability coverage in any state where it is registered without having to become a licensed carrier in each state or use a fronting company. This can reduce the costs of crossing state boundaries. Some states allow reciprocal risk retention groups, which are an unincorporated association of individuals or entities that exchange insurance contracts through an attorney-in-fact, which acts as an agent or manager. In a reciprocal, profits and losses are allocated back to each member. The income and related income tax reverts back to the members. This can be a tax advantage to groups where the members are non-profit companies.
 
 
Rent-A-Captives
 
These are popular with medium-sized companies. Here the policyholder is insured by a captive without owning it. A captive rents its capital, surplus, and license to the policyholder and usually provides administrative services.
 
 
Sponsored Captives
 
These are a type of rent-a-captive that is not created by its insureds, who have no control or ownership in the captive. Sponsored captives allow businesses to insure their own risks without establishing their own captive.
 
 
Insurance pools
 
These are joint underwriting operations where the participants assume a predetermined and fixed interest in all business written.
 
 
Association Groups
 
An association captive is owned by members of a common industry or trade. Participation is limited to members of the association.
 
Summary
 

Companies that participate in ART programs, especially captives that own their own insurance company, realize more control by paying only the claims they incurred and not the losses of bad companies.  Profits on invested surplus (the underwriting profit) go to the group’s members or captive owner rather than an insurance company.

 

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 author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Workplace Wellness and Recovery May Improve Productivity and Ensure Business Survival

 
A recent article titled Fuse Workplace Wellness Programs With Recovery, by Lisa Firestone, helps employers in this economy by explaining that maximum efficiency and productivity is essential for continued growth and even survival. Firestone is president and founder of Managed Care Advisors Inc., a woman-owned, employee benefits and disability management consulting and full service workers’ compensation case management company.
 
 
Firestone writes that more and more employers are engaging in worksite wellness programs that lower health care costs. “In fact, according to American Journal of Health Promotion every $1 invested in a corporate wellness program returns $4 in reduced health care costs and $5 in reduced absenteeism over a period of three to five years,” she writes. [WCx]
 
 
The complete article, which can be found here, indicates by targeting and improving employee population health risk factors, worksite wellness programs reduce absenteeism, increase productivity, reduce injuries and improve employee morale and loyalty. Though most wellness initiatives have been focused on reducing risk factors in a working population with the goal of lowering costs and improving productivity, Firestone writes “leaving out those employees who may very well be at greatest risk for long-term disability and significant and ongoing health care expenditures – workers’ compensation claimants. I am in no way downplaying the importance of prevention, or the advantages of a population-based worksite wellness program, in fact, quite the opposite. What I am suggesting is that there is great benefit to be gained for organizations that broaden the scope and focus of their wellness programs to include individuals recovering from work injuries or illnesses.”
 
 
Firestone includes these other points in her article:
1. Why not target the recovery period after a work-related injury as an opportune time to introduce or maintain wellness activities?
2. It is essential that the wellness program adapt with the employee and provide programming and support to meet the employee.
3. If your health insurance and work comp programs are handled separately try to get the two departments to work together to institute a wellness program.
4. There are significant resources and information readily available to assist in the implementation and management of effective wellness initiatives.[WCx]
 
 
Firestone has been involved in the health care industry for more than 30 years gaining recognition for her expertise in the areas of employee benefit program development, evaluation, and strategic planning. She can be reached at lfirestone@managedcareadvisors.com  www.MCACares.com

 

 

 

 

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 author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Physical and Occupational Therapy Management Basics Explained

 
 

What is therapy management?

Therapy management is a system aimed at controlling costs of physical medicine such as but not limited to physical and occupational therapy. An entity utilizing clinical and non clinical personnel; contracts with a network of skilled therapy clinicians and actively arranges for and coordinates the most appropriate physical medicine services for patients and employers alike. To learn more about the topic, Roundtable sat down with Greg D'Ambrosio, vice president of client services for the Network Synergy Group to give us an insight to the world of therapy management.
 
 

Why do therapy services need to be managed?

Physical and occupational therapy is no different then other medical costs that have skyrocketed over recent years. Proper management of therapy services can ensure appropriate and medical necessary treatment by expediting scheduling, monitoring patient care and compliance, reimbursing network providers fairly and timely. The result should be a positive outcome and experience for the payor and patient. Better outcomes result in lower costs.

 

Is this a new concept?

Conceptually, managed care arrangements date back to the early 1920s when insurance companies began using prepaid insurance arrangements for specific employee populations. However, the term managed care became popular in the 1980s. The need and development for physical therapy management had its origins in the following decade around mid- to late 1990s.
 

 

How does this help reduce my workers compensation costs?

Physical and occupational therapy is often the last form of treatment prior to a claimant receiving a disability status, reaching maximum medical improvement and returning to work. Therefore, since workers’ compensation is predicated on either restoring the claimants functional capacity prior to the injury and/or returning the claimant back to work, a therapy management program that ensures medically necessary and appropriate care is critical in reducing the overall medical and indemnity costs of a claim.
 


Who should be using therapy management?

Any entity that has a stake and interest in reducing their overall cost of their workers’ compensation claims should be using a therapy management program. This would include self insured employers, insurance carriers, captives and pool arrangements, municipalities, public entities and third party administrators.

 

Why is it advantageous?

Other than the obvious reduction in overall claims costs, the management company should alleviate many of the administrative burdens of an adjuster and or nurse case manager that would have to manage therapy on a case- by-case basis. This allows them to focus on other aspects of a claim.
 

 

Can all companies use this type of service?

There are no restrictions as to what type of companies can use this service. Many companies use this service simply by contracting with their insurance carrier or third party administrator.
 
 

Are there times it might not be beneficial to use such a service?

In workers’ compensation there are always unusual circumstances whereby an adjuster may have a need to manage therapy themselves. However, an overwhelming majority of claims are handled by a therapy management company.
 
 

How does an employer find a good therapy management company?

However, management companies vary significantly in their approach to how therapy is managed. Insurance carriers and TPA’s (third-party administrators) often are affiliated with a therapy management company, but that does not necessarily mean it is the best fit for the client. With the proliferation of the internet and maturation of the industry it would be easy to locate a therapy management company. I would search specific workers compensation sites and blogs such as reduceyourworkerscomp.com to obtain information. Organizations should also identify the best fit for them by speaking with others references in similar industries and positions. Conferences and associations offer great opportunities to speak with peers to obtain information.
 
 

What should a company do if their TPA or insurance company objects to using a therapy management service?

This is simple — ask “Why?” Large employers with high deductibles that assume all or most of their workers’ compensation risk should be able to dictate which service providers are the most appropriate for them. Transparency is critical. A company should ask, “Does the carrier and or TPA somehow benefit in the arrangement by using a therapy management company they have contracted with?” A company should also ensure contractually that they are not limited in selecting service providers when negotiating their workers compensation program or TPA services.
 
 

As a service provider what are the biggest obstacles you encounter with implementation of a new client?

Adjusters are busy and even more so in today’s environment. Scheduling time to fit into adjusters’ schedules to properly implement a program is our biggest challenge. Although not as effective as in person meeting, video conferencing, webinars, and conference calls can help alleviate this.
 
 

As a client, how will I determine the return on my investment?

A client should always focus on outcomes. It is up to each individual client to define what a good outcome is. Patient satisfaction, number of visits per treatment, the duration of care, and the functional capacity status of the patient upon discharge are just a few outcome driven metrics. In addition, there are many overlooked costs associated with therapy management such as bill review and percent of savings charges that need to be contemplated when evaluating the cost benefit of a therapy management program. The customer has to place a value on outcomes that meet or exceed their expectation. Then the analysis becomes simple. If outcomes are meeting or exceeding expectations at what the client can define as a fair price, then the return on investment is a positive one.
 
 

 

 

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 author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Greg D’Ambrosio joined Network Synergy Group in 2010 as Vice President of Client Services.  His responsibilities include directing client training and ensuring NSG's therapy management programs are delivered with ease, efficiency and support. Greg has over 20 years of experience in the insurance and PEO industries.  Greg has also been a featured speaker for the NAPEO and Florida Workers' Compensation conferences. He can be reached at: gdambrosio@network-synergy.com or (888) 533-0727 x. 160.

Pat Merrill joined NSG as Vice President of Network Development and Provider Relations in 2011. Pat is currently responsible for the strategic and operational leadership of NSG's Network Development and Provider Relations Departments. She has over 25 years of experience working with large employers; providing solutions for their occupational medicine and workers’ compensation injury care needs.  Pat is a member of the Southern Association of Workers’ Compensation (SAWCA) and the Georgia Self Insured Association. She can be reached at: pmerrill@network-synergy.com or  (813) 207-0727 x. 120 or (404) 314-3225 (c).
 

WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Amaxx Details 2012 Workers Compensation Management Program Updates

Workers’  Compensation Costs Can Be Reduced by Implementing Operational Best Practices: Learn How With This New Guidebook.
 
A company that wants to implement a new workers compensation program or revamp an existing system will find this book helpful. Maybe your company has recently expanded and you realize the need to train a workers compensation manager or regional coordinators how to hold down compensation costs. Whatever your need, here is the answer: Workers Compensation Management Program: Reduce Workers’ Comp Costs 20%-50%.
 
 
Used by more than 150 firms across the country, this is THE book to help every employer develop a more effective workers compensation program to reduce workers compensation costs. It is based on field research and decades of experience in workers compensation from all aspects of the business. Best practices are described in detail for each person in the injury process.
 
 
This easy-to-read manual has been updated for 2012. It now includes:
 
An index for quick topic look-up so you can view a term or a procedure and see all relevant references.
 
NEW – Workers Compensation Basics
Purpose of Workers Compensation
Who Pays for Workers Compensation?
Parties Involved in Workers Compensation
Benefits for the Employer
Independent Contractors
Benefits for the Employee
Injuries Covered
Types of Workers Compensation
How Losses are Categorized
How Losses are Reported
Calculating Your Premium
How Mod Effects Your Premium
Good/Bad Mod Example
Five Ways to Reduce Your Mod
 
NEW – Fundamentals of Cost Containment
Reasons Workers Compensation Costs are High
Who is in Charge?
Work Ability Form Properties
Who is Responsible for Managing Workers Compensation Claims?
Who is Responsible for Managing Workers Compensation Process?
Hidden (Indirect) Costs of Workers Compensation
Additional Costs
Calculating WC Costs
External Obstacles to Cost Control
Internal Obstacles to Cost Control
 
NEW – Working with Your Adjusters or TPA
Account Handling Instructions
MD Participation
 
NEW- Reporting a Claim
Critical Issues
Essential Intake Considerations
Nurse Triage
 
NEW- Directing Medical Care
Occupational Health Clinics
Remote Health Services
Directing Medical Care in California
 
NEW- Return to Work
What to Include in a Transitional Duty Policy
Non-Profit, Volunteer or Charitable Positions
Employees Who Never Return to Work
Coordinating WC with Federal and State Leave Statutes
 
NEW – Other Indemnity Cost Containment Services
Telephonic Disability Intervention
 
NEW – Medical Cost Containment
URAC Certification
Mental Health RNs
Chronic Pain Programs
An Aging Workforce
At Home Recovery Services
Medical Fee Schedules
Fee Schedule Coding
ICD-9 and CPT Codes
 

NEW- Physical Therapy and Physical Rehabilitation

Differences between Physical Rehabilitation Programs
Pharmacy Benefits Management Program
Authorized Drug Formulary
Toxicology Screening
 
NEW – Fighting Fraud and Abuse
Medical Terminology Used to Identify Malingering
Reviewing Investigation Reports and Videos
Avoid good Day/Bad Day Syndrome
 
NEW – Claims Resolution and Settlements
Conditional Payment and Final Demand
Pharmacy Component of MSA
California Settlement Process
 
 
A 183-page guide covering how to assess your workers compensation program, design program materials, roll out a program to the organization, and monitor and manage the program once implemented.
 
 
Written by a national expert on workers compensation cost containment with over 25 years experience helping companies reduce their losses 20% to 50%.
 
 
T. Ronca, a workers’ compensation defense attorney from Long Island, NY, said the book is an invaluable desk reference. “It is one of the tools that should never be out of reach for a risk manager. Direct employer involvement with claims in the first weeks is the difference between success and failure. This manual will guide the conscientious employer through the pitfalls,” Ronca said.
 
 
What’s more, the book can be delivered with your company logo on the cover and a full-color ad for your company on the back cover. 

Take it out to the field. Text tabs are available to put on each chapter and it is ready to go as your company training manual. All you will have to do is customize the Training Agenda that is in Part I of the book.

 
 
Included in the manual are topics such as: Return to work and transitional duty, claim reporting, employee communications, controlling fraud and abuse, directing medical care, medical cost containment solutions, post injury response procedures, reporting procedures, working with your carrier and third party administrator. There is information about physical therapy, pharmacy benefits management programs, training supervisors and gaining management commitment. It also contains concepts of claim settlement and resolution as well as safety and loss control. New areas are identified above.
 
 
There are 5 sample worksheets in the manual to help organize an efficient workers’ compensation program. These include: timetable for implementation, the injury coordinator job description, and several sample roll-out letters. We recently received a terrific phone call from a third-party administration firm saying how the manual provided an organized way to train clients at loss prevention and has helped their clients put "layers of better WC management" in place. Everyone benefited.
 
 
One large distribution firm wrote to us to say the chapter on safety and loss control led to a company-wide safety change that only cost a few hundred dollars but prevented a specific type of injury that had been draining its budget, says Rebecca Shafer, Esq., President of Amaxx Risk Solution, Inc. who authors the book. Shafer is a national expert on workers’ compensation cost containment with more than 25 years of industry experience helping many companies reduce their losses 20-50%.
 
 
When you order your copy of Manage your Workers’ Compensation Program from Advisen at http://corner.advisen.com/wcbooks, the 183-page guidebook shows how to assess your program, design program materials, roll-out a program to the organization, and monitor and manage the program once implemented.
 
 
The workbook is also available with a customized front and back cover for bulk purchases. Discounted rates apply to bulk orders.
 
 
One company said, "After reading the manual, we took a look at past workers comp practices and saw that every department did things differently. Manage Your Workers’' Compensation Program 2012 gave us the guidance we needed to standardize our workers’ compensation programs across the country. It was like a pre-prepared lesson plan," according to the risk manager.
 
 
A regional hospital in North Dakota wrote that, "Our small company expanded rapidly and we actually didn’t have any official workers’ compensation program in place. This manual gave us step-by-step procedures from the first meetings with management to monitoring the final program. Buying and reading the book was almost like hiring another employee – one who was an expert in workers’ compensation."
 
 
Who Uses the Workers’ Compensation Book?
Risk Managers and Workers’ Comp Managers find it useful learning about the cost containment niche and use it for themselves and to bringing new team members up to speed very quickly. The book becomes a “lesson plan” tool.
 
 
Safety Directors use the book to train supervisors in workers’ compensation claims management. They learn more about their area of responsibility — post loss cost containment — adding to their overall knowledge. They also learn what to do after an injury and what steps are supposed to take place during the first 24 hours.
 
 
Brokers use it for prospects, as well as, to learn about specific aspects of cost containment, passing their knowledge on to their clients. For example, when discussing how to develop a return-to-work program and a client asks about, “off-site return-to-work programs,” the broker quickly finds the relevant section in the book, reviews it and passes the answer on to the client, along with a copy of the cost containment book with the broker’s logo.
 
 
Adjusters use the book to gain a better understanding of the employer’s perspective. Adjusters also want to learn more about cost containment to add to their overall workers’ compensation knowledge in order to grow their careers and stay abreast of new services.
 
 
Account Producers give the book to prospects during formal presentations to illustrate their company is on top of the workers’ compensation industry. The book makes an excellent client gift.
 
 
Vendors such as doctors, physical therapy networks, occupational clinics and medical management firms learn how their service might fit into the workers’ compensation marketplace, what is important to employers, and what they look for in medical services to enable the vendors to enter the workers’ compensation marketplace.
 
 
The manual is a cost-cutting tool to learn more about systematic and operational techniques for reducing workers compensation costs.

 
 
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 author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
 
 
2012 NEW WORKERS COMP MANAGEMENT GUIDEBOOK:  www.WCManual.com
 
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php
 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Saskatchewan WCB Proposes Modest Drop in 2012 Rates

The Saskatchewan WCB recently announced its plan for a modest reduction in the average employer premium for 2012.

 
The 2012 average premium will be $1.60 per hundred dollars of payroll, down one cent from 2011. According to the Board, stable claim costs and injury frequencies contributed to the WCB’s decision. The proposed 2012 premium is the lowest average premium rate in a decade, and nearly 22 per cent lower than the 10-year high of $2.05 in 2004. (WCxKit)
 
 
Premiums for 28,071 employers stay the same or are lower. The average decrease is 5.3 per cent; the range is 1.0 to 21 percent. According to the WCB, 14,115 employers pay higher premium rates next year, as a result of their claims experience. The average increase is 5.1 percent; the range is 1.0 to 17.8 percent.
 
 
It is expected Saskatchewan will have the fourth lowest average employer premium in Canada for 2012.
 
 
Peter Federko, the WCB’s chief executive officer, said that recent investment market volatility did not impact the decision on rates. A new funding policy directs that only realized gains and losses – that is, gains and losses from the sale of investments – are used to determine the WCB’s funded position.
 
 
According to Federko, “As required, the WCB has adopted the new international financial reporting standards. The new policy recognizes this financial statement reporting requirement and brings more stability to our calculations, and that includes calculating our employer premium rates.”
 
 
The province has seen an almost 40 percent drop in the workplace injury rate since 2002. (WCxKit)
 
 

Officials credit business owners and Saskatchewan’s working men and women for the huge shift towards safer workplaces, adding that, “workplace safety is the surest way for an employer to bring down WCB costs. It’s a management practice with paybacks for everyone: employers, workers, families and neighborhoods all benefit when we go home safely from work.”


Author Robert Elliott
, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
 

Our 2012 WORKERS COMP BOOK is HERE!  www.WCManual.com
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com

Five Smart Work Comp Moves for NY Employers

The average active measures used by an employer on a New York comp claim consist of filling out the three most common forms (C-2, C-11 and C-240) and little else, unless they are called to testify.
 
 
Employers are rarely asked to do more. But doing more lowers costs, reduces litigation, prevents fraudulent claims and gets the proper benefits faster to the honest workers.   (WCxKit)
 
 
There are many things an employer can do, but the five most basic are:
 
1.       Have a plan for dealing with the worker, starting as soon as a report of injury is received
 
2.       Know how to fully complete the first report (C-2) and know what additional document should be attached to the C-2 and forwarded to all parties.
 
3.       Have a plan for a return to work (RTW) meeting with an employee out of work due to a work related (or allegedly work related) injury.
 
4.       Have a plan for communicating with the law firm that will be handling the comp hearings for the carrier.
 
5.       Know how to detect and make inquiries about possibly fraudulent activity on the work comp claims.
 
 
There are many other things that an employer can do, but the above are indispensably important.
 
 
A full description of how the above five can be carried out will vary from employer to employer but the basic measures will serve the following purposes:
 
 
1. Dealing with the worker.
 
Many claims that are filed are due to improper understanding of comp by the employee, or poor leadership by the employer. A surprising number of potential claims are never pursued with proper employer handling. This is called the post injury process, by cost containment experts such as Rebecca Shafer, and should be a tightly controlled process of each step that takes place after an injury. Of course, the process must be in place before the injury occurs, so planning ahead is critical.
 
 
2. Completing and documenting the first report (C-2).
 
A C-2 form must be filed for all reports of an injury involving more than first aid. However, much more information is usually required for proper handling. That can only be put into the WCB’s, or the carrier’s, file if additional documents are attached. The C-2 form simply does not have enough space to properly report for all claims. Never leave spaces blank because that gives the other side an opportunity to provide such information, and that might not be good for the employer.
 
 
3. A return to work (RTW) meeting.
 
In the past, return to work discussions rarely occurred until after a major claim was settled and closed. That, however, is far too late to achieve positive results. A return to work meeting should be held with the worker no later than 6-9 months after the date of accident and ALWAYS before the carrier makes a settlement offer for a serious claim.
 
 
4. Communicating with the carrier selected law firm.
 
If there are hearings, and most claims have hearings, the employer will be represented by a law firm selected by the carrier. In NY, the law firm represents the employer, not the carrier, but that is frequently forgotten and the employer then loses most of its opportunities to engage in a useful way.
 
 
The employer should always know who is representing their company and should communicate frequently.
 
 
5. Being active in reporting and suppressing fraud.
 
Most information necessary to defeat a pattern of fraud will come from the employer’s files. Employers frequently suspect fraud, but few are trained in how to detect it and defeat it. Anti-fraud measures require a certain amount of special training to be effective.   (WCxKit)
 
 
An employer who incorporates the above into its workers comp plan will see a dramatic decrease in comp costs. The measures do not cost much and do not require much effort, with proper training.
 
 
Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

WORKERS COMP MANAGEMENT BOOK:  www.WCManual.com
 
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact  Info@ReduceYourWorkersComp.com.

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