16 Point Checklist To Determine If You Need A Workers’ Comp Claim Audit

16 Point Checklist To Determine If You Need A Workers' Comp Claim AuditSelf-insured employers can have a good safety program, an established return-to-work program and knowledgeable nurse case managers, and still pay way too much on their workers’ compensation claims.  Ineffective claims management can wipe out most or all of the cost savings achieved through your efforts to control cost.  Whether you have your own claims office, or have a third party administrator (TPA) handling your workers’ compensation claims, poor claims handling will always result in higher claims costs.

 

 

Need to Know If Following Best Practices

 

The challenge for the risk manager is to know whether or not the work comp claims are being handled properly.  The risk manager can personally be involved in each claim for compliance with the Best Practices for Workers’ Compensation claims guidelines, but that defeats the purpose of having company claims adjusters or a TPA if the risk manager has to direct all the work on the claims.

 

An alternative approach is to have the claims supervisor or claims manager review each claim file for proper claims handling, but that often results in minimal improvement.  The claims supervisor or claims manager has a vested interest in not pointing out what could be construed as their failure to properly manage the claim adjusters.

 

 

Determine If You Need An Independent Claims Audit

 

The best solution to determine the quality of the claims handling is to bring in an independent claims auditor.  The independent claims auditor has no conflict of interest when reviewing the claim files and can provide an unbiased evaluation of the quality of your claims handling.  Here is a checklist to determine if you need a claims quality audit.

 

[  ]     You have noticed deviations from your Best Practices guidelines

 

[  ]     You have noticed gaps in the investigation of claims

 

[  ]     Information that should have been known during the initial investigation of the claim turns up later in the life of the claim

 

[  ]     The adjusters are not staying current on their diary system

 

[  ]     You have received an inquiry from the Industrial Commission, Work Comp Board, or Insurance Commissioner’s office

 

[  ]     You have received complaint calls from employees or from the employees’ supervisors or managers

 

[  ]     Your claim cost is increasing faster than the rate of inflation

 

[  ]     The average age of your claims is increasing

 

[  ]     Your claims are open longer on average than your industry’ average

 

[  ]     Your loss run contains errors on loss location, injury description, type of claims

 

[  ]     Your claim reserves are being stair-stepped (many reserve changes on one file)

 

[  ]     Your actuary’s recommended reserves differ significantly from the reserve on the files

 

[  ]     You have noticed significant reserve increases right before claim settlement

 

[  ]     You have noticed missed subrogation opportunities

 

[  ]     You have noticed experienced adjusters being replaced with adjuster trainees or significant personnel turnover in the claims office

 

[  ]     The adjusters have high caseloads

 

 

A Claim Audit Is Recommended If You Checked One or More Above

 

If you checked one of the above categories you should consider an independent claim file audit.  A claim quality audit is recommended if you have checked two or more of the above categories.

 

 

 

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.

 

 

Proper Claim Reporting Parameters for Self-Insured Employers

Proper Claim Reporting Parameters for Self-Insured EmployersSelf-insured employers (SIE) for workers compensation take on the role of claims management in exchange for the cost savings of self-insurance. Whether you elect to self-handle all of your workers’ compensation claims or to hire an independent third party administrator (TPA), you need to be able to verify claims are handled properly. Rather than reviewing the adjuster’s every activity and item of documentation, it is more time efficient if the SIE claims manager requires the adjuster to submit written reports on all efforts to move the claim forward.

 

 

First Report of Injury

 

The initial report, (First Report) and subsequent reports, (Status Reports) are submitted on a predetermined frequency schedule. Most self-insured employers opt for the First Report submission within 14-15 days of the report of the claim to the claims office. Sometimes a SIE elects to have the First Report submitted by the 30th day of the claim. Status reports are routinely placed on a 30-day reporting cycle, with older claims moved to a 60-day or even a 90-day reporting cycle, depending on the amount of activity on the claim.

 

 

For consistency in reporting and ease in reading the reports, the establishment of a reporting format is standard protocol. The First Report is all inclusive covering all aspects of the claim. In the initial report, the adjuster discusses each of these areas:

 

  1. Coverage– policy number where applicable, policy dates, applicable deductible for loss location.
  2. Accident description– date and time of accident, location within the insured’s premise or if away from the premise, where and why away from the premise.
  3. Insured location– includes the department or unit, the street address and the type of work performed at the location.
  4. Employee – name, age, social security number (edited if required by state law), how long employed, years experience in the current job, number of dependents (if the number of dependents might impact the indemnity rate), prior injuries including both workers comp and non-workers comp injuries, summary or recorded statement when appropriate.
  5. Jurisdiction– the state where the injury occurred or federal benefits.
  6. Investigation – a discussion of the investigation and all the applicable information learned about the accident.
  7. Compensability– why the claim is compensable or why it is being controverted.
  8. Reserves– the expected cost of the claim divided into indemnity benefits, medical benefits, and expenses for the anticipated life of the claim.
  9. Nature of injury– the treating physician’s diagnosis.
  10. Medical care – the treating physician’s prognosis, the expected recovery time, plus any information on surgeries, hospitalization, and projected length of recovery.
  11. Indemnity benefits– the average weekly wage, the indemnity benefit rate, the availability of light duty work, the estimated return-to-work date.
  12. Rehabilitation and Physical Therapy – the reasons for rehabilitation, whether it is physical or vocational, the length of rehabilitation and the facility or provider of the rehabilitation service.
  13. Subsequent injury fund – in states where available, the anticipated amount that can be recovered from the state fund.
  14. Subrogation – whether or not there is a third party from whom the cost of the claim can be recovered, and if so, the identity of the responsible third party, the theory of negligence, the preservation of evidence, the employee’s right of recovery vs. the employer’s right of recovery.
  15. Action Plan– steps to be taken to move the claim forward and the potential barriers to resolving the claim. These are often called Specific Plans of Action (SPOA). An SPOA is a “real” plan, not just the adjuster saying they are trying to close the claim…
  16. Litigation– if the claim is being contested, the name and address of the defense attorney, the issues in contention, the probable outcome of the claim, and the anticipated legal budget.
  17. Future report date – when the claim will be reported again.
  18. Attachments– any pertinent information to the claim the adjuster believes the claims manager may wish to review or all documents to the claim if the reporting guidelines dictate same.

Note: If Nurse Triage is employed, a report from the triage nurse will be sent to the carrier automatically before the claim is even made. This type of immediate medical advise often obviates the need for medical care at a clinic or prescription medication, and the injury may never turn into a “claim.” This is especially true if the injury is treated with “self care” by the employee .e.g. ice your lower back, etc.

 

Status Reports

Status Reports normally do not repeat all the information covered in First Reports. It is standard protocol for status reports to be limited to the topics that have changed or are the subject of change. For instance, the status reports would not repeat the information on coverage, accident description (unless new information becomes known), insured location, employee, jurisdiction, compensability, or the nature of injury. ASK for the “grades” of your adjusters. Yes, “grades,” some TPAs score or grade the adjusters files each month and post the grades on the bulletin board! You want the adjusters with high grades!  If the adjusters do not have grades above 80, they are sent for remedial training; if their score is > 85 they receive a cash bonus and if higher than 95 they receive a larger cash bonus in their paycheck that month.

 

However, the status reports usually restates the reserves and explains any changes in the reserves, the status of the indemnity benefits, the status of the medical care, the progress in rehabilitation (when applicable), the status of the subrogation claim or second injury fund claim (when applicable), the status of the litigation (when applicable), the action plan and the next report date.

 

In essence, proper claim reporting is designed to provide the claims management of the self-insured employer with all the information needed to properly oversee the workers comp claims, without the claims manager having to actually handle the claims

 

How To Get the Most From A Workers Compensation Claim File Audit

How To Get the Most From A Workers Compensation Claim File AuditSelf-insured employers, insurers, third party administrators, and government entities all use workers’ compensation claim quality audits to measure the performance of the claim adjusters, supervisors, and over-all claim staff. Common uses of claim file audits include measuring compliance with Best Practices, verifying the accuracy of reserves, identifying leakage, preventing fraud, and improving subrogation recoveries. As self-auditing often results in the inability to see the forest due to all the trees, claims management frequently turns to an outside independent claim file auditor to ensure unbiased and objective opinions in the claim audit.

 

 

Both Closed and Open Claims Files Should be Audited

 

Critics of claim file audits often complain that audits are retrospective, as the Best Practices have already been missed or the leakage has already occurred. The critics are correct if only closed files are being reviewed. However, when open claim files are audited, and the audit results are acted on promptly, substantial savings can be had.

 

When open workers’ compensation claims are reviewed, issues that have been missed can often can still be corrected. This is true because once the claim is paid and closed, it is too late to investigate compensability, arrange for an earlier return to work, provide proper medical management, adjust incorrect reserves or negotiate a better settlement.

 

A complete claim file audit not only provides a report on the correct or incorrectness of individual files, but also includes an aggregate report of the various claim handling procedures that have been reviewed. The most common way of tabulating or scoring an audit category is based on 100%. Usually, a score of 90% or higher is considered acceptable, and a score of 95% or higher is considered good. Hence, a score of 96% in the category of medical management would be good, but a score of 76% would indicate a lack of quality in medical management and the need for the adjuster to improve in this area.

 

When the claim file audit is limited to open files, the adjuster/supervisor/claims manager has the opportunity to correct files where an important part of proper claims handling has been missed. In the above theoretical example where the claims office scored 76% in the medical management category, the aspects of the medical management that have been missed could be completed. This would positively impact the overall medical cost of the claim and possibly also reducing the indemnity portion of the claim by getting the injured employee back to work faster.

 

 

Management Benefits By Identifying Weak Spots In Claims Handling

 

By identifying both individual files where claim handling errors occurred and by identifying claim handling categories where either an adjuster is weak or the entire claims office is weak, management benefits in several ways, including:

 

  • Management can focus training resources on specific issues, whether with a single claims adjuster or the entire claims office
  • Data provided can be used by claims management to support the need for procedural changes, additional personnel, or personnel restructuring
  • Reserving data can be used to verify the accuracy of, or the need to adjust coverage underwriting

 

By having an independent claim file audit, the self-insured employer, insurer, third-party administrator or government entity can use the information gathered to improve the overall quality of the claims handling, and in doing so, significantly impact the cost of workers’ compensation claims. For more information on how an independent claim file audit can improve claim quality and reduce the cost of claims, please contact us.

 

 

 

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.

Proper Claim Management Requires a Strategic Plan of Action

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

 

 

Best Practices Call for a Strategic Plan of Action

 

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

 

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

 

 

Initial Strategic Action Plan

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

Subsequent Strategic Action Plans

 

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

 

  • Reevaluation of the file reserves

 

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

 

  • Coordination of return to work full duty or restricted duty

 

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

 

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

 

  • Obtaining and evaluating the disability rating

 

  • Subsequent reports to insurers, self-insurers or other parties

 

  • Subsequent ISO filings

 

  • Completion of any additional state forms

 

  • Scheduling and obtaining a peer review or independent medical examination

 

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

 

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

 

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

 

  • Settlement of the claim

 

  • Obtaining all required waivers and/or releases

 

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

 

 

 

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

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©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.

 

 

 

Effective Workers’ Comp Claim Investigation Techniques

Effective Workers’ Comp Claim Investigation TechniquesMembers of the claims management team are called upon to investigate claims and make determinations of primary liability and the necessity of medical care and treatment.  This requires them to perform tasks on numerous occasions quickly and effectively.  It also includes the ability to be creative while cost-efficient.  Here are some tips to consider in order to succeed at this difficult task.

 

 

Obtain the First Report of Injury

 

The FROI contains important pieces of claims information that can be useful when starting an investigation on a claim.  While the information might not be accurate, it can lead to important information on the background of a claim.  Information to obtain from the FROI include:

 

  • Body parts injured during the incident;

 

  • Names and addresses of medical providers related to the work injury;

 

  • The mechanism of injury;

 

  • Location of the injury; and

 

  • Potential witnesses.

 

While the FROI is not necessarily accurate, it can be valuable for claim development purposes.  It can also assist when it comes to understanding inconsistencies in the claimant’s recorded statement and future deposition.

 

 

Other Accident or Injury Reports

 

In many instances, there are other accident or injury reports that are generated following a work injury. This can include reports from the owner of the premises at which the injury took place, reports from law enforcement and emergency medical service providers and other interested parties.  Information obtained from these reports can move a claim investigation forward in a cost-efficient manner as they are usually free to obtain.

 

Accident reports also contain additional information that is helpful to an investigation.  This includes photographs and videos of the incident.  Information received from these reports can be priceless, especially if they contain information that contradicts allegations made by the injured worker.

 

 

Recorded Statements of the Employee

 

Most jurisdictions allow the workers’ compensation insurance carrier to take a recorded statement of the employee following a work injury.  It is important to follow the applicable statutes or rules to preserve evidence for future use.  A well recorded statement should follow a script to ensure all important questions are asked.  A seasoned member of the claim management team will also learn how to probe for information in a friendly and courteous manner.  When taking a recorded statement, listen carefully to what is being said and ask probing questions.

 

 

Authorizations for Medical and Other Records

 

Although workers’ compensation claims investigations are generally excluded from state and federal health care privacy laws, it still remains important to obtain properly executed authorizations when requesting medical, employment and other records.

 

  • Medical: It is important to obtain a complete set of medical records for an injured party.  This should go beyond what is directly related to the work injury.  Obtaining a complete set of medical records can lead to other areas of investigation and allow your independent medical examiner to have a complete and accurate background of a claimant.

 

  • Employment: These records are used for a variety of reasons.  Not only will it serve as a source to calculate the employee’s average weekly wage, but it will also allow one to understand an employee’s transferable job skills better and identify areas of vocational limitation.

 

  • Industrial Commission: Records regarding prior workers’ compensation claims are generally stored at a state’s industrial commission.  These records include not only details of prior workers’ compensation claims, but the names of former employers and medical providers.

 

 

Other Sources of Investigation

 

There are countless other areas to investigate as part of any workers’ compensation claim.  Sources of research and investigation should include:

 

  • Social media: Checking to see public activity a claimant has on social media is a must. Be cautious as ethical and legal issues can arise when claims investigation break laws to trick someone into giving you access to their accounts.

 

  • Central Index Bureau Check: This is a clearinghouse where insurers and self-insured companies file reports of claims. It allows members to later search for information on prior injury claims based on one’s name and Social Security number.  Costs may apply for these searches.

 

  • Surveillance: This is another tool that can be used. However, there can be significant costs associated with the hiring of a private investigator to research background information on a claimant and take undercover video.

 

 

Conclusions

 

The modern workers’ compensation claim handler needs to be creative when it comes to investigating a claim.  Technology has provided them with numerous resources to obtain information quickly, and in a cost-effective manner.  Performing a diligent investigation can reduce program costs and limit claims litigation.

 

 

 

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.

Powerful Work Comp Claim Strategy Because You DO NOT Know Everything

You don’t know everything about workers’ compensation. You do not know everything about workers’ compensation. And neither do I. Hello. My name is Michael Stack, CEO of Amaxx. If you’re going to accept that statement, that no one really knows everything there is to know about workers’ compensation, then you can do very well with a concept that I’m going to be teaching today, which is the weekly claims roundtable.

 

 

Leverage Shared Knowledge to Drive Positive Outcomes

 

Workers’ comp could be very simple, but it could also be very complicated, particularly as you get into individual claims handling. The biopsychosocial factors, the additional risk factors, the environmental factors. All these complicated things that go into making us up as individuals, as humans, throw in an injury, throw in a whole bunch of different stakeholders, and you can have a very hairy and complicated claim and trying to figure out the exact best thing to do with that particular individual can often be a daunting task.

 

Let me tell you about this weekly claims roundtable. It is an extraordinarily effective system to partner with your claims handling team, to be able to tackle these very complicated claims and come up with a plan to properly handle them to create the best outcome at the lowest possible cost.

 

 

Weekly Claims Roundtable Agenda

 

Let me give you a real quick agenda and tell you exactly how this can work so that you can implement this strategy within your organization. Three things that you’re going to cover, and this is the basic agenda:

 

  • Basic claim information
  • Claim status
  • Action plan

 

This is your three-part agenda for your weekly claims roundtable. Discussion in each claim should last between five and 15 minutes, tapping into the expertise, tapping into the experience, tapping into the prospective of your claims handling team, which could include your employer, it certainly could include your insurance broker, your insurance adjuster, your claims handling account representative from that organization, it could be a medical advisor, it could be an attorney, it could be other relevant stakeholders as it makes sense. But that’s the basic … That’s the core group of individuals that are going to be meeting on a weekly basis to go over these claims, five to 15 minutes. Come prepared to knock these things out and talk about this action plan.

 

 

Share Ideas & Perspectives to Create Plan For Best Claim Outcome

 

Let’s review this agenda very quickly. Basics. What’s the basic claim information? What’s the name? What is the date of the injury? What type of injury? Where does this claim kind of currently stand? What is the status? Is this individual back to work? Are they not back to work? How many days have they missed? How many days have they been on modified duty? Do they have a surgery coming up? Are they going through physical therapy? Are they seeing a specialist? Whatever that current status is of where this claim currently stands. Then, finally, talking about the action plan. Based on where this thing currently stands, based on what’s going on in the claim, let’s discuss as a group, share ideas, share perspectives, share experiences, share knowledge to create the best possible action plan to create the best possible outcome.

 

Implement this weekly claims round table in your organization. Start small. Start with a handful of claims. Start with your most difficult claims and build from there. Because, remember, your work today in workers’ compensation, it can have a dramatic effect on your company’s bottom line. But it will have a dramatic impact on someone’s life. So, be great.

 

 

 

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.

10 Red Flags Indicating Need For Surveillance in Workers’ Comp

Surveillance Can Be Very Beneficial Tool for Workers Comp When Used ProperlyWhen fraud is suspected, or the injured employee appears to be malingering, surveillance by private investigators is often utilized to obtain information that can be used to move the workers’ compensation claim to a conclusion.   Surveillance properly conducted and documented can be very beneficial at settlement conferences, mediations, and hearings.

 

Surveillance is often used to:

 

  • Obtain photos or videos of the injured employee working either at another job or is working around the home performing yard work, home maintenance, car maintenance, etc.
  • Show the injured employee is not as disabled as claimed – for example, the injured employee uses a cane at each medical appointment but can go grocery shopping without the cane or other medical equipment.

 

The workers’ compensation claims adjuster should maintain an up to date knowledge of the status of the claim.  Surveillance is not a substitute for proper claims management.

 

 

10 Red Flags Indicating Need For Surveillance in Workers’ Comp

 

  • If the adjuster notes any red flags during the course of the claim, surveillance should be considered.  Red flags indicating surveillance could be beneficial include:
  • The injured employee is never at home when the adjuster calls
  • The injured employee develops new complaints and symptoms weeks or months after the initial accident
  • The length of recovery time is excessive for the nature or the extent of the injury
  • There are rumors the employee is working elsewhere
  • The employee is unwilling to attempt modified work/light work
  • The employee’s spouse/partner is also collecting disability income of some type
  • The physical therapy reports or the doctor office visit notes include comments that indicate the employee does not seem to be as injured as the employee claims
  • The employee is receiving an excessive amount of narcotics
  • If the adjuster has been properly working the claim and is up to date on the medical status of the claim, and knows the claimant is not malingering, surveillance is usually not justifiable if there are no red flags.

 

 

Need More than One Piece of Evidence to Help Prove Case

 

Unfortunately, surveillance often has a low “success ratio.”  This does not mean that surveillance was not justified, only that the surveillance did not occur at the same time the employee performed an activity that demonstrated the injury is not as bad as claimed.

 

When surveillance is successful, for example, the private investigator gets 2 hours of video of the claimant shoveling deep snow off his sidewalk, driveway and neighbors walkway, it makes it much easier to settle the claimant’s low back injury claim.  However, the adjuster should not act too quickly with the information obtained by surveillance.

 

When surveillance produces proof that the claimant is not injured as severely as claimed, further surveillance is needed.  One video of the injured employee working or walking without his cane is very much subject to the argument that the claimant “was having a good day,” and the video does not show the claimant spending the next week in bed after shoveling the snow.  To defeat the “one good day” rebuttal of the surveillance video, surveillance video or photos should be obtained on different days.

 

 

Share Videos with Defense Counsel

 

If defense counsel is involved in the claim, the video or photos should be shared with defense counsel.  A decision should be made as to when the surveillance documentation will be used in defense of the claim.  The information obtained through surveillance is normally subject to discovery.  Therefore, the adjuster and defense counsel should collaborate on the most productive time to make the information available to the employee and his/her attorney.

 

Surveillance companies are also utilized to perform civil and criminal background checks, obtain motor vehicle records, interview neighbors and friends to see if the employee has a history of prior medical issues related to the current injury claim, and obtain information on the employee’s educational and work background.

 

 

 

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.

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

 

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

 

 

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

 

 

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

 

 

 

Start Investigation Based on Facts & Circumstances Reported by Employer

 

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

 

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

 

 

Start Investigation Immediately

 

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

 

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

 

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

 

 

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

 

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

 

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

 

 

Assess Injured Workers’ Attitude

 

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

 

  1. The employer.
  2. The medical treatment.
  3. The early return to work.
  4. The benefits provided by workers comp.

 

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

 

 

Timely Investigation Allows Adjuster to Better Manage Claim

 

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

 

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

 

 

 

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

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

©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.

 

 

 

What Is A Workers’ Comp Vocational Consultant?

Vocational consultants are not needed on most of your worker’s compensation claims; just the severe claims. When an employee has a level of permanent partial disability, to the point that the impairment from the injury will prevent the employee from returning to work, a vocational consultant is required.

 

 

Vocational Consultant Evaluates Ability of Injured Employee to Work

 

A vocational consultant evaluates the ability of the injured employee to work and then assist the employee in finding employment within the physical limitations of the employee. The typical course of the vocational process is for the vocational consultant to perform a vocational assessment including vocational testing, perform a labor market analysis, a transferable skills analysis and assistance with job placement.

 

To access the injured employee’s ability to perform a different occupation, vocational testing is used. Testing to measure the employee’s educational achievement, aptitude, interests, and level of intelligence may be used to gauge what the employee’s skills are. These tests are the first steps in a vocational assessment for the employee.

 

The vocational assessment for each employee is done on an individualized basis. To make a complete evaluation of the injured employee’s abilities, the vocational consultant will:

 

  • Complete a detailed interview to obtain the employee’s background information on formal education, trade schools, prior work experiences, interests and hobbies

 

  • Based on the results of the detailed interview of the employee, a transferable skills analysis will be completed

 

  • Vocational testing to verify the level of the transferable skills the employee has will be completed

 

  • Vocational testing to identify other skill sets the employee has but did not express or disclose

 

 

Based on the results of the employee interview and the battery of tests administered to the employee, the vocational consultant assesses the employee’s educational level, skills, interests and abilities. This assessment will include:

 

  • Educational achievement

 

  • Vocational interest

 

  • Vocational function level

 

  • Aptitude/talent level

 

  • Intelligence level

 

  • Personality traits

 

 

Vocational Consultant Identifies Potential Jobs

 

The vocational consultant will analyze all the interview and testing information obtained about the employee and will complete what is known as a transferable skills analysis. Subsequently, the vocational consultant will identify occupations or jobs the employee will be able to perform at the level of permanent impairment the employee has using the transferable skills the employee has.

 

Before the use of computers, the vocational consultant had to manually review numerous (often hundreds) types of jobs to try to find one or more jobs the employee could perform. With the advent of computer programming, the injured employee’s physical limitations, prior training, and vocational testing results are compared to the requirements of thousands of job descriptions. The vocational consultant will obtain a listing of all the jobs the employee can perform with his physical limitations and existing abilities.

 

Utilizing the list of jobs the employee can perform with his impairment, the vocational consultant will complete a labor market survey to locate actual jobs the employee is capable of handling.

 

 

Vocation Consultant Continues Until New Work Is Found

 

While the identification of occupations/jobs the employee can perform is a big step forward, if there are no jobs available, the injured employee will continue to receive workers’ compensation indemnity benefits as he remains off work. The vocational consultant then becomes a career coach assisting the employee in locating jobs to apply for, providing guidance on how to interview for the jobs, and providing support and direction to the employee in the job search. The vocational consultant will continue to work with the employee until the employee is hired by a new employer.

 

 

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.

Five Factors to Review in Your Workers’ Comp Claim Files

While every workers’ compensation claim is unique, every claim contains certain key events and documents. The best practices established either by the insurer or the third party administrator creates a certain amount of uniformity in the claims.

 

When you review the workers’ comp claims of your employees, you will see established criteria in the handling of the claims. Each claim will contain information on:

 

  • Coverage
  • Contacts
  • Investigation
  • File Documents
  • Evaluation and Settlement

 

 

Coverage: 

 

The very first step the adjuster takes when handling a claim is the verification that there is coverage. This includes checking the policy number to be sure it is accurate; the policy dates to be sure the injury occurred during the time frame covered by the policy; the state(s) covered by the policy; and, any endorsements to the policy or any exclusions of coverage. If any aspect of the coverage verification is missing, the wise adjuster stops any further activity on the file until there is proof insurance covers the claim.

 

 

Contacts: 

 

Once the workers’ comp adjuster verifies there is insurance coverage in effect for the named insured, on the date of the injury, and in a location covered by the policy, the adjuster contacts all involved parties. Whether the adjuster contacts the injured employee first or the employer first depends on the nature and extent of the injury and the time frame of known events. The adjuster also contacts the medical provider’s office to obtain the initial medical treatment information, to provide information to the medical provider on billing for their services, and to provide the medical provider with information on the return to work policy of the employer. Any other parties who may impact the claim are also contacted; for example — witnesses on questionable or severe claims.

 

 

Investigation: 

 

Contact with all parties involved is the start of the claim investigation, but a proper investigation contains many other actions impacting the future outcome of the claim. Some of the investigation steps include:

 

  • A comparison of the details of the accident as provided by the employer, the employee, the medical provider, and any witnesses. Any deviation in the information obtained from the various parties needs to be analyzed by the adjuster.
  • The filing of the Insurance Service Office inquiry to determine if the employee has made prior insurance claims, and if so, do they impact the present workers comp claim. For instance, the employee, who suffered a lower back strained in your claim, also had a lower back injury workers comp claim with a previous employer.
  • A determination if there is a third party responsible for the employee’s injury, and if so, the documentation needed to pursue a subrogation claim.
  • An analysis of the nature and extent of the employee’s injury, the medical treatment plan, and the prognosis for the employee’s recovery.
  • An analysis of the employee’s job duties, equipment used, the return to work restrictions from the medical provider and the modified duty information obtained from the employer to determine if a modified duty job is an option.
  • A determination as to the future course of action needed on the file, also known as an Action Plan.

 

 

File Documents: 

 

Every claim file has basic claim documents to support the claim and the activity taken on the claim. Depending on the extent of the injury, the file may have additional documentation that might not be found in a simple injury claim. The documents you may see in the claim file include:

 

  • The Employer’s First Report of Injury (FROI).

 

  • The recorded statement summary of the employee and possibly the recorded statement summary of the employee’s supervisor and/or witnesses.

 

  • The required state forms filed with the governmental office enforcing the workers’ compensation statutes of the state.

 

  • The wage statement is showing the employee’s earnings during the required calculation period.

 

  • The Insurance Service Office report.

 

  • The medical records.

 

  • Vocational and/or rehabilitation reports.

 

  • Subrogation documentation.

 

  • Correspondence to and from defense counsel, correspondence to and from the employee’s attorney, and correspondence between defense counsel and the employee’s attorney.

 

  • Reserve worksheets used to calculate the cost of the claim.

 

  • File notes (a log of activities undertaken) making a record of every telephone call, piece of mail, e-mail, fax or other communication on the claim.

 

 

Evaluation and Settlement:

 

When the claim file has progressed to the point where the adjuster can start the evaluation process (usually when the employee has reached maximum medical improvement); there will either be a reserve worksheet or an evaluation worksheet establishing the financial exposure of the claim. The evaluation of the claim includes the compensability, the disability rating, the jurisdictional law, and any legal questions that need to be resolved. The file notes should describe the adjuster’s settlement discussions when they have taken place.

 

An essential part of risk management is to know as much as possible about the exposures your company faces. We recommend obtaining electronic access (on a read-only basis) to the insurer’s or third party administrator’s claim file. By knowing what is in your claim file, you can contribute any additional information benefiting the adjuster in bringing your employee’s workers’ comp claim to a satisfactory conclusion.

 

 

 

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.

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