The Problem with Wellness Programs and 11 Ways to Make them Work

Wellness Programs in Workers CompContent for this article was derived from a webinar presented through Risk & Insurance by

 

  • Marcos Iglesias, Chief Medical Officer, Senior Vice President, Broadspire;
  • Monica Manske Sr. Manager of Workers’ Compensation and Employee Safety, Rochester Regional Health.

 

Access the On-Demand Webinar here

 

 

Over the past few years we have heard it claimed that wellness programs can generate a 3 – 1 return on investment for employers. But many organizations that implement them become frustrated by the lack of significant – if any – benefits and may feel their money has been wasted.

 

Wellness programs are not a panacea. Some elements of typical wellness programs are questionable or even harmful, from a medical standpoint. Faced with high healthcare and workers’ compensation costs, organizations are seeking ways to help their employees and improve their bottom lines. Experts say with proper design, effort, time, and realistic expectations, employers can see positive impacts from wellness programs.

 

 

The Facts

 

The overall health of the average America is not ideal; “deplorable,” is how some would describe it. Chronic health conditions, which comprise 7 of the top 10 causes of death, are common, deadly and disabling – yet preventable. The Centers for Disease Control and Prevention says if we eliminated poor nutrition, sedentary lifestyles, and use of tobacco products, we could eliminate 80 percent of heart disease, stroke and diabetes, and 40 percent of all cancers. Improving the health and wellbeing of the employee population is far beyond the abilities of any single employer and will require massive changes in society.

 

But employers can take steps to help their employees make incremental improvements in their overall health and wellbeing. More than half of small employers and the vast majority of large employers are trying.

 

The problem comes when companies that undertake these efforts see no gain. One year into the program, it’s not unusual for companies to see no improvement in health outcomes or productivity and no difference in the number of sick days employees take.

 

One recent study showed the only difference after 12 months was that employees who were included in the program were overall happier than others. There were no measurable health changes, however. Another recent well-publicized study of employees at BJ’s Wholesale Warehouse found no reductions in healthcare costs and no difference in clinical measures after 18 months.

 

Dr. Marcos Iglesias, the chief medical officer for Broadspire, said some wellness programs include recommendations that don’t follow evidence-based medical guidelines. One he cited from the Midwest encouraged all employees to undergo a colonoscopy, which is not medically recommended for everyone, is expensive and unpleasant. Another suggested self-breast exams and testicular exams, which he said are also not advised or recommended for everyone. Iglesias said the frequency of preventive screenings in most wellness programs on the market do not follow medical evidence, and in some cases may do more harm than good.

 

Weight management programs, while well-intentioned, frequently advocate crash-dieting principles. Also, they may cause emotional harm by constantly reinforcing the message that the employee needs to lose weight or stop smoking.

 

The penalties for non-participation in the program or failing to meet certain clinical measures may be seen as coercive or punitive, especially for workers who cannot participate – the disabled and single parents, for example. According to Iglesias, employees who do not participate in wellness programs forfeit an average $670 per year.

 

 

How to Impact Employee Health

 

All this begs the question, what can employers do to impact the health and wellbeing of their employees?

 

The first step is to understand what a wellness program is and what elements to include, based on the organization. There are myriad definitions of what actually constitutes a ‘wellness program.’ Generally, it is a benefit to employees that focuses on lifestyle and prevention to help employees improve their health and/or stay healthy. It may include a variety of elements such as fitness activities, smoking cessation and weight loss programs, health assessments, disease management, nutritional guidance, and lunch and learn educational sessions, for example.

 

No two wellness programs are necessarily alike and the most effective ones evolve with changes in the organization. The webinar outlined a series of ‘musts’ in designing or improving wellness programs that can make a difference for organizations.

 

  1. Seek input from inside and outside the organization.
    1. Unless an organization is comprised of wellness experts, it can benefit from consultants who are brought in to provide input.
    2. A wellness program should be a benefit to all employees – not just those who are already-fit and healthy. Their needs and desires may be different. Creating a cross-functional team comprised of various employees can serve as a guide to the elements that should be included. Surveys can also be used to identify their needs and satisfaction levels, once the program has been implemented.
  2. Clearly define the goals of the program.
  3. Explore and determine the amount needed to be budgeted and human resource commitment.
  4. Find the right space.
    1. If onsite fitness will be included, an area needs to be designated.
    2. Additionally, there should be an area for educational services and preventive programs. It should be welcoming and attractive to employees and their families.
  5. Show compassion, care, and foresight for employees in the design and approach of the program. Consider the specific needs of all employees, including those with outside obligations that may prevent them from participating in after-hours programs.
  6. Continuously evaluate the program. Again, seek engagement of a cross-section of employees to determine how effective the program is.
  7. Make it a carrot, not a stick. Center the program on employees. Offer a variety of activities that meet their needs. That may involve expanded hours for certain programs, or allowing workers to use work hours to participate.
  8. Have realistic expectations. Acknowledge that it may not be able to move the needle toward optimal health and wellbeing for all employees, but that some improvement is a benefit to workers and the organization and that it will take time.

 

For existing programs that appear to be ineffective,

 

  1. Conduct a SWOT analysis. Collaborate with a cross-sectional team of employees to determine what is and is not working, and if any new needs have evolved; what, if any external forces are impacting the program.
  2. Identify what to measure. Looking to workers’ compensation costs to determine the program’s effectiveness may not make sense because of its long tail.
  3. Determine if there is the appropriate amount of HR support for the program, since these are often add-ons and, therefore, not administered by a designated person.

 

 

Conclusion

 

The idea of a wellness program should not be to create wellness superstars but to impact workers’ overall health. Organizations that carefully consider the needs and desires of their workforces spend time properly developing the program, and continuously evaluate and tweak it may see some benefits to their workers and bottom lines.

 

Author:

 

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: http://blog.reduceyourworkerscomp.com/

 

Contributor:

 

Dr. Marco IiglesiasDr. Marcos Iglesias is senior vice president and chief medical officer of Crawford & Company’s global TPA, Broadspire. He has more than 25 years of experience in workers compensation, disability evaluation and treatment, and insurance leadership. In addition to being a physician, executive, national speaker and author, Iglesias is known for his compassion for patients, progressive and inspirational leadership, and integrated approach to injured worker care. Iglesias has a special interest in the prevention and mitigation of delayed recovery and disability. He is driven to help ill and injured workers live active, productive and fulfilling lives, which has led him to develop innovative, comprehensive disability management solutions that focus on returning workers to pre-injury function.

 

 

Monica ManskeMonica Manske, Sr. Manager of Workers’ Compensation & Employee Safety; Rochester Regional Health. Rochester Regional Health is the leading provider of comprehensive care for Western New York and the Finger Lakes region. From harnessing research and technology, to helping patients redefine the odds—we are leading the evolution of healthcare. It’s a commitment to health that exceeds expectations, reaching beyond the present into what’s next. Formed in 2014 with the joining of Rochester General and Unity Health systems, now, as one organization, Rochester Regional Health brings to its mission a broad spectrum of resources, an ability to advocate for better care, a commitment to innovation and an abiding dedication to caring for the community.

 

 

 

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

 

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

 

TPA Best Practices: Loss Reporting, Claim Assignment, Assignment Procedure, and Coverage Verification

TPA Best PracticesPicking the right third-party administrator (TPA) takes time.  Failure to pick the correct one can result in increased costs to a workers’ compensation program.  There are many important factors to consider beyond a TPA having the right price.   In the first part of this series, we looked at selecting a TPA on how they make initial contact with the injured employee and other parties following a work injury, and the methodology of their initial claim examination.  Additional factors that need to be considered also include a deeper dive into how losses are reported, claims are assigned, and coverage is verified.

 

 

Nothing Succeeds Like Success…

 

Leading TPA’s success comes from the division of labor into four areas:

 

  1. Loss Reporting: Prompt loss reporting is a key aspect when it comes to timely loss notification. Prompt reporting has three advantages:

 

  • Immediate contact with all parties involved in a workers’ compensation claim results in reduction of claimant representation, and litigation. Contact with all parties includes the employee, employer, witnesses, other interested stakeholders;

 

  • Prompt investigation: This includes several different items to consider immediately after a work injury.  This includes making sure the employee receives medical care and treatment, identifying witnesses, preserving physical evidence, and getting information about the injury from the employee; and

 

  • Reduction of overall cost per claim: This promotes efficiency in any program.

 

 

  1. Claim Assignment: An effective assignment process helps to ensure proper handling of claims at the appropriate technical level. The claim assignment process may include gathering additional information beyond what is available in the First Report of Injury.  It includes other aspects such as making sure the proper forms are filled with the state industrial commission and asking the right questions.  TPAs can practice a team approach by:

 

  • Distributing the work to the most appropriate level of technical expertise; and

 

  • Obtain the highest possible efficiency possible by effective internal communication, use of regular file reviews, and communication with the insured.

 

 

  1. The Assignment Procedure: Upon receipt of a First Report of Injury, a four-step process must be initiated to promote best in class services:

 

  • Supervisory evaluation of the First Report of Injury to ensure it is properly classified. Examples include “medical only claims,” claims involving lost time; and catastrophic injury claims;

 

  • Supervisory review and direction to the appropriate claim handler. Claim management teams should have specialized units for various claims and situations.  The examination of fraud can also take place in these units;

 

  • Creation of a Central Index Bureau referral for lost time claims and medical-only as required. It is important to know the claims history early in the process; and

 

  • Case management services should be utilized as appropriate. (It should also be noted the claim classification and technician assignment can change throughout the life of the claim if a significant change in complexity level occurs.

 

 

 

  1. Coverage Verification: This starts with confirmation of the client’s self-insured  It also must include verification of a client’s policy of insurance, limits of coverage, and effective dates.  Coverage issues are recognized, investigated, and addressed with the carrier before it becomes an issue after a work injury.

 

 

Conclusions

 

Best in class service starts with paying attention to details and ensuring all of the “i’s are dotted, and t’s are crossed.”  It also includes making sure that claim handlers work as a team and have the resources to success.  This results in claims that are handled in an effective manner.

 

 

 

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: http://blog.reduceyourworkerscomp.com/

 

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

 

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

TPA Best Practices: Initial, Ongoing Contacts, and Investigation

TPA Best PracticesThird-party administrators (TPA) perform many important functions in workers’ compensation claims.  It is important to make a reasoned decision when selecting the right TPA.  Failure to do so can result in a chaotic program that does not serve the best interests of the client, nor does it ensure the injured employee receives best in class service.

 

 

Keys to Effective Contact

 

A three-point contact system results in establishing and maintaining effective communication with all key parties to the claim to facilitate the investigation, claim control, and explanation of benefits.  This includes the following:

 

  • The claim handler will verbally contact the injured employee or attorney, if represented, the employer and the treating physician by the end of the next business day following receipt of the loss to the TPA;

 

  • When unable to reach an injured employee within one business day, a letter will be sent asking the injured employee to call;

 

  • The claim handler should make at least two attempts to contact the applicable parties within 3 days following receipt of the loss. A letter will be sent if unable to reach the parties; and

 

  • If contact cannot be achieved due to circumstances beyond the control of the claim handler, the claim file should be appropriately documented.

 

The contact process should continue throughout the life of a claim.  The following steps should be taken during a claim until it reaches its conclusion:

 

  1. Ongoing contacts with the employer, the injured employee and the medical provider;

 

  1. All contact efforts should be detailed in the claim notes. It is not written down contemporaneously, it did not happen;

 

  1. The claim handler should vary calling times to increase the chance of a successful contact;

 

  1. Significant changes in the injured employee’s condition should be documented in the claim notes; and

 

  1. If the injured employee is off work or on transitional duty, contact should be maintained, at maximum, every 30 days by the claim handler and/or medical case manager.

 

 

Medical-Only Claims

 

Medical only claims require contact just like any other claim.  Important steps that need to occur to be effective include:

 

  1. The medical claim analyst verbally contacts the employer by the end of the next business day following receipt of the loss report;

 

  1. The medical claim analyst sends letters to the employee and medical provider by the end of the next business day following receipt of the loss report; and

 

  1. On transitional duty claims with lost wages or a reduction in hours worked, three-point contact is verbal for all three contacts areas.

 

 

Effective Claims Investigation

 

Prompt and thorough investigation provides the framework for timely analysis of coverage, compensability decision, effective claim management, pursuit of cost containment opportunities, and the timely issuance of claim benefits.

 

  1. The scope of the investigation considers the type of accident, complexity of injury, and compensability issues. Investigation applies to all claims other than those designated as medical-only claims through the assignment process;

 

  1. Initial investigation is completed within 14-calendar days of receipt of the loss report. This TPA utilizes a proprietary claim advantage system, an evidence-based decision tree software tool, to support investigation and prioritize claims. The claim-handling process continues to re-evaluate the exposure as the case progresses and allows for the development of a goal-centered strategic plan of action; and

 

  1. Identification and investigation of potential subrogation or second-injury fund maximize recovery potential and reduces client/carrier loss cost. All claims with potential subrogation are handled by a claim handler who teams with licensed subrogation partner to evaluate and pursue recovery opportunities.

 

The TPA, as a matter of sound business practice, and in recognition of its public policy obligations, has a duty to identify and resist all fraudulent claims. When the evidence supports withholding benefits, such claims are promptly rejected, and aggressively defended.  When the evidence is inconclusive, the claim is promptly adjusted.

 

 

Conclusions

 

TPAs play an important role in the claim management process.  It is important to understand how a TPA communicates with parties following a work injury and investigates claims.  Examining these factors allows the insured to run an effective workers’ compensation program and provide better services to the injured employee, and all interested stakeholders.

 

 

 

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: http://blog.reduceyourworkerscomp.com/

 

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

 

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

Ensure Your Workers’ Comp Files Are Properly Documented

Workers Comp Files Are Properly DocumentedIt is important for members of the workers’ compensation claim management team to document their files properly.  If you do not have access to the electronic claims file, now is the time to ask. If not, it should be a condition of claim handling agreement with your third-party administrator (TPA) or insurer.

 

 

What is in a Properly Documented File?

 

Several items need to be in a properly documented claim file.  Important issues concerning coverage should be addressed at every step of the claim.  This should include:

 

  • The policy number;

 

  • The policy coverage period;

 

  • The states or jurisdictions covered by the policy;

 

  • Endorsements to the policy; and

 

  • Exclusions from the policy coverage.

 

If you have questions, be sure to ask – and demand prompt answers before the adjuster proceeds with the contacts and with the investigation.

 

 

Points of Contact Following a Work Injury

 

Prompt contact with all parties should be initiated immediately after the report of the claim.  Demand action is being taken on the same day a claim is received, or within 24 hours of the loss.  Points of contact should include, but not be limited to the following:

 

  • The employee;

 

  • The employer;

 

  • Any witnesses to the injury. All contact information for witnesses should be included as people change jobs over time; and

 

  • The medical provider(s), including ambulance services and law enforcement responding to a work injury.

 

The clock is ticking.  Steps taken during the initial phase of a claim are important.  Other important notes from a claim handler should be noted.  Important information to obtain should include:

 

  • Accident details as stated by the employee in the recorded statement, the employer’s version of the accident, and any witnesses’ version of the accident;

 

 

 

  • The current disability status of the employee, and projected return to work date;

 

 

  • Length of time the employee has worked for the employer;

 

  • The availability of modified duty for the employee not yet back to work;

 

  • Information on the nature of the injury, the treatment plan, diagnosis, and the prognosis;

 

  • Subjective information such as the employee’s attitude toward the employer, returning to work, and the quality of the medical treatment;

 

  • The explanation of benefits provided to the employee and the action plan information provided to the employee;

 

  • If there is an attorney representing the employee, if so, obtain the representation agreement.

 

 

Moving the Work Comp Claim Toward Settlement

 

Any time is the right time to move a workers’ compensation claim toward settlement.  Steps toward resolving the claim can also be taken after a work injury.  Part of this process includes obtaining documentation that is required to evaluate the claim and set reserves.  Documentation the claim handler needs can include:

 

 

  • Recorded statements of the employee, the employer, and any witnesses;

 

  • Medical authorizations. These will be needed to obtain a complete set of medical records regarding other conditions possibility contributing to the employee’s disability;

 

  • Wage records from the employer to calculating the average weekly wage;

 

  • Complete set of medical records. This may include past records, records related to the work injury, and for other records created in the future;

 

  • Other required state workers; compensation forms;

 

  • Police reports, EMS reports, OSHA reports, other governmental reports on an accident;

 

  • Independent medical evaluations (IME) or peer review;

 

  • Vocational and rehabilitation reports;

 

  • Subrogation documentation;

 

  • Second injury fund correspondence and/or documentation;

 

  • Correspondence to/from employee’s attorney;

 

  • Correspondence to/from defense counsel;

 

  • Workers’ Compensation Board/Industrial Commission correspondence and records; and

 

  • File notes on every telephone call, e-mail, or any other activity related to the file.

 

 

The claim file may also contain other important information on the claim handler’s efforts to resolve the claim, including:

 

  • Case evaluations and status reports regarding causation, legal defenses, and settlement;

 

  • Exposure analysis and case valuation;

 

  • A synopsis of any legal questions and the efforts to resolve those questions;

 

  • Information concerning the disability rating or the potential disability rating;

 

  • Legal analysis regarding a litigation strategy;

 

  • The “action plan” to bring the claim to a conclusion; and

 

  • A history of the settlement negotiations.

 

 

Conclusions

 

The claim handler’s file notes contain the main details of all file documentation received regarding a workers’ compensation claim.  It is important for employers to play an active role in every workers’ compensation claim and be engaged.  Failure to do so can prove to be costly and increase program costs.  The file documentation itself, whether maintained in the computer or by paper, must be complete and answer any questions you have about the file.

 

 

 

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 the founder & lead trainer of Amaxx Workers’ Comp Training Center.

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

The RED FLAGS of Workers Comp Fraud

workers compensation red flags of fraudA critical part of controlling workers’ compensation costs is to put into place solid investigation techniques.  No matter how severe or minor a workplace injury, each case needs to be reviewed to identify any fraudulent claims and take appropriate action.

 

When communicating with employees, make it clear that the company will:

 

 

  • Identify corrective measures

 

  • Watch for minor extensions of days out of work and outright fraudulent claims.

 

 

Review these Red Flags of Fraud and request an investigation if you suspect a claim is illegitimate or exaggerated.
 

 

Injured Worker Red Flags:

 

  • Injury reported late, to an attorney or to the state commission before reporting it to the employer.

 

  • Fails to attend weekly meetings.

 

 

  • Is never home when you phone, especially during regular workday hours.

 

  • Has only a postal box rather than a home address.

 

  • Misses doctor appointments.

 

  • Is known to perform seasonal activities, hobbies, or work.

 

  • Has moved out of town or out of state.

 

  • Disputes average weekly wage due to additional income.

 

  • Files for benefits in a state other than the main location.

 

  • Disputes information supplied by the employer on “First Report of Injury” notice.

 

  • Refuses to cooperate in claim investigation.

 

  • Has an unstable work history.

 

  • Has recently been terminated, demoted, or passed over for promotion.

 

  • Has a prior history of injury management or liability claims.

 

  • Makes excessive demands or is pressing for a quick settlement.

 

  • Carries little or no health insurance.

 

 

Medical Flags:

 

  • Medical reports are repetitive, indicating continuing, constant pain with conservative medical treatment

 

  • The word “disproportionate” is used in medical reports

 

  • The doctor mentions there is “facial grimacing”

 

  • Positive “Waddell Tests” (test for low back pain) are mentioned

 

 

Workplace Flags:

 

  • Employer experiencing labor difficulties (i.e., layoffs, strikes, walkouts).

 

  • Tips from fellow workers, friends, or relatives.

 

  • The insurance company wants to settle the claim for a considerable amount of money.

 

 

“Things” just don’t ADD UP! Trust your gut, and if something seems off, be sure to check it out.

 

 

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 the founder & lead trainer of Amaxx Workers’ Comp Training Center.

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

Defending Permanent Total Disability (PTD) Cases in Work Comp

Permanent total disabilityMembers of the claim management team face many challenges when it comes to dealing with injured employees seeking entitlement to permanent total disability (PTD) benefits.  Exposure for these types of claims is high.  It is important to be proactive on these claims in order to reduce costs in a workers’ compensation program.

 

 

The Aging Workforce and Workers’ Compensation

 

Notwithstanding the recent economic upturn and increasing wages, Americans continue to suffer from the effects of the Great Recession.  Proof of this can be found labor market statistics from the U.S. Department of Labor.  According to a recent survey, the “greying” of the workforce continues:

 

  • In 1994, 11.9% of the U.S. labor marker was 55 years old and older.

 

  • In 2014, this age group comprised 21.7%.

 

  • By 2024, people 55 years old and older will make up 24.8% of the labor market.

 

Older people miss work for longer periods of time compared to their younger counterparts.  On average, someone over the age of 55 will miss up to two weeks following an injury.  Those between the ages 20-24 will only miss four days.

 

 

Permanently and Totally Disabled Defined

 

According to Prof. Arthur Larson, someone is totally disabled when the “claimant has been able to earn occasional wages or perform certain kinds of gainful work does not necessarily rule out a finding of total disability or require that it be reduced to partial. The task is to phrase a rule delimitating the amount and character of work a man can be able to do without forfeiting his total disability status.”

 

Reduced into a general rule, courts in many jurisdictions will review the following factors when determining if someone qualifies for permanent total disability benefits:

 

  • Job Search: Employee’s in most jurisdictions are required to conduct a reasonable and diligent job search.  Examples of what is “reasonable and diligent” includes time spent looking for work, the location where one seeks employment, and the overall effort spent.

 

  • Cooperation with Vocational Rehabilitation Assistance: In many states, employees have access to a Qualified Rehabilitation Consultant (QRC) to assist in job search efforts.  A QRC performs a variety of roles when it comes to assisting an injured employee re-enter the workforce.

 

  • Earning Capacity: This factor takes into consideration the employee’s ability to work and earn a wage comparable to what they were making prior to the injury.  It is important to note an employee working in a limited capacity can be successful in their efforts to obtain permanent total disability benefits.

 

  • Refusal of Suitable Job Offer: The employee’s willingness to accept a job offer often comes down to concerns of whether they are able to perform a job offered by the employer.  When reviewing this factor, it is important to evaluate medical and vocational evidence to determine if the work offered by the employer is similar to what they were performing at the time of injury, and uses their training and experience in a manner that would advance the interests of all parties.

 

 

Other Defenses to Consider in Defending PTD Claims

 

There are other issues to consider when defending PTD claims.

 

  • Withdrawal from Labor Market: Employees seeking workers’ compensation benefits are required to stay active in the labor market until they demonstrate an inability to secure suitable gainful employment.  A withdrawal from the labor market can include a move to another geographic location that has fewer job opportunities, or an area where jobs pay lower wages.  It may be necessary to secure a vocational expert to successfully employ this defense.

 

  • Retirement Defense: Most states allow for the termination of PTD benefits when an employee retires.  This is often not a clear-cut distinction, and requires investigation.  This can include statements made by the employee as to how long they intended to work prior to their injury and application for Social Security retirement benefits, and receiving payments from a pension.

 

 

Conclusions

 

The aging workforce is driving members of the claim management team to be proactive when it comes to claims for permanent total disability (PTD) benefits.  This requires a complete investigation and determination as to the employee’s job search efforts, cooperation with their QRC, earning capacity, and refusal of a job offer.  Failure to take the necessary steps can add costs to a claim and reduce a program’s effectiveness.

 

 

 

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 the founder & lead trainer of Amaxx Workers’ Comp Training Center.

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

 

Selection Criteria for New Third Party Administrator (TPA)

third party administratorWhether you are just starting your self-insured claims program or have decided it is time for a switch to a new third party administrator (TPA), the selection of the new TPA is one of the most important decisions you can make in the administration of your self-insured program.

 

Employers switching TPAs often ask questions of potential new TPA partners that address the issues they have had with their current TPA. Employers frequently make the mistake of not asking the new potential TPA partner about areas where the current TPA performs well.

 

 

Areas that need to be explored with all potential TPAs before selecting the next TPA include:

 

  • Obtaining a copy of the TPA’s Best Practices to confirm their claim handling standards
  • Obtaining a list of the current clients and former clients to contact for their impression of the TPA’s abilities
  • Verifying the TPA has a claims office in each state where you have business locations
  • In large states, verifying the claims office(s) are located near your business locations
  • Verifying the TPA will assign dedicated adjusters to your account in areas where your claim volume is large enough to occupy all of one or more adjusters, and will assign a designated adjuster to handle all claims in locations where you have inadequate claim volume to keep one adjuster busy
  • Determining the claim reserving authority the adjusters will have
  • Determining the claim settlement authority the adjusters will have
  • Confirming the experience level of each of the dedicated or designated adjusters
  • Determining the frequency of the claim file reviews by the claim supervisors and the extent of the directions and guidance provided by the supervisors
  • Confirming the licensing of each adjuster and each claims office
  • Establishing the claims intake process
  • Establishing the maximum number of claims that will be assigned to each adjuster
  • Establishing who the legal defense firm(s) will be when defense counsel is needed
  • Establishing who the medical triage company will be
  • Establishing who the medical management company will be when medical management is needed
  • Establishing who the pharmacy benefit manager will be
  • Establishing who will provide the medical fee schedule reviews
  • Determining the capabilities of the claims management system used by the TPA
  • Determining whether your claims management system can be integrated with the claims management system of the TPA and who will be responsible for maintaining the systems integration
  • Verifying that the TPAs claim management system will be able to provide all the data and claim management reports needed to manage your claims programs
  • Determining who will be responsible for correction of data errors that occur
  • Determining the security measures the TPA will take to protect the confidentiality of your data and financial information
  • Determining the nature and extent of the financial data available on each claim file
  • Determining if the TPA data system will allow the creation of ad hoc reports
  • Verifying the TPA will allow annual independent claim file audits to verify compliance with Best Practices including the prevention of claim leakage

 

 

This list provides just some of the areas that need to be considered when selecting a new TPA. By addressing these issues during the TPA selection process, further problems with the new TPA can be reduced, if not eliminated.

 

 

 

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/

 

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

 

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

Tips to Get the Most from Your Workers’ Comp Adjuster

 

Hey there, Michael Stack here with Amaxx. So Happy Mother’s Day to all the mothers that are out there. Hopefully you had a lovely celebration over this past weekend celebrating Mother’s Day. We certainly did for my wife, the mother of my four children. We did coffee and pancakes in bed and taken out to a really nice lunch. We had a really lovely day, and hopefully it was the same for you or your mother as well.

 

But it got me thinking about this sort of this day of demonstration of gratitude for mothers and how really for the amount of work that they do, one day is just not enough. It pales in comparison to demonstrating that gratitude. It needs to be delivered on a regular basis.

 

 

Gratitude for Your Workers’ Comp Adjuster

 

And it got me thinking about this other group, sort of this other role within the work comp industry that’s the same way that doesn’t get even a day at all, and that’s your adjusters. For the amount of work that your adjusters do on a day in, day out basis, the importance of their role within the work comp industry, the amount of gratitude that they get is very, very low. There are no pancakes delivered to them in bed, there’s no taking them out to lunch to have a lovely day.

 

So two things I want to talk about and focus on getting the most out of these adjuster relationships in today’s video. First one is demonstrating gratitude. How to demonstrate gratitude and the second thing is about how to set these up. How to set up these adjuster relationships.

 

So very simple, when I talk about gratitude you’re asking your adjuster for a thousand different things every day. Send me this form, send me this recorded statement, I need this, I need this, did you do the investigation, did you the three-point contact, what was this, blah, blah, blah, and it’s coming out in rapid fire all day long via phone, email and now often times text messages. So all these different places that they’re getting demands to respond to regularly.

 

 

Say Please & Thank You

 

Say please, say thank you to your adjuster. May I please have that investigation report? Can you please send me that witness statement? Whatever it is that you’re asking your adjuster, and when they send it to you, say thank you. Say thank you. This is a lost art within our world today. Don’t just apply this to adjusters, apply it to your regular daily life.

 

We have gotten to be so bold in the way that we interact with people that this has been forgotten. Very simple, very necessary, and it’s going to demonstrate a little bit more of that gratitude for your adjusters. And oh, by the way, maybe take them to lunch every once in a while too. They always like that.

 

Second thing is I want to talk about your set up within your account handling instructions. So when you set this up when you’re with your TPA when you’re with your carrier, if you’ve been with them for a long time it’s worth revisiting definitely at least on an annual basis. But a lot of time we like to talk about your account instructions as a living document, something that you can alter or change as necessary throughout the course of your claims handling relationship.

 

 

Set-Up In Workers’ Comp Account Handling Instructions

 

So let’s talk about the set up. Couple of things that I want you to look for in your account instructions when you’re initially setting it up or if you’ve been with them for a while to potentially modify.

 

 

Dedicated vs Designated Adjuster

 

So you can have a dedicated versus a designated adjuster. Now this is about how to set this up as far as who is serving you and what it costs. So who is serving you and what it costs. So dedicated versus designated, I want you to look at their case loads and I want you to look at their experience.

 

So what type of adjuster, who is that individual who is going to be assigned to your case? Again, in your instructions as you’re setting this up or as you’re potentially modifying it on an annual basis.

 

A dedicated adjuster is one that only works directly for you. So you work with Jane Smith, Jane’s your go to girl. She’s there handling all of your cases, or Jane and John if you’ve got more than one. Designated means that Jane or John works only for you, but they also work for XYZ Company as well.

 

You can develop a relationship. We talk about having your adjuster so much as being this key part of your team, demonstrating them gratitude, bringing them along, really having them as a main cog in your wheel. Setting up these relationships is a great way to do this. You could spend more money on a designated or dedicated adjuster. It’s going to cost you more out of the gates, but it can save you a huge amount.

 

 

Adjuster Case Loads

 

Same thing as we’re looking at these case loads. So adjusters with lower case loads do a better job. Adjusters with lower case loads do a better job. You don’t need a lot of research to figure that one out. It’s just common sense. If you’re handling 50 cases versus 500 cases, you’re going to do a better job on the 50 then you are going to do trying to handle the 500.

 

So one little quick tip here, this is something that you can define within your instructions. Also, do they have an admin support? So does your adjuster have administrative support? They can have a higher case load and do an equally good of a job if they have an admin support helping them to process a lot of that paperwork.

 

So something to think about and look at and ask your carrier, ask your TPA if this is an option and then look at those outcomes of how you can really best set that up.

 

 

Adjuster Experience Level

 

Then your experience level, do they have five years, do they have ten plus years of experience? You can negotiate this in your contract. You can negotiate I want my adjusters to have ten years plus experience, or I want them to have ten years plus experiences on these certain types of cases, the lost time cases, the catastrophic cases, whatever it is. You can define that.

 

Another thing you might want to do is if you look at this and they say, “Sure we can that but it’s going to cost you action.” You kind of choke up on that amount. You could say, “We want a mix step. We want ten years plus experience to be working with some of the newbie adjusters on those medical only files so that they have that supervision, they can deliver those outcomes.”

 

So all different things to look at and think about as you’re setting up these adjuster relationships. Once you do, then show them that gratitude. Bring them that coffee in bed. Take them to lunch. Show them that gratitude for the work that they’re doing. When you do, they’re going to deliver much better outcomes.

 

Again, my name is Michael Stack. I’m the CEO of Amaxx, and remember your work today in worker’s compensation can have a dramatic impact 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/

 

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

 

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

 

Stop The Bleeding! Control Workers’ Comp Leakage

control hard and soft workers' comp leakageSelf-insured employers and insurers understand that workers’ comp leakage costs money.  The overpayment of medical cost, indemnity benefits and claim expenses is a waste of money and weakens the overall financial stability of the employer or the insurer.  What to do about workers’ comp leakage is a frequent topic of discussion.

 

When there is no doubt that a payment should not have been made (example:  a non-recovered duplicate payment), it is referred to as hard leakage.  When a payment is made that is questionable and is subjective (example: a higher than normal settlement), it is referred to as soft leakage.

 

Employers and insurers frequently attempt to mitigate both hard and soft workers’ comp leakage by providing additional training to the claims staff. Additional training definitely has benefits and will reduce leakage, but additional training normally addresses only the issues the work comp supervisor or claims manager has identified.  This approach will often continue to overlook different types of leakage that is not on the company’s radar.

 

 

Independent Claims Auditors Bring Perspective

 

To identify leakage that is being overlooked, companies have been turning to independent claims auditors who bring in an outside perspective when reviewing claim files.  Senior management often recognizes adjusters, supervisors and even claims managers have a built-in conflict of interest in identifying every source of leakage – the more leakage they identify, the lower their level of competency appears to be.

 

The independent claims auditor can be completely objective, as the independent claims auditor does not have to worry about the impression the results of a workers’ comp leakage audit will create. The outside auditor is looking for the financial mistakes (leakage) in an effort to assist the insurer or self-insured employer to lower its overall claims costs without the worry that senior management may be critical of the adjuster’s/ supervisor’s/claims manager’s performance.

 

 

Hard Workers’ Comp Leakage

 

The independent claims auditor will identify types of hard workers’ comp leakage including:

 

  • Payment of non-compensable claims
  • Payment of claims occurring outside of the insurance policy period
  • Failure to utilize the medical bill fee schedule for all medical bills covered by the schedule
  • Payment of the same medical bill, including overlapping medical bills, more than once
  • Incorrect calculation of the employee’s average weekly wage
  • Incorrect calculation of the employee’s indemnity benefit
  • Incorrect calculation of the number of days or weeks of indemnity benefits owed
  • Incorrect handling of the waiting period and the retroactive period
  • Erroneous payment of indemnity benefits after the employee has return to work
  • Failure to properly calculate the impairment rating value
  • Failure to utilize the pharmacy benefit management program
  • Failure to apply offsets including unemployment benefits, social security benefits, over governmental programs
  • Failure to identify and pursue subrogation
  • Failure to obtain Second Injury Fund recoveries
  • Failure to obtain reinsurance company recoveries
  • Failure to arrange for modified duty work when approved by the medical provider
  • Payment of temporary total disability benefits when temporary partial disability benefits are owed
  • Overpayment of medical mileage
  • Over reserving of the long-term claim resulting in a higher than appropriate experience modification factor with Underwriting

 

 

Soft Workers’ Comp Leakage:

 

The independent claims auditor will identify possible soft workers’ comp leakage including:

 

  • Failure to thoroughly investigate the claim prior to acceptance of compensability
  • Failure to complete the Insurance Services Office inquiry
  • Failure to properly evaluate future medical benefits when settling a claim
  • Poor settlement negotiations
  • Failure to properly manage defense counsel
  • Failure to properly utilize medical case management, either overutilization or underutilization
  • Failure to utilize medical triage
  • Failure to settle dispute claims at the optimum cost point

 

 

Controlling Workers’ Comp Leakage Can Mean Large Savings

 

Controlling leakage is frequently the difference between an insurer or self-insured employer making or losing money.  While no claims operation will eliminate all leakage, a five percent (5%) leakage factor on a small self-insured program with $20 million in paid claims each year is an extra $1 million dollars spent, and 3% leakage on a $100 million a year paid out by an insurer is an extra $3 million dollars spent.

 

The above lists of how leakage occurs in workers’ compensation are not complete.  There are various other ways leakage can occur.  For a workers’ comp leakage audit to provide the maximum benefit to the insurer or self-insured employer, an auditor with a high level of expertise in workers’ compensation is needed.

 

 

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/

 

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

 

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

Surveillance in Workers’ Compensation

Surveillance in workers’ compensation plays an important role in resolving claims and detecting fraud.  Given its expenses, there are various factors members of the claim management team need to consider before hiring a service provider to conduct surveillance.  If these issues are not considered, the bottom line of a workers’ compensation claims program will suffer.

 

 

Surveillance in Workers’ Compensation Basics

 

The purpose of hiring an investigator in workers’ compensation cases is to observe and document the movements of an injured employee.  This allows the defense interests to introduce first-hand evidence into a hearing on the merits to demonstrate what someone is doing and their functional abilities – when they do not think someone is watching.

 

The first and most important step in hiring a service provider to assist with this activity is to find someone who is credible, ethical, and experienced.  Failing to take these factors into consideration can result in adverse findings.

 

 

When Should Surveillance be Used?

 

Not every case requires the use of a private investigator.  Instances where surveillance in workers’ compensation can either be helpful or have an effective impact include the following:

 

  • Instances where credible information of fraud is received and the injured employee’s movements and activities need to be closely monitored;

 

  • Cases where the employee is working an unreported second job or engaging in “cash” driven business activities. This can include employees who might be more active in certain times of the year;

 

  • Claims involving employees with a long history of work and other personal injuries. “Frequent fliers” should always be given special attention;

 

  • Employee’s who exhibit signs of malingering or are presenting at their medical appointments with conflicting pain complaints; or

 

  • Injuries that occur under unique or interesting circumstances. Examples include the “Monday morning” injury, injuries that occur before or after lay-offs, or during times of labor disputes.

 

 

 

Getting the Right Background Information

 

Background information on the injured employee’s habits is important before using an investigator for surveillance in a workers’ compensation case.  Given the cost and time involved, it is important to know when someone will be at a particular location and at what times.  Information that can be useful and collected via discovery can include:

 

  • Dates and times of doctor appointments;

 

  • The date and location of the independent medical examination or various workers’ compensation proceedings;

 

  • Places where the employee frequents such as attending religious services, social events and clubs, and restaurants or sporting events; and

 

  • Hobbies and other activities such as gardening, other yard work, or coaching a sports team.

 

 

Other Sources of Free Information

 

The advent of the Internet has created a treasure trove of free information.  This includes where they were born, lived (including specific address), and photographing or postings commonly found on social media.  Members of the claim management team who use social media for background information on an injured employee should be mindful of some simple rules:

 

  • Research on information open to the public is generally fair game when it comes to access by an adverse party. If someone does not closely lock down their security settings on platforms such as Facebook, Twitter, or Instagram, the information in the public domain can be used;

 

  • Use of a third party or “straw man” to connect to an injured employee is generally unethical and can result in information obtained from the query to be inadmissible; and

 

  • Asking for passwords from an injured employee is illegal in some states. That does not prevent defense counsel from bringing a motion to compel to obtain a court order for passwords.  Case law in this area is developing.

 

Interested stakeholders should look beyond social media and access genealogy websites.  Again, if information is published online and not obtained via mischievous means, it will likely be admissible.  Any useful information online should be printed and/or electronically stored immediately.  This is because information can be deleted, removed, or locked down just as quickly as it is posted.

 

 

Conclusions

 

Surveillance in workers’ compensation will always be a part of strong defense. When used, it should be done in an ethical and legal manner.  It must also be used in a cost-effective manner to avoid excessive spending and preserving the stability of a workers’ compensation program.

 

 

 

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/

 

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

 

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

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