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

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

Hindsight is 20-20; Foresight is Priceless

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

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

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

Cost & Cause of Expensive Claims

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

5% of Claims Account for 80% of WC Costs

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

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

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

Which 1 Claim Out of 14 Will Become Catastrophic?

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

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

Early Screening Needs To Be A Part of Your WC Program

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

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

Identify 5 Most Expensive Claims

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

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

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

Contact: mstack@reduceyourworkerscomp.com.

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

©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.

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

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

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

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

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

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

Data in Action

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

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

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

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

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

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

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

Data Cuts Down Costs

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

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

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

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

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

She believes collaboration can help solve these problems.

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

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

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

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

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

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

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

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

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

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

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

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

Content 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,

9. 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.
10. Identify what to measure. Looking to workers’ compensation costs to determine the program’s effectiveness may not make sense because of its long tail.
11. 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:

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

Contact: mstack@reduceyourworkerscomp.com.

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

Contributor:

Dr. 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 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.

Picking 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.

2. 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.

3. 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.

4. 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.

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

Contact: mstack@reduceyourworkerscomp.com.

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

©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.

Third-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;

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

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

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

5. 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;

2. 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

3. 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;

2. 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

3. 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.

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

Contact: mstack@reduceyourworkerscomp.com.

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

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