Causation and Compensability Archives

Dispute Questionable Workers Comp Claims

Notwithstanding conventional wisdom, 80-90% of all workers’ compensation claims are initially accepted. While claims can be later denied, questions arise as to how to properly dispute a claim. It is important for members of the claim management team to take several factors into consideration and avoid making costly mistakes.

All questionable claims need to be reported to a claim handler so a proper investigation can occur

Employers are on the front line of the claims process and generally report workers’ compensation claims to their insurance carriers, or third-party administrators. They know more about the matter and anyone else and can assist the claim handler in obtaining medical records and starting a proper investigation.

Members of the claim management team need to be responsive to the concerns of an employer and flag it for special consideration. Issues to consider include making a timely determination as to compensability, and direction of inquiry. Leakage occurs when this does not take place.

Steps to consider include taking an employee statement, obtaining medical records, prior medical records, and background checks. Taking these steps ensures the claim handler completes the investigation and makes the correct decision in good faith.

Retroactive denials of primary liability and other considerations

Retroactive denials of primary liability can be troublesome. Take for example the admitted low back injury. During the course of investigation, medical records indicate the employee told a doctor they hurt their back over the weekend doing yard work. The claim handler has no way of knowing how bad this injury was based on the timing.

Using nurse triage can reduce the likelihood of this type of claim because the employees speak to a nurse immediately at the time of injury, so there is less room to change a story.

Dealing with injuries that are not proportionate to the work injury

Members of the claim management team should always review medical records and determinate the mechanism of injury. If an injured employee claims a lumbar strain while lifting a 20-pound tote, and the doctor finds objective evidence on exam of severe, and disabling back pain, then something is not right. The lifting of 20 pounds should not have such excessive force that it will herniate multiple lumbar discs. The claim handler should set an IME, and let that IME physician comment on the severity of the symptoms in relation to the stated work injury.

A proactive claim handler should also be on the look-out for false positives. It is likely an average aged individual has degenerative changes in discs without experience symptoms. IN some instances, these changes are not necessarily related to a work injury or activity.

Dealing with the “illegitimate” claim

Members of the claim management team should have an ethical obligation to investigate all claims – even if there is clear evidence from the onset it is not legitimate. In the same manner, employers are required to report all injury claims to their workers’ compensation insurance carrier no matter the circumstances. The claim handler has training and certification, and they are qualified to deny a claim that is alleged to be work-related.

Some jurisdictions can carry heavy penalties for failure to report a work injury to the insurance carrier. The employer pays a premium to the insurance carrier to protect the insured. The employer should gather all the pertinent details, and report the claim promptly. Indicate on the First Report of Injury that the claim is questionable, and then go from there. Follow up with the adjuster, and chances are it will be denied as you suspected.

Conclusions

There are several ways to dispute a questionable claim. But the most important thing to do, as an employer, is to gather all the information you can on the claim, then report it promptly to your carrier and follow it up with a phone call to the adjuster. The more you work together with your Carrier, the better the chance that questionable claims will be denied and not paid.

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

Contact: mstack@reduceyourworkerscomp.com.

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

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

Course and Scope of Employment: Questions of Compensability

Issues of compensability are factually driven and require attention to detail by members of the claim management team. This is extremely important in cases where the claim comes down to whether the injury was in the “course and scope of” employment. The correct decision can only be made when the individual claim handler has a good understanding of the law and knows how to apply it to the facts.

Case Study: The Workplace Fall

Frank Rizzo is a day laborer for Acme Construction Company and dresses for success by wearing his steel-toed work boots and favorite blue jeans. Given his hard work, he is invited to a corporate meeting and was told to “dress like a boring c-Suite professional.” Frank is excited and goes out and purchases a $1,000 suit and wing-tipped dress shoes. While the shoes make his feet uncomfortable, he attends the meeting. The meeting was exciting, and he is looking forward to prime rib for lunch. While walking down a hallway to the banquet room, his right knee buckles and now needs a total knee replacement.

Personal injuries “arising out of and in the course and scope of” employment is generally compensable under workers’ compensation laws. Frank was on the clock at the time of the meeting, but the question remains as to whether the “course and scope of” element has been satisfied. The hallway Frank was walking on did not have any slippery surfaces and was free of imperfections.

Is the injury compensable? These are questions claim handlers must answer daily.

Questions of “Risk” and “Position”

Courts across the country answer questions of “course and scope of” on a regular basis. The result is a maze of tests interested stakeholders must confront to evaluate a claim and whether to accept it:

Increased Risk Test: Under this test, courts will examine whether the employment creates a “special hazard” that gives rise to the work injury. If this is the case, there is a necessary causal relationship between employment and work injury. Common examples of this include instances where something is located in the workplace that increases the risk of injury. Idiopathic injuries (those that are unknown or without explanation) are typically found not to be compensable and are denied.

Positional Risk Test: This test examines whether the employer placed the employee in a location or “position” that gave rise to the work injury. Under this rather low threshold, just being at work and sustaining an injury can give rise to a claim being compensable.

Applying the Standards – Differing Results

The application of these two tests would likely give rise to different results in the scenarios outlined above.

Increased Risk: The injury likely would not be compensable. Although the employee was asked to wear clothing and footwear he normally did not wear, nothing in the workplace exposed Frank to a heightened risk of injury. The defect-free surface would be an important factor. There is also no explanation as to why his knee gave out.

Positional Risk: Frank was required to be at the meeting. It is also important to note he was specifically asked to dress in a certain manner, and testimony at hearing that his new shoes were uncomfortable are important. Although the walking surface was defect-free, his presence in the workplace gave rise to the injury. A court applying this test would find it compensable.

Based on the divergent results, members of the claim management team should understand the importance of how to evaluate the risk.

Investigating Troublesome “Course and Scope of” Claims

Members of the claim management team need to peel back the layers when investigating matters like Frank’s claims. This should include the following areas:

Knowledge of the applicable legal standard – “positional” or “increased” risk;

Obtain a detailed statement from the employee and possible witnesses. Is there an explanation for why or how the injury occurred? This is key;

Determine the type of surface involved in the injury and its condition at the time the incident occurred. Documentary evidence such as photographs and security video should be preserved; and

Instructions on workplace attire such as footwear, etc.

Conclusions

Claim handlers are called upon to make daily decisions on whether to accept a claim and commence the payment of workers’ compensation benefits. Not making the correct decisions can lead to increased costs on claims. This includes money spent on litigation costs, sanctions/penalties and setting incorrect reserves.

Contact: mstack@reduceyourworkerscomp.com.

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

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

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