7 Ways to Avoid Mega Workers’ Comp Claims

7 Ways to Avoid Mega Workers’ Comp Claims“There was an uptick in the number of mega workers’ comp claims in Accident Year (AY) 2016,” according to NCCI. “Ten claims of at least $10M have been observed for AY 2016 evaluated at 24 months. This is more than for any of the previous 15 AYs at a comparable maturity.”

 

The organization’s latest research brief drills down further and outlines additional revelations:

 

  • These multimillion-dollar mega workers’ comp claims are frequently the result of motor vehicle accidents or falls from elevated levels.
  • It is the Contracting industry group that has by far the greatest share of mega claims
  • The carpentry classification has had more mega claims than any other class over the past 15 years.
  • The trucking classification — representing short-haul and long-haul — ranks 2nd in both mega claims and all lost-time claims.
  • Central nervous system injuries (neck/spine or head/brain) and injuries to multiple body parts account for nearly 95 percent of mega claims. For lost-time claims, these categories make up only 16 percent of the claim total.
  • Hospital inpatient and home health care account for more than half of the mega claim medical costs. This is in stark contrast to all lost-time claims where physician expenses and hospital outpatient represent most of the medical costs.
  • Approximately two out of three mega claimants spend at least three months as a hospital inpatient, and approximately one in five are in the hospital for more than a year.

 

Armed with this knowledge, workers’ compensation stakeholders should focus their efforts on preventing these injuries — especially in the industries affected most.

 

 

Auto Accidents

 

Even though strains and slips/trips are the leading causes of loss for all lost-time claims, motor vehicle accidents accounted for more than 30 percent of $10 million+ claims. These are also the #1 cause of work-related deaths, accounting for more than 40,000 fatalities in 2016. The 14 percent increase from 2014 represents the largest jump in more than 50 years.

 

The federal government says fatalities from distracted driving grew nearly 9 percent in 2015, outpacing the overall increase in traffic accidents.

 

The three types of distractions for drivers are:

 

  • Visual — eyes on the road.
  • Manual — hands on the wheel.
  • Cognitive/mental — mind on driving.

 

Cell phones, one of the main causes of motor crashes lately, involve all three forms of distraction. One big problem is that drivers talking on cell phones may not realize they are mentally distracted. Also, this type of distraction usually lasts much longer than either visual or manual distractions.

 

Despite common thinking, hands-free talking on cell phone while driving does not reduce the risk — due to the mental distraction. The argument that it is similar to talking with passengers flies in the face of research. Actually, adult passengers share awareness of the driving environment and having them in the vehicle lowers the crash risk.

 

Unfortunately, educating employees will not lead to voluntary compliance. Employers need to implement and enforce specific policies about driving. These should state that employees who are driving:

 

  1. Are not allowed to use electronic devices, either handheld or hands-free.
  2. May not answer calls. Incoming calls must be directed to voicemail.
  3. Are prohibited from reading or responding to text messages and emails.
  4. May make an emergency 911 call can only after parking the vehicle in a safe location first.

 

The driving policy should include:

 

  • Clear language.
  • Documented training and communication.
  • A requirement for all employees to sign the policy.
  • Disciplinary action for violating the policy. This could consist of warning for the first two violations and termination for the third incident.

 

The effort to encourage safe driving should involve senior leadership, as well as managers throughout the organization. A person high up in the organization can send a letter to employees explaining that the policy is going into effect for any employee using a motor vehicle associated with company business and/or electronic devices owned or used for company business.

 

 

Falls

 

While half the fatal falls in 2014 occurred from a height of about 20 feet, 12 percent of them were from less than 6 feet high. Construction workers are at most risk, although falls can happen to anyone, anywhere.

 

Falls are 100 percent preventable. OSHA has a three-fold plan to avoid falls:

 

  • PLAN ahead to get the job done safely
  • PROVIDE the right equipment
  • TRAIN everyone to use the equipment safely

 

Whether work is being done from a ladder, scaffolding or on a roof, all three of these mandates apply.

 

  1. Employers must look ahead to ensure a job is done safely. That means identifying how the job will be done, the tasks involved, and the safety equipment that will be needed. Safety equipment should be included in a job’s cost estimate.

 

The area where the work will be conducted should be scanned for potential hazards ahead of time. For example, there should be level ground if ladders are to be used.

 

  1. Workers exposed to potential fall risks must be given the proper tools and equipment to ensure they get the job done safely. Depending on the job, that might include

 

  • Fall protection such as personal fall arrest systems and safety gear that is fitted properly to each worker.
  • A ladder or scaffold that is appropriate for the job.
  • Slip-resistant shoes
  • Harnesses
  • Safety nets.
  • Stair railings and/or handrails

 

Holes in which employees could fall should be guarded with a railing and toe-board or flor hole cover.

 

  1. Every employee who works at a site with fall risks must be trained on how to set up the area and proper use of any equipment to be used. All fall-protection equipment to be used should first be inspected.

 

 

Summary

 

Employers and payers are spending millions of dollars and watching their employees suffer for years over claims that are completely avoidable. Implementing and enforcing some simple steps can protect the entire organization.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

5 Questions to Investigate the Mechanism of Injury

Investigate Mechanism of InjuryMembers of the claims management team are required to conduct diligent investigations into workers’ compensation matters, investigate the mechanism of injury, and address issues of compensability.  This is a task that requires them to determine if the information they receive fits the type of injury claimed.  This includes not only injuries involving a specific incident, but also claims that culminated over a period of time.  Failure to properly accomplish this task can result in protracted management of a claim and added costs to any workers’ compensation program.

 

 

The Anatomy of a Work Comp Injury

 

There are essentially two types of injuries employees sustain in the workplace.  Each type of injury is unique in how they occur and the evidence one examines when deciding matters of primary liability.

 

  • Specific Incident/Sudden Onset: This type of injury is often easy to identify as it encompasses a specific injury that is easy to identify and occurs at a specific moment in time.  These injuries include slip/falls, striking an object, an immediate onset of pain, or a fracture of a bone/joint dislocation.

 

  • Workplace Exposure/Repetitive Trauma: This is often more difficult to identify as to when the “injury” occurs as it primarily happens over a period of time.  Common examples include the inhalation of dust, irritants or other substances that result in an injury/respiratory condition.  In other instances, problems occur over a period of time that results in the degeneration of joints and discs.  Questions as to the “date of injury” are often subject to contentious litigation as each jurisdiction defines when these injuries culminate.  Examples include when the employee started missing time from work, when the employee first received medical treatment, or when the employee reasonably believes they have sustained a work injury.

 

Regardless of the type of injury, a complete investigation is required.  Only deny claims in good faith.

 

 

Investigating the Mechanism of Injury

 

It is important for members of the claims management team to investigate and determine if the mechanism of injury (how it occurred) matches the claimed injury.  It is also essential to analyze where the work activity is attributed to the work injury, or if the work condition was aggregated and/or accelerated due to work activity.  Additional issues to consider include:

 

  • Did an injury occur as a result of the work activities?

 

  • Was the employee performing work activity consistent with the claimed injury?

 

  • If there was, in fact, a work injury, what body parts are actually involved? Defining an injury by ICD-10 codes may also be important given the reporting requirements for Medicare and Medicaid coordination of benefit

 

  • How long did the employee engage in the work activity for it to result in a work injury? Was it a substantial contributing factor in the disability and/or need for medical care and treatment/disability?

 

  • If not a specific incident-type injury, when did the injury culminate?

 

Questions regarding these issues may involve a medical director, nurse case manager, or someone with an advanced understanding of medicine.

 

 

Making Informed Decisions Regarding Primary Liability

 

It may be difficult for a member of the claims management team to make a legally defensible position when it comes to primary liability.  This can be due to a number of factors beyond their control.  If that is the case, utilize the service of a peer review physician or medical advisor to obtain further insight on an action plan for the claim.

 

 

Conclusion

 

Members of the claims management team are charged with a variety of tasks.  Chief among them includes collecting applicable evidence and making reasoned decisions based upon the facts of the case and the law.  This also involves seeking information on the mechanism of injury and determining if the claimed injury fits.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

3 Common Defenses Against Illegitimate Workers’ Comp Claims

3 Common Defenses Against Illegitimate Workers’ Comp ClaimsMembers of the claim management team need to be proactive when reviewing their workers’ compensation injury files to make accurate determinations of claim compensability. A careful review is required, and only legitimate claims should be paid.  Failure to do so means workers’ compensation programs will incur unnecessary costs and excessive litigation in the future.  When doing these careful reviews, it is important to know the following common defenses against illegitimate workers’ comp claims.

 

 

Is the Injured Party an Employee?

 

Workers’ compensation programs are only responsible to cover employees of an insured.  In many instances, the issue of whether the injured party is an employee is clear-cut.  However, in cases such as construction cases or other specialized professions such as consultants, this is an issue that requires careful legal review.

 

The term “employee” is generally defined by statute or administrative rule.  Basic components of what constitutes an employee include the following elements:

 

  • A person who performs services for another for hire;

 

  • An alien (regardless of legal status), minor, apprentice, or members of state law enforcement agencies;

 

  • County assessors, elected or appointed officials who fulfill a function of city, county or state governments; and

 

  • Other individuals, regardless of compensation, who fulfill the function of a company – g. – volunteers.

 

When it comes to independent contractors,” a myriad of rules and case law interpretations can apply.  Factors to consider include:

 

  • The issue of “control,” and whether the employer controls the means and manner by which the work is performed;

 

  • The method of payment to the person. Just because someone receives a W-9 does not mean they are not an employee;

 

  • Determination as to who furnishes tools and materials used to perform a job or task; and

 

  • The ability to discharge the worker (or whether the job ends when the work is completed).

 

Intoxication Defense – The Bar is Not Necessarily the Limit

 

Alcohol and drug use continue to be an issue when it comes to workplace safety.  Use of these substances while performing work duties can result in a denial of primary liability if an injury occurs.  In order to successfully assert this defense, the employer and insurer must demonstrate the following:

 

  • The employee was intoxicated at the time of the injury; and

 

  • The intoxication was the proximate or legal cause of the injury.

 

While this looks relatively simply to assert with success, the reality is courts will scrutinize these matters.  Extreme examples in case law include a highly intoxicated construction worker obtaining workers’ compensation benefits after admitted he drank alcohol heavily just prior to a serve fall from height.  Kowalik v. Martinson Construction, slip op. (MN WCCA 7/8/04), sum aff’d 688 N.W.2d 332 (Minn. 2004).

 

 

Prohibited Acts Defense – Is it the Right Defense?

 

Rules are designed to be followed and ensure workplace safety and injury prevention.  It is commonly held that an employer/insurer may avoid liability for an injury under the following conditions:

 

  • Where an employer expressly prohibits the doing of a certain specific act;

 

  • The employee engages in the prohibited conduct in a manner of disregard, of which is not reasonably foreseeable to the employer;

 

  • The violation takes the employee outside the scope of his employment; and

 

  • The employee sustains an injury resulting from the prohibited conduct.

 

While this defense seems clear-cut, courts have generally required a high level of proof for them to be successful.  Common errors on the part of an employer include failure to have the specific prohibited act written into policy and communicated to its employees, and failure of the employer to enforce its safety and/or prohibited acts policies consistently.

 

 

Conclusions

 

Members of the claim management team are on the front lines of matters of high importance.  This includes investigation of a claim and issuing denials for illegitimate workers’ comp claims when appropriate.  When making these decisions, it is important for the claim handler to scrutinize the facts of the case and correctly apply the law.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

Understand the Legal Basics of Workers’ Comp Claim Denials

Understand the Legal Basics of Workers’ Comp Claim DenialsOne of the most important and often difficult roles of a claim handler is to issue a workers’ comp claim denial.  It is important that the claim handler conduct a diligent claims investigation and issue denials that are supported by the facts of the claim and the law.  Failure to do so is not only unethical but contrary to the letter and spirt of the law.

 

 

Back to the Basics – “Arising Out Of” and “In the Course and Scope”

 

Issuing a workers’ comp claim denial requires understanding a basic premise of all workers’ compensation laws – both “arise out of” and “in the course and scope of” the employee’s employment.  This is a legal standard that is complex to understand and depends on the facts of each case.  When analyzing these threshold standards, it is important to understand the following:

 

  • Arising Out Of: This generally refers to a factual determination of whether the injury occurred within the parameters of one’s direct work  In other words, there must be evidence of a causal connection between the injury and the employment.  Courts often struggle with issues concerning whether there was an “increased risk” presented by the work environment that is tied to the injury.  Factors that are subject to litigation and interpretation include slips/falls on various surfaces (flat hallways, stairwells, ice on sidewalks, etc.), assaults/actions by third persons and idiopathic injuries; and

 

  • Course Of: Determinations regarding this element are more clearly defined, but also create concern and litigation.  Generally, this question involves one of the time, place, and circumstances under which the accident/injury occurs.  Notwithstanding its appearance, questions of compensability also include litigation when it concerns the hours of employment (breaks, meals and errands), ingress/egress issues and traveling employees.

 

When considering these issues, it is important for the investigation to involve questions as to specific activities involved and whom else may have been involved in the injury.

 

 

Pre-existing Conditions and Questions of Compensability

 

The presence of a pre-existing condition does not necessarily preclude the compensability of a work-related injury.  Given the rather liberal standard of what constitutes a “personal injury,” the better question that needs to be asked is whether the work injury or activity “aggravated or accelerated the underlying condition.”  If this is the case, more often than not the claim will ultimately be found to be compensable.

 

When investigating these matters, obtaining the proper medical evidence is key to any investigation.  Areas of concern should include the following:

 

  • Chiropractic care and treatment;

 

  • The existence of prior imaging, including MRIs, CT scans and EMGs; and

 

  • History of athletic or MVA related accidents/injuries.

 

 

Notice and Statute of Limitation Defenses

 

Most workers’ compensation statutes require an employee report their injury promptly.  There are also limits as to when an employee can obtain a report from their work injury.  This is where it is important to understand how notice and statute of limitation provisions can prevent recovery and serve as a valid legal defense to a claim.

 

  • Notice Defense: An injured worker is under the legal obligation to report their work-related injury in a timely manner.  The rationale behind this concept is this allows the defense interests a reasonable amount of time to investigate a claim and prevent the spoliation of evidence.  Notice defenses are often not successful given the fact “constructive notice” is often imputed on the employer.  It also comes down to a question of credibility of the employee.  Notwithstanding these limitations, it is something to consider when defending a claim.

 

  • Statute of Limitation Defense: Once a workers’ compensation injury is reported, there is a time limit place on the employee for them to make a claim for  In many instances, the statute of limitation defense is limited to a period of six years.  What this means is if the employee reports and injury, but does not incur wage loss or medical benefits within the prescribed time period, they are forever barred from seeking benefits related to the matter.  This defense is used to deny claims made on trivial injuries and provides certainty.

 

 

Conclusions

 

Members of the claims management teams are on the front lines when it comes to claims investigations and determinations of primary liability.  Issuing a proper workers’ comp claim denial includes determining if the incident falls within the parameters of the workers’ compensation act and other issues of liability.  This requires a claims handler understands the law and is able to investigate a claim to make good faith determinations regarding compensability.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

8 Tips to Investigate Work Comp Claims Like a Rock Star

8 Tips to Investigate Work Comp Claims Like a Rock StarMembers of the claim management team wear many hats.  One of these includes the need to investigate claims and make accurate factual and legal assessments regarding primary liability.  This includes both knowledge of the law and medicine in order to succeed.  While claim handlers cannot be expected to be masters of both, they can learn to become a rock star when handling these matters to promote an efficient workers’ compensation program.

 

 

Start with First Report of Injury

 

The First Report of Injury is usually one of the first documents that is generated following a work injury.  This form is generally specified by the state’s industrial commission, but can also take the form of a company-specific form.  It is also a document that is submitted to the insurance carrier following the report of the injury and serves as the basis for the claims investigation.

 

First Reports of Injury do have their limitations.  It is important to remember the following when reviewing it:

 

  • The form can become inherently biased as it is something usually prepared by an employer representative. Be sure to know who completed the form, when it was completed and obtain additional background information from the person completing the form; and

 

  • Make sure the form is completely filled Important information that should be included are the names of potential witnesses, the mechanism of injury and where the employee received medical care and treatment.

 

Always trust, but verify the veracity of information on this form.

 

 

Recorded Statements from the Employee and Witnesses

 

A top-notch member of the claim management team will also be proactive and complete when taking a recorded statement of the employee.  When performing this task, it is important to be mindful of the various state guidelines as to when this can take place.  Important tips to remember include:

 

  • Obtain as much detail as possible. This includes specific information about how the injury occurred.  This is especially important if the claimed injury involves a repetitive use type claim;

 

  • Avoid taking unnecessary statements. It may be an important consideration NOT to take a recorded statement if it is only being done to confirm the obvious; and

 

  • Questions as to admissibility may come into play later on down the road. Items to remember include having the employee review and sign a transcribed copy of the statement afterward in a timely manner.  Failure to follow these guidelines can prevent it from being admitted into evidence later on.

 

The evaluation and preservation of witness testimony is also important to workers’ compensation claims.  This is especially important when causation resolves around the alleged mechanism of injury.  Different rules and procedures may apply when it comes to these third-parties.  Obtaining cooperation may also be an issue to consider.

 

 

Records, Records, and More Records

 

Obtaining documentary evidence can also be important to various workers’ compensation claims.  There are several types of documents and records a pro may consider when investigating a claim:

 

  • Medical records and authorizations: It is important to know and understand the medical condition and diagnosis of an injured worker.  It is also essential to ascertain any prior injuries or conditions that may be present.  A complete set of records is a must when it comes to the independent medical examination and ensuring proper expert foundation.

 

  • Industrial Commission records: Most states keep prior workers’ compensation records on file within the state agency responsible for overseeing the workers’ compensation act.  An authorization is likely required in order to obtain these records given state data privacy laws.  These records are key as they can contain a wealth of information on an employee’s prior medical history.

 

  • Central Index Bureau records: The Central Index Bureau (CIB or ISO report) is another important place to obtain background information on an employee.  These records also detail other information on prior insurance related claims.  While these records may not be admissible, they can likely lead to other discoverable information.

 

 

Conclusions

 

Being a great claim handler requires hard work and dedication to one’s job.  It also includes basic knowledge of knowing where and how to find information.  It is important to learn the various tricks of the trade to become a rock star when handling workers’ compensation claims.

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

 

Prepare To Effectively Manage Death Claims – And Hope You Never Have To

Prepare To Effectively Manage Workplace Death Claims – And Hope You Never Have ToIt is a horrible tragedy when an employee is killed at work.  While we hope this never happens, over 6,000 people are killed every year in workplace accidents.  This averages out to about 14 workplace death claims per day and nearly 100 per week.

 

The impact of an employee death is heart wrenching and impactful for an organization.  It is essential for members of the claims management team to understand how to effectively deal with workplace deaths.

 

 

Conducting an Effective Death Claim Investigation

 

It is important to conduct an effective and prompt investigation once someone is killed due to a workplace incident.  In addition to the steps normally taken, it is important to obtain the following information:

 

  • Reports regarding the incident. This includes police and ambulance reports.  Other important documents include OSHA generated forms and safety logs, along with information concerning any tools or equipment involved.  Make sure no evidence is destroyed.

 

  • Determine whom may be entitled to benefits. This includes the marital status of the deceased employee, information concerning their dependents and the location of where these people were living.  Questions often arise when the employee and their spouse are separated or are in the process of getting a divorce.  Domestic partnership status is also important to know and understand.

 

  • Validate important documents concerning family relationships. This is important in cases where marriage or parentage is not clear-cut.

 

Most workers’ compensation laws require a workplace death is reported to the state industrial commission within 24 to 48 hours of the incident.  Ensure the proper report is made in a timely manner.

 

 

Dealing With Other Special Issues

 

Determining issues of a spousal relationship or parentage can become complex issues.  This is the result of the chaining definition of what constitutes a family, dependents and the legalization of same-sex marriages.  When investigating these issues, members of the claims management teams should closely scrutinize the following issues:

 

  • Establishment of residence: In many jurisdictions, marriage to another person does not automatically qualify the spouse for dependency benefits.  If the couple is separated (even not in a legal sense), the survivor may be excluded from additional compensation;

 

  • Recognition of marriage: This issue can arise in several different instances.  The most common is couples who were married under “common law” in a jurisdiction that recognizes such practices but later moves to a location that does not recognize that form of marriage.

 

  • Parentage: The increased use of genetic testing has helped resolve some of these issues over the years.  However, questions may still remain if there was not legal recognition of the relationship prior to death.  Legal battles may ensue of the deceased employee is cremated prior to testing being performed.

 

 

Most Important: Demonstrate Care in Difficult Situation

 

Demonstrating care and empathy is critically important in the face of a tragic death claim. Steps to prepare your organization include:

 

  • Create a dedicated team to handle all workplace death claims. This will allow for others on the team to better allocate their time on other cumbersome files and allow for a more effective response.

 

  • Educate employers and other interested parties on workplace safety issues. This is especially true when working with employers who fall into high-risk categories.  This includes construction jobs that involve employees working at heights, the operation of dangerous equipment and machinery and those who work in the lumber and logging industries.

 

  • Go beyond what is required by the law. This can include random acts of kindness such as sending flowers to the next-of-kin.  Members of the claims management team should also avoid blaming the deceased employee – it was someone’s son or daughter who died.

 

  • Promote efforts that go beyond safety training. Encourage interested stakeholders to look beyond the incident and understand the events leading up to the fatal incident.

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

 

Conclusions

 

A workplace death is an event all employers hope they never experience.  However, it is important for members of the claims management team to be properly prepared.

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

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

 

 

Need to Know If Following Best Practices

 

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

 

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

 

 

Determine If You Need An Independent Claims Audit

 

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

 

[  ]     You have noticed deviations from your Best Practices guidelines

 

[  ]     You have noticed gaps in the investigation of claims

 

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

 

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

 

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

 

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

 

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

 

[  ]     The average age of your claims is increasing

 

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

 

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

 

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

 

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

 

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

 

[  ]     You have noticed missed subrogation opportunities

 

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

 

[  ]     The adjusters have high caseloads

 

 

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

 

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

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

 

 

Proper Claim Reporting Parameters for Self-Insured Employers

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

 

 

First Report of Injury

 

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

 

 

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

 

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

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

 

Status Reports

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

 

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

 

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

 

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

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

 

 

Both Closed and Open Claims Files Should be Audited

 

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

 

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

 

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

 

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

 

 

Management Benefits By Identifying Weak Spots In Claims Handling

 

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

 

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

 

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

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

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

 

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

Proper Claim Management Requires a Strategic Plan of Action

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

 

 

Best Practices Call for a Strategic Plan of Action

 

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

 

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

 

 

Initial Strategic Action Plan

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

Subsequent Strategic Action Plans

 

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

 

  • Reevaluation of the file reserves

 

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

 

  • Coordination of return to work full duty or restricted duty

 

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

 

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

 

  • Obtaining and evaluating the disability rating

 

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

 

  • Subsequent ISO filings

 

  • Completion of any additional state forms

 

  • Scheduling and obtaining a peer review or independent medical examination

 

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

 

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

 

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

 

  • Settlement of the claim

 

  • Obtaining all required waivers and/or releases

 

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

 

 

 

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

Contact: RShafer@ReduceYourWorkersComp.com.

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

 

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

 

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

 

 

 

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