The workers’ compensation process is a contentious process regardless of the different protections states offer litigants and defense interests.  This is based on the inherent need for justice in making sure the rights of all parties are respected and the payment of benefits in made in a timely manner.

In order to address the changing dynamics and increased cynicism within the systems, states are seeking creative solutions to inform parties of their rights without being an advocate.  One such method of accomplishing this goal is the creation of an ombudsman program to make sure parties are aware of their rights and avoid needless litigation.

What is an Ombudsman?

The term ombudsman has its origins in accident Rome, where a government official would monitor elected officials.  Their role was to ensure the government was not taking advantage of their position.  In essence, it was an undercover inspector of the government.  This same form of oversight took hold in indigenous Scandinavian culture under the term “ombudsman,” with an entomology derived from Old Norse.  Translated literally it means a “proxy representative.”

Role of an Ombudsman in Work Comp

With the increasing demands of workers’ compensation disputes, many states have developed the position of an ombudsman to oversee and assist all interested parties in the workers’ compensation system.  This ensures the rights of the injured worker are being considered in the process, but not being an advocate for either side.

Ombudsman: Watchperson and Neutral

Jurisdictions with an ombudsman program often locate this office inside their industrial commission or labor department.  Although the position is located within an agency that ultimately decides workers’ compensation disputes, the role serves a distinct capacity of not taking sides.  The focus is always to improve the process for all, at the expense of nobody.

Ombudsmen assist injured workers in the following ways:

• Develop and provide clear and concise information regarding an employee’s rights within the workers’ compensation system;

• Assist unrepresented employees if they have problems in contacting a claim handler. They can also direct the employee to the correct representatives inside an employer when dealing with self-insured employers; and

• Serve as a resource for additional human services an employee might need. This can include information on assistance with finding housing and medical care during disputes over primary liability and the reasonableness/necessity of medical treatment.

An ombudsman can also assist employers and small business in the workers’ compensation process.  Help on these issues can include:

• Provide information on correct workers’ compensation processes and timelines. This includes how to correctly complete a First Report of Injury following a workplace incident;

• Matters concerning workers’ compensation insurance coverage, or even issues concerning coverage disputes; and

• Notifying employers of their rights within the workers’ compensation process.

An ombudsman should never be an advocate for a party in the workers’ compensation process.  This includes never providing legal advice to an employee, employer or insurer/self-insured employer.  While the role is somewhat limited, proactive stakeholders can publicize the role of an ombudsman and use one as a resource to educate all involved in the process.

Conclusions

Ombudsmen play a defined, but important role in many workers’ compensation resources.  While they are mainly used for educational purposes, stakeholders concerned about costs in programs can use them to their advantage.  This includes educating the labor force and working with one on troublesome issues to improve the system or processes.

Author Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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/

©2017 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.

There are many challenges to settling a workers’ compensation claim.  One of these challenges includes the possibility the employer may desire to seek a voluntary resignation of employment.  It is important for members of the claims management team and defense attorneys to carefully navigate the complex maze of laws and regulations during this process.  Failure to do so can result in program sanctions or other unwanted legal matters, which negatively impact your program’s bottom line.

When is Voluntary Resignation Appropriate?

Seeking the voluntary resignation of an employee as part of a global workers’ compensation settlement should not be a part of every claim.  There are a number of legal and practical barriers that warrant careful consideration when making this a part of the negotiation and settlement process.

When evaluating a claim, it is important to be in contact with trained legal counsel.  Examples of this include several state workers’ compensation acts that explicitly prohibit this practice.  If there is the appearance of even suggesting an employee resign as part of resolving their workers’ compensation claim, the employer and insurer may be subject to additional legal sanction.  This can include paying punitive compensation benefits to the employee and other legal causes of action under a state’s discrimination laws.

Even in instances where the practice is allowed, careful legal guidance is required.  Matters to consider include:

• Careful drafting of the legal document being signed by the employee as part of the voluntary resignation;

• Adequate monetary consideration paid to the employee, which is beyond the settlement of the workers’ compensation matters. Attorneys may resist these measures as monies received under an employment release/resignation are considered taxable income;

• Understanding the legal considerations of paying additional funds to the employee. This is an issue regarding employment law and no necessarily a service or protection covered by a workers’ compensation insurance policy.  All monies paid as consideration for a resignation must come from the employer.

Employer Involvement in Termination Decisions

Beyond the legal aspects of including a voluntary resignation, employers play a key role in this process.  In many instances this is a business decision that must take into consideration several factors:

• The physical demands of a position and whether the employee will be able to perform certain job duties upon their return to work;

• Other return to work considerations, including whether modifications can be made to accomplish the goals of a work hardening, vocational rehabilitation or job search efforts; and

• Overall workplace morale. If employees view themselves as being “expendable” following a work injury, efforts to recruit and maintain a diverse talent base may diminish.

Other Considerations for Attorneys

There are also issues workers’ compensation defense attorneys must consider as part of the voluntary resignation process.  These issues are ethical matters and include consideration of the rules of professional conduct.  Matters for the defense attorney to consider include:

• Who is the client and whether adding another distinct legal task changes the nature and scope of whom the client might be in employment related matters;

• Who is responsible for paying for legal services rendered in the negotiating and drafting of an employment release in the global settlement; and

• Whether adding a client to a related case creates even the potential of a conflict of interest.

Failure to consider these matters can result in loss of business and one’s professional reputation.  It can even result in an ethical complaint or malpractice exposure.

Conclusions

The workers’ compensation claims process is complex and requires interested stakeholders to remain proactive.  One such area includes the consideration of a voluntary resignation and employment release as part of the global settlement.  Everyone involved in the process must be proactive and consider the risks and rewards of this important issue.

Author Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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/

©2017 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.

Leaders of claim management teams are constantly seeking solutions to solve problems.  This includes surrounding themselves with like-minded individuals who have a mindset that empathizes with the injured worker while at the same time advocating for the bottom line.  When seeking to accomplish this goal, interested stakeholders should evaluate their program and settlement procedures.  Another area of focus should include the development of relationships with defense attorneys that share the same vision as the claims management team.

Evaluate Cases Early and Attempt to Settle

All members of the workers’ compensation claim management team needs to develop the skill of evaluating a case and driving it toward timely settlement.  This involves several steps that need to be taken before referring a case for legal assistance.  Necessary steps include:

• Conducting an effective initial investigation and, if necessary, issuing a denial of primary liability grounded in the facts of the claim and the law. Failure to do so in a timely manner will only add to the cost of each claim;

• Accurately calculate the average weekly wage (AWW) to determine properly the employee’s benefits and future exposure. Most workers’ compensation benefits are grounded in the AWW.  Failure to calculate it correctly can significantly increase the time and money spent on a clam; and

• Obtain the necessary background information on the claimant and work injury. In many instances, even seasoned claim handlers are not able to settle a case given their lackluster efforts in doing basic research on a claim.

Identify Defense Counsel with Similar Values

Members of the claims management team need to expand their horizons and continually develop relationships with members of the defense bar.  This investigation needs to go beyond where an attorney went to law school or the name of their law firm.

• Build relationships: There are countless opportunities to meet defense attorneys.  This can include bar association functions, claims association meetings or involvement in community programs.  Claim handlers serious about seeking creative solutions need to be proactive when it comes to finding the right attorney.  A factor should not include who is offering a free lunch or tickets to the big game.

• Ideals Consistent with Your Program: Part of getting to know a defense attorney needs to go beyond that person’s favorite restaurant.  Members of the claims management team who want to find the best fit for their program need to understand the defense attorney’s strengths, opportunities to become a better lawyer and their views on how to handle claim.

Claim Updates and Consistent Status Reporting

Knowing what is going on in a case is important for anyone involved in handling workers’ compensation claim.  This is due to the speed at which claims are handled, litigated and moved toward final resolution.  Effective claim handlers need to seek out attorneys dedicated to keeping them involved and apprised of claim developments.

• One effective tool to do this is a status report. A typical status report should include information on the facts of the case, a clear and concise legal analysis and proactive recommendations for further handling.  There should be no surprises.  This includes matters concerning case evaluation, the exposure of a claim and what likely will happen.

Conclusions

Running an effective claims management team and handling individual claims is demanding work.  This requires the individual claim handler to be proactive in the early part of a case as they investigate the injury and make determinations regarding liability.  Another important point is for claim handlers to develop relationships with attorneys to drive claims to settlement.

Author Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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/

©2017 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.

Litigation management is a crucial element of controlling your workers’ comp costs. Otherwise, you may be paying significant dollars for a variety of seemingly miniscule costs — all of which are easily avoidable. Your company’s mindset toward a layer should be that of a partner who can bring value to your worker’s comp program.

The Right Fit

Partnering with the right lawyer is the first step to reigning in legal costs. Rather than hiring someone ‘off the rack,’ your defense attorney should be someone who understands and shares your company’s culture and works with your organization to find ways of achieving best outcomes while keeping an eye on costs. You want someone with whom you can easily communicate — even on cases that are not being litigated.

Here are some factors to consider in deciding on a lawyer:

• Ask for recommendations. Seek input from others in similar businesses to yours. L-ook for attorneys who are considered part of the team.
• Get references. Especially if you are not sure whom to ask for recommendations, talk to clients of attorneys you are considering.
• Do a meet-and-greet. Don’t rely on phone or email interviews. You want to feel comfortable with the person you hire and vice versa. Bring him to your company, show him your facilities and see how he interacts with others involved in your workers’ comp program and other areas of your organization. Also, see how your TPA gets along with the person and vice versa.
• Ask questions. Find out the fees he charges as well as overall litigation costs.

Best Bang for the Buck

Once hired, your attorney should help you manage claims by showing what he can and should do and what you and your company can do.

• Accident investigations. Work with your attorney to find out what information you should obtain immediately following an injury that will help in the long run. Interviewing all relevant witnesses, taking recorded statements and creating a paper trail are among the best practices. These actions will cut down on the amount of work required of the attorney or other outside vendors later on, should the claim be litigated.
• Approvals/denials. Your attorney can help your claims adjusters better understand which claims can be defended if they are denied, and which are clearly compensable. You don’t want to waste time and money fighting losing battles.
• Determine who has responsibility for what. Defense counsels should do the work that is in their areas of expertise; likewise the claims adjuster, nurse case manager, TPA, etc. Completing wage forms, for example, should be the duty of the adjuster in most cases; however, they attorney may be better served taking on this responsibility if, say, the injured worker was employed for only a short period of time or was paid in a nontraditional manner. In that case, the attorney may be better able to calculate the wages. While nurse case managers and others are aptly qualified to complete many forms, the attorney should at least be consulted if the injury is complex or multiple body parts are involved. An attorney should be the one to obtain medical records when a case is in litigation — even if a nurse case manager has already obtained them. By using a subpoena, an attorney can get a more complete set of records.

Check the Facts

Even if you have hired the best workers’ comp defense attorney who is doing a great job helping your company, you still need to understand his bill and see if there are areas for reductions. Audit companies can help review the numbers. If anything looks too legalese or vague, ask questions until you are clear on what is being charged for what. Make sure you are paying for actual time spent on your claims and not on administrative tasks.

Summary

Instead of a necessary business expense, your attorney should be an asset to your company — someone who helps streamline the claims process.

For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices.

Contact: mstack@reduceyourworkerscomp.com.

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

Live Stream WC Training: http://workerscompclub.com/livestreamtraining.com

©2017 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.

Selecting the right person to defend a workers’ compensation claim is an important component of any program.  Not selecting the right attorney can be detrimental.  This includes failing to settle cases in a timely manner, unnecessary litigation costs and other missed opportunities.  Now is the time to review the panel of attorneys you are working with and remove those who are not meeting the needs of your program.

It All Starts with the Selection Process

Over the years, experienced claim handlers develop relationships with countless attorneys who defend workers compensation and other insurance related claims.  This results in a referral process where various firms are selected to represent the program on claims and the funneling of a consistent file load to those who make the grade.  While the development of these relationships is great, it can often have a negative impact on your claim files if the attorneys are not meeting the objectives of your program.

The review of defense attorneys and panels should done on an ongoing basis.  While the development of a prior professional relationship is important, it should never be the sole or controlling factor.

Important Factors to Consider

There are a number of factors members of the claims management team should consider when selecting the right attorney to defend a case.  This includes some thoughtful consideration on the part of all members on the claims team who need to deal with and interact with attorneys.

• Ability to think independently. All workers’ compensation cases are subject to evaluation based on criteria related to the statute and interpreting case law.  While component counsel must understand these basics, effective defense attorneys have the ability to peel back the layers of a claim and develop strategies that will drive a case toward settlement.

• Ability to be a zealous advocate. This is the core of what separates a good attorney from one who is great.  In workers’ compensation, a zealous advocate is able to see through the smoke and provide the claims handler with an honest analysis on the case and all likely outcomes.  They will also be able to provide common sense solutions that take into consideration the law and other extraneous factors that are in play when it comes to a demanding file load.

• Ability to “win” every case. The inherent bias in the workers’ compensation system toward the employee and compensability of claims means a majority of cases that go to hearing will result in an award to the employee.  It is important to work with those defense attorneys who understand the biases within the system and proceed with caution.  Top-notch defense attorneys are able to pick the cases that should go to court, and settle those that are destined for failure.

Other Important Intangibles

Interested stakeholders responsible for programs should also monitor and be aware of important intangibles that make a defense attorney great.  This should never include the inducement of free tickets to sporting events or fine wine.  Instead, those who seek to improve the counsel they work with should look at other facts:

• Ability to seek creative solutions to complex problems;

• Responsiveness to inquiries such as voicemail messages and email;

• Regular status reports and forthright analysis on files; and

• A positive reputation amongst peers and ability to deal with difficult opposing counsel and claimants.

Conclusions

Most claims management teams have a number of good defense attorneys to work with on their disputed files.  The ability of claims handlers to find the great attorneys will reduce time spent on files and promote savings in their workers’ compensation program.  Part of this process includes the need to evaluate all defense counsel on a regular basis and work only with those dedicated to effective and efficient representation.

For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices.

Contact: mstack@reduceyourworkerscomp.com.

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

Live Stream WC Training: http://workerscompclub.com/livestreamtraining.com

©2016 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.

There are many factors in the United States forcing workers to continue to work into their traditional retirement years.  Although this provides a source of dedicated workers, the downfall is that injuries tend to result in prolonged periods of disability and missed time following an injury.  It is important for members of the claim management team and attorneys defending these claims to coordinate efforts and evaluate the use of a retirement presumption defense.

Misconceptions about the Aging American Workforce

People are living longer in the United States.  The result is people are staying in the workforce well into their “retirement years.”  A recent survey noted that 37% of non-retired American say they expect to retire after age 65, and 26% at age 65.  This is steady increase for past years when Americans were planning to retire at an earlier age.  This trend is having the following impact on workers’ compensation and other disability programs:

• Increasing pressure and underfunding of the Social Security system = decreased benefits;

• Increasing dependence on other social “safety net” programs; and

• Increasing severity in injuries resulting in higher benefit awards.

Failing to Prepare for the Aging American Workforce

The aging American workforce has caught employers and other interested stakeholders by surprise.  The results of a recent DMEC & Cornell University study titled State of the Field: Absence and Disability Management Practices for an Aging Workforce should serve as a wake-up call.

• 6% of employer respondents “very” to “somewhat” concerned about an aging workforce. The transportation industry had the highest level of concern, and the financial/banking/insurance industry had lowest level of concern;

• 64% of employer respondents have not considered the aging in absence and disability programs. It was also noted that “many organizations are concerned about the implications of an aging workforce, but relatively few have considered an aging workforce in designing integrated absence and disability management programming.”

Effectively Defending Disability Claims with Dealing with Older Employees

The proper defense of every workers’ compensation claim starts with treating the injured worker with dignity and respect.  This is especially the case when dealing with persons who have worked for an employer for a majority of their working career.

One defense available in many jurisdictions is the “retirement presumption.”  This defense is typically codified in a workers’ compensation act.  Under this presumption, a certain age or receipt of Social Security Retirement Insurance Benefits creates the conclusion that a person is retired and not entitled to workers’ compensation disability benefits.  This would include Temporary Total, Temporary Partial and Permanent Total Disability benefits.

Successfully Using the Retirement Presumption Defense

Not all jurisdictions have a “retirement presumption” codified in statute or recognized under case law.  In all instances where such presumption exists, it is important to remember the defense rebuttable.  This means the employee can present evidence to demonstrate they are not retired or do not intend to retire, and thus entitled to future wage loss benefits.

When trying to employ this defense, it is important to evaluate the following factors based on medical and vocational evidence, as well as the actions or testimony of the employee.

• Express intention to retire at a certain age, or implicit actions on their part that suggest a departure from the labor market;

• Actions by the employee to apply for Social Security retirement benefits;

• Information concerning the financial status of the employee. This includes other sources of income, investments, pensions and 401K plans;

• Discussions of retirement by the employee with the employer and their representatives. Information about the employee’s intentions to retire can also be found in medical and vocational records;

• Diligent (or lack thereof) job search efforts by the employee; and

• Testimony from other lay witnesses regarding the employee’s intentions to retire.

Conclusion

Dealing with an aging workforce entails a number of challenges for stakeholders in the workers’ compensation system.  When claims occur with these parties, it is important to evaluate all possible defenses, including the retirement presumption defense.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

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

The effective claim management team should continually seek opportunities to reduce costs of managing and defending workers’ compensation claims.  This delicate dance needs to balance the interests of the client against the bottom line.  Part of this analysis includes the area of litigation costs and defense attorney referrals when a workers’ compensation claim is placed into litigation.

Referring a Claim to Defense Counsel

The first step in correctly managing defense claims includes the threshold decision of referring files out for defense.  This is a careful analysis that needs to consider a number of factors.  These items include the following:

• Procedural posture of a claim;
• The likelihood of litigation and benefits of referring a case to counsel;
• Complexity of legal issues presented in the case (and those reasonably anticipated); and
• The overall utility of managing the claim compared to benefits of having legal assistance and representation.

Another factor to consider is the experience the attorney representing the employer/insurer on the claim and their existing fee structure.

Insurance Defense Billing Structures

There are generally two types of billing structures used by attorneys in the defense of a workers’ compensation claim.  Each methodology of billing has its pros and cons.

• Hourly billing with defined billing increments; and
• Flat fee billing arrangements.

Regardless of what billing methodology is agreed upon when referring a file for defense, it is important to agree with counsel on the basic terms.  All fee arrangements should be in writing.  Important defined terms should include:

• The nature and scope of representation;
• The obligations of the parties. This can include the frequency of status reporting and file budget matters;
• Post-hearing expectations, including appeals;
• Whom may work on the file? This can include whether multiple attorneys can work on a file, and what roles are permissible for support staff; and
• Billing increments and fee parameters. While “block billing” is generally considered outdated, it is important to define whether this practice is acceptable.

Defining the billing rates for associates, senior associates and shareholders is also necessary.

Moving Beyond the Billable Hour

Current trends indicate that insurance defense firms are interested in accepting flat fee or alternative fee structures.  Under such arrangements, insurance defense attorneys accept workers’ compensation cases for defense that do not include rates billed upon time worked on the matter.  They will instead bill the workers’ compensation insurance carrier or third-party administrator based on the service performed.  An example of these services include:

• File in-take and initial preparation of a status report. This will include a review of the information known about the claim, what additional information would be helpful to better analyze the case, legal issues present or to be anticipated and recommendations for further handling;
• Written discovery and obtaining medical/other records;
• Other discovery, including the deposition of any witnesses, the employee and experts;
• Independent medical examination cover letter preparation and post-report analysis;
• Hearing or mediation preparation;
• Attendance at any necessary conferences, mediations and hearings; and
• Post-hearing disposition of a case.

Deciding what type of fee structure works for a claim management team depends on a number of factors.  This includes anticipated costs of each billing methodology and buy-in from component legal counsel.

Conclusions

Alternative fee arrangements can reduce the costs associated with a workers’ compensation program.  Before implementing alternative fee arrangements, there are a number of important considerations.  This should include a complete review of your program and the impact on retaining efficient and capable legal counsel.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

©2016 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.

Hello, Michael Stack here with Amaxx. We’re coming up on the WCRI Annual Issues and Research Conference being held in Boston next Thursday and Friday, March 10 and 11. This is one of my favorites conferences of the year.

I have an accounting and CPA background, so the numbers, the data, the analysis, the summaries that WCRI puts together create very actionable items of how we can improve our industry moving forward, and they take the emotion out of that process to come to those conclusions. Today, I want to review one of my favorite studies that WCRI completed a few years back, and then I also want to give you a short preview of what’s going to be covered in next week’s conference.

Avoiding Litigation. What can Employers, Insurers, and State Worker’s compensation Agencies Do?

Fear of Being Fired

One of my favorites studies that I reference the most throughout the course of my trainings is called Avoiding litigation, what can employers, insurers, and state worker’s compensation agencies do? In this study, they analyzed over 6,800 claims across 11 states and looked at the factors that went into why those injured workers hired an attorney. There were a number of results that came from that study. Today, I want to highlight the top 3 findings that they discovered.

The first one was a fear of being fired. The injured workers had a fear of being fired, and if this factor was present, that injured worker was 2 to 3 times more likely to hire an attorney. Again, if the factor of the fear of being fired was present, that injured worker was 2 to 3 times more likely to hire an attorney.

Supervisor Questioned Legitimacy of the Claim

The second major finding from that study is that the supervisor, their direct supervisor, was perceived to question the legitimacy of that claim. They thought that they were either faking it or exaggerating their injury. If that factor was present, they were 8 to 18% more likely to hire an attorney.

Perception That Claim Was Denied

The third factor was their perception that their claim was denied, so whether real or imagined, their perception that their claim was denied. If this factor was present, they were 2 to 3 times more likely to hire an attorney, very similar to the first factor of the fear of being fired.

Employer Training and Communication

As we look at these findings, and again, like I said, one of my favorite things about WCRI is it takes the emotion out of how we improve our industry. How do you take these findings and now create actionable items to improve your program, to improve the program of your clients? Let’s take at these. When I look at this board, really numbers 1 and 2 fall directly on the employer. It’s all about training, it’s all about setting expectations and it’s all about communication. Fear of being fired and the supervisor’s questioning of legitimacy, that can easily be fixed with training and communication.

This third piece and the perception that the claim was denied as being a major factor of why injured workers are hiring attorneys; that to me is falling on a couple of different parties. That falls on the employer and again with their communication. It also falls on the adjuster, and it also falls on both of those, really that whole team of claims management and looking at that process. We all know that there’s a number of different items and different factors that can be at play in a claim being delayed, not getting enough information, etc.

What is your process that you’re using at your organization? What is your communication system in order to be able to communicate this information to the injured worker. Because if their perception is that their claim was denied even though it wasn’t and they hire an attorney, they’re going to delay that claim. They’re going to make that claim a lot more expensive just because you didn’t make a phone call, you didn’t send them a letter, you didn’t give them enough update on what was happening with their claim. Actionable items based on studies, based on research, based on taking the emotion out of that process.

WCRI Annual Issues & Research Conference 2016

All right. Now, let’s take a quick look at what they’re going to be covering in next week’s conference. A lot of great topics. I took a look at the agenda, and there were a couple that stood out to me, particularly the first 2 sessions on Thursday morning. Going over fee schedules and case-shifting as well as the worker outcomes across states, and then that afternoon really diving deep into the sessions on opt outs. Check out the agenda, a lot of really great information. I’m looking forward to being in attendance. If you are in attendance, I would love to say hello to you, so feel free to definitely come over, say hello, and introduce yourself. I’d love to have a discussion with you.

I look forward to seeing you hopefully next week at that WCRI Conference. My office is just outside of Boston in a town called Hingham, so it’s an easy local conference for me to attend, and hopefully you will as well.

Always remember, your success in worker’s compensation is defined by your integrity, so be great.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

©2016 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.

Imagine the following scenario when handling a workers’ compensation claim:

• John Doe is a construction worker who shows up for work on Monday morning appearing to being “a little off his game.” Shortly after starting work he falls from some scaffolding and suffers a severe work injury.  Following the accident, he was taken to a hospital.  Post-injury blood testing is performed and it is determined his blood alcohol level is three times the legal limit.  Sounds like an easy case for maintaining a denial of primary liability related to the work injury, right?

Sadly, this is not the case.

What is the “Intoxication Defense?”

Under most workers’ compensation laws, employers and insurers can successfully deny primary liability related to injuries sustained when an employee is “intoxicated.”  This defense is not limited to being impacted by alcohol.  It can also include intoxication from street drugs or other controlled substances.

Questions as to Legal Causation

Notwithstanding the obvious impairment in the above situation, the ultimate question for the courts is typically one of the legal or proximate cause of the work injury.  One example of this issue came into play in Kowalik v. Martinson Construction, July 8, 2004, MN WCCA.

In Kowalik, the employee suffered injuries from a fall while being significantly intoxicated.  At hearing, testimony was presented that the employee was able to function at work despite his state of drunkenness.  It was also noted he was a capable carpenter.  The court found the injury to be compensable based on the finding of fact the fall was caused by loose subfascia at the construction site and not the employee’s intoxication.

The successful assertion of this affirmative defense fails on a frequent basis.  This is based on the requirement that the party seeking to defend the case on these ground prove the following elements:

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

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

Failing to prove both elements can be fatal to defending a workers’ compensation case.

Other Legal Barriers

Stakeholders in the workers’ compensation system seeking to assert successfully this defense have other legal barriers.  These include the following:

• Challenges to the accuracy of the testing;

• Questions as to whether the Employee did not unlawfully use the substance in question;

• Passive ingestion or inhalation of a controlled substance. Given the increasing legalization of marijuana on the state level, this will be a question for the courts to review; and

• Issues concerning the disabling impact of a controlled substance. This will again be an issue due to the prevalent use of marijuana recreationally.  An injured worker may argue that although the substance is present in their system, it was not disabling and merely residual.

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Practice Pointers for Asserting the Defense

All members of the claims management team need to take a proactive approach when handling cases where an intoxication defense can render a claim non-compensable.

• Selecting the proper expert is central to these cases. Part of this will include having an expert testify that the intoxication, and no other factors was the legal cause of the work injury.  This is important given the result in Kowalik.

• Rapid post-injury response that includes post-injury drug and alcohol testing.

• Training managers and supervisors to recognize employees who may be intoxicated in the work place. This goes beyond the common signs of intoxication such as stumbling, stammering and poor coordination.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a monthly basis working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

©2015 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.

Workers’ comp legal defense expenses are increasing at an alarming rate. For instance, California Workers Compensation – Aon Advisory Bulletin from a study by WCIRB of California, said allocated costs (mostly attorney payments) increased 7.3% in 2013.”

Overzealous defense counsel and untrained (or spineless) adjusters can prolong litigation, increase costs and wreak havoc on the lives of injured workers. Let’s take a look at how risk managers can more closely manage the process.

1) Review outside counsel financial arrangements.

Consider capped fees, flat fees, or “invoice paid upon file completion.” The latter allows outside counsel to defend the claim but discourages runaway fees for unnecessary hearings by having the entire fee paid at the end. With just one bill instead of monthly bills, excessive fees are more noticeable and easier to compare against other cases and law firms. It makes attorneys who are milking the claim more visible.

This is a good approach if you use the same attorney frequently.  However, this approach should not be used in a locale where the defense counsel only has one case.  You could end up with an excessive bill with little recourse other than fighting over the bill.

2) Conduct an independent audit to assess whether an attorney was needed in the first place, or whether they have just been assigned the case to do work the adjuster was too busy to do.

A favorite ploy of overworked or lazy adjusters is to let the defense counsel handle everything.  Don’t pay a lawyer to do the adjuster’s job.  An independent claims audit will uncover any such problems.

Are the same attorneys requesting hearings on the same issue repeatedly or requesting hearings on issues they are likely to lose? E.g. if terminated benefits are often reinstated at hearings, it indicates that benefits are being terminated without sufficient cause. This is one example of “churning.”

Churning is any activity for the sole purpose of increasing the legal bill. It can include unnecessary research, motions and discovery; having another attorney in the firm review the case; and having a paralegal or associate undertake an unnecessary action. Before the hearing, the adjuster should discuss with the attorney the need for the hearing, and the probable outcome. If you know you are going to lose, have counsel resolve the issue with the opposing counsel instead.  It will save both legal fees and unnecessary claim cost (indemnity and medical costs continue while you wait for the hearing).  You’ll move the file faster, at lower cost, to resolution.

3) Review whether “opportunities for agreement” between counsel are ignored.

For example, in Connecticut a claimant’s doctor can be changed with agreement of counsel, but defense lawyers never agree because it is more profitable to have a junior attorney attend these hearings.

Knowledgeable defense counsel will know which doctors are over-treating and over-rating disability, which doctors are known for unbiased treatment and ratings, and which doctors are conservative in their treatment and ratings.

Does defense counsel make unfounded accusations of misbehavior or wrongdoing against claimants on every claim to obfuscate issues and prolong the litigation? If your lawyer is not totally objective in assessing both the claim and the claimant, get someone else.

Red flag research charges. Very little legal research is necessary except in unusual claims.

4) Adjusters – with sufficient authority – should attend all hearings with defense counsel.

Sometimes there are opportunities to settle litigation during hearings. Often, seasoned adjusters are capable of attending hearings without a lawyer. This is not allowed in some jurisdictions.

5) An employer representative should be available to testify about job requirements and transitional duty.

To verify you are controlling your legal fees, have a litigation management review by an independent claims auditor to determine the effectiveness of your adjusters in controlling legal expenses.  Second, have an experienced legal bill auditor review legal invoices.

 
Rebecca Shafer is an expert in workers’ compensation cost containment and the author of 2015 Ultimate Guide to Mastering Workers Comp Costs: Reduce Costs 2%-50%. Shafer has developed training programs for organizations of all sizes to reduce workers’ compensation costs 20%-50%.  Her clients have included CVS, The New York Times, Knight- Ridder, Cablevision, Wyeth, First Group America and many others. She can be reached at Rebecca@WCManual.com or 860-553-6604.