Every self-insured employer has to contend with the occasional workers’ compensation claim the employer feels is of questionable validity.  The urge is often to ‘fight fire with fire.’  However great the urge is to give the employee ‘a taste of his own medicine,’ the employer must hold itself above taking the low road taken by the employee.  Just as there are laws in every state against insurance fraud, there are also laws in every state that have names such as “unfair claim settlement practices.”

Unfair claim practices are any action taken by the self-insured employer that is unfair, discriminatory, deceptive, or misrepresent the facts.  Any inappropriate conduct by the self-insured employer can land the employer in legal trouble.  Also, if a particularly unfair practice is shown to occur with any frequency, the insurance regulatory authority will review their approval of your self-insurance status.

Common Mistakes That Get Employers In Trouble

While there is a wide array of inappropriate actions a self-insured employer can get into trouble for, we will discuss only the most common mistakes an employer might make that would be classified as an unfair claims practice.

• Delaying the processing of a claim – the self-insured employer cannot refuse to process the Employer’s First Report of Injury form or delay sending the required forms to the employee or the required forms to the state agency that oversees workers’ compensation.

• Delaying the necessary investigation of the claim – most states require the claims office to accept or deny the claim within a specific period of time.  If the claim is not accepted or denied timely, in most states the lack of a timely decision is acceptance of the claim.  Worst yet, if the employer does not investigate the claim within the frame specified by the state, the employee’s version of the claim facts is accepted without any rebuttal by the employer.

• Misrepresentation of coverage – the self-insured employer is handling its own claims must provide the employee making an injury claim full information on available medical care and indemnity benefits, if indemnity benefits apply.  For example:  you cannot tell the employee there is a 30 day waiting period for indemnity benefits.  Or, you cannot tell the employee that required medical services are not covered.

• Withholding payment of benefits – the self-insured employer who has accepted a claim, or has received an adverse ruling on a claim, cannot withhold payment of temporary total disability benefits or the payment of medical bills to coerce a quick settlement with the employee.

• Needless duplications – the self-insured employer cannot bombard the injured employee with extra or duplicate claim forms, or have the employee repeat medical procedures that were completed properly.

• Withholding an equitable settlement – if the workers’ compensation regulatory authority has ruled that workers’ compensation coverage must be provided, the employer cannot refuse to make a good faith effort to reach a prompt and fair settlement of the claim, regardless of how the employer views the validity of the claim.

• Appealing all awards – the self-insured employer cannot make it a standard business practice to appeal all awards of workers’ compensation coverage in an effort to compel employees to settle for less than they would otherwise be entitled to.

• Putting forth an unreasonable settlement offer – the employer cannot offer to settle a workers’ compensation claim for permanent partial disability or permanent total disability for less than the requirements of the state statutes.  The settlement offer must be based on the requirements of the law.

Unfair Claims Practices Acts Designed to Protect Employer & Employee

The unfair claims practices acts are not designed to compel a self-insured employer to pay fraudulent workers’ compensation claims.  The unfair claims practices act statutes are structured to compel the self-insured employer to investigate thoroughly all claims. These statutes mandate the employer to either accept an employee’s work comp claim or to provide the reasons and the documentation as to why the work comp claim is not owed.

When the self-insured employer is confronted with the questionable claim, the employer should investigate the claim completely gathering all information from the employee, the co-workers, witnesses, medical providers, past employers, past medical providers, state agencies, the Insurance Services Office, and all other sources.  A decision on the claim should be made timely, and the decision should be conveyed to the employee and the state agency.

By acting in an unbiased and factual manner, the self-insured employer will avoid any violation of the unfair claim settlement practices acts.

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: http://blog.reduceyourworkerscomp.com/

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

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

A common issue in the compensability of a workers’ compensation claim includes a determination of whether the injured party is an employee or independent contractor.  This is important for employer stakeholders to understand as the issue is often subject to litigation.

Important Factors to Consider

The law concerning employee relationships is defined by each state or jurisdiction, which results in differing interpretations.  It is important to understand the law in the jurisdiction where the claim arises or could be venued.  When in doubt, always consult with an attorney.

Here are some common elements found under state workers’ compensation law to consider:

1) Financial control.

This deals with issues concerning whether the employer has the right of control in the various business aspects of the relationship with the injured party.  Careful inquiry and examination must include:

• How the person is reimbursed for their time. While the issuance of a 1099 tax form is key, it is not always determinative on the issue.

• How the party and employer handle unreimbursed business expenses. In all instances, a true independent contractor are more likely to have unreimbursed expenses than employees.

• The investment of the worker’s time. In a true independent contractor relationship, the only investment the person will have is the actual time they spend on work.

2) Behavioral Control

This inquiry involves the understanding on what instructions the employer will give to the person performing work.  Key questions that need to be asked include:

• When and where to do the work?

• What tools or equipment to use?

• What workers to hire or to assist with the work?

• Where to purchase supplies and services?

• What work a specified individual must perform?

• What order or sequence to follow?

Issues of “behavioral control” are often central to investigations in construction workers such as siders, roofers and other work that can be considered seasonal.  Allowing an “independent contractor” to use company tools can be fatal to an assertion the party was not an employee.

3) Types of Business Relationships

Courts will also examine the nature of agreements—both verbal and written.  This includes documents signed between the person and employer.  Merely calling someone an “independent contractor” does little to avoid establishing an employee-employer relationship, and thus compensability should an injury arise.  Having a written document calling someone an independent contractor can give a false sense of security and shattered hopes of defeating a claim at hearing before a compensation judge or industrial commission.

• Written contracts. Courts give little deference to what a person is described as in a written agreement.  The devil is always in the details.  A potential employer should not forget to memorialize the arrangement in writing.  It is still an important piece of evidence.

• Insurance agreements and other fringe benefits. An employee-employer relationship can be established if the person in question receives tangible benefits beyond payment for the labor they perform.  In many instances, court have declared a person to be an employee for purpose of workers’ compensation based on the payment of other benefits or perks such as pension plans, 401K contributions, vacation pay, sick pay or other forms of PTO.

• Tenure of service. The longer a person works an employer, the greater the risk there is for them to become an employee.  In order to avoid this situation, the written independent contractor agreement should be for a defined period, or specific to a particular project.

Conclusions

Central to the determination of whether someone is an independent contractor revolves around issues of control.  The more control a company has over an individual, the more likely they look like an employee and resulting injuries are compensable.  It is important to be aware of these issues to avoid unnecessary costs in your workers’ compensation program.

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

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/

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

©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.

Big data. Predictive analytics. Very sophisticated modeling to predict claims outcomes versus a paper and a pen. I’m Michael Stack with Amaxx and today I’m going to be telling you how to guarantee better claim outcomes without spending any additional money and only maybe about 20 to 30 minutes of additional work on your claim.

Now, don’t get me wrong. Big data, predictive analytics, sophisticated claims modeling to predict claims outcomes, incredibly valuable tool and resource that the companies are specializing in this information and then bringing it to the market place give for our industry. But for your employee, Tom Smith, who gets injured today, you’re going to have the most impact and guarantee a better outcome for Tom’s claim with a paper and a pen.

Look at Your Last 5 First Report of Injury

Let me tell you what I mean. What I want you to do is pull out your last five first-reports of injury. Go ahead and pull those out and take a look at them. How well are they completed? How well are they, on a scale from one to ten? What would you get it? Would you give it a one, would you give it three, would you give it a five, would you give it a ten? I’m going to bet that there’s room for improvement in the completion of your first reports of injury. Here’s what I want you to do, is that I want you to realize that how well that first report of injury is completed is a huge determining factor in how well that claim is going to go. I want you to step up your game in the completion of those first reports of injury because it’s going to guarantee for Tom’s claim, who gets injured today, a better outcome for Tom and thereby a better outcome for you in reduced worker’s comp cost.

4 Points To Properly Execute

When you’re taking a look at these first reports, here’s the information that I want you to look at and see if you can have room for improvement here. First point is who’s responsible for completing these? Is it Jane, Jane the low-level employee and Jane just whips through this in three minutes and says, “I don’t know, that was Tom and he fell off a ladder,” and check-check-check and leaves a whole bunch of blank information? Or, is it a highly responsible accountable person, is it you that’s completing this, or is it you that’s holding that person accountable for getting all the information that you need?

Step number two is, is all the basic information right? Do you have the name right, do you have the social security right, do you have the average weekly wage correct, do you have the date of injury correct? This happens so often it is criminal that this basic information is wrong and the amount of litigation a problem that it causes in a claim just because you didn’t get this right, is incredible.

Number three is I want you to look at the mechanism of injury. Do you have information about the mechanism of injury or is it just written, “Tom fell of a ladder and hurt his low back”. Sorry, that’s not really going to help me very much. That’s not going to cut it in the investigation of a claim. The mechanism of injury, was Tom lifting, was he pulling, was he twisting? Was he carrying paint buckets when he was going up that ladder? Was it against the roof, was it against the siding? Was it a big ladder, was it a small ladder? What was it that caused that injury? What was that mechanism of injury? What are those details surrounding that?

Finally, what is the context of the injury. Again, painting that picture of what actually happened. Was Tom inside, was he outside? Was he in the warehouse? Was he lifting up and putting something in the third shelf or was he lifting up and putting it up on the second shelf? What happened? What is that picture making that very crystal clear for what actually happened on that claim? Without good information we can’t make a good decision and the processing of big data, without good data going in you’re not going to get good data going out. Spend that extra 15, 20, even 30 minutes on Tom’s injury, detailing this out, take a look at your first reports of injury, step up our game in getting information ready and you will guarantee yourself better worker’s comp claim outcomes.

Learn More About Reducing Workers’ Comp Costs

Again, I’m Michael Stack with Amaxx and if you’re watching this video somewhere other than reduceyourworkerscomp.com, go ahead and go to that website, sign up for a lot more free information on how to control your worker’s comp costs. To take it one step further, you can go to workers compclub.com/livestreamtraining and sign up for my next live stream training. Again, I’m Michael Stack with Amaxx, remember your success in worker’s compensation is defined by your integrity, so be great!

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

©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.

When employees can make more staying home than working, there is very little incentive to return to work.

Collateral Source Benefits

A collateral source benefit acts as a “collateral source” of income or perk. It creates a situation where an injured employee has an incentive NOT to work.

While providing certain benefits can foster employee loyalty for many productive years, sometimes these benefits can be offset without a complete injury management program and excellent employee communication.

Involve all departments in designing, administering and maintaining policies. In a large company, human resources, labor and industrial relations, and employee benefits and compensation as well as workers’ comp departments must all be involved. Incentives to remain at and return to work must be built into management systems. Disincentives must be removed from all direct and indirect sources. Substantial savings can be achieved when a company coordinates its salary, benefits and compensation programs so employees are not rewarded by staying out of work.

The following are employee perks that may form disincentives to returning to work:

Salary and Wage Continuation

Some companies pay 100 percent of salary instead of an employee collecting workers’ compensation for short term injuries.

Occupational Injury Pay Supplements

Some companies pay supplemental benefits to make up the difference between workers’ compensation benefits and regular earnings.

Open-Ended Job Return

Holding open an employee’s job indefinitely does not encourage them to return to work as quick as possible. Instead, employers should hold jobs open for a specific time period, such as six or nine months.

Vacation and Sick Time

Companies frequently allow vacation and sick time to accrue for employees on workers’ compensation. Some even allow employees to “borrow” more sick time if they need to stay out of work longer.

Short-Term Disability

In some companies, disabled employees receive STD benefits after six weeks. However, the standard definition for the disability policy may differ from that of workers’ comp, allowing an employee to collect both. Combined with some personal insurance policies, this double income means that the worker’s at-home pay exceeds their at-work pay. Eliminate double dipping. Although an employee’s personal insurance is their own, employers should deduct workers’ compensation from other duplicative company payments. Otherwise this encourages malingering.

Perk Continuation

Employers often maintain ancillary benefits and privileges such as car allowances, club and professional dues, company store privileges and periodical subscriptions for employees on leave.

Loan Protection Policies

Individual insurance policies are available to pay mortgages and consumer loans such as car loans and credit card debts in the case of a disability. Credit disability insurance may eliminate house and car payments while being unable to work.

Unemployment Compensation

In a few states, an employee receiving workers’ comp also can qualify for state unemployment benefits under certain circumstances. To prevent this form of double dipping, companies should offer all injured workers transitional jobs they can perform even with their physical restrictions. Under the eligibility rules, workers who refuse such offers will not be deemed unemployed as they must be both able and available for suitable work.

Pension and Retirement Plans

If these plans do not allow for offset of workers’ comp benefits, an employee can receive workers’ compensation benefits and a full pension.

Legal Actions

An employee can file a product liability action against the manufacturer of a product that injured him to collect damages. If the employee was injured in a motor vehicle accident, there may be insurance proceeds involved. The employer should seek reimbursement for workers’ comp payment from any such settlement.

To prevent driving up your costs, ask yourself: What Benefits Are Injured Workers Getting by Not Working?

Many companies fail to look closely enough at their internal wage and benefits structure when looking to reduce workers’ compensation costs. Look for these collateral income sources that provide built-in disincentives to remaining injury-free or returning to work. Even such things as reduced childcare and commuting expenses while at home can be disincentives to returning to work.

If not properly coordinated, a company’s employee benefit and compensation programs may inadvertently serve to extend workers’ compensation absences.

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.

Should employers be involved in investigating dubious compensation claims? Yes, of course – if they do it correctly. Two examples show, rather dramatically, a right way and a wrong way. Each, in its own way, serves as an example from which an employer may learn. Both examples are completely true events which occurred in the New York City area a few years ago.

Right Way To Investigate A Claim

First, the right way. A small employer had a worker out of work from a work comp claim. A co-worker reported to the employer that the worker on disability was working off the books as a self-employer owner of a truck vending coffee and snacks.

The employer, at its own expense, engaged an investigator to trail the employee. Rather quickly, impressive motion pictures captured the employee selling from the truck. Even more dramatic was the footage showing the employee performing repairs on the truck, crawling under it with a large wrench and playfully twirling the wrench after he crawled back out.

The footage showed not merely an exaggerated claim but considerable IRS fraud as well. The employer forwarded the material to the carrier, and had it shown at a workers’ compensation board hearing. The worker made an excuse that he could not attend the hearing as he had to go to his cousin’s wedding. The claim, of course, was closed without further awards.

Wrong Way To Investigate A Claim

Now, the wrong way. A moderately large self-insured employer had an in-house workers’ compensation claims unit. The unit was told that a worker out on a work comp claim, was, in fact, working. The unit quickly engaged an investigator to follow the worker and photograph him reporting to work. The investigator reported back that he had succeeded. Would the employer approve further detailed investigation? It did. Films were sent showing conclusively that the employee was reporting daily for work.

The problem? He was reporting to his regular job with his employer. He was, in fact, working one floor below the workers’ compensation unit! And the investigator was a former claims examiner who had handled workers’ compensation claims, at a TPA, for that very employer.

Ask Questions, Look At Pictures & Reports

In both cases the employer had received factually correct information. In the second case, the employer had never asked the correct question – who is the employer paying this employee? Nor did the employer ask to see the first photos, showing the worker driving into its own parking lot!

The first employer, a rank amateur at claims and investigations, had used a little common sense and got everything right. The second used a team approach with trained professionals and provided its outside counsel with a “you can’t make this up” story for future seminars.

But the second employer was fortunate in that the investigation effort never got beyond the unit and served as a live training event. The unit never made a similar mistake again.

Please, be involved. Just ask one or two more questions.

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

©2015 Amaxx Risk Solutions, Inc. 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, so we’re 11 days until Christmas in the final countdown stage here to make sure you got those final gifts wrapped got everything prepared for the big day. Of course we also know Santa’s up in North Pole and he’s double checking his list as well to see if your work comp program has been naughty or nice.

Reason #1 – “Hope” Medical Treatment

I want to talk about three ways that you would land on Santa’s work comp naught list. Here’s number one, and I call this “hope” medical treatment and if you have ever read any of the reports or you’ve talked with an injured worker that has been involved in what I like to call a work comp horror story. Something in that claim went wrong right in at beginning, where they weren’t able to get the medical treatment that they needed. And part of the reason for that for that is this “hope” medical treatment, where you hope that they get to the doctor, you hope that they see the right person, and you hope that they start that healing and recovery process.

Transport the Injured Worker to the Doctor

Here is one way to prevent that. You need to be transporting the injured worker to the doctor after the injury…you need to be transporting the injured worker to the doctor after the injury. To make sure that they get there, make sure that they are getting the treatment that they need to start the healing and recovery process. The second thing you are doing is you are staying with them, staying with them through the treatment. And then when the treatment is done you are taking them back to them company to get them back to work right away, or you’re taking them home if they can’t get back to work right away. And if you do take them home, you are going to talk to the spouse while you are there as well.  Demonstrate that care, talk about what happened in the accident, and just demonstrate that you want to get them back to work right away, to have them continue to be productive for themselves, of course, for their family, and for your organization.  So, that is number one.

Reason #2 – Zero Communication

Number two way to end up on Santa’s Work Comp Naughty List, is zero communication.  Now let’s say, this scenario, I’ve been working for you for 15 years, I’ve developed some pretty good rapport, developed some pretty good relationships at the company.  Now I get injured, and I don’t hear from anybody, it’s crickets.  I felt like I was a part of an organization, a part of a community, I felt like I was a part of something, and now I feel like an outcast.  Because I have never heard from anyone, or if I did hear from someone, it was someone in the corporate office, all the way on the other side of the country, that is a very cold communication.

First Day Phone Call / First Day Visit; Followed By Weekly Meetings

So, what you want to do is you want to do a first day phone call, or better yet, a first day visit, to the hospital.  From someone that I had a relationship with, ideally my direct supervisor, or someone in the company that I know, that I felt like I was a part of that community.  A first day phone call or a first day visit, and then you are going to follow that up with weekly meetings.

You are going to be bringing me into the company so that I, again, can see my friends, see my peers, feel like I’m connected, feel like I’m a part of your organization.  You are talking about the transitional duty job that I’m on, you are talking about the medical treatment, and you are making sure that everything is progressing as it should.

Reason #3 – “My TPA Will Handle It”

And the final way to end up on Santa’s work comp naughty list, is the feeling that my “TPA Will Handle It”, the feeling that my “TPA Will Handle It”, so we see this so often, abdicating the responsibility of the management of work comp in an employer’s organization to the TPA, and blaming them for everything that is going wrong.  And if you are not blaming the TPA, you are blaming the broker, or your blaming the vendors, or blaming the attorney, blaming everyone else, except for yourself.

Employer Has Most Responsibility To Control Work Comp Costs

And the reality is the employer has the most control, the most accountability, and the most responsibility for their work comp management program.  All of the other parties play very significant roles, but they can’t really do their job effectively without the employer taking the reins and taking that reasonability and accountability.  So, once an employer has that perspective, then they are in great shape to really work effectively with those service providers.

So, that is 3 ways to end up on Santa’s naughty list, and if you do end up on the naughty list, it’s not coal that he’s going to be delivering to you, it’s going to be significantly increased work comp costs, significantly increased work comp premiums, and significantly negative experiences for your injured workers at your organization, so hopefully you avoided those this year, or you can avoid them moving into 2016.

So, remember, your work comp success, your success in the work comp industry, is defined by your integrity. So be great, and Merry Christmas!

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.

©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.

Waiting periods are variable in every jurisdiction.  Michigan for example has a 7 day waiting period before wage loss benefits start.  TTD starts on the 8^th day, and if still off by day 14 then the first 7 days are then picked up and paid if the worker is still out of work.  Wisconsin is a little different, with a 3 day waiting period and TTD starting on day 4, with days 1-2-3 being picked up if the worker is not back by day 8.

These examples of waiting periods show the differences between states.  Some are more, some are less.  They are meant to be used in good faith, to give the employer time to investigate and report an injury to their carrier, and then for the carrier to take receipt of the injury and complete their investigation.

Waiting Periods Are Being Used In Bad Faith

Sadly, I have viewed examples of waiting periods used against the injured worker in bad faith.  Not to avoid paying the claim, but in bad faith by trying to save money and not compensate the injured worker for those days wages.

Let us use Michigan as an example.  Say a worker reports an injury and goes for treatment.  The injury is common, witnessed, and there are no outstanding issues.  Instead of placing the worker in a light duty program where they can continue to be compensated, they are placed off of work, in a feeble attempt to starve out the employee in order to gain a full duty release quicker than normal.

This worker has a laceration injury, their hand is wrapped up, and they cannot perform their normal job.  The carrier/employer state that they cannot accommodate the restriction of keeping the wound “clean and dry.”  The worker then is released to full duty after 6 days of disability, and returns to work on day 7.  In the Michigan jurisdiction, this means the worker will net $0 in TTD payments.

Let us now view this from each standpoint:

• The carrier is OK with this, since the file still would remain a non-lost-time file because the worker did not clear the waiting period to be eligible for TTD.  They have a full duty release.  The injury was not questioned or suspicious.  Their file will consist of paying a couple medical bills and will close.  In their mind, perhaps they feel they saved their client 6 days of light duty work at the workers regular wage because the worker was not placed in the light duty program.

• The employer had a worker sustain a minor injury.  The medical was paid for.  They were not on the hook for paying normal gross wages for a worker in their light duty work program, so essentially they saved 6 days of gross wages.

• The worker is not very happy.  They sustained an injury, and yes the medical was paid but they were not placed in any light duty position.  Surprise to the worker, they knew nothing about a waiting period in work comp.  After talking with the adjuster they learn they were taken for a ride with their last 6 days of pay; the worker is very displeased—and rightfully so.  The 6 days of pay could mean a lot to that worker, and to their family.  Now this worker has a large mistrust for their employer, and they will let anyone and everyone know about it.

Taking everything in to consideration, was this worker treated fairly?  The obvious answer is no.  If a light duty work program does indeed exist, why would they not be placed in to that program, to save a measly few days of pay?  Is this what workers mean to carriers and employers?  The empathy for an injured worker exists very little these days, and that is really a shame.

A Sad & Outrageous Practice

Carrier/employers may use these types of cases to show a statistic—saved money on work comp cases.  A case here and there might not amount to much, but think about if a carrier utilized this tactic on every case.  Placing workers back to work (in Michigan) on day 8 after an injury which means that this worker will lose out on 7 days of pay.  Over the course of a policy year the savings could be sizeable.  However, as an employer if you are cutting the throats of your own employees by utilizing this tactic, after they were injured working for you, then everyone else should be outraged.

It is very easy to be disassociated with work comp.  Injured workers become file numbers.  The human factor is removed.  An adjuster working at a desk 5 states away will never see this worker, their family, and probably will care very little if at all.  If the work comp world has become this callous, and this far removed over saving minimal amounts of dollars then I hope this practice is not as commonplace as I think it could be.  The fact that I even have to mention something like this happening within the realm of workers compensation is a sad for all of us in this business.

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.

Most employers could be paying less in workers compensation premiums if they participated more. An example of an employer who tried a little, but not enough, shows how effective participation is essential. What follows took place a few years ago and is completely true.

Employer Heard A Rumor The Employee Was Working

A large employer had a problem workers compensation claim. The employee was not trusted. The employer heard a report that the employee was, in fact, working. The employer notified it’s carrier who began an investigation. An investigator was assigned to catch the employee working and document it, if possible, with films.

The investigator succeeded, but requested additional time to fully document the work activity. It was granted. The investigator sent a considerable amount of film showing the employee driving to work and parking his car every morning at 8AM.

The Problem? He Was Working At His Old Job

The problem? He was driving to the employer’s main plant. He had, in fact, returned to his old job.

Bad communication. Very bad! The personnel department did not automatically communicate with the risk manager. The risk manager took a rumor and assumed that the carrier would find out the truth, which, eventually, it did. The attorney for the employer/carrier was the last to know that all this was in progress. The investigator said that it had completed the assignment as requested. Who was he to question why the employer wanted to photograph its own employee going to his usual job?

A lot of people were left looking more than foolish. Mercifully, the employee never found out what had happened. He was never overpaid and never suspected that his every move in the employee parking lot was being watched and filmed.

This was the most extreme example of good intentions leading to a result that should have been the script for a television sit-com.

Employers Need To Be Active Participant In Work Comp Management

What should have happened was that risk manager should have spoken to personnel first. A hearsay report should never be the start of an outside investigation since the employer still had untapped resources to go to first. And a call to the outside lawyer would have warned that second hand rumors need to be seasoned with a grain of salt.

Employers are the single best source of information for the defense of workers compensation claims. The above example shows that good intentions are sometimes not enough. Raw information is at the start, not the finishing line. Information, to become useful, needs to be processed and the employer is the most efficient partner in that process.

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

©2015 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

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

I am reading the ProPublica Report with great interest because there are many things I agree with. After reading all the press brouhaha over this report however, I still regard the high cost of workers compensation (for those companies which do have high costs) mostly as a management problem.

TPA or Carrier Is Often Blamed For Workers Comp Problems

 
The companies I see — which are the ones that have huge problems — are clueless about workers comp. They turn their claims and injury process over to their claims administrator or carrier, hardly participating in the process, then they blame the TPA or carrier when costs go up even though they have done nothing internally to manage safety or injuries.

 
These companies never budget for workers’ comp management, don’t staff the risk department (if there even is a “department”) properly. THAT would cost money and our headcount would increase, they say. Often if they do have staff, they do not allow, encourage or require the staff to attend conferences, seminars or join organizations or purchase resources. THAT would cost money, they say.

Sometimes their brokers offer to help by providing consulting resources, and the companies with high workers comp costs do not see the merit in such an approach. I worked with a major entertainment facility, speaking with them once per week, on behalf of their broker, hoping to gain insight. I offered to “consult” with them since I am a consultant, getting to the root of the problem, finding the cost drivers, and fixing them is what I do. They did not need a “consultant”. Then, one day I said I could “help them develop their training program” and they accepted instantly! I had used the wrong word — they needed “training help” not “consulting help”. Within months the high cost of their workers compensation program went down to almost zero. Problem solved.

Workers Compensation Needs To Be Managed

If you don’t manage and monitor it, the process (any process, not only workers’ compensation) will not work well.

 
It’s time for employers to become involved in their own business! The first step is assessing the problem in YOUR company, not the industry in general or another company, but get that mirror out and have a look. You are most likely looking at the problem.

End.

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 author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

Editor Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. He is an expert in employer communication systems and helps employers reduce their workers comp costs by 20% to 50%. He resides in the Boston area and works as a Qualified Loss Management Program provider working with high experience modification factor companies in the Massachusetts State Risk Pool.  He is co-author of the #1 selling book on cost containment,  www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

©2015 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

SALES TO PAY FOR ACCIDENTS CALCULATOR:  http://reduceyourworkerscomp.com/sales-to-pay-for-accidents-calculator/

MODIFIED DUTY CALCULATOR:   http://reduceyourworkerscomp.com/transitional-duty-cost-calculators/

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

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

What are the biggest challenges for small, mid-sized and large businesses nationwide today?

Yes, competition is certainly a challenge that many face. For others, it is finding and retaining the best employees to get the job done and meet the satisfaction of customers. Still others find challenges in getting their message out to consumers.

With that said, reducing workers compensation costs is something that any business owner of any size should never overlook.  Whether a 30% savings for you equals $3,000 or $300,000, there is no reason a business should be overpaying for workers compensation.

Among the Top 10  excuses businesses claim for why they have not implemented a program to reduce their workers compensation costs.

1. Too costly, something that in reality is a misperception, referring to the cost containment process;
2. The business is decentralized and its operating units are in fact autonomous;
3. The company is centralized, thereby making it unable to have any sort of influence on the operating units’ decision-making;
4. The business is unionized, therefore the union will forbid it from making the necessary changes (in most cases, this is simply false);
5. A business that is too large (one with an abundant amount of silos, regulation and inflexibility) or too small (too few resources) can’t decrease costs;
6. The business simply believes it is unable to have a return to work program;
7. The company believes it is unable to produce modified or transitional positions in its environment;
8. The company’s management does not back them (bad take in order to achieve commitment);
9. In fact, the claimant’s (plaintiff) attorneys are the root of the problem, making it imepossible for the company to improve;
10.  Those businesses based in other countries with U.S. operations claim there is too much litigation in America.

At the end of the day, many businesses simply do not have the wherewithal on how to go about decreasing comp costs.

In fact, with a little time and effort, many of the roadblocks to reducing comp costs can be turned aside, despite what seems like overwhelming obstacles at the start of a cost containment program.

Pick One Strategy And Get Started

The best way to go about it is to break down the process into smaller pieces, making it easier to handle over time.  Pick one simple piece of the puzzle like injury response, or return to work and get started.  As the great Zig Ziglar said, “you don’t have to be great to start, but you do have to start to be great!”

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

WORK COMP CALCULATOR:   http://www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

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