First Report of Injury Accuracy Critical for Workers Comp Success

Delegating First Report of Injury Can Create Problems

 

Risk managers and workers’ compensation managers normally delegate the job of filling out the First Report of Injury form (also known in some states as the Employer’s First Report). Delegation of the First Report of Injury to someone who is not extremely careful create numerous problems. All the information on the First Report of Injury needs to be checked carefully before it is submitted to the claims office and to the state Workers’ Compensation Commission / Department of Labor / Industrial Commission / etc. For this article we will use Workers’ Compensation Commission (WCC) for all the states.

 

The First Report of Injury form is usually given the number 1 in most states, whether it is known as the WC-1, DWC-1, or other nomenclature. The reason the form is given numeral 1 is because normally it is the first form for both the WCC and the claims office. The information and data used by both the WCC and the claims office in setting up their files is taken from the First Report of Injury. Little errors on the First Report of Injury are copied and can create havoc.

 

 

Ensure Important Details are Correct

 

Name Spelled Correctly

The spelling of the employee’s name should be checked. If the last name is misspelled by the employer’s representative completing the First Report of Injury, the WCC will copy it verbatim. When the WCC receives medical information or other state forms which they are unable to match to an existing claim, the WCC will inquire as to why the claim has not been reported, as they could not find the work comp claim in their database.

 

 

 

Correct Social Security Number

An employer should never submit a First Report of Injury without the correct social security number (SS#). Too often when the SS# is not readily available, the employer’s representative will use a fake SS# such as 123-45-6789 or 000-00-0000 or 999-99-9999. This may get the First Report of Injury off the desk of the employer’s representative, but it creates issues for the employer, the WCC and the claims office. For the employer, it can mess up your loss run accuracy. The WCC will being call the employer and/or the claims office for the correct SS#. The claims office can submit the Insurance Services Office (ISO) inquiry with the fake SS#, but the likelihood of identifying previous insurance claims by the injured employee is greatly reduced when the SS# is not accurate.

 

 

Correct Date of Injury

When the date of injury is incorrect problems occur. In most workers’ compensation claims, the date of injury is also the date of the first medical treatment. Most claim management computer systems are programmed to kick out medical bills that occur before the date of injury. For example: an incorrect date of injury of 3-3-13 is entered on the First Report of Injury while the correct date of injury is 3-2-13. The medical bills from 3-2-13 will get denied because, to the computer system, they occurred before the date of injury. This results in phone calls from the medical provider(s) and the claims office trying to determine the correct date of injury.

 

 

Proper Wage Information

When the wage information on the First Report of Injury is incorrect, it will create problems, especially if the employee is represented by an attorney. Too often the employer’s representative will take the easy way out rather than contacting the payroll department for the correct wage information. When the employer’s representative completes the First Report of Injury reflecting the employee works 5 days a week, 8 hours per day, at the standard hourly rate for the work the employee normally does, without verifying with the payroll department, problems arise. For example, on a 40 hour week with a position that pays $10.00 per hour, $400.00 is entered as the weekly wage. But in reality, work has been slow; the employee has been absent a lot and has only averaged 32 hours per week. In this situation, the employee’s attorney often will request a hearing trying to compel the payment of disability benefits based on the higher payroll information entered on the First Report of Injury. This will force the claims adjuster to spent time and legal fees proving the correct earnings information.

 

 

Proper Type of Injury & Body Part Affected

The importance of properly entering on the First Report of Injury the type of injury and the body part affected cannot be overstated. One of the first things an attorney for the employee will do is check the First Report of Injury for the type of injury and the body part. If this information is missing, your represented employee’s injuries will expand dramatically. Neck and back injuries that you did not know the employee had on the date of injury will suddenly appear. The employee’s pre-existing medical problems will be severely aggravated. The additional medical treatment and extended time off work can be very costly when the type of injury and body part is not completed properly.

 

 

Double Check First Report of Injury Prior to Submission

Any incorrect or incomplete information on the First Report of Injury can result in problems. A lot of the problems created by wrong information can be corrected with a few phone calls or the resubmission of the First Report of Injury with the correct information. However, this is a waste of time for all the parties involved. Plus, when the First Report of Injury is inaccurate or incomplete, it can often be exploited by the employee’s attorney. To make the job easier for everyone related to the workers’ compensation claim, be sure your representative who completes the First Report of Injury checks it twice to be sure it is totally accurate.

 

 

 

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, Director of Operations, 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.

 

©2013 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 about workers comp issues.

How to Gather All Information Necessary for High Quality Claims Management

 

System Creates Repeatable, High Quality Results
A significant improvement in the world of claims management over the years is the implementation of an electronic system for entering and managing claims.  Used by employees of the Carrier/TPA, this is an automated system that assigns risk if certain conditions are present.  These systems allow the claims professional to gather more information in less time, follow up appropriately on responses to high-gain questions, and evaluate the information systematically. 

System Guides the Questions So Nothing is Missed
The person receiving the claim for the Carrier/TPA will have questions that need to be answered.  If the answers are positive for certain criteria, the system will assign the claim a risk number within certain values from the software. The higher the score, the more risk is assigned to the claim. The system will be used initially for 3-point contacts to the injured worker, the employer, and the medical provider.  Positive responses to certain criteria will pop up other questions to ask which ensures the adjuster does not forget anything that can be crucial to the claim.

When the claim arrives at the desk of the adjuster, they already have some risk areas highlighted that can negatively impact the claim.  This streamlines investigation and saves costs as the sooner a problem area can be addressed, the better.   

Adjusters are all under a heavy workload. Claims are in various stages of their lifespan, and some claims will get more attention than others.  This program presents a way for new claims to get the needed attention they require as early as possible.  Like any system, it also takes out a portion of the human factor.  After a while adjusters can get stuck in a rut and a question could be missed or skipped by accident.  The answer to that question could have a huge impact on the outcome of the claim.  This system can prevent those misses, which helps everyone in the end.  In no way does the system replace the need for a qualified adjuster, it does however, make every adjuster better.

Adjusters Can Receive Bonus for Following Best Practices

Bonus incentive can be another positive with the use of this program. Carriers/TPAs often use a bonus system to reward adjusters, and these bonuses revolve around timeliness of their contacts, resolution of their claims, and overall reserve savings by proactive claims handling.  A system that helps the adjuster hone in on what gets them salary bonuses is a nice incentive to ensure they are motivated to follow best practices.


Makes Process Efficient

Claims can also be classified based on their system score.  Medical only claims or minor lost time claims can be routed to the appropriate adjuster, instead of going initially to a senior level adjuster, only to be passed back to the medical only adjuster after contacts have been made.  Many Carrier/TPAs will assign the claim based on what information is listed in the injury report.  This process can be inefficient if the injury report was completed in error.  Time and money can be saved when each adjuster is making the highest and best use of their day.


Outside Vendor Usage Identified Right Away

Outside vendor usage can also be identified right away.  If the system has certain positives, it can trigger assignment to a field nurse case manager right away, instead of weeks after the claim process has begun.  This is another proactive benefit as the earlier a claim can be assigned to a vendor for help the better.  The outside case manager can get involved in the claim at the outset, instead of a month later.  This can equate to large cost savings as this month can include crucial moves within the claim, preventing missed work when a return to work could have been possible.  Another example is when the injured worker needs a medical referral to a specialist. Instead of waiting for the paperwork the case manager can get it at the appointment and send it to the adjuster the same day, instead of when the actual medical reports come in with the bill weeks later.


Summary

Several technological advancements are going on within the claim industry.  As an employer, you should be open to new technology, and trying new things in order to be more proactive in the claim process.  The same can be said for the adjuster.  Oftentimes the adjuster is very set in their ways, and there can be some resistance to the introduction to new techniques and new technology.  These advancements are made to help all parties involved to make the process more streamlined and more effective for the claims profession.


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, Director of Operations, 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

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

Unknown Is Not Good Enough in Work Comp Claims

Basic Information Critically Important in Claims

 

A recent NY comp decision,” Lama v SPK Restaurant, Inc.” (10/25/12), demonstrates the importance of employer providing accurate basic info as soon as possible on any alleged claim. A claim made by a person unknown to, and never employed by, the alleged employer should not be responded to by sending a document to the Board, carrier or TPA simply saying “unknown”.

 

 

Employee Alleged Assignment

 

In the “Lama” decision, a person alleged that they were assigned to sweep the sidewalk in front of 325 Broadway, NYC, on 9/14/01 (three days after the 9/11 attack) and as a result, developed pulmonary problems.

 

The worker consistently said that his employer was a Mr. Gelestathis and that the employer owned the Empire Restaurant in a one story building at 325 Broadway.

 

 

Employer Did Not Own Business or Employ Claimant, Ruled Liable

 

Mr. Gelestathis FORMERLY owned the Five Star Deli at 325 Broadway, but sold in to SPK Rest, Inc. in March 2000, who operated it as Wall Street Grill in a multi-story building.

 

Therefore, the claimant’s version was impossibly wrong as to a description of the building, the name of the restaurant, and the name of the owner, yet the Board ruled that SPK Restaurant, Inc. was the employer. The court reversed and said that NONE of the facts was consistent with that decision.

 

 

Matter Could Have Been Avoided

 

The entire matter could, probably, have been terminated far, far sooner if the alleged employers had promptly provided fuller evidence in a response. The Board assigned an investigator to locate an Empire Restaurant, and found none near 325 Broadway, but the same info could easily have been provided by both alleged employers far faster. A photograph of the location should have been included in the response, which would have shown that the claimant could not possibly be describing the alleged address. Phone books pages from the years 2000 and 2001 would have shown that no business fitting the name was listed at that address and that another restaurant entirely was there. A photo of the upper floors would have shown a multi-story building.

 

It is not stated in the decision precisely what evidence the employers provided, but the ruling, even after a field investigation showed no employer with that name at that address, shows that it could not have been very much.

 

The pitfall for the unwary lies in assuming that simply because your business has never had the alleged name, at the alleged address, and has never heard of or seen the alleged employee means that the Board won’t find you liable. It may very well do so, as it did here.

 

“Unknown” is not a response; it is a default.

 

 

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

 

Editor Michael B. Stack, CPA, Director of Operations, 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.

 

©2012 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 about workers comp issues.

Is Your Adjuster Playing Favorites With Your Claims

Adjuster Will See Thousands of Claims

 

Throughout the course of an adjuster’s career they will handle hundreds if not thousands of claims.  Most of these claims will be audited for company and state compliance, and plans of action will be discussed on all of them.  Whether to deny or accept claims can be based on a multitude of factors using the comp statues and company policies as guidelines.

 

There are no two claims that are exactly alike, the same way that there are no two adjusters that are identical.  There is room for interpretation in this field of workers compensation.  Adjusters will review the details of a claim and make a decision on the compensability based on their investigation.  But not all of these factors are based purely on law alone.  There are plenty of personality factors that are taken into account, especially when dealing with subjective claims where the claim is questionable.  But why would one person’s claim be accepted, when another person with similar circumstances could be denied?

 

 

Reputation of the injured worker

 

One of the questions a claims adjuster will ask the employer is if this claimant is a credible worker.  Since the employer deals with this worker day in and day out, they get to know whether this worker is a “troublemaker” or “dramatic” over the course of time. Some workers are known for being drama kings and queens, where they can complain about every little thing.  Other workers are workhorses, complaining little if at all about the work and just putting their nose to the grindstone and getting the job done day after day.  When it comes to subjective injury, especially one that is not witnessed, the claims adjuster will hold a lot of weight on the worker’s credibility. Sometimes this fact alone can determine whether or not a claim is accepted or denied, where the adjuster will lean towards denial of the claim based on credibility of the worker alone.  This is by no means applicable to all cases, but it can come up in the minor ones.  This fact can be very true if the worker has a history of reporting injuries about every little nick or strain.

 

On the other hand, if a “good” worker has a subjective injury, and little to no injury history, then you can bet that the employer will pass that on to the adjuster. Chances are that this claim would be accepted just based on the fact that this particular worker is never hurt, a good worker, and because they reported an injury means that they are probably in need of some medical assistance to recover.  Whether this is considered ethical or not is in the eyes of the beholder, but it is a reality.

 

It can be viewed as negative in the eyes of an adjuster if the worker was recently moved, assigned a different job, suffered a wage decrease, or was recently disciplined.  It can be seen as “getting back” at the employer if one of these events happens and all of the sudden a worker claims an unwitnessed subjective strain injury.  Whether it was warranted or not, employees can harbor some resentment towards their employer for whatever “wrong” was committed.  A lot of workers see filing an injury as a way to get back at their employer.  But just because they file an injury doesn’t mean that it will be accepted. This will come down to the investigation of the adjuster on the aspects of the claim.  Sure an injury was reported, but if it was not witnessed and the doctor cannot find anything wrong with them, did an injury actually occur?

 

 

 

90% of Claims Are Accepted

 

Keep in mind that for the most part, approximately 90% of claims are accepted.  The adjuster sees payment of a few medical bills as less costly than if they deny the claim and the worker files a lawsuit for comp benefits.  If this were to happen, the adjuster is now faced with legal fees which would probably be triple what the claim would cost if they had just accepted it, so they may accept it based on that fact alone. It will depend on the facts of the case, the reputation of the employee, and the medical details.  If nothing seems to add up, then you can bet the claim will be denied or disputed. The burden of proof is always on the injured worker.

 

 

Rapport Between Adjuster and Injured Worker

 

Maybe the most important factor in claims such as these will be the rapport between the adjuster and the injured worker.  Sometimes the relationship is like oil and water.  If this is the case, the adjuster may default to questioning everything, and making the claimant do everything by the book exactly.  If the relationship is rocky the adjuster leans toward an overall denial versus acceptance.  Especially true will be those claimants that call the adjuster over and over and over again, but not in a positive way. Saying that the “squeaky wheel gets the grease” is not always true. Sure it is common for someone to have questions about their claim, but when it turns negative in nature, adjusters are taught to notice that something may be up. That will make them take another look at the claim to make sure everything adds up.

 

On the other side of the coin, let’s say the adjuster and the injured worker click for whatever reason.  The employer sees the worker as a “good guy” and the investigation doesn’t turn up anything to go crazy about.  In this scenario, adjusters are likely to give an injured worker the benefit of the doubt.  This adjuster can let a few things slide and can push the claim towards compensability versus a denial, based on their relationship alone.

 

 

Is This Ethical?  Not Really.

 

So is this ethical?  Just because two people do not seem to see eye to eye, does that mean that their claim should be denied due to a personality conflict?  The answer depends. Ethical adjusters can look past any personality flaws and focus purely on the facts of the case, and they can make their decision on compensability based on that alone.  For all intents and purposes that is the proper way that adjusters should conduct themselves.  However, this is not reality.

 

This is where managers and audits should come in to play.  Even if everyone on Earth did not like said claimant, that should not mean that this worker cannot get their fair shake when they file for a work injury. This point should be taught to newer adjusters, and the veteran adjusters should be reminded of this from time to time.  This is the proper and professional way to conduct the determination of claims, day in and day out, no matter how little or how often you have to argue with a claimant.  Personal feelings and attitudes need to be left in your car in the parking lot when you come in to work. They should not influence if a claim is accepted or denied.

 

 

Summary

 

Adjusters will get along with some people, and they will have conflict with some people.  That is the nature of the business.  But professional adjusters can leave their personal opinions outside of the workplace, and handle claims based on the merits of their investigation.  If the employer does not see this happening, then something needs to be said to the adjuster.  Everyone deserves the right for a fair, non-biased claim investigation and determination.

 

 

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, Director of Operations, 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.

WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com

VIEW SAMPLES PAGES

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

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

Selecting a Claims Management System for a Self Insured

Sometimes a self-insured has a hodgepodge of systems to handle claims. These are often referred to as RMIS – risk management information systems. An auditor recently found, to his dismay, that a self-insured was recently using a 20-year-old version of a computer claims management system with numerous patches, upgrades and revisions. The claims management system often broke down; the claim audit itself was delayed due to one of the breakdowns. Litigation management was kept on a separate computer system. While documents were being scanned into the claims files, a parallel paper file was kept on each claim due to the claims management system’s inadequacies and failures.

 

The manager was unable to run some basic reports – closings for each month, total new claims per month, total open claims in the office for the month, etc. The IT Department had to help obtain basic claims office management data. Due to the inadequacies of the claims management system, the claims manager could not run his own analytical reports. (WCxKit)

 

 

The Cost of an Outdated Claims Management System: Flying by the Seat of the Risk Manager’s Pants

 

COST was the self-insured’s explanation of why they had such an outdated claims management system. The self-insured thought it cost too much to obtain a better system although it knew the deficiencies of their current system was causing the claims office to waste a lot of time. However, the self-insured had not quantified the cost.

 

It turns out that the self-insured spent more each month with their vendor to keep the old system going than it would cost to pay for a new claims management system. It was as if the self-insured spent $500 every month to keep an old car going, when they could have spent $500 each month paying for a new car.

 

The self-insured’s risk manager was at an extreme disadvantage in obtaining data needed to properly manage their claims and exposures. Without information, maintaining claims quality and analyzing progress or declines in the performance of the claims office was, as the claims manager said, “flying by the seat of my pants.”

 

Both the risk manager and the claims manager were making judgments and decisions based on their gut, rather than verifiable information. They both agreed they needed a better claims management system and hoped that the next revision of their current claims management system was going to make it better, a new transmission in their 20-year-old car.

 

If the next revision of the 20-year-old claims management system is unsuccessful, if the new transmission doesn’t fix the overall old vehicle’s performance, this self-insured should purchase a modern claims management system. While the process may be scary due to their concerns of making a poor choice, the selection of a claims management system designed to meet their needs can be done. However, as we advise when beginning a workers’ compensation cost reduction analysis –the biggest step is to just START – pick one thing and GO.

 

 

Finding the Right Claims Management System

 

To find a claims management system that will provide for their needs, this self-insured should consider:

 

  • Purchasing or leasing from a vendor as their IT department does not have the resources to develop their own.
  • Contacting other large self-insureds (RMIs are a good place to start) to see what systems they use and how they would rate those systems.
  • Identifying several options and
  • Obtaining detailed information from vendors on how their claims management system is integrated with medical case and litigation management.
  • Vendors who have experience at conversion of data from their old system to the new claims management system.

 

This self-insured should also consider several aspects of how the new system itself works. One of these is what does their claims system need to do? Does it need to enter file notes, create diaries or digital copies of documents, process payments, track reserves, write letters, state form filings, litigation management, medical management, etc.

 

The next issue the self-insured needs to consider is how the claims system will operate on a daily basis. Is the system:

 

  • Easy to input data, to navigate and for new employees to learn.
  • Able to respond immediately – a five second delay to change pages will add up to an extremely large amount of wasted time over millions of page changes during the life of the system.
  • Able to encrypt sensitive information like social security numbers, passwords and medical information.
  • Able to run sophisticated analytics, both canned reports and ad-hoc reports for data mining.
  •  Able to keep the reporting database separate from the transactional database to allow for data reports without impacting system performance. (WCxKit)
  • Complete with a disaster recovery plan with a back-up of all data.

 

 

Summary

 

When moving from an old to a new claims management system, it is important to evaluate your company’s needs, the qualifications of the vendor and the capabilities of the new claims management system. A quality claims management system will improve risk management’s effectiveness, improve claim management and save time for the claims staff while reducing overall operation costs.

 

 

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, Director of Operations, 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.

WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com

VIEW SAMPLES PAGES

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

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Quite Possibily The Worst Workers Comp Claim Handling Ever

 

Candidate for the Worst Claim Handling Ever

 

A leading candidate for the worst claim handling everturned up in a workers compensation claim file audit.  A third party administrator (TPA) was handling claims for a statewide government self-insurance pool. And yes, all of the following mistakes were on one file!

 

 

Coverage

 

The TPA adjuster, upon receiving the claim, went to verify coverage.   The coverage had expired twelve days before the claim was reported. The date of loss was five days after the coverage expired. The adjuster wrote in the file notes that he would confirm coverage before making any payments.” However, before the adjuster had done so, the TPA switched adjusters and the coverage question was forgotten.

 

Mistake #1. Handling the claim before coverage was verified.

 

 

The lack of coverage wasn’t addressed again until the pool’s executive director contacted the adjuster over a year later. By then over $65,000 had been paid on medical and indemnity by the TPA from the pool’s trust fund. There was no coverage but the pool was in an estoppel situation, so the TPA continued to cover the claim.

 

Mistake #2. The second adjuster not reading the first adjuster’s file notes.(WCx)

 

 

 

Contacts

 

Best Practices for a TPA include making contact with the employer, the employee and the medical provider within 24 hours. The TPA had overloaded its workers comp adjusters with over 200 files each. The government pool’s contract did not contain any provision for the maximum number of claims to be assigned to an adjuster.   The second adjuster on the file never even saw the claim during the first three months it was assigned.

 

Mistake #3. Not reviewing the file when it was assigned.

 

Mistake #4. Timely contacts with the involved parties were not made.

 

Self Insured Mistake: Not having a contract stipulation on how many files could be assigned to one adjuster. 

 

 

 

Investigation

 

Since the second adjuster never contacted the insured, the claimant or the medical provider, there was no investigation of the claim. The Employer’s First Report of Injury reflected that “the employee (a painter) hurt her lower back when she tried to move a five-gallon bucket of paint.”

 

Mistake #5. No investigation of the claim.

 

 

Medical Handling

 

File note entries read “Received medical bill” or “Paid medical bill” with the name of the medical provider and the bill amount. One medical report summarized in the file notes stated, “employee continues to work with her low back pain and wrist pain.”   Three months into the claim a medical report stated “will need to do bilateral CTS (carpal tunnel syndrome) surgery.”

 

Mistake#6.  Not comparing medical reports with the reported injury on the claim.

 

 

The employee was an obese woman with diabetes – two factors that can bring on CTS without an injury. Even though the claim was reported as a back injury, at no time did the adjuster question the carpal tunnel syndrome treatment.

 

Mistake #7. Failure to separate a covered injury from other medical conditions of the employee.

 

Mistake #. Lack of medical knowledge that CTS is not always injury related.

 

Mistake #9. Failure to get a medical termination based on whether the CTS was work related. If it was it should have been handled as a separate claim.

 

 

Indemnity Handling

 

The first contact with the employee occurred over four months into the claim when the employee called the adjuster inquiring about when she would be paid for her Temporary Total Disability, as she was off work due to the right wrist Carpal Tunnel Syndrome surgery (the left wrist would be done a couple months later). The adjuster did not follow up on the Temporary Total Disability question and got another phone call from the employee. The first contact with the employer occurred almost five months into the claim when the adjuster asked the employer for a wage statement.

 

Mistake #10. No on-going contacts with the employee and the employer.

 

Mistake #11. Not obtaining the wage statement from the employer when it was first noted the employee was going to need CTS surgery.

 

 

The adjuster put the temporary total disability (TTD) checks on autopilot and forgot about them. After about six months, the employee returned to work. As the adjuster had not been in contact with the employee or the employer, the Temporary Total Disability checks just kept on going out. The adjuster did not know the employee was back to work until receiving medical reports stating that the employee was at maximum medical improvement on her wrists and had been given a 15% impairment rating for both wrists combined. The employee received an extra eight weeks of Temporary Total Disability after she was back at work. The adjuster stated in the claim file notes that the overpayment of Temporary Total Disability would be taken out of the permanent partial disability (PPD) settlement. However, it never was recovered.

 

Mistake #12.Not making any effort to get the employee back to work earlier or to return to work on light duty.

 

Mistake #13. Putting Temporary Total Disability checks on long-term automatic issue. (WCx)

 

 

Remember the low back pain?

 

The employee had only been back to work for two months when the adjuster contacted her about the overpayment of Temporary Total Disability and settlement of the Permanent Partial Disability claim. The employee advised the adjuster that her back still hurt and she needed to go to the doctor.   The doctor ordered an MRI of the low back. The employee had a herniated disc at L4-L5 and a partially herniated disc at L5-S1. The doctor scheduled surgery for the employee.

 

Mistake #15. Not having inquired about the lack of medical treatment on the low back for almost a year.

 

 

The adjusterfinally paying attention, refused to approve the surgery until an independent medical evaluation (IME) could be completed. The IME confirmed the need for the surgery. After the surgery, the employee was off work for another seven months before the doctor placed her at maximum medical improvement with a 25% rating.    

 

Mistake #16. Not making any effort to get the employee back to work earlier or to return to work on light duty.

 

 

Negotiations

 

The adjuster contacted the employee with an offer to settle both of her Permanent Partial Disability ratings based on her being 40% disabled. The employee argued that she should be considered 100% disabled as she was not able to go back to her job as a painter. The adjuster refused to consider the claimant as having permanent total disability (PTD). A week later, the adjuster received a letter of representation from the employee’s new attorney, who claimed the employee was PTD. The attorney requested an administrative law judge (ALJ) hearing. The ALJ reviewed all the medical records and agreed with the adjuster’s defense attorney. The employee’s attorney appealed. The Workers Comp Board (WCB) agreed with the defense attorney. The adjuster paid the 40% PPD rating.

 

 

Worsening of Condition

 

A year later the employee’s attorney contacted the claims office, but the second adjuster was no longer with the TPA. A third adjuster on the claim learned that the attorney filed a request for the WCB to consider a “worsening of condition.”

 

 

Index Search

 

The new (third) adjuster looks over the file and realized that an ISO Index had never been filed on the claim. Once the index was filed, it was discovered that the employee had a prior back injury claim eight years before this claim. The employee was represented by the same attorney for both claims. The prior insurance company already classified the employee as 10% Permanant Partial Disability for a non-operated herniated disc. The prior medical reports showed that the employee’s earlier claim was for an L4-L5 herniated disc – the same injury the claimant had surgery for in this claim.

 

Mistake #17. Failure to index the claimant resulted in the TPA/pool paying for a claim that should have never been paid.

 

 

Exacerbation vs. New Claim

 

It was now obvious that the present injury was not a new claim, but the exacerbation of an old claim. If the index had been done when the claim first was received, it could have been referred back to the prior insurance carrier. The defense attorney requested that the ALJ transfer the claim back to the original insurance company. This is after the TPA had already paid the employee a 40% award (15% wrist and 25% back) on top of the 10% award the employee had received for the earlier claim.

 

The ALJ stated that as the TPA had already accepted the injury as a new claim, it would not change it now. The WCB appeal was denied, so the current insurer was stuck paying for the claim although it was an exacerbation of a preexisting injury.

 

 

Back to the Medical

 

The employee’s disk fusion surgery had failed. The treating doctor recommended another surgery. The third adjuster was too inexperienced to be handling this type of claim.

 

Self Insured Mistake. Not having a stipulation in the contract requiring experienced adjusters to handle claims -especially high dollar ones.

 

 

The adjuster asked her supervisor what to do. The supervisor said to get another IME. The IME stated that the fusion had partially failed, but absolutely did not recommend another surgery.

 

 

Sympathy

 

The attorney gave the third adjuster a sad tale of how much pain the employee was in, that the employee’s marriage was falling apart due to her pain and she was desperate to have the surgery. The attorney played on the adjuster’s sympathy until the adjuster agreed to the surgery.

 

Mistake #18.  Allowing emotions instead of medical facts to make the determination on how to proceed on a claim.

 

 

The adjuster should have had denied the additional surgery and forced the employee’s attorney to have the ALJ or even the WCB make the determination.

 

 

Permanent Total Disability Granted

 

Following the second surgery, the employee’s attorney filed a petition for PTD.   The treating physician had given the employee a total 75% Permanent Partial Disability rating based on the bilateral CTS surgeries and the two back surgeries. The defense attorney arranged another IME and got a similar rating of 65% total. The ALJ looked at the total medical history and the employee’s 65% or 75% permanent partial disability rating following her two wrist surgeries and her two back surgeries. The ALJ gave the employee a PTD finding. The defense attorney appealed to the WCB.   The WCB agreed with the ALJ and the third adjuster paid the employee another 50% rating. (WCx)

 

 

Summary

 

The failure to do the simple things in the claim file handling resulted in the self-insured pool paying out over a half million dollars in medical, indemnity and legal expenses. Verification of coverage would have stopped this claim before any dollars were spent. A proper investigation at the start of the claim, including an index of the employee, would have shown that the low back claim was an exacerbation of a prior injury and would have eliminated that portion of the claim. The review of the medical reports would have resulted in a denial of the CTS or at least had it treated as a separate claim. Non-compliance with Best Practices changed what should have been zero dollars paid into a PTD claim.

 

 

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, Director of Operations, 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.

 
WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

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

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

There is Only One Reason to Close a Workers Comp Claim

 

The Only Reason to Close a Worker’s Compensation Claim
 
A workers' compensation claim should only be closed when all known activity on the file has been completed. If it is possible that another dollar can be spent on the claim, the file should not be closed.
 
 
If there is still activity on the file, it should not be closed. A claim should be left open in all of these situations:
 
1.   The employee has not completed all medical treatment
2.   All temporary total disability indemnity has been paid, but the employee is continuing treatment with a medical provider
3.   The employee has completed medical treatment, but all medical bills have not yet been paid
4.   The employee has temporary total disability benefits that have not been paid
5.   The employee has completed all medical treatment and all medical bills have been paid but the employee is still receiving payments for permanent partial or total disability
6.   The widow(er) is still receiving benefits
7.   All medical bills and indemnity benefits have been paid, but there are still outstanding bills for the defense attorney, nurse case manager or other service provider (WCxKit)
 
A Claims Manager’s Performance Should Not Be Evaluated by Numbers of Closed Cases
 
Best practices of the Third Party Administrator require that claims managers’ performance review criteria should not include the number of closed cases.  This leads to too high of an incentive to artificially close cases that should not be closed.
 
Examples of Improper Claims Closings
 
Claims Manager Evaluated on Number of Closed Files
 
One claims manager had several old files where employees had permanent medical problems and had occasional doctor visits. The claims manager had closed the files but was still making annual payments. During a claim file audit, the claims manager argued that the claims should be closed because all the indemnity benefits were paid, although there was on-going medical maintenance treatment.  In this situation the manager's performance was evaluated based on the number of files closed. 

 
TPA Gets in Trouble with Large Fortune 500 Client
 
In the following example, a large national third party administrator (TPA) got into trouble when a big client noticed major irregularities in the number of claim files that were closed and re-opened. (WCxKit)
 
The client’s risk manager found that the TPA had a salary bonus program for adjusters. One of the performance criteria was to close as many old claims each month as new claims received.  
 
The adjusters found a way to get around the intent of the performance measurement so their numbers looked good. At the end of the month, adjusters who had not closed enough old claims closed files in the computer system that had little current activity. The following week in the new month, the adjusters re-opened the claim files. Obviously, this improper handling of file closings was not in the realm of best practices.
 
 

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, Director of Operations, 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

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

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

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Legal Pad vs. iPad, How Workers Comp Claims Handling Has Changed

 

Two Big Changes in Claims Handling
 
20-30 years ago, a claims adjuster used to investigate claims a lot differently than they do today.  Back then, adjusters were given legal pads, a tape recorder, a pen, a company car, and a list of their claims. Some say that the technological trend we live in today has negatively affected the art of investigation for injury claims.  But how?  And what is so different today when compared to 30 years ago?   The answer to this is subject to argument, but there are a lot of clear differences when you compare today’s insurance adjuster to the one of yesteryear.  Here are the pros and cons on the two biggest changes in the way claims are handled below:
 
 
Field adjusters versus in-office claims adjusters
 
Back in the day, adjusters always did in-person statements.  This entailed going to the employer or house of the claimant and taking their statement along with gathering their pertinent information, and putting paper notes in a manila folder which consisted of the actual claim forms and information. [WCx]
Field Adjusters Meet You Face-Face
 
In the past, if you are the adjuster and you are sitting across from the claimant, it could be considered more difficult for the claimant to distort the injury or accident details when recalling what happened. In fact, seeing your claimant in their actual home environment was considered a good way of “sizing them up” when it came to their complaints of injury and how their actual behavior and activities of daily living were affected.  Since you are right there, you can look around the house and see what is actually going on.  Is the house neat and tidy?  Is the claimant wincing in pain or finding it difficult to sit still?  Does your injured worker have dirty fingernails which show they may be doing activities more strenuous than what they are telling their doctor they can do? Do they have a good family support system present to help them in their time of need or to tend to their daily tasks?  The answers to these questions could affect the outcome of the claim, and what the future could hold for where the claim is going to go in the future.
Today Adjusters Work Almost Exclusively by Phone
Today, the role of a field adjuster is about gone.  Some insurance carriers still have field adjusters to do accident investigations and so on, but it is nowhere near the capacity that it used to be.  Claimants can “hide behind their phone” and essentially make any allegation they want, since they do not have to put on an act with their adjuster sitting right there. 
Since the claimant rarely if ever sees their actual adjuster, a personal relationship is really not made, be it positive or negative.  By keeping the adjuster in an office, the carrier eliminated large overhead costs with company vehicles, drive time, mileage, and so on.  This also allows the adjuster to carry a larger caseload.  Since they are chained to the office they are capable of handling a lot more than someone who is on the road.  This again can be seen as a positive or negative.  The point is that the actual in-person investigation that all adjusters used to do is no longer a factor.  Whether or not this is a negative in regards to the actual investigation is tough to prove.  Adjusters nowadays have had hours of training about how to interview, and what verbal and nonverbal cues to pick up on when they are talking to their injured parties.  There is more in-depth training involved now than there used to be years ago, both in investigation tactics and in medical terminology training. So the difference really lies in the adjuster, and how good they are at doing their job.  There were good adjusters and bad adjusters 20 years ago, and there are good adjusters and bad adjusters now. [WCx]
 
 
“Start to Finish” claims handling versus ascending levels of adjusters
 
In the past, adjusters were assigned to certain employers or insurance agencies, and that sole adjuster was the one to handle claims from either of those two parties.  Not only did they get every claim those parties produced, but the adjuster of the past handled those claims from start to finish no matter what the level of severity.  This lead to the adjuster forming a great relationship with those agencies or employers, and several positives came of this relationship. The adjuster knew an employer in and out, toured their facility and knew the job tasks demanded of their workers.  The adjuster knew a lot more about the employer than the injured worker may think they knew. 
Pro of Single Adjuster is Level of Employer Knowledge
If the adjuster knows the job titles, responsibilities, layout of the floor, the risk managers, and the executive staff, then an in-depth relationship is made, and it is hard to put a price on that.  A single adjuster could be saving this employer a lot in insurance expense and premium cost, just by the simple fact that the adjuster knows the employer’s demands and what goes on at this employer on a daily basis.  
Nowadays, it may be considered a luxury if the adjuster that handles your claims is even in the same state as the employer.  Out of state adjusters miss out on local politics, stereotypes of local doctors and clinics, and the overall work ethic of people in one city versus another.  Even more disconcerting, the adjusters start to bounce files to other adjusters in other states depending on the financial exposure or reserves allocated by the carrier. 
Con is Unspecialized Claim Experience
This can be considered a pro or con.  If one adjuster specializes in severe injuries, and you incur a severe injury for a comp claim, then it would make sense that you want that adjuster to handle the file versus the entry-level adjuster who doesn’t have the experience or background in dealing with severe injuries.  But, negative issues can come attached to those carriers who bounce claims around, namely the main issue that this new adjuster has not handled the claim in the very beginning.  A lot can go on early in a claim, and every adjuster has their own style of claims handling in general.  So what if some factors were missed early on that could affect the outcome of the claim?  What if certain questions were not asked that could have affected the compensability of the claim, had they been asked the day after the injury versus being asked months later? 
This is what can frustrates claimants the most.  Just when they get comfortable and start to trust the first adjuster, their file is moved to another adjuster.  They have to essentially repeat the whole process over again, possibly including taking another statement and trying to form another relationship with this new adjuster.  Maybe this new adjuster doesn’t return calls as quickly as the first adjuster.  Maybe the new adjuster is not as verbose as the first adjuster, and the claimant feels that this new adjuster is not paying them the attention they feel they were paid before.  Whatever the case may be, there are again pros and cons to each argument about which way is best.
Summary
These two issues have only scratched the surface between how claims are handled now versus how they were handled 20-30 years ago.  Which way is better is best left up to the parties having this discussion. As you can see, even with these two changes, it can open the door to hours of discussion.  The fact is that it is 2012, and with the technological advances that have been made, both in the insurance industry and in industry in general, we have to adapt to these changes and provide what we think will be the best info to help the adjuster make the proper decisions handing their claims. 
Let’s face it, claims are not going anywhere.  How we handle those claims is a constantly changing atmosphere, and you have to adapt to change.

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, Director of Operations, 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

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

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

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

If the Shoe Fits, Make Sure The Responsible Party Wears It in a Workers Comp Claim

If someone Else is at Fault, They Should Pay For It

 
Subrogation is the process and the right of the workers’ compensation insurer or the self-insured employer to recover the money paid on a workers’ compensation claim from another party when the other party is responsible for the injuries to an employee.  In civil law, the principle of negligence guides and determines who should pay for damages caused to another.  Basically, the simplest way of putting it “if someone else is at fault, they should pay for it.” [WCx]
 
The most common situation where the insurer or self-insured employer can recover the amount paid from another party is the automobile accident where the employee is injured due to the carelessness of another driver.  While automobile accidents give rise to a significant number of workers’ compensation subrogation claims, there are many other events that can produce a subrogation claim. 
 
Some examples are:
  • Factory machinery that malfunctions injuring an employee
  • Factory machinery that does not incorporate standard guards and safety systems
  • Ladders and scaffolding that fails or is defected
  • Any piece of equipment that malfunctions causing an injury
  • Delivery people injured due to a defect at the delivery location (for example a trip and fall due to a pothole in the parking lot)
  • Injuries caused by the faulty workmanship of a third party
Subrogation in workers compensation can arise from any event that would create a claim in automobile liability, products liability, general liability, construction defect liability, homeowner’s liability, medical malpractice, or any other types of liability insurance.
 
Every Claim Should Be, But Isn’t Being Reviewed for Subrogation
 
Every workers’ compensation claim should be reviewed for subrogation potential when it is reported.  Unfortunately, most workers’ compensation adjusters are experts in workers’ compensation but have little or no knowledge of liability claims.  This results in the work comp adjusters frequently missing opportunities for subrogation.
 
The workers’ compensation adjuster should be taught to incorporate into the initial investigation of workers’ compensation claims to ask these questions:
 
  1. What caused the accident?
  2. How did the employee get injured?
  3. If someone else had done something differently, would the injury have occurred?
  4. What object was the employee in contact with when he/she was injured?
  5. Did the object function correctly?
  6. Was there another party involved?
    • Individual
    • Manufacturer?
    • Business?
    • Creator of a defect?
The answers to these questions will assist the adjuster in the determination of the opportunity for subrogation. [WCx]
 
While the workers’ compensation adjuster can be instructed to ask themselves the above questions, the work comp adjuster will still miss some opportunities for subrogation. There are a couple approaches the insurer or self-insured employer can take to improve the number of qualified subrogation opportunities.
 
 
Develop Subrogation Department
 
One approach some workers’ compensation insurers and large self-insured employers use is to develop their own subrogation department staffed with liability adjusters and subrogation specialist who can analyze each claim for subrogation potential.  A cost benefit analysis of this approach should be undertaken to verify that the additional personnel cost are more than offset by the additional subrogation recoveries.
 
A different approach to maximizing subrogation recoveries while minimizing the associated cost is to outsource the identification of subrogation opportunities.  This is accomplished by hiring an outside, independent claims auditor who has an extensive background in both liability claims handling and workers’ compensation claims handling. An independent claims auditor with multiline claims handling experience will be able to maximize the number of files identified to have subrogation recovery potential.  The independent claims auditor should review not only the open claim files, but also all closed claims files still within the tort statute of limitations for the jurisdiction.  If you would like assistance in identifying an independent claims auditor to assist you in maximizing your subrogation recoveries, please feel contact us.
 
 
 

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, Director of Operations, 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

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

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

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

To Replace or Not Replace that Shoulder

 

At one time or another as an employer you are going to experience work comp injuries.  Some of these injuries are minor in nature, while some can be severe and life-changing. 
 
Joint Replacement More Common – Very Difficult Claims
 
The nature of joint replacement can rear its ugly head from time to time.  In the past, joint replacement surgery was only thought to have occurred in older employees, with a lifetime of cumulative injury to the specific joint, be it the knee, hip, shoulder, or ankle.  But now Carriers are starting to see knee and shoulder replacement surgeries in younger to middle-aged employees.  This type of injury and subsequent surgery can lead to very difficult claims in the field of workers compensation. [Wcx]
 
In the past, Carriers were quick to deny surgeries such as these on the basis of the need for the surgery not being totally occupational in nature.  Once this replacement surgery is performed, it is seldom a “one-time” procedure.  The life span of prosthetic joints was said to be short, with it being a positive outcome if the prosthesis would last 3-5-7 years.
 
 
Advances Made in Surgery, Much Homework Still Needs to be Done
 
Recently over the course of the last handful of years several advancements have been made in the field of joint replacements, and several surgeons are getting quicker to recommend joint replacement surgery as a way to resolve ongoing pain and the need for opiate medication on a long-term basis.  Joint replacement has led to a better quality of life, and an increase in overall functionality in the right candidate.  But in the world of work comp, carriers are still very slow to accept these procedures without a lot of homework done beforehand. Let’s look at some of the pros and cons of these types of procedures:
 
 
PROS – Less Pain Meds, Decreased Long-Term Treatment
 
The first positive for getting joint replacement surgery is the decreased need for ongoing pain medication.  Expensive, and often addictive in nature, surgeons will point out that the prosthesis can lead to be a functional way of life without the need of strong pain-relievers, automatically positively impacting the overall expense of the work comp claim.  Decreased needs for physical therapy, diagnostic testing such as MRIs and EMGs, and decreased loss of work time after rehabilitation are all positive indicators that can mean less wasted claim dollars.
 
The technology involved in the actual lifespan of the prosthesis has improved as well over the last 10-20 years.  In the past, prosthetics were often drowned out in negativity, with insurers quick to point out that the lifespan is really an unknown.  In certain cases, the replacement could last 15 years whereas in others it could fail right out of the starting gate.  The price tag on these surgeries can hover well over $100,000 after all of the surgeries, diagnostics, physical therapy, medications, and so on, and that doesn’t include lost wages away from work and decreased productivity once the employee returns to gainful employment.  However, all of these are past stereotypes and research has shown more positive outcomes.  It varies from patient to patient, but, most injured workers have decreased pain levels, which can be the most important factor. 
 

Need Proper Evaluation to Determine if Surgery is Correct Answer
 
There may be no model for the perfect joint replacement candidate because everyone’s body varies.  Age, arthritis, functionality,pain tolerance, patience, activity level, job tasks, employer flexibility, job experience, and other pre-existing conditions need to be taken into careful account before a procedure like this is even considered.  I have seen some cases where the doctor will start off with a rotator cuff tear repair, only to end up recommending a total or partial shoulder replacement within 2-3 months post-surgery.  This may be quick to jump the gun considering the extent of the injury, however, the adjuster has to consider if the injured worker will fail a number of surgeries before finally considering joint replacement.
 
 
CONS – Fear of the Unknown, Will the Surgery Work?
 
I believe that the strongest con involved in these procedures is the factor of the unknown.  Carriers like to know facts, and have statistically-guaranteed outcomes.  Unfortunately with joint replacement procedures there is not a guarantee.  You can send the claimant for a few IMEs with different surgeons and get a feel for what they think will happen, but until that patient goes under the knife all bets are off. These claims and injuries have to be evaluated on a case-by-case basis.  Your risk drivers will help to determine if authorizing these procedures will lead to a best outcome.
 
The biggest unknown of them all is the actual claimant.  Psychologically, surgeries are not a magic bullet.  There can be months of pain and rehab ahead, and your injured worker may not be the most patient person in the world.  In my experience dealing with these procedures post-op, the most common complaint is they want to know when they will be better and able to function like they did prior to the injury.  The truth is, some people will never be the same.  They may never be able to pick up their kids or grandkids and toss them in the air as they did before.  They may not be able to lift 30lbs over chest level or they may never be able to squat down and garden in their front yard pain-free as they once did.  And this fear of the unknown can stop many people from even wanting to go through with a procedure with such unknown results.
 

Carriers Often Settle Early to Ensure End to Claim
 
The reality is that with these invasive surgeries is nobody knows the outcome. This can scare off adjusters from authorization and steer the claim into litigation for settlement, which could be just as costly.  Carriers calculate if the claim were to settle, they know the outcome and the associated costs.  If a claim such as this were to settle for $250,000 at least the Carrier can pay that, and be done with it.  Whereas if the carrier sinks $100,000+ into this procedure, who knows if this person will need another surgery in 5 or 7 years, and maybe that surgery is the one that will fail even worse than the first one. 
 
Carriers fear unknown future costs, and fear even more the potential for a claim to have to be re-opened with a higher expense in the future. Settlement leads to the end of the claim and guarantees that it is over. Your claimant receives a check, and you close the file knowing it cannot be reopen years down the road. Carriers have to hedge risk which can cost them greatly upfront in Court, but they get comfort knowing the claim is over.  This isn’t to say that the carrier doesn’t care; after all, the claimant has to be on board with settlement for it to go forward.  This maybe the best way for all parties to move forward with each satisfied with the outcome.  Of course, each case will vary greatly from one to another, which is the hardest part involving claim of this nature. [Wcx]
 
 
Summary
 
If a claimant has a recommendation for joint replacement surgery, your carrier has to do their homework.  Whether is it involving the knee, shoulder, hip, or ankle, I would be surprised if any carrier or adjuster accepted the need for a joint replacement surgery without taking the time to gather years’ worth of past medical records, get a few IMEs, and evaluate the case very carefully.  These procedures affect the claimant in one way or another, either positively or negatively.  It is only after the procedure that all parties know if it is worth it in the end or not.
 
 
 

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, Director of Operations, 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

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

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

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

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