Costs and Benefits of Integrated Disability Management

 

Protecting the Bottom Line and Increasing Productivity

 

Integrated Disability Management (IDM) is a coordinated, consistent approach to an employer’s disability benefits programs. It includes:

 

  • short-term disability (STD)

 

  • long-term disability (LTD)

 

  • workers’ compensation

 

  • Family Medical Leave Act (FMLA) 

 

In an IDM program, employee absences due to illness or injury, regardless of the reason, use the same claim reporting, claim and medical case management and return-to-work protocols. Using these simplified processes can result in direct program cost savings and improved operational tracking of claims and absences.

 

Many companies that have thought of trying an IDM program have not actually implemented the programs. About 20 percent run some sort of parallel program with either a single point of contact or a single claims administrator paying and coordinating short and long term disability. Salary continuation is often paid instead of lost wages, then at 12 -16 weeks (depending on the plan) short term disability takes over. There are many type of programs, each slightly different, depending on the companies’ philosophy. For example, will there be wage replacement instead of workers compensation? Do they offer short and/or long term disability benefits?

 

The objectives of all the programs, however, are to get the employee back to work as quickly and as effectively as possible, to maximize productivity, and to mitigate costs. Three key areas must all work together to achieve success: the potential benefits of IDM; the key components of a successful program and the steps involved in an efficient implementation.

 


The Potential Benefits of an IDM Program
An effective IDM Program benefits an organization in several ways, including reducedoverall disability claim costs.  But how are these figures comprised?

The total costs of an employee disability are the:

 

  • Direct Costs, such as wage replacement, medical expenses, benefits expenses and litigation costs.

 

  • Indirect (Hidden) Costs, including temporary employee replacements, overtime, lost productivity and reduced employee morale.

 

  • Administrative expenses to manage multiple programs, either internally, or through vendors.

 

  • Increased productivity resulting from shorter disability durations and quicker return to work.  Studies show that the longer an employee is off work, the less likely the employee is to return.

 

  • Enhanced, consistent claim management processes for both occupational and non-occupational injuries and illnesses.

 

  • Integrated data collection, sharing and reporting across benefit lines and policy years.

 

  • Reduced chancesto submit multiple claims and “double dip” due to single source claim reporting and management. (WCx)

 

  • Increased employee satisfaction from simplified claims services.

 

  • Medical management of all disability lines. A medical director could potentially have a great impact since the employee is using all benefits available.

 

  • Modified duty and transitional work assignments with internal accounting. While having modified duty has a cost, NOT having one has an even higher cost -100 percent loss of one employee’s productivity plus replacement wages for another employee, plus workers comp, STD or LTD.

 

 

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

 


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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.

 

Help I am So Injured I Can Only Work Two Jobs

An Australian dock worker was found guilty of workers compensation fraud after a WorkCover investigation found that he had lied about working up to 50 hours a week as a security guard while being too injured to carry out his first job, according to a report from Work Cover Authority of New South Wales.
 
 
Ronald Perrine, a 46-year-old store man from Welby, west of Wollongong, received a suspended jail sentence, was ordered to repay almost $20,000, and was fined $1500. Perrine alleged that in September 2000 his left wrist had become too damaged to continue working after repeatedly driving a forklift. His employer accepted his claims and Perrine began receiving weekly compensation totaling $19,059.05 from August 2004 to April 2007. During this time, Perrine took on a second job as a security guard and was receiving cash payments in envelopes. (WCxKit)
 
 
The WorkCover investigation found Perrine had been dishonest on numerous occasions in deliberately misleading representatives acting to protect the Workers Compensation Scheme. Perrine said he was working around 12-16 hours a week when he was in fact working around 50 hours and not informing WorkCover. His pay slips and  group certificate did not reflect the true income he was receiving from his second job. These had the effect of pushing the compensation payments he was receiving through the Workers Compensation Fund.
 
 
WorkCover staff requested to interview Perrine during the investigation however the requests were declined. Perrine was prosecuted for offenses under the Crimes Act 1900.
 
 
The Court sentenced him to an eight month jail term, fully-suspended, and a 6-month good behavior bond. (WCxKit)
 
 
In addition, he was ordered to repay the $19,059.05 he had fraudulently received in compensation, fined him $1,500, and ordered to pay WorkCover’s legal costs.

Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.

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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.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

Pending California Bill Would Limit Workplace Violence Against Medical Staff

A bill designed to prevent violent acts against healthcare workers was recently introduced in the California Assembly. Assembly Bill 30 (AB 30) would bolster existing laws mandating hospitals to have safety and security plans.
 
 
The measure is in response to the October death of Cynthia Palomata, an RN, who died after an attack at a California detention center. (WCxKit)
 
 
AB 30 if passed would necessitate:
 
 

1.     Certain types of security measures when hospitals update their security plans.

2.     Employees to receive proper violence prevention and response training.

3.     Hospitals to improve reporting of violent incidents.

4.     The California Correctional Standards Authority to establish standards for safety to protect healthcare workers in correctional facilities. (WCxKit)

5.     Medical workers would have the right to involve local law enforcement in cases of workplace violence.

6.     The state would be able to impose fines against hospitals failing to comply.

 


Author Robert Elliott
, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information.  Contact:  Info@ReduceYourWorkersComp.com or 860-553-6604.

 
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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.

©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
Info@ReduceYourWorkersComp.com

A Hernia from a Spinal Cord Stimulator — Really

Possible Causal Relationships Considerations
 
Have you ever read a court decision on a workers' compensation case and had the reaction……. “what?” The following discussion of a court decision definitely creates a “what?” reaction in most people. A press release explained how the Wyoming Supreme Court overturned a lower court decision denying medical benefits to a man who claimed a spinal cord stimulator caused a hernia.
 

In 1993
James L. Ball slipped while walking into a walk-in refrigerator to get some milk. Mr. Ball claimed injury to shoulder, neck, back and right leg. He was awarded permanent total disability. What? Yes – Permanent total disability for a foot slipping. The court description of the accident does not indicate Mr. Ball fell when he slipped. (WcxKit)


Wyoming
is a monopolistic state for workers compensation. You have to wonder if the state employee/work comp adjuster was asleep at the wheel on this one. The location of the accident in the walk-in refrigerator makes it most likely an unwitnessed event. There is no mention in the press release if Mr. Ball's accident was witnessed or if any investigation was done to confirm how Mr. Ball's foot slipping would have injured his shoulder, neck or back.   A strain to the right leg is possible. As Mr. Ball had a spinal cord stimulator implanted in 2000, he definitely had an injury, but did the injury happen on the job? Anyway, the claim was accepted.

In 2006  the original spinal cord stimulator failed and a new one was implanted. In 2007, Mr. Ball states he was at home lying in bed when the second spinal cord stimulator caused him to experience a sensation that made him to stand up “real fast” then he fell down, causing a pain in the groin. [Another unwitnessed event?]. Ball went to a Dr. James Shaw who ordered a CT scan that confirmed an inguinal hernia. 

Dr. Shaw stated:  I would consider this a work-related problem based off the origin of the fall.”   What? Inguinal hernia's are normally caused (according to the medical book) by a:

1). defect at birth, 
2). prolonged wear and tear from lifting, straining or coughing,
3). age related weakness of the abdominal wall,
4). history of previous surgery in the area. 


Risk factors increasing the chances of the hernia developing include advancing age, straining to urinate or pass stools, severe or prolonged coughing and obesity.   Mr. Ball's description of how the hernia occurred does not fit the medical literature. In rare cases a hernia can be caused by falling hard on a blunt object, but there is nothing in the press release that states Ball fell on any blunt object.  While Ball clalimed  the spinal cord stimulator malfunctioned, there is no mention in the press release stating it was ever confirmed the stimulator malfunctioned. If the spinal cord stimulator malfunctioned as claimed, there is no mention of Ball bringing a products liability claim against the spinal cord manufacturer. What? You have to wonder why no products liability suit was brought if the spinal cord stimulator did malfunction. 

The Wyoming Division of Workers  Safety and Compensation denied payment for the hernia treatment on the basis it was not related to the original 1993 injury. There is no mention in the press release whether or not the state employee/work comp adjuster had an independent medical examination done to refute the doctor's statement. Also, there is no mention in the press release whether or not the Division of Workers' Safety and Compensation did any investigation to determine if Ball was working somewhere else when the hernia occurred. What?  You have to wonder why there was no investigation into other causes for the hernia.


Mr. Ball
disputed the Division of Workers Safety and Compensation determination. The matter was referred for a contested hearing. At the hearing Ball contended he was entitled to medical benefits for the cost of the hernia treatment claiming the hernia in 2007 was causally related to the 1993 injury. The hearing examiner ruled in Ball's favor stating the hernia was caused by a fall, the fall was caused by the spinal cord stimulator, the spinal cord stimulator was implanted to treat Ball's chronic back pain. 


The adverse finding for the Division resulted in their appealing the matter to the District Court. The District Court found the examiner was correct in its finding of fact, but ruled against Ball stating a hernia is a compensable injury only when it is the original injury. The District Court considered the hernia a second compensable injury which was barred. Ball appealed the District Court decision to the Wyoming Supreme Court. 

 

The Supreme Court reviewed the work comp claim on whether the hernia occurred “in the course of employment” per the Wyoming work comp statutes.    The Supreme Court ruled the position of Ball was in keeping with the language and context of the statute and with the legislative intent. Ball therefore received the medical benefits for the hernia.

Almost all states treat injuries that result from the original work comp injury as part of the original injury. For example: The employee had a verified work-related fall that caused a leg fracture. A week later the employee is on new crutches on his way to the doctor's office for his leg fracture, when he loses his balance. He falls and breaks his arm. The broken arm is causally related to the fractured leg.   In most jurisdictions this is referred to as a “compensable consequence of the injury.”


In a similar vein
, in a very recent New York case, a Cornell University employee, James Smith, had a compensable work-related back injury in 2001. Smith suffered depression that was brought on by the chronic pain related to the back injury. In 2007 Smith committed suicide. The New York State Appellate Court found “sufficient causal relationship” between the suicide, the depression, the chronic pain and the original work comp injury. The court has ruled Ms. Smith is now entitled to death benefits under the New York work comp law.(WcxKitz)


 

Causal relationships can be tricky.   There needs to be in-depth investigation into any possible intervening events that would sever the causal link between the initial injury and the subsequent injury.   If the employee can prove that the second event would not have occurred except for the original event (accident), the medical cost and associated indemnity disability cost will be owed by the work comp insurer.


Author Rebecca Shafer
, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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.Contact:  RShafer@ReduceYourWorkersComp.com

 
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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.
 
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

Know the Difference Between Permanent Partial Disability and Permanent Total Disability

When an employee reaches maximum medical improvement (MMI) but still has medical issues from his/her on the job injury or occupational disease, the employee will normally be eligible for permanent disability benefits. Most of the states recognize two types of permanent disability benefits. While the names vary by state, the most common used names are:
1.      Permanent partial disability (PPD)
2.      Permanent total disability (PTD)
Independent Medical Evaluation:
In most jurisdictions when the treating physician states the employee has reached MMI, the workers compensation adjuster reviews the medical report and evaluates the disability rating assigned by the treating physician. If the disability rating is high, or if the adjuster has any reason to suspect it is not correct (for example – the treating physician has a history of providing high disability ratings), the adjuster will request an independent medical evaluation (IME) [also known as an independent medical examination].   The IME doctor reviews the medical records and performs an examination of the employee. The IME doctor then provides a disability rating based upon the results of the examination. (WCxKit)
Employment:
If the medical providers – the treating physician and the IME doctor – agree the employee has recovered enough to return to some type of employment, but will always be partially disabled, the employee is classified as PPD and will be paid PPD benefits per the state statutes. If the medical providers both agree the employee is unable to return to any type of employment, the employee will be considered PTD and will be paid PTD benefits per the limitations in the state workers comp statutes.
Permanent Partial Disability:
PPD benefits are paid to employees who have a permanent physical impairment but can return to some type of work. The amount of PPD benefits can be either a percentage of a body part, a percentage of the body as a whole, or a set scheduled amount.   The calculation of the benefit amount will depend on which of these three types of ratings is given.
When a percentage of a body part or a percentage of the whole body is used by the physicians to give their opinion of the disability rating, in most jurisdictions they use the American Medical Association (AMA) Guide to the Evaluation of Permanent Impairment. The physician will review the employee’s disability and compare it to the description provided in the AMA Guide. An example – the physician following the AMA Guide determines the employee has a 15% loss of use of a leg. [When the employee is given any rating to a body part, as opposed to a whole body rating, the employee will be classified as permanent partial disabled.]
The adjuster will then take the disability rating for the leg and multiply it by the number of weeks the state statutes allow for a leg. If the state law states a leg is worth 200 weeks, a 15% rating for the leg would equal 30 weeks (200 X .15). The adjuster would then multiply the number of weeks by the PPD compensation rate. (Most states set the PPD compensation rate at the same level as they set the temporary total disability rate paid to the employee before the employee reached MMI). If the PPD rate is $500, then the amount paid for PPD would equal $15,000 ($500 x 30).
In about 40 states, the statutes have a schedule for the lost of a body part. Examples of body parts listed on the state schedule would include an eye, an ear (hearing), a finger, a hand, an arm, a toe, a foot and a leg. The complete loss of the body part is still considered as PPD as the employee will still be able to return to some type of employment. An example would be the complete loss of a finger. Per the state schedule the finger is worth 10 weeks. With the PPD rate of $500, the PPD benefit paid to the employee would be $5,000 (10 x $500).
Permanent Total Disability:
When the treating physician and the IME doctor agree the employee will never be able to return to any type of employment, the employee is given a disability rating of 100%. With a 100% whole body disability rating, a PTD rating is almost automatic. (WCxKit)
The adjuster will take the 100% disability rating for the whole body and multiply it by the number of weeks the state statutes allow for whole body. If the statutes states the whole body is worth 400 weeks, a 100% rating equals 400 weeks. The adjuster would then multiply the number of weeks by the PTD compensation rate. (Most states set the PTD compensation rate at the same level as they set the temporary total disability rate paid to the employee before the employee reached MMI, but some states have a lower PTD rate then the rate for temporary disability). If the PTD rate is $500, then the amount paid for PTD would equal $200,000 ($500 x 400). [It should be noted that some states do not put a cap on the maximum number of weeks a PTD person may receive. The employees in those states receive their disability payments for life].
It is not unusual for the treating physician to give a higher rating than the IME doctor (especially in states where the employee selects the treating physician). If the treating physician rates the employee as 100% disabled, but the IME doctor (reviewing the same medical records and AMA Guide) rates the employee at 60% disabled, it becomes a question for the Workers Compensation Board (also known as the Industrial Commission in some states) to determine whether or not the employee is PTD. The Workers Comp Board will often have a doctor they select examine the employee and give a third opinion as to the level of disability before making a final decision.
Another area where disagreement arises about PTD is when the employee has suffered severe injuries and is unable to return to work for your company, but is not classified by the doctors as 100% disabled.   A number of issues will come into play in determining PTD. The nature and degree of physical impairment, the educational level of the employee, the age of the employee, the ability of the employee to be retrained for other suitable work, and the availability of suitable work, are all factors in a determination of PTD.

Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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.  Contact:  RShafer@ReduceYourWorkersComp.com

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©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

NEW YORK Will Guidelines Limit Disability Settlements

The largest amount of money awarded in NY comp is for “permanent partial disability” claims. These are the claims that have the largest settlement figures at the end of the claim (frequently over $100,000) and generate nearly half of the legal fees.
The new guidelines will measure the amount awarded for permanent disability claims not subject to a “schedule loss”. Usually this means back claims. “Schedule loss” claims are for fingers, toes, arms and legs (as well as vision and hearing). (WCxKit)
The new guidelines call for a three-step evaluation measuring
a. severity of injury,
b. loss of functional abilities, and
c. loss of wage earning capacity.  

It is the loss of wage earning capacity that is causing problems since New York for many decades has ignored measuring wage earning capacity.

This presents a unique opportunity for employers to submit evidence which can substantially reduce comp costs. Most employers have several job titles for their employees; larger employers have dozens of titles. By selecting the least strenuous job, documenting its physical requirements and pay scales the employer can often document that wage loss is less than 10% of pre-injury wages – or, in fact, that there is no wage loss at all.
An employer would have to coordinate closely with a carrier to achieve these results. Waiting to be asked is courting a certainty of losing an opportunity.
The employer is uniquely qualified to document the wage earning capacity and is, in fact, an “expert witness” whose testimony is difficult to refute. Even more difficult to refute is documents proving what the pay is for these jobs – documents which are always available to an employer. (WCxKit)
Decades ago, the employer had an active role in providing just this type of testimony. It fell into disuse by the expedient of substituting “minimal, mild, moderate or marked disability” (nowhere defined in the law) instead of measuring actual wage loss.

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, New York. 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.

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©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

Montana Study Says Claims Cost Behind High Workers’ Comp Rates

Large medical and wage claims costs for workers shown to be permanently partially disabled are the major reasons behind the state's high workers' compensation insurance rates, a Montana State Fund analysis reports.
 
According to The Associated Press, Dan Gengler, the state fund's internal actuary, presented a report last week to the State Fund's board of directors outlining why workers' comp insurance premiums for Montana businesses were the second highest nationwide for fiscal 2008. As a result, state lawmakers are searching for means to reduce costs.
 
Gengler's report notes claims from workers determined to be "permanently partially disabled" make up 9% of claims but account for 70% of overall work comp costs.
 
An individual with a permanent partial disability is classified as one with a workplace injury permanently preventing the ability to work. Benefits include wage payments while out of work and medical coverage.
 
Gengler's report noted such claims take place in Montana at a rate 50% above the average in other states and that medical costs for such claims are two times higher than other states.
 
The 2008 report noted Montana's work comp rates are approximately $3.50 for every $100 of payroll, 50% the national median of $2.25. (workersxzcompxzkit)
 
Montana law allows doctors broad authority to determine treatment in workers' comp claims, Gengler said.

Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.


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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.
 
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.

Five Items That Drive Workers Compensation Medical Costs

Study Finds Medical Costs Rise

Medical costs  per workers’ compensation claim in Wisconsin shifted from being lower than other study states to being typical. A study by Workers’ Compensation Research Institute (WCRI)  (CompScopeTM Medical Benchmarks for Wisconsin, 9th Edition) found Wisconsin employers paid lower costs per claim than the median of 14 study states 2001 injuries with experience through the first quarter of 2004.

However,  by 2004/2007 Wisconsin employers paid typical medical costs per claim compared to the other 14 study states.

WCRI attributed  Wisconsin’s shift in the average medical costs per claim compared to the study states to:

1.  Faster growth  in the medical costs per claim.

2.  Being  among the highest non-hospital prices paid and hospital outpatient payments per service.

3.  Medical costs per claim rose more rapidly.

4.  Over a  period of five years (2001/2002 to 2006/2007) Wisconsin experienced a 70% growth in medical costs per claim vs. a rise in study states of 47% to 54%.

5.  The main  cost drivers were rapid growth in prices paid for non-hospital services and hospital outpatient services.

It was found employers paid among the highest prices for many procedures performed in a non-hospital setting, such as:

WI:    Nonhospital established patient office visits:  $95.  (Most frequently billed service.)
SS:      62, median study state.
DIFF:  $33.

WI:     Arthroscopic knee surgery:  $3,035 (most common procedure).
SS:      $1,336, typical study state.
DIFF:  $1,699.

WI:     MRI:  $1,997.
SS:      $805, median study state.
DIFF:  $1,192.

Not only  did the study find Wisconsin paid substantially higher prices in the typical study state, but, compared to Iowa and Indiana (study states not regulating prices) they were also higher.  In general, higher non-hospital prices were offset by lower utilization of medical services. Similar conclusions apply to hospital outpatient services.

Despite these  higher prices workers reported faster recovery and return to work and better access and satisfaction with care.

WCRI  observed might be reasonable for an employer to pay higher costs if workers experience improved outcomes over time. WCRI is currently conducting a survey of injured workers in Wisconsin to address this question.

For the period 2006/2007 WCRI reports:

1.  Medical  costs per claim increased by 11%, driven by growth in costs per claim to both non-hospital and hospital providers.

2.  Medical  cost per claim for non-hospital services grew as a result of a 5% increase in prices paid and a 5% increase of medical services utilization. (workersxzcompxzkit)

3.  Hospital  outpatient cost per claim grew 10%, driven by a 6% increase in the average payment per service and 4% growth in number of services per claim. These growth rates were similar to the rates in previous years.

To order this  report, go to the WCRI Web site: www.wcrinet.org.

Author:  Robert Elliott, J.D.

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Claim frequency is down, but Severity and Permanent Total costs rise in 2007

The good news: Claim frequency declined, but it declined less than in previous year, according to NCCI press release issued August 1, 2008.

The bad news: Indemnity and medical severities increased. The increase in lost -time wage claims is projected to have been 4 percent in calendar year 2007 which outpaced wage inflation of 3.3%. Medical claim costs rose 6% in 2007 outpacing the CPI for medical care which was 4.4%.

Permanent total disability claimshave increased significantly over the last three years. Permanent total claims rose the most in the Southeast region and in the contracting industry and other industries that are in the “miscellaneous” category.

Factors influencing frequency declines slowing are: the economic downturn which can result in hiring more injury prone, less experienced workers. Factors which are thought to help in reduction in frequency are: global competition, more robotics use, ergonomic design improvements, increasing use of cordless tools, and increased use of power-assisted processes.

The lesson: make sure to get safety departments involved in your workers comp cost containment efforts, and WORK TOGETHER!

To get management buy-in use the Sales to Pay for Accidents Calculator at: http://www.reduceyourworkerscomp.com/calculator.php

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