Top 10 Tips For Handling Workers Compensation Claims

Top 10 Tips For Handling Workers’ Compensation Claims: What New Risk Managers Need to Know

Learning Objectives • Know how the worker’s compensation system works. • Know that not managing workers’ compensation claims impacts your organization’s bottom line. • Top 10 Tips for managing workers’ compensation claims effectively. 2

The Worker’s Compensation System § Workers’ Compensation is a stateregulated system for workplace injuries. § Benefits are based on the various workers’ comp laws in each state, and some states have life-time open medical. § Physician fee schedules can be higher than those for group health. 3

The Worker’s Compensation System § State laws can be confusing. § Best to keep employees safe and out of the system. § Is the system employee friendly or employer friendly? 4

The Worker’s Compensation System WC is NOT for: § Personal injuries, illnesses or diseases. § Accidents that happen when not on company time during personal life activities. 5

Workers’ Compensation Costs § For every dollar spent on actual claim costs, $2 to $4 dollars are spent on indirect costs. § Therefore, if a workers’ compensation claim’s actual cost is $30, 000, the total cost including indirect costs can become $60, 000 to $120, 000. 6

Workers’ Compensation Costs Direct Costs Indirect Costs • Workers' Compensation medical costs • Increase in insurance premium • Claim-handling fees • Loss of production • Payment to employees while recovering from injury • Decreased employee morale • Legal expenses • Administrative time • Training new employees or retraining • Staff and supervisor time $1 : $2 -$4 7

Workers’ Compensation Costs § Keep an eye on claims handling fees and hidden costs. § Monitor and measure incurred dollars and incurred changes. § Is poor claims handling costing more money? 8

Workers’ Compensation Costs ü Make sure you have the right workers’ comp policy for your organization. Not doing so could cost you. ü Not closely watching and managing claim costs will cost you. ü Workers’ Comp claim audits can come back to bite. 9

Workers’ Compensation Costs There is an even greater cost… An injured worker’s quality of life can become greatly diminished. 10

Why Having No Accidents Is Important § The “National Council on Compensation Insurance” (NCCI) collects workers’ compensation claims information from all insurance companies in the U. S. for all employers who have workers’ compensation insurance. § NCCI then issues an experience modification factor that may affect premiums, safety programs, and customers. § A rate of 1. 00 is average. § Anything above 1. 00 is poor. § Under 1. 00 is better than average. 11

Why High Modification Scores Can Hurt Insurers, Customers, OSHA, BLS are noticing! 12

What To Manage – Top 10 1. Letter of Credit versus Pre-Loss Fund 2. Premium and Claim Cost Allocations 3. Accruing for the claims audit 4. Claims Handling Fees 5. Claim Investigations/Catching Fraud 6. Treatment Plans 7. Nurse Case Management 8. Attorney Fees 9. Return-To-Work 10. Claim Settlement 13

Final Comments 1. Share workers’ compensation premiums and claim dollars at your organization. 2. Assign a safety champion (safety or facility manager or other appropriate employee). 3. Implement strong safety/loss prevention programs. 4. Add safety/loss prevention to employees’ goals and objectives—your own and others within the organization. 5. Make sure all employees receive annual training and document the training. 6. Continually monitor the program and make adjustments for successful results (e. g. observation program, etc. ). 14

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