Benefit Notices Often Ignored, Complexity Elevates Litigation Rates

Friday, April 8, 2011 | 0

By Bill Zachry
Safeway

One part of the workers' compensation system that gets little attention, and yet is the biggest cause of the workers compensation paper blizzard, is the benefit-notice process.

As it currently is designed and implemented, the benefit notice process is inefficient and does not accomplish its goal or mission.

Benefit notices are intended to provide information to injured workers of their rights, obligations and benefits within the workers' compensation system. The goal of the benefit-notice process is to allow injured workers to transition through the system in an efficient and effective fashion.

Another use of benefit notices is to use the injured workers as a safety net to insure prompt, accurate benefit provision. If the injured worker is correctly notified of their benefits, then is more difficult for the claims administrators to somehow not provide those benefits.

Some states have specific mandates concerning the benefit notices within their labor codes concerning the notice wording.

Most states leave the benefit notice rules and regulations up to the state administrators. Because of its complexity and lack of standardization, compliance with the current different state benefit notices is also one of the more administratively expensive, problematic and vexing processes in workers' compensation.

Thirty years ago, the benefit forms in most states had one check-the-box form that indicated when the benefit would start and how much and how often the payment would be. This, combined with a (rarely read) pamphlet that was also sent to the injured worker, provided the basic information on the workers' compensation system and benefits. It was expected that (as a part of the three-point contact process) the examiner would call and provide most of the information needed for the injured worker to navigate the system.

One of the best examples of a system gone wrong is the current California benefit-notice process. It went from one form to a system that now has well over 700 variations on the benefit notices. Current regulations in California now go beyond the post-accident notice process by also requiring communication to all employees within the state (pre-accident or upon hire) concerning their access to a medical provider network should there be an accident. Most of the changes were well intended by the legislature (improved communication), however those who were responsible for executing the oversight process did not have any practical front-line experience and did not understand the ramifications of their regulations.

I have no study on this issue, but would submit to you that the benefit notices are probably read about as often as the general public reads their mobile phone manual (and that both are equally as difficult to understand). This is because injured workers now receive too many benefit notices and the wording is indecipherable. What they lack in simplicity, they make up in volume. 

As a solution, I propose the following;

1. The International Association of Industrial Accident Boards and Commissions  should take up this issue and issue simple easy to use model benefit notices that could be implemented by most states.

2.  Every state should revisit the system benefit notice process with a goal of simplification and standardization.

3.  The administrative bodies overseeing their state system should be responsible for promulgation and wording of all the benefit notices (full content and timeliness).

3. States having mandated wording in the labor codes should remove the specific wording from their labor codes.  Having wording in the labor codes creates relatively permanent processes that most times are unnecessarily complex.  Having benefit notices fixed in the labor code does not allow the systems to change to the most current technology for benefit notice delivery.

4. The administrative bodies overseeing their state systems should be mandated to provide all parties in the system with necessary information of their rights and responsibilities concerning the workers' compensation system.  For instance, most of the focus of the process is on employee benefit notices rather than on the whole system. Most benefit notices to the injured workers do not reinforce the responsibilities of the injured workers to work diligently toward recovery and returning to work.  Claims administrators, employers, physicians and other vendors are usually ignored, though they also have rights and responsibilities within the workers' compensation system.

5. The injured workers should be allowed to determine how they want their notices (e.g., SMS, e-mail, hard copy, faxed, verbal, etc.).

6. The basic benefit notices for the injured workers should be simple enough to be texted to the injured workers (even the monolingual Spanish speaking day laborers all have cell phones).

7. All benefit notices should be tested for simplicity and ease of use.

8. Benefit notice processes should be re-examined every five years.

9. Regular customer satisfaction surveys of the benefit notices to determine effectiveness of the process should be undertaken by the oversight body. The process of doing a user survey is rarely done in the workers' compensation system.

10. The basic benefit notices should cover the following issues:

• Accept / delay /deny (if delayed when the final decision will be provided)
• How to access further detailed information.
• Hhow to access medical care (the phone number, e-mail address and other contact information of medical professional overseeing the injury, or of the treating physician)
• Start of benefit
• End of benefit
• If there is any change to the indemnity benefit
• Amount of indemnity payment (based on XYZ earnings)
• An 800 number or e-mail address where workers can go to get more detailed information (such as a claims administrator or the state oversight body)