Employer's School - Take Control Part 2

Sunday, June 6, 2004 | 0

The following is the second in a lengthy series of articles that, when pieced together, comprise the "Employer's School" developed by Brent Heurter, Founder and Chief Solutions Officer of ClearComp. The first article presented a list of topics that will be discussed in this series, as well as the introduction. This article reviews the first three of the strategies in detail.

TAKE CONTROL

1. Create a Culture of Vigilance and Determination
It will take your leadership to create substantive and lasting change.

If there are problems with your workers' compensation system, don't blame your employees, your managers, your supervisors, the doctors, the attorneys, the legislators, or the insurance companies.

It all starts with you! You are the person who has the power to create change. You are the person who can take control and change your operation from the top down. You are the person who sets the strategy.

Once you stop waiting for someone else to fix the problem, you are already half-way there to solving it.

* Seek out mentorship, support, and guidance. You've taken the first step by seeking out this workshop. ClearComp brings to the table 139 years of combined, cumulative experience in every discipline of workers' compensation. We will tap into that expertise and set you on the path of creative change within your workers' compensation system.

* Do your homework. The workers' compensation system is complex, convoluted, and full of pitfalls waiting to snare the unwary employer. You absolutely need to become informed. Seek out experts. Talk to others in your industry. Learn how to sidestep the common pitfalls.

Ask Yourself: Do you think that you've always been as involved in the workers' comp process as you should be? How well do you understand the system? Why do you think it's important for you to take an active part in this process?

2. Find Religion.
Your culture must change in order to better manage and control your claims.

You'll need to create a heightened sense of urgency throughout your company about trimming costs and turning your workers' comp situation around. How can you make this happen? You need to find religion.

Finding religion is meant only as a metaphor. What we are basically talking about here is that "Aha!" moment when you convert from one belief to a new one and leave your old ways behind. You change from a sense of powerlessness in which you believe I can't do anything about this workers' compensation system to a sense of empowerment in which you believe I am not going to wait for legislation and reform to take control. I am going to find ways to cut workers' compensation costs now.

When you find religion, the information and research that you've collected falls into place and suddenly begins to make sense. You see the logic of taking a new approach and you make a commitment to seeing it through.

In this case, finding religion means seeing the wisdom in adopting a whole new way of managing your workers' compensation process. It means making a clear commitment to doing whatever it takes to turn your company around. And it means taking the leap of faith and developing the resources to get you to your goal.

When you've found religion, you free yourself of misgivings and you are ready to take total control. The answers appear, the path clears before you, and you become focused. You are confident and your employees notice the difference. Your conviction will bring about respect, admiration, and control.

Ask Yourself: What steps have you taken to create a plan for strategic change? How will you proceed to implement that plan?

3. Know Your Workers' Compensation Facts
Take a look at the root cause of workers' compensation claims.

Why do injuries occur in the workplace, anyway? Ask most managers and the typical response might be "the employee was careless" or "the employee didn't follow procedure." What these statements really say is that employees are the problem. In this scenario, management shirks responsibility and blames the worker for the injury.

In 2002 (the most recent year for which statistics are available), there were 1.4 million workplace accidents that required time away from the job-1.4 million!

According to Liberty Mutual's most recent annual Workplace Safety Index, the top three injury causes are overexertion, falls on same level, and bodily reaction (injuries resulting from bending, standing, reaching, and slipping or tripping without a fall). These top three injury categories&.

* Are the fastest growing of all injury causes, with the cost of each rising 10.7%, 17.2% and 13.7%, respectively, faster than inflation between 1998 and 2001.
* Represent just over half of the total costs of serious workplace injuries in 2001, costing about $23 billion a year or $450 million a week.

With these statistics in mind, it becomes clear that workplace accidents don't just happen. Nor are they always caused by carelessness. When you begin to closely examine the root causes of your claims, you'll see that many of them can be addressed and resolved before they become workers' compensation claims!

However, when legitimate claims occur, the workers' compensation insurance system is designed to cover both the employer and the employee. The system is complex and has multiple parties with sometimes-conflicting interests:

* Employer
* Employee
* Workers' compensation appeals board
* Treating doctor
* Nurse case managers
* Return to work coordinators
* Defense and applicant attorneys
* Rehabilitation professionals
* Private investigators (when fraud is suspected)
* Insurance broker
* Risk manager
* Loss prevention specialists
* Underwriting professionals
* Claims department adjusters, management, and supervisors

When claims costs go up as a result of the actions of any of the parties listed above, the cost is passed on to you.

Small and medium-sized businesses rarely possess the expertise and resources to stay on top of the complex claims processes. Claims tend to be handled poorly or slowly. At times, claims simply "fall through the cracks." These claims are the ones that often get out of hand.

Here are some potential trouble spots to be particularly aware of:

* Questionable claims are not acted on quickly.
* Medical bills and provider payments are late or delayed.
* WC forms to governing bodies are processed slowly and filed late.
* Files are over-reserved.
* There is a low number of file closings.
* There are few or no reserve reductions.
* Benefits that are due to the employee are delayed.
* The employee feels that his or her needs are not being met.
* The employee turns to an attorney.
* The employee is reluctant-or refuses-to return to work.
* The relationship sours and costs go much higher.

Ask Yourself: Highly effective workers' compensation systems address these pitfalls and put safeguards in place in order to contain costs and manage WC claims.

Effective systems that use best practice approaches &

* Coordinate the development and implementation of relevant policies and procedures
* Educate and train employees, supervisors, and managers about the WC system and processes
* Have a central contact person for all work-related injuries
* Screen claims for evidence of fraud and questionable claims
* Coordinate and review accident investigations
* Have a system for corrective measures
* Set up a rigorous claims submission process
* Ensure return to work documentation
* Coordinate return-to-work strategies
* Maintain effective communication with the injured employee, physicians and other medical providers, the insurance carrier's claims representatives, and company management
* Regularly evaluate procedures for all aspects of the company workers' compensation management system

To be sure, the claims process is challenging and complex. Few businesses are able to perform strongly in every aspect, yet the ones that do save a substantial amount of money.

Remember what we emphasized earlier: The insurance company does not pay for your claims. You pay for your claims. An insurance company simply finances your claims at a very high rate of interest. For every claim your company submits, you will pay anywhere from 200% to as much as 500% and more within the next four years!

It makes sense to explore your options and find a system that will enable you to improve your claims handling processes.

You can do this by putting together a multi-disciplined team of experts who are assembled to guide and direct medical care for injured employees. With top-quality medical care as the experts' main priority, they can integrate best-practices claims management with cost-control strategies.

You'll want to include representatives from the full spectrum of workers' compensation disciplines: a cost-containment claims controller, an insurance company claims adjustor, a workers' compensation medical professional, an employer representative, a return-to-work specialist, and a fraud investigator.

These experts do not necessarily have to be on site. You can use teleconferencing, Web conferencing, or videoconferencing technology to have virtual meetings to discuss individual claims. The experts can provide expert direction and guidance to companies on their workers' comp claims. This helps to ensure proper management and successful outcomes for employees' workplace injuries and ensures a successful outcome.

New claims should be discussed within 30 days in order to analyze the claims and look for the red flags that indicate situations in need of special attention.

With this kind of system in place, you'll end up with a tightly controlled claims system that will trim up to 30% off your costs. And for every $10,000 reduction in a claim, you save at least $20,000.

Article series by Brent Heurter.
Brent Heurter is the Founder and Chief Solutions Officer of ClearComp, a workers' compensation alternative for companies that desire to control and reduce their workers' compensation costs. Brent can be reached at 888-CLEAR-89 or email brent@clearcomp.com.

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The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.