What Would You Do? Part 2
Saturday, October 25, 2003 | 645 | 0 | min read
The first part of this article series posited three different scenarios for the small business owner in a "what would you do?" format. While an experienced claims person could provide prompt and effective resolutions for each of the scenarios outlined in the first part, the only problem is, you don't have one on staff.
Help is available! One solution is to obtain the services of an independent claims manager/risk manager. Before you think that such services are just another expense, think again about how an injury affects your experience modification and you will understand that spending a few dollars now can save you a bundle in premium dollars down the road (see Watch Your Ex-Mod for an explanation of how the experience modification factor works and how it affects you premium calculation).
An independent claims manager/risk manager can work with you from the first hour of an employee injury. You can get help with obtaining prompt, adequate treatment by a reputable clinic-and find out if the injury is reportable to your insurance carrier. You can find out what you can do, as an employer, to reduce the cost of the claim and the impact of the claim on your injured worker-as well as reducing the impact on your company. And you can obtain assistance with expediting resolution of the claims that your carrier does handle.
The following are some recommendations based on experience for the scenarios posited in Article 1:
Develop a relationship with a clinic in your area that specializes in industrial injuries. Even if you don't have one down the block, there is certainly one within a reasonable radius-and many clinics offer transportation for injured workers.
Don't let your employees go to their own physicians, and be especially wary of HMO's who may try to project an industrial injury into the situation in order to increase their income. A reliable industrial injury clinic would have treated the injury, kept it classified as first aid if at all possible, and would let you work your carrier yourself on the issues of reporting the claim, whether or not a file should be opened, whether reserves are indicated, and so on. You have the opportunity to provide input and some degree of control over what happens.
Once again, an effective solution begins with a reliable clinic to evaluate the injury initially. A responsible, experienced clinic would have provided follow up with their office, so that a non-industrial practitioner (who is not aware of the laws and provisions in work comp) would not get involved.
The next step would be to provide modified work for the employee, doing anything you can possibly assign him to do so that he does not sit at home.
Finally, your insurance carrier would then be setting up a "medical only" claim rather than a lost time claim, which generally calls for much lower reserves and a quick closing date for the claim. The impact on your loss ratio would be greatly reduced.
There are a couple of critical points here that an experienced claims person could have spotted right off the bat.
First, the key to effective defense of any claim-but particularly a stress claim-is DOCUMENT, DOCUMENT, DOCUMENT! Contemporaneous documentation of any sort, kept in a reasonable fashion as events transpire, can provide effective sources for defense.
Thus, this employee's problems (health, personal, performance) might have been documented throughout so that a helpful pattern may be determined--information that could later provide a springboard for strong defenses against the claim.
Documentation after-the-fact is not as effective. However, if you have reached the point where preliminary documentation is not possible, then an assembly of everyone's recollections may prove useful.
For this particular set of facts, there are additional important points: An employee cannot file a stress claim unless employed for at least six months; a post-termination claim is not allowed by the Labor Code, and stress claims are not valid in the circumstance of good-faith personnel action.
WHAT YOU CAN DO
In each scenario outlined above, the bottom line for improvement can be expressed in this succinct phrase: Reduction of medical costs and claim costs through case management.
The employer cost of worker's compensation has almost doubled in California over the last seven years. Statistics from the Workers Compensation Insurance Rating Bureau indicate the total cost of the system was just under $8 billion in 1996, but will escalate to more than $15 billion by next year. Legislation has not been effective, for the short run, in decreasing these expenses.
A proven way to achieve real savings is accomplished through managing medical costs decreasing the impact of injuries through means such as proper and experienced evaluation of injuries, effective return-to-work programs, and vigilant claims handling.
Just because you are a small-business owner does not mean you are required to sit back and become helplessly entangled in bureaucracy, or have your claims costs spiral hopelessly out of control. Start today to develop a pro-active stance in handling industrial injuries.
The author is Meg Gallagher, president and owner of MM Gallagher Company, Risk Management. She can be reached at (714) 447-9449, or by e-mail at email@example.com.