The Workers' Compensation Crisis; The Hidden Truth 5

Sunday, February 1, 2004 | 0

This is the fifth of a five part series. A list of all prior articles in this series is at the bottom of this article.

The last article was an explanation of the experience modification factor, and looked at how it was really like a high (usurious?) interest rate revolving credit line. This article will show how your actions directly affect that ex-mod, and can save you big money down the road.

We started off with a hypothetical. The injured worker returned to work. The claims examiner has never worked with you before, so is unsure about your commitment to RTW programs, and set reserves on the file at $50,000, but the first unit statistical filing shows only $8,000 medical only on the file. However, it is the $50,000 figure that has been reported to the WCIRB.

Early intervention is key here, act with urgency even though the situation doesn't seem to be life or death. Up-front the carrier and the doctor need to know how serious you are about your 'stay-at-work' program, I call it stay-at-work because unless absolutely necessary, the employee should never even leave work to have to return to work, get it?

Just as important as it is to call the injured employee, you need to make contact with the claims adjuster within 24 hours of submitting the claim to initiate a dialogue.

With a proper InjuryCare Program in place, you should have more information about the employee and the claim specifics than the claims adjuster will ever have. It is now your job to facilitate the flow of information to the claims adjuster. You need to find out what information the claims adjuster is lacking in order to best handle this claim. If it sounds like you're doing the adjuster's job, you technically are, but it's not the adjuster's (or the insurance company's) money at stake here, it's yours.

You need to find out when the adjuster is going to post the reserve to the file and mark that day in big red ink on your calendar as 'D' day. If you truly want to impact your mod and the cost of your workers' comp insurance, it's what you do now that makes the most difference, because this sets the foundation for everything else to follow.

What you want to do is to gather as many facts as possible and facilitate the flow of information between the parties involved:

+ The employee*
+ The employee's family*
+ Any witnesses to the injury*
+ The CEO or top exec*
+ The employee's co-workers
+ The employee's supervisor*
+ The company's Safety or Risk Manager*
+ The Human Resources Department*
+ The Return-to-Work Coordinator*
+ The company's safety committee
+ The investigator (if deemed necessary*
+ The Subrogation Specialist (if applicable)*
+ The Benefits and Payroll Department
+ The company's employment law attorney(ADA issues) + Cal/OSHA or OSHA (if required)*
+ The Nurse Case Manager (if assigned)*
+ The Initial Treating Doctor*
+ The company's work comp/injury care coordinator*
+ The InjuryCare Providers (flowers, groceries, transportation, grocery home delivery, care packages, cards, baskets,)*
+ The Doctor Specialists (ortho, pysch, etc)*
+ Specialty Care Providers: wheelchair, crutches, etc.*
+ The Pharmacy
+ The insurance company's claims adjuster*
+ The broker's claims manager-employer advocate*

If this seems like a long list, then you won't want to see how much longer it gets if the employee retains an attorney. While I have made every attempt to make this list of parties involved from the onset of a non-litigated claim as exhaustive as possible, I'm certain I missed a few, and if I did, please email me at brent@clearcomp.com so I can share it with everyone else.

The parties you need to be most concerned with are marked with a* after their name or function. The ones in bold and underlined are the most critical, they are the key to your success in proper injury management.

Now you act as a detective, a conduit, a coordinator, a scheduler, for the claims adjuster and as a friend, a resource and a care-giver to the injured worker. Your goal is to funnel as much information as possible to the claims adjuster as it becomes available and as quickly as possible before D-day.

The types of information that you are looking to spoon-feed the adjuster include:

First Report of Injury (5020)
Employee's Claim Form (DWC-1)
Employee's Medical Release Authorization
Supervisor's Accident Report
Wage Statement & Schedule of Weekly Earnings (if employee will Be off work for more than 3 days)
Questionable Claim Notice (if applicable)
Picture of employee (if questionable claim)
Stay-At-Work Employee Benefit signed acknowledgement
Personal Physician Designation (if applicable)
Doctor's First Report of Injury
Disability Status / Work Restrictions from Doctor
Subsequent Reports of Injury
Employee's Signed Statement
Witness Signed Statement
Copy of employee's job description
Copy of the employee's personnel file
Copy of the employee's medical file
Any information you have on previous injuries work-related, Automobile, recreational, sports, etc.
Any information you have if employee is working elsewhere
Employee Injury Report Form
Copy of your Claim Reserve Set-up Form, completed to the best of ability
A handwritten thank-you note

Why are you going to all of this trouble? Why not let the adjuster do their job? Will all of this work really make a difference?

Here's the reason why: you want to get as much information to the claims adjuster BEFORE ANY RESERVE is ever established, this is the best and maybe the ONLY time you can have significant influence on how the claim is handled and reserved. After the reserve has been established it is a lot more difficult to get the reserves lowered without some real effort put forth. In order to lower an established reserve, the adjuster has to be willing to admit that they weren't doing their job correctly, and how many people do you know are willing to admit to a mistake if they don't have to?

Another reason that's just as dynamic, is that the adjuster sees just how actively involved you are in your claims, probably more so than anyone else they've worked with in the past. So they know you're going to being watching the claims like a hawk and unless they want to hear about it constantly, they had better spend the time it takes to properly administer your claims, fully document the file and to justify their plan of action.

If those two reasons weren't enough, a third reason is to get the trust and respect of your injured employee. By being involved it shows you care, because you and your team are getting involved right from the onset. An employee who sees this type of interaction is most likely not going to litigate and will be focused on positive outcomes like coming back (or staying) at work. Everything you do to get the claim on track will also directly help the injured employee. This is a winning outcome, because both you and the injured employee benefit.

This system works. We've used it, we've seen other companies use it, we've helped other companies implement it and we've had companies outsource the entire function to us. We've spoken to countless claim adjusters who also believe in it and the best part is that everyone wins.

Let's take a look at that same claim had we not implemented the INJURYCARE PROGRAM right from the onset.

By not taking control of the claim from the onset using the INJURYCARE PROGRAM, this is what a typical claim looks like. This is also how the insurance companies get to legally charge you three times for the same claim.

In 2002 the total incurred amount reported to the Bureau is 50,000, of which $8,000 was actually paid and $42,000 was left in reserves.

In 2003, again the total incurred amount reported is $50,000 with only $15,00 having been paid out.

Another $50,000 gets reported the Bureau in 2004, now totalling $150,000 and with a paid amount of only $22,000.

These charts are great to show your CFO after you've successfully implemented your INJURYCARE PROGRAM. This shows the same $50,000 claim we've been watching, but in this chart we ran the numbers through our MODANALZER System. Again the same numbers are reported to the Bureau in 2002, 2003 and in 2004.

ModController