By Patrick Hagge, Leavitt Group
As a safety professional, I have always preached accident prevention – but only after transitioning to the bigger picture in my role as a risk manager have I come to understand the importance of managing workers compensation claims. This critical piece of an organization’s overall management is often misunderstood and, in many cases, simply ignored by employers.
Managing claims is as important as managing any other aspect of an operation. The benefits of effective claims management include faster recovery time for injured workers, reduced operational downtime, reduced claims costs, and less negative impact on an organization’s experience modifier.
The first step in reducing claim costs is to recognize that you, the employer, can have a much greater impact on the progress (and costs) of a claim than you might think. By implementing the following key components of an effective workers compensation claims management program, you will be able to reduce the financial impact that employee injury claims have on your organization.
Early reporting of claims saves money. Reporting within 24 hours results in claims that, on average, cost 28 percent less than reporting an injury after seven days.*
Early reporting can:
- Benefit the employee through prompt, quality medical care.
- Help the employee return to work sooner.
- Reduce the number of lost-time claims.
- Reduce attorney involvement.
- Lower overall costs.
- Ensure a timely accident investigation to prevent future injuries.
Employers must communicate the need for all workers to immediately report injuries. Reporting requirements can be communicated during routine staff meetings, as well as using posters or paycheck stuffers. It is also critical that all employees know how to report an injury to their employer.
Employers need to emphasize the importance of reporting all injuries, no matter how minor the injured worker feels the injury may be. This way the employer is informed about the injury and they can then make the determination as to how to move forward with medical attention and claims submission to the insurance carrier.
In order to minimize the impact of a workers compensation claim on an organization, the employer must encourage and practice effective communication. It is essential that the employer stay in contact with their injured worker throughout the life of the claim. This is especially important if the injured worker’s ability to return to work is delayed due to his/her injuries.
One of the primary reasons injured workers retain legal counsel is they feel their employers no longer care about their well-being. Checking in with your injured worker at least once a week shows your concern and could avoid costly and unnecessary legal representation. Phone calls, emails, and text messages help you keep in touch, but sending a “get well” card or other appropriate gesture will further help convince your injured employee that they are missed and they are valuable to the organization.
While frequent contact with your injured worker is the most important link in the communication chain, let’s not forget the importance of communicating with the claims adjuster as well as the treating physician. Yes, it is okay for employers to talk to the doctors! In fact, it is more than just okay; it is extremely important.
An open line of communication with the doctor will help employers understand the treatment plan and allow them to voice any concerns they might have. Do not confuse this with the employer trying to direct medical care (which is illegal). This is simply a way for the employer to stay current on the care of their injured worker.
If you work in a state that allows employers to select designated medical providers, make sure you do your homework and select providers that practice occupational medicine. These facilities not only provide excellent care for your injured workers but they also understand the needs of the employer. Meeting with potential providers is highly encouraged so that the employer can explain their operation as well as their communication expectations.
Offering modified duty (a.k.a. light duty or transitional duty) is an essential element of an effective claims management program. Modified duty offered in accordance with the physician-determined work restrictions will typically result in a more engaged worker, a shorter claim duration, and lower claim costs.
Employers should consider a variety of job tasks when determining modified duties for their injured workers. Too often employers interpret “light duty” only as office work, which significantly limits the number and type of tasks available to an injured worker. As a consequence, injured employees remain off work for extended periods of time, driving up costs and further increasing the employer’s experience modifier.
Determining modified duty tasks should be done before an injury occurs so that the employer is ready to bring an injured worker back as soon as possible. Coming up with light duty ideas can start with walking the premises to see what tasks are available. Painting, housekeeping, weeding, sweeping, or washing company vehicles are just a few of the hundreds of ideas that exist for bringing injured workers back within their restrictions. Office work does not have to be the only solution.
Modified duty also helps keep your injured worker mentally and physically engaged with the company. Their sense of self-worth is elevated if their light duty tasks are productive, and they feel like they are contributing positively to the overall operation. In contrast, staying at home for extended periods of time can cause an injured worker to question whether or not their organization still needs them. This in turn can result in attorney involvement and/or a lack of desire to return to work.
Treating injured workers with dignity and respect is not only the right thing to do, but it will also help the claim process move smoothly. It is understandable that employers may be unhappy about the events leading to a worker’s injury, but showing outright anger and/or vindictiveness towards injured workers will only complicate the claims-handling process and increase the potential for higher costs. Instead, employers should engage injured workers in the accident investigation process and look for solutions that will keep similar incidents from occurring again.
Effective management of workers compensation claims benefits the employer and the injured worker. Employers who consistently practice proper claims management will see a reduction in the duration of claims as well as overall claims costs. Ultimately this will have a positive impact on the employer’s experience modifier and result in lower insurance costs, improved employee morale, and a more productive workforce.
*Based on 2004 Pinnacol Assurance claims.