WORKERS’ COMPENSATION CLAIMS PROCESS & COST CONTROL B Y JO H N H AR P , CSP , AR M — R I S K E N G I N EE R I N G C O N S U L T A N T MITSUI SUMITOMO INSURANCE GROUP
When an injury happens to one of your employees, the actions taken by you as the employer can greatly assist your workers’ compensation carrier in managing lost time and claims costs. The initial information you provide your insurance carrier will help them in determining whether the injury was caused by work and is a viable claim. And your early actions ensure the employee receives prompt and effective medical care, reducing the likelihood of a frustrated employee that may reach out for an attorney.
These are the key factors in managing a workers compensation claim: 1. Employee Notification—Employees should be informed at hire and periodically after, that you or your manager needs to know about any possible work injury within 24 hours. This shortens the report time to the insurance company and helps control injuries that might not be from work. 2. Get the Facts—Gather all the details you can, including When, Where, What were they doing, and Who might be a witness. Depending on severity, is surveillance footage available?
“ Your early actions ensure the employee receives prompt and effective medical care, reducing the likelihood of a frustrated employee that may reach out for an attorney.”
3. Direct or advise the employee about medical care. Find out if your insurance company offers a 24/7 telemedicine option. Depending on the severity of the injury, an urgent care or occupational clinic is the next most efficient and cost-effective option. In many states, you can direct the care. If you can’t, support the employee with local treatment options. Know your preferred medical provider before an injury occurs. 4. Report the injury to your insurance company within 72 hours. Most carriers have multiple options for reporting including phone, fax, email, or online. Know the contact information before a claim occurs. 5. The claims adjuster will need information about the employee’s work history, payroll, and other facts. The quicker the adjuster has these details, the more efficient the claim can be handled. 6. Attempt to accommodate restrictions. Work with your claims adjuster, medical clinic, or nurse provider to bring the employee back to work as soon as possible by working with any restrictions. The average cost of a lost-time case is now $55,000.
no policy limit nor excluded treatments. The goal of workers’ compensation is to use any “reasonable” care to treat the injury and return the employee back to work. Also driving up costs is the continuing advances in medical treatment, especially for catastrophic injuries. Years ago, a gun-
“ Remember, the SEI Hotline is not how to notify your insurance carrier.”
Reasons For Increasing Cost There are several reasons for the steady increase in workers’ compensation injury costs. First, it’s important to consider that, unlike group health or Medicare, there is
shot wound could frequently result in a fatality. Now with rapid medical response and advanced treatments, lives are being saved. The other factor in a claim cost escalating is the time from the injury occurring to a report submitted to the insurance company. This “lag time” has a large influence on the chances of an employee seeking an attorney and general costs in lost time and medical treatment. In this study and others, costs can be expected to increase at least 6 percent if reported after three days, and 40 percent if reported after 15 days.
Lag Time Management Tips 1. Inform your employee at hire and periodically after to report all injuries before the end of the work shift. 2. Remind and post information about timely reporting. 3. Make sure your managers know what to do. 4. Make it easy—Check if your insurance company has a telemedicine option.
The Claims Process Once your claim is received by the insurance company, a file is created continued on page 40 J U LY | A U G U S T 2 0 2 1 AVANTI
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