Workers’ Compensation Claims Process And Cost Control

WORKERS’ COMPENSATION CLAIMS PROCESS & COST CONTROL

BY JOHN HARP, CSP, ARM—RISK ENGINEERING CONSULTANT

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? 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.

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 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-

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

“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.”

“Remember, the SEI Hotline is not how to notify your insurance carrier.”

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and a claim number is assigned. Depending on the extent of the injury the claim may be kept in the medical-only department or if the claim has possible medical complications or results in lost time, it will be assigned to a specialized adjuster.

The claims adjuster will review the information received at intake and then need to discuss the specifics of the injury and assess whether it’s a possible claim. The adjuster will also need payroll information and other employment details to effectively manage the claim. The sooner the information is received, the sooner the employee can be cared for and compensated, as required.

The adjuster will also coordinate billing with the medical provider since there are no out-of-pocket expenses for the employee or employer if proper procedures are followed. The adjuster is also responsible for coordinating payments to the employee if there’s lost time. It’s important to know there are various waiting periods, which is the number of days after the injury before lost wages (indemnity) benefits begin. Waiting periods vary by state and will be communicated by your adjuster in a lost time case.

The adjuster will stay with the claim and manage the process until the file is closed and all along the way it’s essential to stay in contact with them to manage the costs and help the claim to closure.

Tips for success in controlling workers’ compensation costs:

1. Injury prevention. This is the most successful tool in controlling costs. 2. A new or experienced employee should be reminded of reporting all injuries without fear of reprisal or discipline. Focus on the positive or lesson learned. 3. Managers should take an active role in injury prevention and after injury management. 4. Look for a telemedicine option to report injuries or provide follow-up care. 5. Find a local clinic that understands work-related injuries (your insurance company can help). 6. Document the facts after an incident. 7. Report the injury to the insurance company within three days. 8. Communicate with the employee. 9. Communicate with the Claims Adjuster. 10. Reduce lost time costs by accommodating restrictions. 11. Workers’ compensation is no fault, making it essential to manage the rules and safety awareness.

MSIG provides workers’ compensation insurance for thousands of 7-Eleven franchised stores throughout the U.S. Our risk management and claim professionals are available to help you with your risk control and claim management efforts. Check with your agent or broker, or for more information contact:

“The other factor in a claim cost escalating is the time from the injury occurring to a report submitted to the insurance company.”

JOHN HARP, CSP, ARM Risk Engineering Consultant jharp@msigusa.com 908-604-2951 HARRY ENGLEHART, CPCU, ARM Claim Account Executive henglehart@msigusa.com 908-647-4726

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up to 10,000 of its stores

over the next several years, up from 1,300 stores currently, as it moves closer to functioning as a grocer in more of the communities where it operates, reported Progressive Grocer. • Core-Mark International has partnered with Neste and Diesel Direct to reduce greenhouse gas (GHG) emissions and pollution from its operations in California, reported Convenience Store News. Powered by Neste MY Renewable Diesel, Core-Mark’s en-

tire California truck fleet—150 vehicles— emits no new GHG emissions and contributes

to cleaner air. • A breakdown in the freight supply chain, trucker shortages, and the labor crisis have combined to create problems for retailers and restaurants. reported Business Insider. Experts

said the supply-chain crisis will last well into

2022, and it likely won’t stop until we have widespread vaccination, new shipping containers, and a drop-off in demand. • In an effort to draw workers, Target is offering to cover the cost of tui-

tion, fees and textbooks for part- and full-

time workers who pursue a qualifying undergraduate degree at more than 40 institutions, reported CNBC. It will also fund advanced degrees, paying up to $10,000 each year for master’s programs at those schools. • Walmart is testing an all-self-checkout Supercenter in Plano, Texas, the first of its kind in the Dallas-Fort Worth area, reported The Dallas Morning News. The Supercenter has 32 checkout stands, all of which remain open, and has shifted cashiers to the role of “customer hosts” to help shoppers find available registers or assist in the checkout process. • Shipping rates from China to the U.S. were on track for gradual increases, but the pandemic brought supply chain issues that reduced capacity and sent prices soaring, reported the Wall Street Journal. Daily shipping

rates from China to West Coast ports have

surged more than 400 percent since the start of last year, and rising consumer demand for goods and the approaching holiday shopping season are expected to drive costs even higher. • Oil giant BP recently said it would buy the majority share it does not already own in its Thorntons joint venture from ArcLight Capital Partners LLC to expand its presence in the U.S. fuels and convenience retail business, reported Reuters. The acquisition will bring BP more than 200 c-stores in Kentucky, Illinois, Indiana, Ohio, Tennessee and Florida. • According to new research from the AAA Foundation, the average

number of all daily personal car trips plunged

45 percent in April 2020 because of the COVID-19 pandemic and associated restrictions. The dip in travel moderated later in the year but remained below 2019 levels. • A new report by the National Low Income Housing Coalition reveals that full-time

minimum wage employees cannot afford a