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NEWSLETTERS
NEWSLETTERS
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In this issue
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Audit review leads to client savings of $18,940
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Finding the right Rx for your Workers Compensation program
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Dealing with alcoholism in the workplace
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Audit review leads to client savings of $18,940
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Insured
The insured is a family-owned trucking company with 20 employees. Its primary business is hauling dirt, sand and gravel, as well as landscape product sales.
Situation
In early April 2008, the insured received an additional premium from the 2006/07 final audit in the amount of $15,129.
Assessment
Following established guidelines as set forth by the Institute of WorkComp Professionals (IWCP), a Certified WorkComp Advisor (CWCA) reviewed the final audit billing and determined that the audit should be placed under protest. Audit worksheets were requested from the insurance carrier. Once the worksheets were received and analyzed, major discrepancies became apparent.
Solution
Examination of the final audit worksheets revealed that the auditor had not properly identified payroll, due to a split Normal Anniversary Date during the policy period. As a result, the carrier had front-loaded the first rating period, which had significantly higher rates. To offset this, the CWCA had spreadsheets prepared that properly recorded the payrolls by rating period, which in turn provided a calculation that correctly identified the proper earned premium.
Result
The carriers audit supervisor agreed with the findings and processed the revised final audit billing. Subsequently, this produced a final audit return premium of $3,811. As a result of the Certified Work Comp Advisors findings, the net premium savings for the client was $18,940.
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Finding the right Rx for your Workers Compensation program
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Those who oversee safety in the workplace have every right to be proud. There is no doubt that todays workplace is safer than ever. Since 1991, the frequency of workplace injuries is down approximately 50%, thanks to the hard work of safety professionals and engineers, the advent of OSHA in the 1970s, safe workplace practices, cordless tools, modular construction, even robotics, which has lessened human interaction with potentially dangerous machinery.
So if this increased attention to safety has led to a decline in the number of workplace accidents-which has resulted in fewer claims and lower rates-then why has the cost of claims risen dramatically over the years? Why have some workers fallen through this safety net? The answer is simple: higher medical costs are the direct result of alarming increases in utilization of medical services.
According to a recent study by the NCCI, the factor driving medical severity is the growth in the number of medical treatments and the different mix of treatments. The study took a look at the years 2001-2002 as compared to 1996-1997, and found that the number of treatments for all diagnosis increased 45%, while with such injuries as knee and leg sprains, the increase was as high as 80%.
Through negotiations, doctors have been cajoled into accepting lower fees, and to counteract these losses, medical treatments have increased. Think of it like squeezing a balloon; when you pinch in on one end, it expands on the other. Doctors are for the most part not following evidence-based treatment protocols as set forth by the American College of Occupational and Environmental Medicine (often referred to as the ACOEM Guidelines). And by not doing so, we are witnessing medical treatment plans that are misdirected and unnecessary, coupled with increased levels of treatment, additional testing, and the high cost of doctors to run the tests.
What we arent seeing is anyone challenging these recommendations. The reason is quite simple; no claims adjuster has ever been fired for agreeing with a doctors recommendation. And nobody wants to be the first. The bottom line is that the only thing more costly than a good doctor is a bad doctor.
Another major danger with over-utilization is that the steady stream of doctors visits, MRIs, prescriptions, therapy sessions, etc., creates in the employee a mindset that says, "If Im undergoing all this treatment, I must really be hurt." The injured employee then slips into a deep mental chasm referred to as "secondary gain behavior," where his decisions are driven more by his emotions than his economic well being, often resulting in litigation and the loss of a valuable employee.
Another negative by-product of over-utilization has been the recent introduction into the Workers' Compensation system of narcotics, once solely prescribed for individuals in their last months or weeks of life. Where years ago an employee might be given a couple of Advils for a backache, today it is not uncommon for doctors to prescribe drugs such as Oxycontin for the same ailment.
The overuse of narcotics in the workplace causes bad things to happen. New problems are created. But if the injured worker doesnt get the prescription from one doctor, they may simply find another. Its not a stretch to say you can easily pick up a magazine and find an advertisement for a doctor willing to prescribe narcotics.
If over-utilization is wreaking havoc on the medical costs associated with the Workers' Comp system, then why would an overwhelmingly high percentage of doctors suggest treatment that is not evidence-based? Simply put, doctors have been trained this way throughout their professional lives. Since the day they picked up their first medical book, it's been ingrained in them that their judgment is whats best. That thinking is not going to change anytime soon.
The key to solving this problem is to be sure every effort is made to select the right doctor, one who will follow evidence-based treatment protocols and work towards returning the injured employee to the workplace in the appropriate time, even if in a modified position. And evidence supports the view that workers get better quicker when they are back on the job.
To find the right doctor, engage in dialogue with other companies and businesses in your area, looking specifically for those trained in occupational medicine. And once you find the right physician, remember -communication is key. Doctors shouldnt have any doubt that their recommendations and restrictions will be respected. Furthermore, they need to fully understand the return to work possibilities that exist. The steady flow of information between the doctor, the employer, and the claims adjuster is the first step in changing a system that is severely eroding the good work being done by safety officials. |
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Dealing with alcoholism in the workplace
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The January 2008 Legal Report from the Society of Human Resource Management authored by Beth M. Andrus explores in depth the unique challenges that employers face in dealing with an alcohol dependent employee. According to the report, the Americans with Disabilities Act (ADA) gives guidance and substantial flexibility in addressing problems; however, it does not answer all of the questions that such a situation presents. But a combination of thoughtful ADA analysis, some common sense management practices and appropriate legal advice should be the guide.
Here are some of the highlights:
Employees who are alcohol-dependent may be held to the same performance and behavior standards as nonalcoholics (42 U.S.C. §12114(c)(4)).
Employers can prohibit employees from using alcohol or being under the influence of alcohol in the workplace.
Employers may discipline or discharge employees for inappropriate conduct generated by alcohol abuse, including at after-hours business events, as long as the same standards apply to all employees.
If an employee appears to be inebriated at work, the employer has the right to ask them if they are in fact under the influence of alcohol.
The courts are divided on whether alcohol dependency is a disability under the American Disabilities Act (ADA). Some courts have ruled that alcohol dependency is a disability only if the condition substantially limits a major life activity.
Injudicious behavior as a result of excessive alcohol may be a one-time aberration and does not make employees alcohol dependent and therefore covered by the ADA.
Employers are not required to condone criminal behavior or egregious misconduct, such as profanity or driving under the influence, which may arise out of an employees alcohol dependency.
Employers need not retain employees who pose a direct threat of injury to the health or safety of themselves or others (42 U.S.C. §12113(b)).
The 9th Circuit Court of Appeals (one of the most employee-friendly circuits in the nation) approved the following steps as "reasonable accommodation" for an alcohol-dependent employee.
The employer:
Informs the employee of available counseling services.
Provides the employee with a firm choice between treatment and discipline.
Affords the opportunity for outpatient treatment, with discipline for continued drinking or a failure to participate in treatment.
Provides the employee with an opportunity for inpatient treatment, if outpatient treatment fails.
Discharges the employee only after a second relapse.
The courts are fairly unanimous in finding that, in the absence of misconduct or misuse of alcohol on the job, employers should grant at least one leave of absence for an alcohol-dependent employee to participate in a treatment program.
In alcohol-dependency cases, courts have found that the following accommodations are not reasonable:
Paid leave for treatment
Compensation to pay for an employees chemical dependency treatment
The elimination of an essential function of the position
The creation of a part-time position when the essential functions of the position demand a full-time employee
Advising the employee on the option of taking a disability retirement
These guidelines appear to apply broadly to all employers, regardless of size.
According to the report, "The employer is responsible for reasonably accommodating known disabilities (42 U.S.C. §12112(b)(5)(A)). Generally, if the employee does not disclose the condition, and the employer has no knowledge of it, the issue of accommodation does not arise. The duty to accommodate, however, does arise if the employer is told about the disability by a third party or becomes aware of it through observation. The employee need not say any "magic words" to trigger a duty to accommodate; the employee, however, usually must ask for some type of job assistance. The employer is then responsible for evaluating the various accommodation options. The employer need not provide the "best" accommodation, as long as the offered accommodation enables the employee to perform the essential functions of the position."
Employers need to send a clear message - do not drink alcohol at work, and limit any such drinking while traveling on business, while operating a company-provided vehicle or attending public events on behalf of the company. The company has the right to take disciplinary steps when employees do not comply, including a change in job responsibilities, the removal of supervisory duties or the removal of company privileges, such as a company-provided vehicle.
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Q & A: When an injury occurs
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Q. "We suspect that some employees delay reporting injuries to avoid a drug test. If an employee does not report an injury right away, without good cause, can we make it grounds for termination?"
A. This is an employment-related issue that warrants a legal opinion. Termination tied to late reporting could be determined to be retaliation. While termination may not be an option, employers can do several things to encourage prompt reporting of injuries. Benchmarks should be established for foreman or supervisors in prompt reporting of injuries and the results should be part of their annual review process. Clearly stating the companys objectives in employee manuals, safety meetings and posting posters throughout the companys premises encouraging the early reporting of injuries conveys the importance to employees.
Q. "We are a small company and do not have medical personnel on staff. Are we required to give first aid at the time of an injury?"
A. OSHA standards require that an employer must ensure prompt first aid treatment for injured employees, either by providing for the availability of a trained first aid provider at the worksite, or by ensuring that emergency treatment services are within reasonable proximity of the worksite. The basic purpose of these standards is to assure that adequate first aid is available in the critical minutes between the occurrence of an injury and the availability of physician or hospital care for the injured employee.
Q "We had an employee who was taken to the hospital, but insisted we do not notify his family. Are we obligated to do?"
A. You may want to begin with a review of your emergency contact form. Does it clearly indicate who should be contacted and does it give the option of "do not contact anyone?" Given the focus on privacy concerns today, it is best to review the situation with your legal counsel.
Q. "We have employees working off site who communicate with their supervisors electronically, including public text messaging (SMS) and instant messaging (IM). Is this an acceptable way to communicate injuries?"
A. Public IM (free downloads) and SMS communications typically arent archived, even as call records. With all accidents, its critical to have an audit trail, both for internal reasons and for future retrieval in the event of a lawsuit. Its also not secure and exposes the company to legal actions. Some companies are replacing public IM with enterprise class IM systems that feature archiving capabilities and can restrict communications to appropriate personnel.
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