|
NEWSLETTERS
NEWSLETTERS
|
In this issue
|
| • |
Review of Audit Finds Mistakes: Incorrect Change in Classification Nets $41K |
| • |
Is your response to an injured employee costing you money? |
| • |
Injury Management Process and Preventing "PD" |
|
Review of Audit Finds Mistakes: Incorrect Change in Classification Nets $41K
|
Insured:
The business is a local hauler in the South that handles towing risk. It has 25 employees and does approximately $1.5 million per year in business.
Situation:
Following an audit of the insured's Workers' Comp policy, the company was charged an additional premium of $46,000. The company paid the first installment of the additional premium - $26,000 - and was now being called upon to make the second installment of $20,000.
Assessment:
A Certified WorkComp Advisor (CWCA) who had been working with the insured for a number of years reviewed his client's coverage and performed his own audit of the policy. He found the insurer had incorrectly changed a classification on the audit that had resulted in the additional premium. Besides being the wrong classification for the position in question, the rules governing classification codes in the company's home state prevent them from being changed in the last 90 days of a policy, as was the case with this change. Initial contact with the insurer was not met with action, but rather with threats for non-payment of the second premium installment. The Advisor continued for several months to work out the situation with the carrier and to get them to admit to the mistake in the classification change.
Solution:
After several months with no result, the CWCA finally got NCCI involved. He had previously worked with NCCI to develop a program for towing risk classification codes - the very same program he had used for his version of the audit that had showed the incorrect change. He sent the results of the audit he performed that indicated the code to have been incorrect and also pointed out that the carrier should not have been allowed to make the change under the rules for classification code changes. After several more months, NCCI accepted the data he had sent and supported his claim that the classification change had been incorrect.
Result:
After more than 10 months of fighting the change to the insured's classification code, the CWCA's data finally led to NCCI ruling that the additional premium should only have been $5,000, not $46,000. The insured was instructed not to make the second payment of $20,000 and is now awaiting a return of premium check for $21,000. Although the carrier is currently disputing NCCI's decision, the CWCA says, "If I hadn't gone to the Institute and learned the things I learned, I would have given up on this after a couple months. But relying upon what I learned I knew I was right, so I stuck with it, got the classification fixed and got my client's premium reduced."
|
|
Is your response to an injured employee costing you money?
|
"We've got an employee who's abusing the system and we're just about fed up. So are our people." Every insurance agent has heard these words from frustrated employers who are certain injured workers are taking advantage of the Workers' Compensation system.
While we all know such abuses occur, they may be far less frequent than we may think, particularly when 90% of job related injuries are first-time occurrences. Very few employees have a pattern of multiple injuries.
As a matter of fact, the vast majority of injured employees behave quite differently; they do as they are told. "We'll get you to the emergency room," says the supervisor. Or just as frequently, employees are sent to their own physicians.
For most employers, that meets their obligation to care for the injured worker. But this isn't the way employers run other aspects of their businesses. For example, before a contractor makes an equipment purchase, there's a thorough due diligence process. Will the equipment produce the desired results? Will it operate efficiently where the company will use it? If it's a manufacturing operation, material sourcing follows a rigorous set of standards and specifications.
As someone has said, "Companies spend far more time selecting a copier than they do planning the medical support for injured workers."
This laissez faire approach to medical care is costly in dollars and lost productivity. Studies show that a worker who is out 10 to 12 weeks on Workers' Comp rarely returns to the job. That means finding and training a replacement and that translates into even higher costs.
Here's the point: If nine out of 10 injuries are first time incidents, most employees don't know what to do, what to expect or how to behave when they're injured. There is no reason to assume that they will do anything other than what they are told.
For example, if they are told to "go to the emergency room," that's where they will go. If the employee is asked, "Do you have a doctor?" and the injured worker says yes, then that's where the worker will go.
In the same way, if the injury is a sprain or strain, the doctor may prescribe "a few days off until you feel better," hand the worker a prescription, set up an appointment in 10 days, and the worker follows orders. But this lack of activity may result in the worker telling the doctor at the next visit, "I'm still having pain." Almost certainly the doctor will write a prescription for physical therapy. "Let's see how you get along with this," says the physician.
Let's make it very clear that physicians are not to blame. Beating up on doctors will not solve the problem. They are pressed for time and to keep costs down, even while wanting to respond to their patients in appropriate ways.
Although the blame may seem misplaced, it rests squarely on the shoulders of employers. At the same time, the insurance agent responsible for Workers' Compensation also bears a share of responsibility. Simply put, if you want to control the outcome, you must establish a process that produces the desired results.
If you want the injured employee to heal quickly, then the task is to install a system that assures employees of the correct medical procedure-one that gets them back to work as quickly as possible.
One of the key issues is locating a proper medical clinic close to the employer's location that is committed to the philosophy that one of the greatest health risks is not being at work. In fact, as Level 5 WorkComp Advisors, we develop relationships with physicians who understand that "group health care" is different from Workers' Compensation therapy. This is a significant issue as pointed out in a recent study by the Louisiana Workers' Compensation Corporation, which revealed that the median cost for a claim treated by a Workers' Comp- oriented facility was $3,015, yet for other physicians the cost was $5,793. Yet, the median time off was 34 days and 58 days respectfully. "The mean differences were statistically significant," the report concludes.
This is a worthy investment since it can facilitate getting the worker back on the job faster and thus reduce the overall costs. As the National Council on Compensation Insurance points out in its NCCI Research Brief, July 2005, "Medical-only claims that become lost-time claims cost an average of 40 times more than those that remain medical-only."
All this calls for a proactive approach to medical care for injured workers. Because it can make a significant difference both for the injured worker and in the cost of the claim, it is worth the effort.
The process of engaging employer, medical provider and insurance agent deserves serious attention since it is perhaps the most critical component in reducing Workers' Compensation costs, overcoming lost productivity and providing the proper care for the injured employee.
Studies indicate that about 20% of job-related injuries are responsible for driving up 80% of the Workers' Comp expenses. And conversely, it's that same 20% that stands in the way of reducing costs. By providing proper care from the moment an injury occurs, employers take the most important step toward driving costs down.
|
|
Injury Management Process and Preventing "PD"
|
For most employees, being injured at work is a first time event. It can be a confusing and frightening experience that can negatively shape an employees' attitude about their employer. Or, it can be an opportunity for the employer to demonstrate care and concern for an injured worker, improving employee morale, allaying fears and accelerating recovery time.
Employers who have not defined and documented an Injury Management Process further take the risk of exposing the injured worker to yet another Workers' Compensation hazard. Case Management professionals fondly refer to this condition as "Process Deficiency" or "PD."
You will not find a CPT code that matches the diagnosis, "Process Deficiency," but every case manager recognizes the signs and symptoms of PD when reported by injured workers.
Process Deficiency is far more serious than you think; in fact PD may far outweigh the severity of the primary injury, profoundly affecting the injured worker and employer. PD is more prevalent than imagined and certainly is at the root cause of litigation. To make matters worse, the prognosis for PD is always the same: a delayed recovery and/or an unnecessary absence from work.
All/EM employers, regardless of size, revenue, industry or location must develop and communicate an Injury Management Process that will contain a structured sequence of activities with a single goal in mind: taking care of the injured worker from the time of the injury until the return to full duty.
Prevent PD from affecting your injured workers by putting an Injury Management Process into action today!
As Level 5 WorkComp Advisors, we are experts in injury management. For more information about developing a customized Injury Management Process, click here.
|
Most Injuries Begin at Date of Hire
|
Many employers are confused about what they can and cannot do during the hiring process to prevent problem claims from occurring. The Americans with Disabilities Act does not allow you to ask questions about disability or use medical examinations until after you make someone a conditional job offer. However, after making a job offer, you may ask any disability-related questions and conduct medical examinations as long as you do this for everybody in the same job category.
It is critical for employers to integrate into their hiring process two powerful hiring forms: the Conditional Offer of Employment and the Post-Offer, Pre-Placement Medical History Questionnaire.
Just as the name indicates, the Conditional Offer of Employment makes the job offer conditional upon the employee being able to perform the essential functions of the job and would not pose a direct threat (i.e., a significant risk of substantial harm) to the health or safety of themselves or others. The offer may be withdrawn, if in a medical opinion, the employee poses such a threat with reasonable accommodation.
Once the Conditional Offer is in place and before work begins, the employee should complete the Medical History Questionnaire. Some employers direct the employee to their local medical clinic to have the form completed with the assistance of a doctor, nurse or physician's assistant. Assuming the employee is truthful, the medical history information will go a long way to determine if the employee is fit for the job. Sometimes, an additional examination may be needed.
This process is in the best interest of all concerned. The employer, employee and the employee's family all lose if an employee is placed in a job for which they are not fit. Injury or re-injury of a pre-existing condition is likely to happen if the employee is not suited for the job.
To request a sample of these forms, click here.click here.
|
|
Previous Newsletters
May-2009
Apr-2009
Mar-2009
Feb-2009
Jan-2009
Dec-2008
Nov-2008
Oct-2008
Sep-2008
Aug-2008
Jul-2008
Jun-2008
May-2008
Apr-2008
Mar-2008
Feb-2008
Jan-2008
Dec-2007
Nov-2007
Oct-2007
Sep-2007
Aug-2007
Jul-2007
Jun-2007
May-2007
Apr-2007
Mar-2007
Feb-2007
Jan-2007
Dec-2006
Nov-2006
Oct-2006
Sep-2006
Aug-2006
Jul-2006
Jun-2006
May-2006
Apr-2006
Mar-2006
Feb-2006
Jan-2006
|
