Why, does it seem that workers compensation claims sometimes go on a vacation, never to be seen again until their effect shows up on an employers Experience Modification Rate? Could it be this is the result of a bigger underlying problem? Lets take a look at the life cycle of a workers comp claim and talk about a few things an employer should know.
Each workers compensation claim consists of many individual parts. Between the initial injury and final payment exist many opportunities for claim errors and mistakes to occur. Errors and mistakes that may ultimately lead to additional premium cost for an employer and you should learn how claims effect premium. When you consider how every claim for compensation is different, it then becomes obvious how important it is to know just what makes up a claim and to know role of everyone involved in the claim process.
What are some of the parts of a workers comp claim?
- An Injury Occurs: You can’t have a claim without an injury, or can you? When an employee suffers an injury on the job it’s pretty easy to tell. However over years of legislation workers compensation statutes were broadened to provide coverage where maybe it was never intended. During this time performance results suffered and workers compensation systems for many states were in danger of failing. In recent history many states have taken active steps to tighten up their definitions of on the job injuries, have overhauled their workers comp systems and in many ways strengthened the overall system. So the starting place for any workers comp claim is when an employee is injured on the job and how the employer responds to the employees need for medical attention!
- TIP: Do you know what to do when one of your employees is injured? You should….
- Claim Reporting: One of the most important steps in the life cycle of a claim is proper reporting of the claim. It’s a well known fact that the quicker an injured employee is contacted by a case manager or claim rep the better the claim will go. We’ve seen countless situations turn into costly out of control claims just because the injury was reported late, incorrectly or not at all! When an employee is injured the employer is responsible for reporting the claim to their insurance carrier. This should be done immediately if not sooner! At least as soon as possible after the employees medical attention has been arranged.
- TIP: Be prepared to complete a Report of Injury and submit it to your insurance company immediately!
- Case Manager or Claim Adjuster Contact: After reporting the claim to your insurance company it will be assigned to a case manager of adjuster. This person will then be in direct contact with the injured employee. They should provide the employee with information as to what they can expect while receiving medical treatment along with information about how the medical bills will be paid and compensation they will receive for lost wages. They should also discuss a plan on how to get the employee back to work as soon as possible.
- TIP: Get to know the case worker or adjuster. Learn their name and contact information. You will want to make regular contact with this person and receive regular updates on the progress of the claim.
- Behind The Scene Action: Once your insurance company has been notified of the claim they will assign the adjuster, contact the injured employee, gather information on the type and extent of injury, investigat the claim to determine if it is compensible under the workers comp act for your state, consult with the medical care provider and review medical care being provided.
- Claim Reserve: Soon after the insurance company has been contacted about the claim they will establish a “reserve” for the claim. This is a best projection on their part of what the ultimate cost of this claim will be. Think of a reserve as a “bank account” for the claim and as payments are made for medical costs and lost wages the account is drawn down. For statistical data purposes reserves are treated as dollars paid out, even if they have not been paid! This directly effects the experience mod calculation.
- TIP: Have your workers compensation claims reviewed by an independent consulting firm.
- Preferred Provider Networks: Just like the health care industry, most insurance carriers involved in workers comp use some form of preferred provider networks. This helps keep the medical costs of a claim under control. As a matter of fact many carriers will use some form of medical cost containment system to assist with managing the medical part of a claim.
- TIP: Make sure your insurance carrier uses all tools they have to control medical costs. Get your employee healed and back to work!
- Case Management: Workers comp insurance carriers will have experienced case managers on the job. If your workers comp carrier doesn’t seem to know how to handle a claim, then you need to find another carrier!
- Return To Work: It is important in every work comp claim to get the injured employee healed and back to work as soon as possible! An organized return to work program will help get that done.
- TIP: Make sure your RTW, Return To Work, program is up to date! Ask for help if you don’t know what a RTW is or how one should work!
Who plays what role in a claim situation?:
- The Employer: 1) Must report the claim as soon as possible. 2) Must stay involved with how the claim is proceeding. 3) Must stay in touch with the insurance case manager. 4) Must do whatever they can to get the injured employee back to work as soon as possible.
- The Insurance Company: 1) Must investigate and verify the claim is legitimate. 2) Must provide an active case management program. 3) Must work to control medical costs while making sure the injured employee is receiving the medical care the need by working closely with the physicians. 4) Must keep the employer involved in the claim. 5) Must clearly communicate the claim process to both the injured employee and employer.
- The Injured Employee: 1) Must report their injury to their employer as quickly as possible. 2) Work with their physicians so they can heal and get back to work!
This is just a snapshot to give you an idea of a few of the complicated issues surrounding a workers comp claim. And yes, there are many more things an employer can do when it comes to handling a workers comp claim.
But here’s a thought…why not have your goal be to eliminate work place injuries? Start at the begining, work on your safety program. If you don’t have one, get one! It’s a good place to spend your time and money!
Hope this helps you out!