Handling Workers’ Comp Claims is a Numbers Game
The number “6” can have many connotations. It can be the number of players a hockey team puts on the ice during a game, it’s how many eggs in a half-dozen container, or it’s how many points a touchdown is worth.
But perhaps nowhere can the number “6” have more impact, at least in terms of business, than when it comes to managing a claim for an employee who is injured on the job. That’s where Injury Code #6, the designation for a “Medical Only” injury, comes into play. And it’s a number well worth remembering because it is the preferred designation for the agent to implement as soon as possible for an injured employee. It’s the designation that says the company has done what it takes to have that employee return to work doing just about anything in order to minimize the financial impact on the bottom line, the company’s productivity and its ability to win bids. It is not a number to be taken lightly. Injuries other than “6” will increase the experience modification rating (e-mod) quickly, whereas the “6” designation will have minimal negative impact on the e-mod score.
Many employers believe that when an employee is getting paid by the insurance carrier that they are actually “saving” money because the injured party is only receiving two-thirds of their pay once they are taken off the payroll books. After all, they think, “Isn’t that why I pay insurance, so I don’t have to pay injured employees?” But what many fail to realize is that the injury claim sits on their books for three years, like a festering sore, getting worse and worse, while the employee is sitting home watching daytime TV with personal injury ads telling them they should sue (“Call us today at 1-800-GET-PAID!”).
Here’s a good example. A worker on a construction site hurts his back and goes out on workers’ comp. The primary insurance cost is $1,241, which stays on the e-mod for three years, finally totaling $3,723 in insurance costs along with a rise in the e-mod. Now, if Mr. Bad Back had returned to work in any type of light duty, the actual loss penalty would have been reduced by 70 percent to $372, or $1,116 over the three years—a total reduction of $2,607 over the life of the claim.
Obviously the name of the game when it comes to managing claims properly is to have a well-thought out Return-To…ANYTHING plan in place. But there are still other valuable pieces of the puzzle that have to fall into place to minimize both recovery time for the employee and overall claim cost.
THE REPORTING PROCESS
Timing is everything and if a company doesn’t have an injury reporting plan in place, one that everyone knows and understands, it is already at a disadvantage. If the injured employee reports a claim in a timely manner, immediately preserve evidence and get treatment sooner (not to mention avoiding fines for not reporting claims quicker). Reporting the claim to the workers’ comp insurance agent is also very important, as he or she is responsible for making sure any claim than can be medical only injury code “6” remains an injury code “6.”
TREATING INJURED EMPLOYEES
It’s important that the injured employee receive prompt medical attention, but it’s equally important that the medical attention be put into the hands of a physician up to speed on occupational medicine, preferably one with a working knowledge of what it is the company does.
REPORTING A CLAIM AND INVESTIGATION
Claims should be reported to the carrier the same day as the occurrence, so that the claims adjuster has the necessary time to do a thorough investigation. This will include such things as talking to witnesses to the injury, looking at any video that might be available, taking photos of the area, talking with coworkers about the mindset of the injured party prior to the accident (was he disgruntled?), etc. This will also help in lowering the overall costs of the claim and subsequent high premiums.
Active communication with injured employees is paramount during the claim process in order to make sure they have full understanding of medical treatment and how their payroll will be affected. This communication also includes keeping in touch with the workers to let them know they are a valuable part of the company and the company wants them to return to work quickly. Everyone wants to feel wanted. And in a society tethered to cell phones, texts and emails, there is no excuse for a lack of communication.
Sometimes an owner will think that an injured worker wants to come back to work as they are only receiving two-thirds of their pay. While that is true, payments from the carrier have no taxes taken out, whereas a normal paycheck from the employer is taxed at an overall average of 31 percent. The financial motivation to return to work is not at all what many owners think it is.
BACK ON THE JOB
In some ways, all the other points outlined are really just a precursor to this one, because until the employee is back in the fold, the premium clock is ticking at a high rate. The goal is to minimize the cost of the claim and temporary partial disability (TPD) payments, all of which can negatively affect the e-mod. Identify activities that injured workers can do within the company, and make sure there are no less than 15 different tasks outlined, including everything from watching safety videos to teaching other employees in a foreign language.
It’s also important to make sure, once again, that the company is working with someone who knows occupational medicine; otherwise, that doctor will list what the worker can’t do, instead of what the employee can do. Additionally, it has been proven that employees who return to work for modified duty have faster recovery rates and are less likely to pursue attorney representation.
Managing claims doesn’t have to be difficult, or frustrating, or a feeling that no matter what a company does, every time an employee gets hurt on the job it will have to pay big bucks while watching its e-mod score climb higher. True, there will be costs incurred with an injury; it’s in many ways a part of doing business, particularly in an industry like construction, where any job site can be a virtual minefield of potential injuries. But by taking the necessary steps and being pro-active in getting injured employees back to doing anything within their restrictions, a company can mitigate the financial fallout that will occur should it be ignored.
And when it comes to managing injury codes, what a company doesn’t know can, and will, hurt it.