Now for My Next Trick
The magic of keeping “medical only” claims from turning into indemnity claims
In the workers compensation arena, it takes more than a little magic to ensure medical-only claims do not become complex and costly indemnity claims that result in years of medical and wage loss exposure. To keep such claims from evolving, employers and third-party administrators must manage them effectively and mitigate costs while helping injured employees promptly and safely return to work.
The First Line of Defense
The best and most obvious way to avoid workers compensation claims is to prevent injuries from occurring in the first place. While it is impossible to prevent all injuries, reducing and limiting them in the workplace is possible. Knowing your workforce and implementing a detailed safety policy is the first step. This includes educating and training supervisors, managers, and employees, and including them in safety planning and procedures. By reducing injuries, both direct costs (employee payments and increased premiums) and indirect costs (lost productivity and reduced employee morale) will be significantly lower.
Establishing an effective safety program can help ensure that a safe work environment is established through strong communication, commitment, coordination, consistency, and compliance by management and employees. Building support and obtaining commitment from senior leadership; work site analyses; hazard prevention and control; and training programs for all employees, supervisors, and management are all critical elements of an effective safety program.
Maintaining equal and consistent accountability at all levels of the workforce ensures compliance with safety procedures and policies. Developing a proper orientation program and continually educating all employees and management are also necessary. Training should include safety meetings, defining the proper chain of command, and performance reviews so that all involved clearly understand the program and what is expected. Prompt identification, investigation, and keeping records of all injuries, hazards, accidents, incidents, or near misses are critical to the overall success of a safety program.
Avoiding Unnecessary Costs
Unfortunately, even the best injury prevention programs cannot prevent all injuries. When an injury does occur and an employee seeks workers compensation benefits, there are specific steps to take to avoid unnecessary costs. Maintaining pre-employment physicals of all employees; knowing employees’ social activities, hobbies, and comorbidities; and clearly understanding the applicable state laws/regulations concerning medical treatment will help limit overall costs.
Diligence in recognizing the different types of work injuries and establishing an appropriate panel of medical providers to address them are effective ways to manage medical care. Closely monitoring the extent and nature of all medical treatments, actively obtaining all medical records throughout the life of a claim, and determining the necessity for an independent medical examination (IME) and the appropriate timing for that exam are essential components of limiting unwanted medical expenses.
Strategic Medical Claims Management
Strategic medical claims management starts with a healthy workforce. Employers should consider incorporating pre-employment physicals that include regulatory and compliance examinations, fit-for-duty examinations, executive wellness examinations, and regular health risk assessments to achieve and maintain a healthy workforce. If an employee is injured, most states allow employers to establish a panel of medical providers to treat the employee. Panel physicians allow employers to effectively oversee, control, and manage initial medical treatments. It is most beneficial to provide the panel physicians with pre-injury and light duty physical demand job descriptions. Employers and adjusters should also discuss with the employee how he or she likes the panel physician so that concerns can be addressed and any changes, if necessary, can be made immediately.
IMEs are another way to obtain an expert opinion on the medical condition, causation, course of treatment, and level of disability of the injured employee. Multiple IMEs are often necessary to effectively diagnose injuries and provide treatment protocols. Providing the independent medical examiner with the mechanism of injury, medical history, comorbidities, and medical records/diagnostic study films is essential to securing the most complete medical opinion. This opinion may allow the employer to control exposure on the claim.
Proactive claims management for post-injury investigation can minimize workers compensation costs. An organized, investigative approach is the best way to gather detailed facts, determine the root cause of injury, identify corrective action plans, address ergonomic issues, implement appropriate risk control measures, identify subrogation opportunities, and eliminate recurrence. Periodic claims review meetings further enhance the claims management process and should be conducted throughout the life of a claim.
The post-injury investigation should focus on fact-gathering for prevention, and not for determining fault. Once it is confirmed that the location and date of loss fall within the available insurance coverage, it is critically important that a prompt investigation be conducted after the incident has occurred (best practices call for within 24 hours). After ensuring that the injured employee has received first aid or medical treatment, she should be interviewed to obtain the facts about how the injury occurred, and to provide a written or recorded statement.
The investigation report should include a discussion of the root cause of the injury and should outline recommended corrective actions to prevent recurrence. With an eye toward subrogation and preservation of evidence, employers should identify potentially responsible third-parties that may be involved. Witness statements and any pertinent video of the incident should be retained. Are prior claims involved? This will help to determine if retraining is required or if the injury is related to a prior incident.
It’s also important to obtain a medical release to secure all medical records and obtain prior medical history from the injured employee. Employers should secure and verify the accuracy of wage statements to ensure accurate calculation of indemnity payments. Finally, return-to-work issues should be considered at the onset of the claim, and it may be appropriate to discuss job modification with the injured employee in a cordial way that is productive for all parties.
The Power of Claims Review Meetings
A strong claims review team can help monitor claims before they go awry. The team should include the employer’s risk manager, claims manager, insurance broker, defense counsel, and panel provider; the insurance carrier’s or third-party administrator’s claims professional, claims account manager, risk control representative; and the nurse case manager. The team should have an in-depth understanding of the employer’s business culture and its claims management philosophy, and the team should possess the requisite knowledge, expertise, and resources to address changes for injury prevention. Communication protocols should be established along with an outline for establishing reserves, and authority levels to settle claims. The team should also schedule periodic claims meetings to review the nature and extent of the losses.
Without proper claims management, medical-only claims can quickly evolve into costly indemnity claims. A strategic, proactive team approach will enhance and strengthen the ultimate goal of limiting exposure, reducing costs, and effectively closing claims—with no magic spell required.