How Can Workers’ Compensation Claims be Managed?

Organizations need to learn to manage workers’ compensation claims. Organizations with organized claims and disability management programs have lower rates of lost work time, reduced costs, and less attorney involvement in their workers’ compensation claims.

What part do managers and supervisors play in managing the claims process? Typically, they act as a focal point in relaying information, providing the injured employee with information about the claim, providing the claims division of the organization and the insurer with information about the injury, and otherwise coordinating the information flow.


Claims management

Improved claims management helps control costs. It is important for the manager or supervisor to provide, as soon as possible, complete and accurate information about the accident or injury (including the initial report from the doctor) to those persons inside the organization who are responsible for reporting to the insurance carrier. The insurance carrier should be notified and be able to contact the injured worker’s treating physician within the first 24 hours.Why is this important? First, managers and supervisors are most often the ones who have the first-hand information. Second, even a day’s delay can distort memories, and important details may be forgotten. Third, workers’ compensation payments to injured workers have to be made, by law, within a certain time period (often within 14 days), and penalties can result if payments are delayed because of lack of information.

Additionally, the insurance carrier sets up “reserves” based upon the information it receives, and if it does not receive complete and accurate information quickly, it may set inappropriate reserves on a claim. This can have a negative impact on a organization’s insurance premiums, particularly if reserves are set too high.


Reporting system

An easy-to-use system gets better results. Reporting relevant information to the claims personnel and the insurance carrier does not have to be a complicated process. In fact, the easier the procedure, the more likely that people will use it. If your organization’s reporting procedures are difficult or complicated, see if they can be streamlined so that information passes quickly from employee to manager or supervisor, and from manager or supervisor to the claims handlers.A genuine concern for employees translates into quick reporting of claims and fast delivery of services. This leads to more efficient use of medical care and shorter periods of disability. Lower loss costs means lower workers’ compensation costs. As a manager or supervisor, relaying information and showing concern makes good economic sense.


Medical care provider

Have a relationship with the medical care provider. Managers and supervisors need to be involved in the medical care provided. There’s more to workers’ compensation medical treatment than just providing medical care. Instead, everyone’s focus should be not only on treating the illness or injury, but on bringing the affected worker back into the organization in order to maintain a productive lifestyle.Establish a relationship with the treating physician. Even if your organization has not prearranged a medical provider, you can educate the treating physician about the workplace as a whole. That information will help get the employee back to work because the physician will know the employee’s job responsibilities. Quality medical care is provided when the physician has work site knowledge, specific job knowledge and can match the worker to the job.

A relationship with the treating physician will allow you to get full reports immediately following the initial diagnosis that determine:

  • nature and extent of injury;
  • estimated course of recovery; and
  • estimated return-to-work date and plan.

Remember that employees who are out on workers’ compensation disability continue to be your employees. It is not the responsibility of the insurance organization or the treating physician to manage their claims, but yours. However, work with, not against, the treating physician. Consider the employee’s needs and those of the physician as well as those of the organization. You can get the information you need about the nature of the illness and injury, plus return-to-work plans, without disturbing the doctor-patient relationship.

A good relationship with the treating physician or the organization’s medical provider will get you information on what the injured employee cannot do. With that information, modified duty –work that does not involve the restricted activities –can be designed so that the employee can be brought back to work. Gradually, restrictions can be lifted, based upon new medical information. Getting the employee back to work becomes, ideally, a cooperative relationship between the physician and the workplace.

 

Medical costs

One thing to keep in mind when reviewing the medical costs involved in workers’ compensation is that the kinds of incentives to keep costs down that exist in health care generally are not present in workers’ compensation. Rather, providers who are reimbursed 100 percent for their workers’ compensation patients have little incentive to control costs. Some studies have shown that for apparently identical injuries, the treatment given in workers’ compensation cases exceeds that given in non-compensation cases.

Medical care

Monitor the medical treatment given. Ask what service was rendered, was the service required, and whether the charges were appropriate for the service. Organizations need to look at what kind of monitoring currently exists. Many of the cost-control measures that have been applied to health benefits plans can be applied to workers’ compensation as well.

These kinds of programs can include:

  • Claims administration audits
  • Hospital/medical bill review
  • Utilization review (review of and participation in treatment decisions, such as elective surgery or long-term treatment programs)
  • Review of physician practice patterns (e.g., which medical providers were used, what their treatment patterns looked like, how long they considered injured workers disabled, and how losses compare to other similar organizations, etc.)
  • Medical fee schedule compliance
  • Use of HMOs, PPOs, etc.
  • Precertification of hospital stays
  • Rate negotiations with health-care providers
  • Coordination of benefits with existing group health programs

Not all of these options are available in every state; for example, some states do not allow employers to require injured workers to use particular health care providers, such as HMOs and PPOS, in workers’ compensation cases. Similarly, not every state has fee schedules against which medical costs can be compared.