The Right Prescription for Resolving Workers' Comp Claims Quickly
It’s frustrating for any employer, particularly one who understands the value of an early return-to-work process, to deal with a doctor that does not encourage employees to go back to work as soon as possible. And it’s a major reason injury costs are escalating.
The National Council of Compensation Insurance (NCCI) has tracked workers’ compensation costs for decades. Its studies reveal a significant change in how the costs line up. For example, in 1987, medical costs represented 46 percent of all injury costs and indemnity (wages) payments were 54 percent. By 1997, just 10 years later, medical costs were 53 percent compared to wages at 47 percent. In 2007, medical costs increased to 59 percent while wages were 41 percent.
On the surface, the results could be viewed as companies doing a better job of returning employees to work. But in reality, the amount paid to out of work employees due to an injury is actually up while the amount spent on medical care is exploding. This is why health insurance premiums are also increasing.
Through all of this, insurance companies and third-party administrators have been increasing their focus on reducing medical costs, particularly through the reduction of fees to doctors and facilities. The insurance companies even tout the “savings” to their clients as a way of showing where their medical cost containment programs have brought them.
Interestingly enough, at its 2012 conference in Orlando, Fla., NCCI announced that these fee reductions have had little impact on curtailing medical costs. Focusing on medical fees is really not the solution; focusing on the injured employee receiving the best treatment as quickly as possible is. This includes both the quality of medical treatment the employee receives and how the employee is treated by his company. Employers need to take charge of the process, because if they do not, they are leaving it to the whim of the doctor, the insurance company, perhaps even the employee himself, as to when that injured employee is fit to return to work.
The “best” insurance companies may say the average number of claims per adjuster is around 100 claims or less, which means they would have more time to focus on managing companies’ claims as compared to an adjuster with more than 250 claims. However, if asked how many claims the insurance company has total and how many trainee adjusters are working on cases, the answer reveals that seasoned adjusters are probably handling 150 or more claims. The problem ends up being that a company’s priority—which is the claim—may not necessarily be the priority of the adjuster. Therefore, the business owner must take control of the process.
Who are the three most impactful people when it comes to having a better managing a claim?
The doctor, who:
- understands that an employee at work recovers more quickly than one who is sitting at home;
- understands that not being sedentary is actually good for an employee’s healing process;
- understands that the loss of a significant social environment at work can weigh heavily on an employee’s psyche; or
- can send the injured employee home.
The employer, who can:
- be caring;
- bring the employee back to work;
- accommodate any variety of conditions and provide meaningful work, so that the employee feels he is still a valuable member of the team; or
- send the employee home.
The employee can:
- either be compliant and follow the suggestions and recommendations of the doctors and try to recover as quickly as possible and return to work; or
- can become disruptive, seek out an attorney and exaggerate how serious his condition is to the doctor in order to receive time off from work.
These are the three most important people that affect a claim’s outcome. Notice that the adjuster is missing from this group. Although the adjuster is important, he can only manage based on the decisions of the other three.
If the doctor says the employee is not to return to work, all the adjuster can do is wait for the doctor to release the employee to full or modified duty or order an independent medical evaluation and fight to bring the employee back sooner. If the employee wants to retain an attorney, an adjuster really cannot stop it. When that occurs, they generally try to settle the claim as quickly as possible to reduce overall costs.
Clearly the doctor wields the pen and is critical in this process. Employers need to choose and choose wisely. Some of the questions they need to ask are:
- When an employee suffers an injury, who is the doctor?
- Is it a doctor provided by the insurance company?
- What experience does the doctor have in treating workers’ compensation injuries?
Some doctors want treat workers’ compensation injuries because it is currently more lucrative from a fee schedule than healthcare.
- What is the doctor’s return-to-work philosophy?
- How will the doctor communicate with the employer and how often?
- How long does it take to see the doctor?
- What exactly are the doctor’s capabilities? Can he remove metals from the eye, provide sutures and take x-rays, for example? Or will the employer need to send the employee to a more expensive Emergency Room for basic services?
- Is the doctor familiar with construction jobsites to understand the requirements of the jobs and the types of temporary transitional jobs that may be available to recovering employees?
- Is the doctor related by ownership or contract with secondary facilities such as physical therapy or imaging facilities?
- Does the doctor follow ACOEM (American College of Occupational and Environmental Medicine) standards? By following the ACOEM standards, the doctor has best practices guidelines to follow for each type of injury rather than doing multiple tests that most likely have no bearing on the injury.
Currently 60 percent of injury costs come from medical costs and 40 percent from indemnity wages. By getting the injured employee the right care as quickly as possible, controlling the wages more, and getting the employee back to work as quickly as possible, companies will actually reduce overall medical costs. Creating doctor relationships that will work best to bring the employee back to work and provide better employee care will result in better managed claims.
David R. Leng is the author of “The 10 Laws of Insurance Attraction” and “Stop Being Frustrated & Overcharged.”