This article is for anyone looking to reduce their company’s workers’ compensation claims costs. It is vital to understand why it is important to manage insurance claims and how to do so proactively. This post provides actionable best practices that can be implemented to reduce the cost of your next workers’ compensation claim.
Why is it Important to Manage All Insurance Claims?
It is important to manage any insurance claim in order to reduce the costs associated with losses. When it comes to worker compensation insurance, your company can lower its insurance costs as well as reduce your total recordable incident rate (TRIR).
The TRIR is typically based on a company’s total OSHA recordable injuries over a year’s time. The number is calculated as a rate so it can be compared to other companies, typically within the same industry. The calculation for this score is shown below.
Lowering insurance costs for any business is vital, but maintaining a low TRIR is extremely vital for some operations. For example, general contractors in the construction industry rely heavily on subcontractors’ TRIR rates when considering bids for work. If a company has too high of an injury rate, then they may not be able to bid for certain projects.
Hiring companies will compare the TRIR rate of bidding subcontractors to the industry average as well as against other companies that are bidding on the work. Many large corporations that are responsible for significant projects will often hire subcontractors that may not have the lowest bid, but have an outstanding safety record.
By following some of the tips below, a company may reduce the number of OSHA recordable injuries it has over time as well as lost time days, which will have a positive impact on their TRIR rate.
Six Tips to Proactively Manage Your Worker Compensation Claims
There are many best practices that can be leveraged to reduce the cost of a worker compensation claim. The below tips are effective steps that can be taken by an employer when an employee is injured on the job.
The tips provided in this post are as follows:
- Report claims in a timely manner
- Implement a return-to-work program
- Use a nurse case manager
- Designate local clinics for injury care
- Use light-duty tasks to get employees back to work
- Use temporary transitional work services to get employees to work in the community or at home
Not all of the best practices may be allowed by your local or state regulations. Always check with an attorney prior to making changes to your claims handling process.
Report Claims in a Timely Manner
Reporting claims in a timely manner and proactively managing these claims until they are closed is vital in managing the costs of workplace injuries. Your company should have a written accident/injury policy that outlines the process of how employees report injuries.
All employees need to be trained on the policy at the time of hire, and follow-up training should be completed as required. The injury policy should contain:
- Definitions of an injury
- Expectations of reporting when an employee is injured
- Who the injury is initially reported to
- Who the injury is reported to after the initial report is made by the employee (if applicable)
- Who is responsible for reporting the claims to the insurance company
- What disciplinary action may occur if the stated process is not followed
The timely reporting of claims is vital to containing the costs of worker compensation claims. It is usually a best practice to have one person who handles reporting and managing claims unless there are many claims. This practice ensures that there is no miscommunication regarding who is reporting claims. It also allows for the reporting individual to become an expert on the claims reporting/management processes over time.
By not reporting claims in a timely manner, you are risking incurring additional expenses that can be difficult to dispute later in the case that a claim is exaggerated or flat-out fraudulent. Insurance companies consider companies that try to self-handle injuries or report claims late as a liability. By not reporting claims in a timely manner, you can contribute to your insurance premiums rising.
Implement a Return-to-Work Program
There are a lot of written safety programs to help to prevent injuries from occurring on the job. The same should be true for having a plan when an injury does occur. A return-to-work program, which includes policies and procedures, is vital for reducing the cost of worker compensation claims.
Getting injured employees back to work sooner, when possible, has positive benefits for both the employee and employer. Through an effective return to work program, an employee can decrease recovery time following an injury, maintain their sense of duty/purpose, and experience less of a financial burden from being out of work. The benefits for employers include reduced claim costs, fewer fraudulent claims, and getting employees back to work sooner.
Your return-to-work program should outline items such as:
- Who manages communication between all parties
- How frequently injured employees and claim adjustors are communicated with during the claims handling process
- Where employees can seek care for a workplace injury (when regulations allow the employer to direct medical care)
- Alternative job duties for employees who cannot perform their regular duties while recovering from a workplace injury
- The use of temporary transitional employment (if applicable)
This program will incorporate many of the remaining best practices below.
Any policy or procedure should be reviewed by an attorney prior to implementation. Also, your company should refer to a lawyer if there are any odd situations involving an employee with an open claim.
It is vital to follow what is in your written policies. A return-to-work program can assist in ensuring a consistent process is followed as well as assist in reducing liability in the event of litigation.
Use a Nurse Case Manager
A nurse case manager is exactly what it sounds like; it is a nurse that assists a company with managing care when an injury occurs. The services that provide these nurses may have nurses that are local, or they may provide services remotely via telephone and email. Nurse case managers will speak to the medical facility providing care to the injured employee and will communicate with the employer as well as the insurance company until the claim is closed.
It is a best practice for employers to designate a nurse case manager service that will be used for every (or a large majority) worker compensation claim. For smaller operations, this may not be feasible. In many cases, the insurance company will provide a nurse case manager for claims that have the potential to be costly.
These services are billed to the claim, so the employer is still paying for this service at some level. That being said, the cost of this service can significantly reduce the cost of worker compensation claims.
These services can also assist in reducing the number of OSHA recordable injuries or lost-time injuries through proactive management of medical care. A company’s safety rates, such as TRIR, can be impacted positively through the use of nurse case managers.
Designate Local Clinics to Use for Medical Care
In a majority of states, the employer has the ability to direct medical care in some aspects. Directing medical care means being able to designate where employees must seek medical treatment following a workplace injury. Many states allow employers to put together a panel of physicians, which the employee must use when seeking medical care.
Others states are more restrictive and do not allow employers to direct care. If you are in a state where you can do so, then take advantage of it. Look up your specific state’s regulations (click here to see Tennessee’s laws).
When choosing clinics or doctors where your employees will seek care in the event of an injury, ensure any location that is used is close to where the workplace is as well as where employees may live. For operations that have all the employees near the business, then this is easy to achieve.
By working with local clinics, there is a better chance an employer can work with the physician to get the employee the care they need without excessive treatment being administered. For example, occupational health clinics usually understand the OSHA Recordkeeping standard and will avoid treatments that cause an injury to be an OSHA recordable injury whenever possible.
This best practice can lead to reduced claim costs and favorably impact safety rates.
Use Light-Duty Tasks to Get Employees Back to Work Sooner
As stated above, specifying light-duty or transitional work is part of the process of implementing a written return-to-work program. Light-duty work is work that an employee can complete until he or she is released by the doctor to complete their regular work duties.
A company should identify work tasks that employees can do while recovering from a workplace injury. These tasks are limited in scope compared to regular job positions and are less physically demanding. After light-duty tasks are identified, a job description with physical requirements should be developed. These descriptions and requirements can be provided to the treating physician to get approval for the injured employee to complete the light-duty work if it is within the restrictions.
The job description and written requirements can also be used as an offer letter to the employee, which can be signed off on once accepted. This practice ensures that the employee understands his temporary duties, they do not exceed what is expected, and can limit liability in the event of a dispute involving the claim later on.
Leveraging light-duty tasks is an extremely vital part of reducing the costs of worker compensation claims. Ensure you have a clear and compliant plan when it comes to this best practice prior to needing it.
Use Temporary Transitional Work to Get Employees Out of the House
For some operations, having employees complete light-duty or transitional work at the job site or facility may not be an option. This can occur due to not having light-duty for employees to complete, not having light-duty tasks that fit the injured employee’s work restrictions, or the injured employee being located far away from the workplace.
If light-duty cannot be completed at the workplace, then there are still options to get the employee to complete work. There are services that will set the employee up to complete work in the community or even in their home. These services should be used when the employee is able to complete this type of work, but cannot come into the workplace.
There have been studies that have shown that if employees do not return to the job within the first two weeks following an injury, the chances that they return at all go down drastically. This situation can result in claims that are much more costly than they could have been.
By getting an injured employee to complete work in the community or at home, this practice can assist in getting the employee to return to work sooner as well as reduce the costs of claims. Additionally, if the employee chooses not to complete this alternative work, it can assist the employer in denying future medical costs.
It can be challenging to prevent all workplace injuries and contain the costs once these injuries do occur. It is vital to implement as many best practices as possible to reduce the costs of worker compensation claims. Do not wait until an injury occurs to implement the above best practices. Take the time to develop your return-to-work program if you have not done so already.
Do you want downloadable PDFs of all of the talks? Join as a member and get all of the 250+ free talks as well as 300+ additional talks in PDFs that are easy to download and print!