It comes as no surprise to employees or business owners that healthcare costs are on the rise. Many have felt the pinch of premium increases, higher deductibles, and soaring prescription drug prices. Unfortunately, those changes also serve to increase the total cost of Workers’ Compensation (WC) claims, making mitigating WC claim costs and controlling losses a primary concern for companies as claims get pricier and severity increases (source 2).
BENEFITS OF IMMEDIATE REPORTING & DIRECTING MEDICAL CARE
One of the most effective ways companies can address rising WC claim costs is to fully utilize a Workers’ Compensation provider network to help appropriately direct necessary medical care. This can help generate significant cost savings by ensuring that treatment is requested in the appropriate manner and WC procedures are followed, which reduces liens and use of excessive or unauthorized medical treatment. Typically, there is no cost to join a provider network and dedicated provider assistants can help with onboarding so that employers become familiar with all the advantages a carrier has to offer. Ideally, an injured employee should see a WC physician at the outset to get the claim started in the right direction. This is helpful because care providers that are part of provider networks are better aware of WC rules, regulations, and jurisdictional requirements, such as prior authorizations.
Using a 24/7 Nurse Triage Hotline can also ensure that employees speak to a registered nurse immediately after being injured or having symptoms from a work-related injury or illness. They can then be directed to an authorized and approved physician while also ensuring that the incident is promptly reported to the carrier. Research indicates that delayed injury reporting can increase WC claim costs by up to 51%.4 While the required timeframe for reporting a claim depends on the specific jurisdiction, when claims are reported immediately, the carrier has a better opportunity to appropriately direct medical care. The longer it takes for a carrier to receive a claim, the harder it is to get the initial investigation completed. Early reporting enables employers to proactively investigate by collecting evidence and interviewing witnesses soon after an accident or injury occurs. Quicker reporting also gives employers the chance to help injured workers understand the claim process, including how they will receive medical care and wage replacement payments, which works to alleviate fears that could lead an injured employee to hire an attorney. With that in mind, employers should also avoid implementing punitive claim reporting policies that could backfire by causing workers to hide their injuries out of fear of repercussions for missing a deadline and allow an untreated condition to worsen.4
Nurse triage hotlines can also go a long way in making sure the right kind of care is sought after an injury by enabling a licensed nurse to swiftly assess employee symptoms and body parts affected. With that information, a nurse is often able to direct the patient to urgent care or walk-in clinics, which reduces emergency room visits that often result in higher costs. Nurse triage can also set an injured worker’s mind at ease because the employee knows he or she is speaking with a medical professional capable of providing reassurance regarding recovery expectations and advise that further treatment can be sought if recovery is delayed.3
THE BENEFITS OF COMMUNICATION
Throughout the claim process, from early reporting via nurse triage all the way through to claim closure, clear communication is key to the WC process. When the employer and the WC claims handler proactively communicate with the injured worker across the entire lifespan of the claim, the employee feels as if they are valued and important because they have a team working together to help make them whole again. Employing designated Human Resources associates that can maintain regular communication by reaching out to check on the injured or ill employee and offer light-duty accommodations also helps employees continue to feel like part of the team. It also creates the opportunity to maintain relationships with coworkers, ultimately increasing the likelihood that injured employees will want to come back to work when able.
Open communication with all parties involved is also vital to keeping everyone on the same page regarding the treatment plan, approval of treatment, and claim processing, which reduces the chance of surprises across the life of the claim. Keeping the lines of communication open can also go a long way in reducing the likelihood of an employee hiring an attorney and moving the claim into litigation, which can dramatically increase the cost and exposure of a claim. Overall, attorneys are typically involved in 5% - 10% percent of all WC claims in most states—but in as much as 20% in systems with a high number of disputes and in approximately 33% of claims where a worker was seriously injured.5 Keeping a claim out of the courtroom may also mean that Human Resources needs to follow up with the insurance company to ensure a claim is handled promptly and provide necessary information, such as financial records, as soon as possible so that WC benefits can be calculated and paid.
KEEPING WORKERS’ COMPENSATION PREMIUMS DOWN
Most often, claims are the reason a business’s WC insurance premium increases. It’s simply a financial fact that more claims lead to greater costs. While claims are definitely employer and jurisdiction-driven - slips, trips, and falls are typically more common. Keeping claims down, particularly lost time losses, is the primary means employers have when it comes to moderating premium costs. This can be accomplished via multiple avenues, including strategic loss control. Accommodating work restrictions and allowing modified duties when feasible can also help reduce the lost time expenses paid out on a WC claim. Employers should review claim trends to analyze what their unique loss drivers are and collaborate with a safety committee or risk management team to address the issues causing injuries or illness. Safety committees bring workers and managers together to achieve and maintain a safer, healthy workplace. According to OSHA, the most effective safety committees collaborate to find solutions to problems that cause workplace injuries, accidents, and illnesses. These groups also provide a forum for problem-solving that includes diverse perspectives and wider fields of experience. An effective safety committee also gives supervisors and managers a resource to turn to when faced with a safety issue they might not have the time or technical expertise to effectively handle. Such committees are capable of mobilizing and drawing people together, opening up healthy lines of communication and developing a broader base of safety knowledge through subcommittee assignments, which helps build an organization’s safety culture.6
BOTTOM LINE
Workplace accidents or injuries can cause harm to both your employees and your business. With record workforce shortages across the country, it’s important that employers do all they can to keep employees healthy and at work. Absences due to injury can result in reduced productivity, require extra time to replace personnel, increase overtime costs, or mean the addition of expensive temporary workers to fill gaps. Especially for a smaller company, these costs can be devastating. Maintaining Workers’ Compensation coverage with a high-quality carrier can help ensure that Workers’ Compensation claims don’t fall through the cracks and are handled as promptly and thoroughly as possible. Reach out to your CRC Group producer today to learn more about how we can help address your clients’ unique coverage needs.
ABOUT NEGLEY ASSOCIATES
Over the last 50 years, Negley Associates - a division of Starwind - has built a solid reputation as a leading insurance provider for the behavioral healthcare, addiction, and social service industries. Negley strives to meet the unique needs of behavioral healthcare providers by bringing together world-class insurance specialists to create a broad spectrum of customized insurance coverage options. For over 40 years, there has been no better insurance solution. Learn more about Negley Associates here.
CONTRIBUTOR
- Susan Cohen holds a Master of Social Work and is the Executive Vice President of Negley Associates, a division of Starwind. Sue and team specialize exclusively in the behavioral healthcare, addiction, and social services space.
END NOTES
- Eight Reasons for Rising Healthcare Costs, PeopleKeep, July 8, 2022. https://www.peoplekeep.com/blog/eight-reasons-for-rising-health-care-costs
- Severity, Cost of Comp Claims on the Rise, Business Insurance, May 3, 2022. https://www.businessinsurance.com/article/20220503/NEWS08/912349505/Severity,-cost-of-comp-claims-on-the-rise
- Pre-Claim Nurse Triage a Little Used Best Practice for Workers’ Comp, Claims Journal, November 9, 2015. https://www.claimsjournal.com/news/national/2015/11/09/266847.htm
- Delayed Reporting of Workplace Injuries Can Raise Comp Claim Costs up to 51%, Business Insurance, June 7, 2015. https://www.businessinsurance.com/article/20150607/NEWS08/306079984/delayed-reporting-of-workplace-injuries-can-raise-comp-claim-costs
- Spotlight On: Workers’ Comp, Insurance Information Institute, May 20, 2021. https://www.iii.org/article/spotlight-on-workers-compensation
- Safety Committees, RMU of Alameda County, 2021. https://www.acgov.org/cao/rmu/programs/safety/topics/committees. htm#:~:text=According%20to%20OSHA%2C%20the%20most,lower%20workers'%20compensation%20claims%20costs