19-point Workers’ Comp Program Annual Checkup

The early part of the year is a good time to take a step back and look at your Workers’ Compensation program and assess strengths and weaknesses. I even see companies that provide excellent training, are fully OSHA-compliant and ensure the workplace is free of safety hazards that are being frustrated and overcharged when it comes to Workers’ Compensation costs. In essence, there is always room for improvement. Here are 19 points to consider:

  1. How engaged are your workers in safety? Is safety truly a core value?Attitudes and behaviors on the plant floor too often prove management’s commitment to be little more than superficial lip service. To establish credibility, the best companies back up words with actions that show their commitment, shared leadership, and accountability, encouraging employees to be responsible not only for their own personal safety but also for that of others. Rather than setting robotic processes, management integrates safety as a core value and does not make safety exceptions, regardless of the importance of the customer or urgency of the order.
  2. Do you know your lowest possible Experience Modification Factor?Even if your Mod is low, working towards the lowest possible Mod is the best way to ensure long-term savings. It’s important to review loss runs and assess all open claims three months into the new policy year because the critical number crunching for calculating the Experience Mod takes place six months after the policy anniversary date. This gives you three months to reduce or close claims that will affect the Mod calculation.
  3. How quickly are claims reported?If claims are not reported within 24 hours of the incident, there is work to be done. Lost time will severely affect the final claim cost, so it’s vital that medical attention begin promptly. Quickly reporting a claim is also the best way to get an accurate report, before memories fade.
  4. How many claims involve lost time?The percentage of claims that are lost time is another key metric in managing Workers’ Compensation expenses. A good target for lost time is no more than 20% – 25% of claims. Higher percentages are a red flag, signaling a problem.
  5. How often are open claims and reserves reviewed?Excessive time lags in care or claims may indicate that a case is spiraling out of control. Today, claims are more complex, often involving co-morbidities, narcotic drugs, an aging workforce and expensive medications. Employers with poor loss histories may find it difficult to get renewals. At a minimum, open claims and reserves should be reviewed quarterly.
  6. What is the relationship with the claims adjuster(s)?Regardless of the company size, employers who take a hands-off approach and do not properly monitor claim adjusters will likely experience higher claim costs. Workloads are heavy and mistakes do happen. Having a designated adjuster who can work collaboratively with your staff will increase the efficiency of claims management and expedite closure.
  7. How many claims are litigated?A 5% litigation rate is very good, 10-15% is good, and anything over 20% should be considered a red flag warranting further analysis.
  8. Have you reviewed your Injury and Illness Prevention Program (IIPP) recently?The IIPP should be a living document that is updated when new equipment or practices are introduced and change with the company’s size and functions.
  9. How effective is your hiring process in identifying possible future claims?If injuries occur shortly after hiring, the hiring and training process should be examined. Having a consistent process for background checks and medical exams help prevent hiring the wrong person for a job.
  10. When was the last supervisors’ training?Supervisors play a key role in the management of injuries as well as staff morale. Consistent training in both the functional and human relationship aspects of their jobs is essential to be sure they have the confidence and skills to create a high performance and safety culture within their team.
  11. Do injured employees hear regularly from their supervisor?Injured employees who feel neglected or hopelessly lost in the system are fodder for eager lawyers. Legitimately injured workers often feel vulnerable and fearful of the workers’ comp system. Continual contact from the employer helps to reassure them that the employer cares about their well being and returning them to work. The moment communication stops with an injured employee, the harder it will be to maintain cost control over a claim and ensure a return to work.
  12. Are you in tune with the injured employee’s emotions?Psychological factors can impede recovery and have a significant impact on the outcome of a claim. While this includes mental health issues, it also involves economic circumstances, health illiteracy, cultural influences, coping skills or resiliency, as well as a person’s lack of knowledge about their injury. In such cases, intervention is key.
  13. Is your return to work program working properly?Examine your program to see if the jobs are meaningful, truly transitional, and meeting established metrics to return the injured employee to their original position in a timely fashion. Are opportunities proactively shared with the treating physicians? Are supervisors and workers truly onboard? Returning to work from an injury is an adjustment for both the worker and the workplace. An established process with support and engagement for all involved will help ensure its success.
  14. If the accident investigation reveals measures that should be taken to prevent future incidents, how quickly are they addressed?The employers’ response to an injury sends a critical message to employees. In addition to a thorough investigative process, employers should have a response process in place – what are the options to resolve the problem, who is responsible for insuring changes are made and implemented, and how is this communicated to employees.
  15. Are you up to date on OSHA regulations?OSHA has rolled out new injury reporting requirements effective January 1, 2015, has released a new education bulletin on injury recording for temporary workers for 2015, which is designed to protect temporary workers in the workplace through outreach and training, and has an aggressive agenda for 2015.
  16. Are you and your employees prepared for an OSHA visit?According to its budget justification, OSHA plans to increase the number of health inspections occurring in 2015. If it’s been awhile since you’ve done a walkthrough to identify potential problems, reviewed your recordkeeping and training documentation, written safety and health programs or discussed the procedure should an inspector appear, now is the time to do it.
  17. How effective are your medical cost controls?While state statutes differ with respect to the extent to which employers can direct injured workers to certain medical providers, the medical management of a workers’ comp claim is essential to reducing costs. Evaluate your relationships with medical providers and medical bill review processes to be sure they are working for you and your injured employee.
  18. What have you done about wellness programs and how successful have they been?Many employers are taking advantage of the provisions in the Affordable Care Act (ACA) that encourage workplace wellness programs. The ACA allows employers to charge differential premiums to workers who choose not to participate in workplace programs or fall short on certain health outcomes. If you have a plan, what are the participation rates and the results? Are you monitoring the correct metrics? If you don’t have one, now is the time to explore the options.
  19. How effectively is your risk management program integrated with HR?It’s easy to develop a myopic view of workers’ compensation since it’s so claims driven. Yet, health care costs, absenteeism, presenteeism, long-term disability and workers’ comp are integrated and there are opportunities for cost savings. Moreover, the overlapping and often conflicting requirements of ADA, FMLA, workers’ comp and a plethora of federal and state laws, including emerging medical marijuana issues, can be an administrative nightmare if not properly coordinated.

For Cutting-Edge Strategies on slashing Workers’ Compensation Costs visit www.PremiumReductionCenter.com

David Leng, CPCU, CIC, CBWA, CWCA, CRM

Author | Speaker | Certified Risk Manager | Certified Work Comp Advisor

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