NJASBO 2015 Annual Conference Wednesday, June 3rd Workers Compensation A Claim from Start to Finish Key Elements

Transcription

1 NJASBO 2015 Annual Conference Wednesday, June 3rd Workers Compensation A Claim from Start to Finish Key Elements Studio 1, 9:00 a.m. to 10:15 a.m. - Clinic #3 Studio 1, 10:30 a.m. to 11:45 a.m. - Clinic #7

2 Session Speakers Craig H. Wilkie, RSBA Area Vice President, Arthur J. Gallagher & Co. Executive Director SPELL JIF Recently Retired School Business Administrator Scott C. Tennant Area Vice President, Arthur J. Gallagher & Co. Deputy Executive Director SPELL JIF Slide 2

3 Session Goals Understand what workers compensation is Understand who the parties to the process are and what role they play Know what drives cost in the system Know the District s role in the process Be a positive advocate Be ready for the challenges Slide 3

4 What Is Workers Compensation? Slide 4

5 Workers Compensation Is: Social legislation (N.J.S.A. 34:15-7, et seq.) intended to guarantee injured worker s specific benefits due to a work related injury as a trade-off against a worker s right to sue their employer due to a work related injury The administration of the system is through the New Jersey Department of Labor, Division of Workers Compensation who has the exclusive original jurisdiction of all claims for workers compensation benefits When a claim petition (litigation) is filed the matter is adjudicated through an administrative court and these claims are not civil court actions Slide 5

6 Workers Compensation Benefits: The statute provides three distinct benefits: a. Medical Benefits (medical paid to plateau) b. Temporary Disability Benefits (lost wages) c. Permanent Disability Benefits (financial awards) Worker rights to benefits are rarely affected by their own negligence Workers compensation benefits can continue past employment and for life Slide 6

7 Workers Compensation Responds To: Accidents arising out of and in the course of employment. The burden of proof that an accident did not occur rests with the employer Occupational disease if it is proved the disease is characteristic of or peculiar to the work in a material degree. The burden of proof that the workplace gave rise to the disease rests with the employee

8 The workers compensation law Disability (Lost Wage) Payments Workers Compensation Law An employee has to be disabled more than seven days before temporary disability benefits shall accrue. They don t have to be consecutive days. The benefit applies retroactive to the first day. The benefit changes every year based upon the Statewide Average Weekly Wage calculation and has a weekly maximum and minimum amount. The amounts are $826 and $220 for 2014 and will be $855 and $223, respectively. Other Laws Affecting Disability Payments N.J.S.A. 18A: provides that school district employees are entitled to full salary for up to one year following the date of injury for absences due to a workers compensation injury. IRS Regulation Section (a)(2)-1 states that wages do not include the amount of any payment made under workers compensation laws. The NJ Division of Pensions has interpreted this to mean that no federal, state or FICA taxes may be withheld. N.J.S.A. 43:15A-25.1 If a member of the retirement system receives periodic benefits payable under the Workers Compensation Law during the course of his active service, in lieu of his normal compensation, his regular salary deductions shall be paid to the retirement system by his employer. Slide 8

9 System Organization and How It Works Injured Employee Employer Attorney Claim Administrator Communicate Managed Care Nurse Physician Slide 9

10 What Is The Process? Attorney - manage the litigation process - keep the employer, claim administrator and involved physicians up to date - resolve the litigation Injured Employee - promptly report injury - provide a complete description of the accident - get better Employer - create internal reporting policy and procedure - ensure its enforcement and communication - monitor all accident activity - investigate accidents - communicate with all players Managed Care Nurse - monitor medical progress - speed up medical processes - work to get injured employee back to full health as soon as possible - communicate with all players Physician - see injured employee promptly - determine if injury could have happened as described - prescribe treatment - monitor patient progress - communicate with all players - make return to work decisions! Claim Administrator - set up claim file - determine compensability within the statute - monitor activity for breaches of the statute - pay claims as appropriate - manage file through litigation and closure - communicate with all players Slide 10

11 Cost Drivers Know what drives costs up Untimely reporting Out of network doctors and personal physicians Disability resulting in people out of work Litigation Weak internal negative system

12 Untimely Reporting Workplace injuries reported within ten (10) days of their occurrence cost an average of $10,172, while ones reported after thirty (30) days average $15,745, Kemper National Insurance Companies finds. Early reporting leads to quicker treatment, while delay lets problems fester and increases chances of litigation, says Kemper. LABOR LETTER THE WALL STREET JOURNAL AUGUST 10, 1993 Time is money... Slide 12

13 Untimely Reporting The prompt reporting of claims is one of the easiest ways to lower your total cost of risk; the sooner we learn about the claim the quicker we can engage in medical and disability management. Time is money... Using the 0-3 day period as the baseline, the cost of a late reported claim is 9% more if reported between 4-7 days, 20% more if reported between 1-2 weeks, 32% more if reported between 4-8 weeks, and 72% more if reported at one month or later. The Cost of Late Claim Reporting Liberty Mutual Group 2011 Slide 13

14 Cost Drivers Out of network doctors and personal physicians Usual and Customary pricing is much higher than in network pricing Currently, between 50 to 70 percent of medical provider charges that are out-of-network are being paid at full price, Gaughan said. How to Reduce Out of Network Medical Billing Costs By Denise Johnson November 27, Personal Physicians are: Rarely trained to manage workers compensation claims Far more likely to extend time off to a patient with whom they have an established medical relationship and whom may be only one of many family members the Physician treats

15 Cost Drivers $1 $3 - $10 Like an iceberg the below view (indirect) costs usually add up to much more than the in view (direct) costs. Disability Costs Direct Costs Medical Expenses Lost Wages Permanency Awards Indirect Costs Substitutes and temporary help Increased payroll benefit costs Replace valuable employees Train new employees Reduced productivity Administrative paperwork Associated other liability issues Decline in customer satisfaction (students, their parents and coworkers) Slide 15

16 Cost Drivers Workers Compensation Litigation Employees who are not satisfied with their treatment and/or believe they can get more money using an attorney to represent them, don t file suits they file petitions The assumption by the Division and its judges in these petitions is that an injury has occurred and the main question isn t did an injury occur but instead how much an injured employee deserves in settlement Slide 16

17 Cost Drivers Workers Compensation Litigation No two workers compensation judges will rule the same way given the same set of facts The law is intended to provide relief to injured employees and will always give the employee the benefit of the doubt It is up to the employer to prove that a set of facts as provided by an employee are inaccurate Even when there is evidence that people are performing tasks while out of work that they have been restricted from doing while at work due to their injury will be given the benefit of the doubt by most judges Slide 17

18 Cost Drivers Weak internal and negative systems The number one reason for excessive increases in the cost of workers compensation in districts is weak and negative systems that do not reward desirable behavior and ignore undesirable behavior. This results in the appearance and belief that the employer district allows process abusers to easily abuse the workers compensation system and when that happens the number of abusers increases. Slide 18

19 There is hope

20 Be Hopeful - Manage the System If you understand the system and its challenges, you can manage the system efficiently. Slide 20

21 Success depends upon Knowledge of the workers compensation law Knowledge of how the system is organized and works Knowledge about how to build a policy and procedure that manages the laws and challenges Having a positive workers compensation policy and procedure actively managed that allows employees to feel the district does the right thing Knowledge of how to handle difficult claim issues Knowledge of specific tax law, pension rulings and employment laws and how each is related to a workers compensation claim

22 The Morality Scale out of any given 100 employees 10 of any given 100 employees - believe it s immoral to do anything that may hurt their employer 80 out of any given 100 employees are undecided about how they might react to a situation and are greatly influenced by the employer s clear desire 10 of any given 100 employees have no moral issue with getting all they possibly can out of every situation Slide 22

23 The Morality Scale Your workers compensation management system will define the balance between moral and amoral behavior providing guidance to all employees who may some day be involved in a workplace injury Slide 23

24 Have a Positive Moral System That encourages 90 out of any given 100 people to do the right thing Ten wouldn t think of doing anything to hurt their employer EIGHTY are trying to figure out what they should do Ten do nothing but think of ways to help themselves at their employer s expense The simple truth about any given 100 people is: 90 people will do the right thing, want the workplace to treat everyone fairly and will support policies and procedures designed to meet a positive objective Slide 24

25 Put your philosophy in play. District Risk Management Program Objectives Safety and : Claim Management Slide 25

26 Start with Board Policy & Procedure ANYTOWN BOARD OF EDUCATION PROPOSED PROCEDURES FOR MODIFIED DUTY PROGRAM FOR ADOPTION The ANYTOWN Board of Education recognizes the need to provide a safe working environment for all of its employees. Based upon that need the Board has previously adopted a safety program and has vigorously applied it district wide. Begin by using the general rubric of safety as the basis for the policy. Slide 26

27 It Pays to be Positive About Safety! Emphasize SAFETY! Counsel employees on unsafe acts Form safety committees Provide safety equipment Provide safety training Every claim avoided through safety is money in the district s pocket START TODAY! Slide 27

28 Policy & Procedure (continued) The Board also realizes that during the course of normal work activities, an employee may experience an unavoidable accident. Given this, the Board had adopted procedures and policies for handling injuries on the job. Realizing that the adopted procedures and policies will result in proper handling of employee care and welfare, the Board also realizes that there is a need for a modified duty program to safety return employees to work, who are injured on the job, as soon as possible. Tie into your district policy and procedure on incident and claim reporting. Slide 28

29 Timely Reporting To avoid the chaos and extreme expense that results from claims being untimely reported, adopt a district policy that requires all employees to report all injuries big and small the day they occur There is nothing in law preventing an employer from enforcing a reporting policy and procedure that helps ensure employee safety and health Enforce the policy by requiring that all direct supervisors follow up a breach of the policy with the employee and document the breach and discussion to the employee file Slide 29

30 Modified Duty Disability (Lost Wage) Payments There is nothing in law that bars a school district from having a modified duty policy and program Without a modified duty policy and program a school district will have to wait until the treating physician declares that the injured worker can return to work without restriction A district is in sole control of a modified duty program and can choose to accept the modifications/restrictions and find a role for the employee or choose not to accept the modifications/ restrictions and send the injured employee home to recuperate. It is not the employees choice unless the district has given the employee that right in a labor contract Supervisor buy in on the program is critical Slide 30

31 Policy & Procedure (continued) Any employee who is hurt on the job must follow previously adopted procedures to have the injury properly treated by the appropriate health care professionals. Once the proper paperwork is filed and the employee has received appropriate treatment, the Board fully expects the Worker s Compensation doctor to file a report with the Business Office the same day. The Worker s Compensation doctor will advise as to the nature of the injury, proper treatment of the injury and any restrictions to be placed upon the employee before he/she returns to work Be certain to tie into the District s expectations of your appointed physician Slide 31

32 Policy & Procedure (continued) In consultation with the appropriate administrative employee(s) of the district, the doctor will formulate a modified duty plan for the individual employee in question. Any assignment to modified duty will be appropriate as to the employee s regular job duties. Upon assignment of the modified duty, and in consultation with the Worker s Compensation doctor, the employee will be informed of the duty and when he/she is expected to return to work. If the employee does not return to work at the appropriate time as indicated by the Worker s Compensation doctor, that employee will be charged for sick time until such time as the employee returns to work. Your policy must make your workers compensation physician a partner in the effort and you have to educate the physician to normal job duties and possible alternative work assignments Slide 32

33 Policy & Procedure (continued) Any employee asked to return to work on modified duty will be given any and all reasonable tools to conduct the duty in a safe manner and to the fullest of his/her ability Be certain to provide a safe alternative duty The Board realizes that the employees are most valuable to the district when they are allowed to actively participate in the every day duties of the district. This procedure should result in shorter leaves of absence due to injuries, maximization of an employee s available skills and a reduction in the use of substitute employees who may not have the same working knowledge of the injured employee Provide a rational basis for the policy Slide 33

34 Policy & Procedure (continued) It would be appropriate for the Board to adopt this procedure and implement it immediately in order to maximize the effectiveness of the above described procedure Draft, introduce, amend, adopt and implement Slide 34

35 Establish Claim Procedures Report claims promptly Coordinate all claims reporting Require employees to report ALL injuries big and small Put one person in charge of the claim reporting system Conduct prompt accident investigations Gather facts & interview witnesses while memories are fresh this should be a direct supervisor Learn from mistakes and teach others Direct medical care Select YOUR doctor -- doctor reports to you» Familiar with Workers Comp issues» Encourage early return to work Establish lines of communication Slide 35

36 Communicate with Injured Employees Contact them immediately Explain benefits Stay in touch We care and want you back to work as soon as possible Send cards or letters Go visit them at home Get Involved - These folks are your coworkers Don t leave them hanging on a limb Slide 36

37 Communicate with the Claim Adjuster Provide job description Have they accepted compensability? (Why or why not) Are benefits being paid? (For how long - To whom) What steps are being taken to manage medical? Is the employee cooperating? Has the employee obtained an attorney? Any suggestions for early return to work? YOU are their customer! Slide 37

38 Communicate with Physician/s Provide job description Information about nature of injury Plans for treatment Any special instructions for employee Is employee cooperating with treatment Target date of return to work Discussion of employee s actual duties Discussion of potential alternative duty Get Involved - These folks make the return to work decision Slide 38

39 Communicate with the Managed Care Nurse Provide job description Information about nature of injury Plans to expedite treatment Any special instructions for employee? Is employee cooperating with treatment? Discussion of employee s actual duties Discussion of potential alternative duty These folks can help compel action within the medical community Slide 39

40 Communicate with Respondent (Defense) Attorney Provide information promptly Discuss strategy Help coordinate interrogatories Help arrange for witnesses to be present at court These folks control the defense strategy in all litigated claims Slide 40

41 Be prepared to manage challenging scenarios

42 Challenging Scenarios Whispers of Fraud What do you do if a coworker comes to you and advises they don t believe the injury of a different coworker actually happened at work? Do you know what tools your claim administrator has at their discretion to help find out if this is true? How would you conduct an internal investigation to determine what the facts are surrounding the incident? Slide 42

43 Challenging Scenarios Going and Coming Rule Is a fall from a big pothole on pavement while walking from where you parked to get to work on campus compensable? What if the parking spot is in a school district owned parking lot? What if the parking spot is on an adjoining public road not owned by the school district and the pothole is in the street? What if the parking spot is on an adjoining public road not owned by the school district and the pothole is in the school districts bus drop off driveway? What if the parking spot is in a local parking garage not owned by the school district and the pothole is in the street but the school district has leased space in the parking lot specifically for use by employees to park? Slide 43

44 Challenging Scenarios Heart attacks Hernias Stress Aging workforce Pain Management Opioid Addictions Slide 44

45 Conclusion Workers compensation left unmanaged will result in constantly increasing costs well beyond tolerable percentages. It is only through knowledge of how the workers compensation system works and a thoughtful disciplined approach to managing your district operations that you can manage to keep the cost tolerable and to manage each and every claim very well from start to finish. Thank you for the opportunity to teach. Slide 45

46 Questions? Slide 46