Strategies to Contain Workers Compensation Costs and Increase Profits

Transcription

1 Strategies to Contain Workers Compensation Costs and Increase Profits Presenters: John Hibben, ARM, Loss Control Director Everest National Ins. Co. Andrea Hiltbrunner, Claims Director, Everest National Ins. Co. Hosted by: Steve Thompson, ARM, COSS Aspen Risk Management Group, Inc. DISCLAIMER The information presented in this material has been developed from sources believed to be reliable. It is presented for informational purposes only and should not be constructed as legal, professional or business advice. Everest National Insurance Company and its affiliates accepts no responsibility for the accuracy or completeness of this material. It makes no representations or warranties of any kind herein and disclaims all such representations and warranties. Neither Everest National Insurance Company or its affiliates will be liable for any damages alleged to be caused by the information contained herein. It recommends you consult with legal counsel and/or other professional persons before applying this material. This information is solely for illustrative purposes and does not constitute a contract. Only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions.

2 Factors Impacting Your Premium Your Business: Trade Contractor, Retail, Office, Manufacturer Your Payroll Your Experience Modification Factor, determined from your claim history < 1.00 better than expected >1.00 worse than expected Your claim prevention and mitigation successes Your Most Controllable Factors Preventing Claims and Reducing Claim Costs Effective Loss Prevention & Claim Mitigation Practices Your Insurance Premium is only a small portion of your Total Business Cost when work related incidents occur

3 Business Costs Arising from a Claim Business Costs Lost production & personnel resources Overtime Hiring and training Loss of customers / Delays in service, shipment or filling orders Potential premium increase or inability to acquire coverage Adverse reputation Fines or punitive damages Loss of income or inability to bid on jobs due to your incidence rate Business Costs vs. Claim Costs Total Claim Costs Business Costs Your business costs as much as 4 times greater than the cost of the claim.

4 A worker cuts his hand while moving some material. The laceration requires stitches. The worker dropped & damaged the material. You have your office support staff drive him to the medical center. Total lost time is 4 hrs. Total cost, paid by insurance is $600. Estimating Your Business Costs for this $600 Injury Activity Loss Cost Office Time First Aid Assistance Lost Production Damaged Material Vehicle Expenses 4 hrs * Hourly Wage.5 Hrs * Wages of Assisting Emp. Value of Lost Hrs, Product/Services Cost to Repair / Replace Gas / Mileage Your Solution Preventing Claims Saves MONEY An Effective Injury & Illness Prevention Program (IIPP) Prevents Claims

5 Elements of An Effective IIPP Program Management Leadership Workforce Participation Hazard Analyses Hazard Prevention & Control Training and Education Monitoring Results Hazard Prevention & Control Strategies Transfer Risk Engineering Administrative Personal Protection Preventative Maintenance Inspections Emergency Preparedness Medical Programs

6 Job, Task Specific Training and Education Address anticipated hazards, safe work practices, rules, equipment, materials, & emergencies New hires, newly assigned workers When new changes, processes, materials or equipment are introduced When observations, near misses or claims indicate a need Program Assessment and Monitoring Compare Results Against Goals Pre-Claim Measures: Training, Observations, Inspections & Participation Post-Claim Measures Frequency, Severity, Trends

7 Containing Claim Costs While Effective Safety Programs Prevent Claims When they Do Occur, The Best Strategy is to Contain their Costs Elements of an Effective Workers Compensation Cost Containment Program: Hire the Right Person for the Job Educate Your Staff on Basic Workers Compensation Create Job Descriptions Create a Return to Work Program Select Medical Clinic Use MPN Clinic

8 Costs of a Lost Time Claim: o Average cost of a CA lost time claim has reached record high $66,922 for 2011 per CA Workers Compensation Institute (CWCI) reporting o $20,000 more than the average lost time costs in 2005 Hire the right person for the job: o Pre-placement physical testing Simple as a medical questionnaire or thorough as medical exam, drug/alcohol screen, functional testing Ensure your management team understands workers compensation basics o ( o Teach them the basics so employee questions are not answered by attorneys o Disability payments up to 2/3 weekly wages, tax free o Medical treatment paid through the claim, employee should not be billed Job descriptions: (written or video) o Job Description templates may be available from a medical clinic or the internet o Assists hiring the right person for the position o Physicians need accurate description of job duties to evaluate whether a work injury has occurred o Physicians also need accurate description to evaluate return to work

9 Return to Work Program: o Identify opportunities where injured can return to work modifying existing job or performing different position o Same job, limited lifting, less hours, more breaks o Different job such as inventory, answer phones, etc. o Ensure medical clinic is aware of modified availability Medical Clinic Selection : o Implementation and use of Medical Provider Network (MPN) for CA o Use of MPN physician means medical control, quality care, significant savings and quicker resolution/closure o Preferred Provider Network for non-ca o Tour clinic, meet physicians, question wait time, does the staff contain interpreters, etc. o Provide job descriptions to clinic, make aware of return to work program

10 Strategies to Contain Costs When an Injury Occurs Timely reporting: o Easy 800# to report your claim o Know your state s rules when to report a new claim to avoid penalties o CA Labor Code 5401 requires within one working day of receiving notice or knowledge of injury the employer shall provide a claim form to the injured employee. o Knowledge of injury from any source on the part of the employer o Within one working day after claim form received by employee, must provide medical care o If liability is not denied within 90 days after claim form is filed, injury presumed compensable. o Timely reporting is proven to reduce lost time days, decrease claim costs overall, decrease litigation and quicken recovery o When claims are reported beyond three weeks, studies have shown significant cost increases by as much as 29% o When claims are reported beyond 11 days, studies have shown a 29% increase in litigation o Immediately report all injuries, including those you refute, so the best investigation and defense may be conducted o Communicate all known facts at time of reporting and as claim proceeds No information is insignificant!

11 Timely Investigation: o Thoroughly investigate all injuries to include injured worker/ witness statements, take photographs, preserve evidence while information is fresh o Any third party responsible for injury? o Equipment failure, machine breakdown, building owner, third party cleaning/service company, etc. o Provide claim adjuster with all information gathered New Claim is Timely Reported, What s Next? o Ensure initial treating physician has all facts of how injury occurred and reviews job description provided o Understand the injured worker perception o Communicate, show you care, demonstrate understanding, discuss job security o Studies have shown only 10% of workers compensation claims are fraudulent o Convey injured worker issues/concerns to claim adjuster for assistance o Team with loss control and claim to prevent future injuries and mitigate costs

12 What Can You Do to Prevent Injury & Control Claim Costs? o Create a safe work environment through an IIPP program o Perform Hazard Prevention o Create goals and measure to succeed o Actively participate in the workers compensation claim process by immediately reporting new injuries, utilizing an MPN clinic, creating return to work opportunities, utilizing job descriptions, etc. Effective prevention of injury and cost containment strategies succeed when we work as a team. Build relationships with your medical providers, claim adjusters and broker/agent. We are all here to help.

13 For More Information Visit our web site at: Contact us via our web page at: Call us at (800) Polling Question # 1 Are you an Everest Policyholder? Yes No Don t Know

14 Polling Question #2 How many of the below elements are in your IIPP Program? (check all that apply) Management Leadership Accountability Workforce Participation Hazard Analyses Hazard Prevention & Control Training and Education Monitoring Results Polling Question What topics would you like to see in future Webinars (check all of interest) Cost Containment Ideas Claim Handling Best Practices Safety & Health Topics Emerging Regulatory Changes

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