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Handling worker's compensation claims can be trying and expensive for an employer. Effective claim investigation coupled with efficient claim administration and management can greatly reduce worker's compensation costs by streamlining claims processing and identifying problematic issues.
Effective Claims Investigation
Plan your Accident Investigation Before the Accident Happens.
Being prepared well in advance of an incident is the first critical step to effective claim investigation. Formulating a "game plan" which defines each individual's role allows the investigation process to flow smoothly and efficiently.
Steps to Conducting an Effective Internal Investigation:
- Conduct Your Own Thorough Investigation - do not assume that the insurance carrier will investigate a reported work injury.
- Identify Your Point Person - determine who will conduct the investigation and define his/her responsibilities during its course.
- Review Company Policies Prior to Taking Action - as with any action dealing with employees, consistency is critical.
- Identify Potential Witnesses - interview the employee and all witnesses, taking signed statements and discussing with the employee any inconsistencies or omissions with what he/she told you.
- Prepare Interview Questions - know exactly what questions you plan to ask prior to speaking with the employee or witness. This will allow you to anticipate their answers, formulate follow-up questions, and develop lines of questioning.
- Videotape a Reenactment of the Incident - this will record the employee's version of the incident, locking in his story and enable you to analyze what happened so that similar accidents can be prevented in the future.
- Identify Issues to be Investigated - Analyze every aspect of the accident to determine causes, contributing factors, or aggravating circumstances which may require follow-up investigation.
- Gather and Review Documents and Prepare your Strategy - as the investigation progresses, develop a strategy for defending the claim and formulate ways to reduce liability.
- Timeliness in Reporting Claims - reporting the incident immediately is critical to the worker's compensation carrier. This will provide you with a team member to assist you early in the investigation process.
- Train Your Supervisors - it falls to the first line supervisors to make certain that employees know and understand the importance of following the company's policies and procedures concerning injury incident investigation.
Efficient Claims Administration - Communication with the Insurance Carrier
Communicate Closely with Your Carrier.
In order to minimize the cost of worker's compensation, you should work closely with your insurance carrier, providing information by:
- reporting to your insurance carrier the results of your in-house investigation, including employee and witness statements,
- providing any records developed in the employee's application process regarding preexisting injuries, and
- discussing your opinion as to the merit of the claim and possible strategies you have identified to reduce liability.
Claim Review Meetings.
Establish Claim Review Meetings with the insurance carrier to expedite resolution of pending claims by:
- reviewing why old claims are still open,
- verifying the accuracy of information sent, and
- determining what is still needed to resolve pending claims.
Such meetings will not only allow you to more quickly wrap up pending claims but will also enable you to challenge all excessive claim reserves.
Review Experience Modification Worksheet to Ensure Proper Calculation
of Experience Modification.
You should also obtain a copy of your experience modification worksheet from either your insurance agent or the state Worker's Compensation Rating Bureau to verify the accuracy of classification codes and payroll amount used. You should also verify that the claim experience is consistent with what was paid in each claim, especially if carriers have recently been switched.
Effective Claims Management - Communication with the Employee's Health Care Providers
Maintaining Control of a Claimant's Course of Treatment.
An employer who is able to keep his finger on the pulse of a claim can monitor medical care costs, ensure an employee is returned to work quickly and is provided with the information necessary to formulate the best possible defense to a worker's compensation claim. You may wish to assign a specific company representative to monitor your employee's course of treatment and act as a liaison between the physician and the company.
Employer-Suggested Treating Physician.
You can verbally suggest a treating physician who you respect, but you must also inform the employee that he/she has the right to select any treating physician. This may have a persuasive effect in terms of the employee using a physician with whom you have a working relationship. You may also give the name and address of a recommended clinic or hospital in the employee handbook.
Educating the Employee's Health Care Provider.
If the physician is communicating solely with the employee, the facts on which the determination will be made can be very limited. Make sure the physician is aware of:
- past injuries,
- employee activities away from work which may have caused or aggravated the injury (the skiing accident last weekend, various sports in which they participate and may have been injured), or
- ways in which the employee may be at fault or may have brought on the injury.
Confused by Doctor Jargon? Just Say, "Show Me the Evidence!"
Often a physician's report contains unfamiliar terms or confusing language. Make sure you have a medical dictionary on hand to provide clarification or definition. You may also wish to speak directly to the physician, asking him to put the evidence of his/her findings into "lay language" to enable you to understand what is going on with your employee. Request clarification from the physician when a return to work note is provided that lacks any detail or explanation as to the specific limitations of the employee. Do not accept a restriction from the doctor which says, "off work until further notice." In the worker's compensation setting such a note is unacceptable because it is equivalent to the doctor saying, "employer, you must give this person a paid leave of absence indefinitely."
Doctor's Knowledge of the Workplace Should be Thorough and Complete.
You may wish to communicate with the doctor detailed information about the workplace environment, work that is available, its physical requirements and ask the doctor to assess the employee's ability to perform each available type of work. This may include:
- sending job descriptions to the doctor,
- sending videotapes of the work,
- inviting the doctor(s) to perform an on-site analysis, or
- informing the doctor that you offer restrictive duty to your employees who have suffered a work-related injury.
Provide Information on Employee.
With this in mind, there is information you can provide and request from the doctor to facilitate an accurate evaluation of each claim as to work-relatedness and to assist in returning the employee to work. To help the physician in making an accurate diagnosis, provide:
- the age of the employee,
- any information known regarding specific hobbies or physical activities or any background or relevant past medical history of the employee, or
- any recent changes in the employee's life of which you are aware (marital problems, employee was just transferred from a job that he or she liked to a different job; a personality conflict with another employee at work, any other information relevant to the employee and the injury) that would be helpful for the doctor to know.
Helpful Hints to Requesting Medical Records.
When making a request for medical records for proper claim investigation, send requests to all known physicians, checking the Company's health insurance claim records over the years to discover the names of additional treating physicians. Keep in mind that an employer is not required to furnish copies of any medical records secured in response to a worker's compensation claim to the employee or the employee's attorney. Do not attempt to seek the consent of the employee before requesting the medical records you need. It will slow down the process and is unnecessary. Be sure keep the records separate from the employee's personnel file as required by the ADA.
The Independent Medical Examination ("IME"). You have the right to request that an employee undergo reasonable medical examinations to investigate the status of an employee's claim for worker's compensation benefits. Keep in mind you must pay the full cost of any examination requested. As "reasonable medical examinations" does not mean unlimited exams, it would behoove the employer to consult with its carrier prior to requesting an independent exam.
Conclusion
Planning and communication are critical elements of a program designed to reduce worker's compensation costs. Prepare for accidents by establishing an investigation process designating key people and defining their responsibilities. Interact with your insurance company, reporting the claim immediately and ensuring information is provided in a timely manner. Maintain communication and contact with the injured employee and with his health care provider. Taking these steps will streamline your worker's compensation claims process, making it efficient and effective.
For more information, please call (414) 423-1330 or e-mail educational services.
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