Avoid the workers' comp crunch - personnel management

Costs for workers' comp are skyrocketing, but following a few common-sense principles can keep them in check.

Employers in the United States spent an estimated $60 billion in direct workers' compensation expenses in 1990, according to a study by Towers Perrin. That figure is double what costs were a mere five years earlier and - even more important - it could go above $140 billion by 2000 if current trends continue and the costs and incidence of work-related injuries go unchecked.

KEEP COMMUNICATION CLEAR

Astute employers can find some good news in the midst of this bleak picture; the same policies and procedures that will minimize the effects of this escalating financial burden will also lead to a healthier, safer workplace. These policies are based on the common-sense principles of good communication and respect for employees.

The following are five steps employers can take initially to lower their workers' compensation costs:

* First, make certain employees know what to expect if they experience a work-related injury or illness by establishing workers' compensation policies that allow consistent management of all claims. Accompanying instructions should spell out reporting requirements, the person to notify about claims, where to obtain medical treatment, how compensation is determined, pay policies, job status and return-to-work procedures.

* Appoint one individual within the organization to serve as the primary resource for employees in matters relating to workers' compensation. The individual should have a thorough working knowledge of the company's workers' compensation policy and procedures and the state workers' compensation law. This key individual (often an occupational health nurse) is responsible for providing medical treatment or medical referrals, return-to-work clearance, case management, and administrative and legal tasks.

* Train managers to provide appropriate guidance and referral to employees who are injured on the job. Each manager should know where to send an injured employee for medical treatment, how to complete and process an industrial accident report, and how to follow up with an injured employee and the workers' comp office. Develop a guide for managers that explains these procedures as well as workers' comp benefits.

* Ensure that the designated health professional is available to advise managers about how to meet employees' needs in the workplace, provide psychological support to an injured employee, recognize safety and health hazards and clarify supervisors' responsibilities under the workers' compensation program.

Good communication with the employee is critical after a work- related injury or illness occurs. Lack of understanding by the injured employee about his or her rights is one of the most common reasons for legal action. Let the employee know what your expectations are, monitor medical treatment on a weekly basis, and always be available to respond to questions and concerns. According to one study, workers whose employers called to see how they were feeling were more likely to return to work. Managers and co-workers should send the injured employee a get-well card or a gift such as flowers even if a claim is being litigated.

* Establish clear lines of communication from the insurer or third-party administrator, attorneys, and health-care providers. The employer must be aware of the duration and amounts of payments to employees. Physicians should provide timely medical reports to avoid delay or denial of workers' comp benefits and should telephone the employer when questions arise or the employee's medical status needs to be discussed.

EVALUATE THE INJURY

Employers can save money and offer improved health services by establishing a preferred provider network. An injured employee needs prompt medical evaluation and treatment and most likely will be out of work longer if he or she has to wait for an appointment with a health-care provider. The preferred provider network should offer treatment in specialties including orthopedics, neurology, infectious disease, allergy, dermatology, internal medicine, occupational health and chiropractic. Providers should be knowledgeable about workers' compensation law, the work sites and physical requirements of various jobs, and the importance of documenting the injured employee's physical restrictions and work status.

Injured employees should be evaluated by a health professional before returning to work if medical treatment was required or time was lost from work became of the injury. The injured employee must submit clearance from the treatment provider documenting his or her ability to return to work along with a description of physical restrictions and length of time the restrictions are in effect. The health professional reviews all the information and determines whether the employee is capable of performing the essential functions of the job. The employee's supervisor and health professional together determine if a return to work is possible.

If the employee is not capable of performing the essential functions of the job, alternative work may be offered through a light-duty program. If suitable accommodations cannot be made, the employee should remain out of work until the restrictions are removed.

If the employee is capable of performing the essential functions of the job, the health professional should notify the supervisor if there are any work restrictions, the time period for those restrictions and the date of the next medical appointment.

All employees who return to work with restrictions should be seen periodically by the health professional to review whether an increase in work duties is possible.

Social and psychological factors may delay recovery in employees who sustain work-related injuries and illnesses. Those employees may be depressed, have experienced recent life changes, or be dissatisfied with the job. These individuals, who are said to suffer from disabling behavior, focus on some type of secondary gain such as sympathy, attention and support (including indemnity payments) and release from responsibilities and obligations. They must be promptly identified, referred for counseling, and convinced that they are expected to return to work.

WHEN LITIGATION OCCURS

Some cases will end up in court despite an employer's best efforts. When that happens, the employer should try to maintain a nonadversarial relationship with the employee while preparing a strong legal case. Make certain that everyone involved with the case - attorneys, supervisors, health providers - understands that documentation of issues related to the claim will be critical. Obtain clear and concise medical documentation from healthcare providers that states how and when the injury occurred and the current work status of the employee. Managers should provide any written documentation of corrective measures taken and note the behavior of the employee during interactions with health services.

Independent medical examinations (IMEs) can be used to determine the extent of disability and work status, to clarify a diagnosis or medical treatment, or to provide a prognosis and conduct ongoing case management. Select IME physicians for their specialty, clinical expertise, credibility and communication skills. Contract with a specific IME company and negotiate a reduced price for each medical examination based on volume, because IMEs can become expensive over a long time period.

If necessary, use private investigators to determine an injured employee's level of physical activity, inquire about other employment (an employee may be collecting workers' compensation benefits and working simultaneously), and obtain more information about the alleged injury or illness. Any relevant information should be referred immediately to the employer's attorneys for legal action.

A worker's compensation review committee can be an effective method for reviewing problem cases. This multidisciplinary committee - usually including a health professional, insurer or third-party administrator, attorney and benefits manager - makes decisions on the compensability of questionable claims and authorizes lump sum payments.

KEEP MONITORING THE PROGRAM

Work-related injuries and illnesses require consistent management. Pay attention to red flags such as expensive claims, unclear diagnosis or prognosis, problems in the workplace, alcohol or drug abuse and personal problems. Do not automatically assume an injury or illness is compensable. Obtain a detailed history of what occurred, the initial treatment, current symptoms and ability to work. Then, consider all the facts and make a decision.

Review the total figure for workers' compensation costs. Monitor lost runs, reserves, and indemnity or medical costs, and track trends. Also, identify areas with the highest frequency of injuries and costs, seasonal injuries, and departmental injuries by shift, supervisor and work section. Implement prevention programs in high risk areas to educate employees about safe and healthy work practices. Individual departments should be responsible and accountable for their own workers' compensation costs. Charging back a percentage of the cost of an employee's injury to the department is one option.

Establish goals for annual cost savings to motivate all individuals involved to handle claims efficiently and monitor their associated costs. Use contests and awards to encourage employees to work safely, and consider safety records in annual performance evaluations. Offer financial incentives to supervisors and managers to motivate them to support an injured employee's return to work.

Preventing injuries and illnesses is the most effective way of cutting workers' compensation costs. Work closely with the safety department to promote and maintain a healthy and safe work environment. Arrange safety walkthroughs and accident investigations to identify ergonomic or safety interventions that could prevent future injuries. Other strategies include safety training, and educational programs like stress reduction. Safety should be given the same attention as production, customer service and quality control.

Employee assistance programs (EAP) provide confidential assistance to employees in dealing with personal problems that may pose a threat to their health and well-being. An EAP can be the cornerstone of efforts to keep illnesses and injuries at a minimum and may promote a quick return to work if they do occur. An effective program will recognize significant financial, family or workplace problems and refer employees promptly for counseling to cope with frustration, fear of disability and loss of work ability, anxiety, depression, pain and financial problems.

Gael A. Evangelista-Uhl is an occupational health nurse practitioner/workers' compensation coordinator at Massachusetts General Hospital in Boston.

COPYRIGHT 1995 Society for Human Resource Management
COPYRIGHT 2004 Gale Group