The best way to minimize work comp claims’ impact on your business is to prevent injuries in the first place. If an injury does occur, here are some work comp claims management strategies that safety leaders can use to reduce costs and help the employee return to work safely and quickly. Case study with Meek’s Lumber.
When it comes to work comp claims management, having a plan in place before an injury occurs is the most important step a business owner can take. In the state of Missouri, employers have a right to direct medical care for workers compensation claims. Knowing where you will direct initial care will help get the claims management process started.
Step 1: Get the injured employee medical care
After an injury occurs, the first step is to assess the situation.
- Is it an emergency?
- Does the injury involve lots of blood, a head injury, or a serious fracture?
It’s also fine to ask the injured employee, “Do you feel you need emergency care, or could you wait until tomorrow?” For emergencies, you should send the employee to the emergency room. However, most workplace injuries are not true emergencies. An ER visit is one of the most expensive types of medical care, and knowing when it is warranted can significantly reduce costs.
For rural businesses, an alternative to the ER (for non-emergencies) may be a family physician, nurse practitioner, or urgent care. In urban areas, an occupational medicine doctor is a great option. They have experience determining whether an injury is work related, setting a treatment plan, and getting employees back to work safely and quickly.
Telehealth options for convenient care
A common challenge faced by many businesses, including Missouri Employers Mutual policyholder Meek’s Lumber, is that rural locations may not have medical care nearby. A telemedicine program is a great option for businesses in this situation. Telemedicine allows an injured employee to consult with a doctor via video conference. For non-emergency injuries, that face-to-face communication can make a big difference in claims costs, and getting the employee the care they need more quickly.
Nurse triage is another helpful telehealth program. At MEM, when an injury is reported, an on-staff nurse consults with the policyholder to learn more about the injury and recommend the appropriate next step for medical care. However, business owners in rural areas may still face the same challenge of not having a facility nearby once they know their next step.
When a medical facility isn’t nearby, some rural businesses may be less likely to report injuries at all. An employee with a minor injury may simply self-treat. However, all injuries should be reported to your insurance provider regardless of the severity. It is required by law and allows the provider to forward the reported injury to the Division of Work Comp.
Step 2: Report the claim soon after the injury
Businesses should have a clear injury reporting policy and communicate it to their employees. At MEM, we recommend requiring employees to report all injuries before the end of their shift. Depending on your organization’s structure, a reported injury may go through four or more steps:
- Employee reports injury to their supervisor
- Supervisor reports injury to compliance manager or internal work comp manager
- Compliance manager reports claim to insurance provider
- Insurance provider reports claim to the Division of Work Comp
This reporting process must be completed within five days of the injury. It’s crucial to start this process as soon as an injury occurs, particularly if the business has multiple locations and information must travel to the headquarters.
What to expect after reporting a claim
Policyholders report claims to our Claims Service Center, providing all the information required by the Division of Work Comp. This information is extensive but is essential to keep the process moving forward.
Once the claim is reported, MEM’s claims team determines whether it is classified as report only, or if it requires action.
Report only: In Missouri, a report only claim involves three days or less of lost time and no permanent disability. However, contrary to its name, it can also include medical treatment up to $3,300 paid out of pocket by the employer. Report only claims do not count against businesses in any way; notably, they do not impact your e-mod.
Medical only: If a claim is not report only and requires action, it may be classified as medical only, meaning the injured employee did not suffer any permanent loss or disability. The employee requires medical treatment to some extent but is expected to fully recover to their initial ability. MEM has dedicated medical only claim representatives who help policyholders and their employees manage the medical care process and get the employee safely back to work as soon as possible.
Catastrophic: Claims involving extensive lost time and severe injuries are classified as catastrophic. This type of claim must be managed over long periods of time.
A note about e-mod
The experience modification factor, or e-mod, is a factor used by all insurance companies. Every business has one. This number compares your company’s claim experience to other businesses in your industry and impacts the premium you pay for work comp insurance.
An e-mod of 1.0 indicates that your loss experience is average for your industry. If your e-mod is higher than 1.0, you’ll pay more premium than your competitors due to your loss history. An e-mod lower than 1.0 means you’re doing a great job with workplace safety – and providers want to insure you, so you’ll pay lower premium. For some government contracts, you may not even be eligible to bid on jobs if your e-mod is higher than 1.0
If safety hasn’t always been your priority, there is hope: your e-mod is calculated using your loss experience during the last three years, not including the current year. So, an e-mod for 2019 incorporates claims from 2016-2018.
“I’ve seen several policyholders really improve their e-mod,” remarked Terri Sweeten, MEM Field Service Manager. “It starts with educating companies about the importance of safety in the workplace.”
Workplace safety saves money
It helps to start by considering the direct and indirect costs of a work comp claim. Many business leaders know that claim expenses can add up quickly, but it can cost even more than you realize.
“For every dollar that’s spent directly on a work comp claim, there’s anywhere from four to ten dollars in indirect costs behind the scenes,” explained Terri. “That includes time to manage claims – your staff spending time filing and managing the claim when they could be doing other things that benefit the business.”
Understanding the true benefits of preventing injuries (and work comp claims) rather than managing them is crucial to truly prioritizing safety. Want to know more about the ROI of workplace safety? Check out this article, Return on Safety: Impact of Workplace Safety on Your Business KPIs.
Step 3: Conduct an accident investigation
After seeking medical care for an injury, one of the most important things a safety manager can do is conduct an accident investigation. Answer the questions: What happened? Where? How? If possible, take photos of the accident scene. Document these details as soon as possible after the injury; scenes can change and witnesses may forget details.
Investigating incidents can help you identify attempted fraud – but most importantly, can help you identify the cause of the injury and prevent it from happening again. Was the injury due to a lack of training? Equipment failure? Collect as much information as you can to continuously improve workplace safety.
Accident investigation can take some time and be intimidating. MEM provides forms to guide policyholders through employee and witness statements, and to document corrective action and other investigation activities. Be sure to prioritize reporting the claim and provide additional info from the investigation later. At the same time, if you notice any red flags during investigation, share them with your claims representative right away.
Case study: Effectively managing claims at Meek’s Lumber
About Jill Burford, Meek’s Lumber Compliance Manager: Jill has been in her role at Meek’s for 14 years. As compliance manager, she manages insurance claims including work comp, auto and general liability. She also handles compliance for the Department of Transportation and OSHA.
Many businesses find managing work comp claims challenging. For Jill, one of the biggest challenges is her widespread employees. With 42 locations across the state, she can’t meet face-to-face with every injured employee. Instead, she relies on on-site managers and supervisors to facilitate the work comp claims management process.
Jill’s advice? “Starting the claim with a positive tone sets a good precedent.” She often calls employees directly throughout the process or encourages their supervisors to do so. Managing the claim from the beginning, rather than waiting for issues to arise, keeps her updated and ensures the employee’s recovery goes quickly and smoothly.
Injury and claim reporting
At Meek’s, employees are required to report injuries the day they occur. When an injury is reported, the employee immediately receives a printed letter explaining their rights under work comp law and how the claim process works. The process is designed to set expectations from both sides.
“If people have never been injured, they don’t know how it works,” Jill said. “Giving them the information up front helps them deal with the injury.”
Jill commented that while each Meek’s location has a different culture, most employees who go through the claim process appreciate the information they’re given. The key is to show that the company – and the people – really care and want the employee to get better.
In the printed letter, Jill informs employees that they can contact her any time with questions or concerns. Some employees may feel more comfortable communicating with their direct supervisor, but some may prefer to ask questions to someone outside their location. Providing options gives employees some control over the process.
Benefits of a return to work program
Having an established return to work program has been shown to reduce claims costs and give injured employees a better recovery experience. When an injured Meek’s employee first visits the doctor, they take an authorization form that informs the doctor that Meek’s provides light duty return to work options.
Meek’s implemented their return to work program about seven years ago to help control claims costs. With their doctor’s approval, injured employees get light duty work options – often seated jobs like answering phones – until the doctor clears them to return to their regular jobs.
“The program has been well received by employees who are legitimately injured and just want to get back to work,” Jill commented. “They know that they’ll be paid their full salary, and they appreciate that. They also stay in the loop about what’s going on at work.”
Some safety managers may face the challenge of injured employees wanting to return to their standard job activities too soon, but it’s important to follow the physician’s orders when it comes to light duty. Taking the time for a full physical recovery will help prevent recurring injuries in the future.
Balancing work comp claims management with other duties
Jill wears many hats at Meek’s; work comp claims management is just part of her job as compliance manager. While it can be tough to balance everything, she says managing claims is her top priority.
“Sometimes I have stuff coming in all day, and sometimes we go a week without any injuries or claims,” she explained. “Then, I can work on the other stuff that I need to do.”
Whether it’s work comp or another type of claim, it’s important to act as soon as it’s reported. Responding slowly to new claims could result in unhappy employees, high medical costs, or both.
Compassion in claims management
According to Jill, compassion is key to managing work comp. When someone is injured at work, it’s more than just a pain that they can’t do their job. It affects their home life, too. Communication goes a long way toward showing that you care about an injured employee, in addition to moving the process forward and controlling costs.
Jill advises not to just let your insurance provider handle claims. Instead, work alongside the adjuster throughout the process, and involve the injured employee’s supervisor as well. Remember, no one knows your employees like the people who work with them every day. Be sure to provide job site managers with the tools they need if a work comp claim arises. Make sure the injured employee knows what to expect and keep open communication with medical providers and your insurance company.
Jill’s final thought: “People don’t just want to be managers; they want to be leaders. They want to be safe and to keep their teams safe. Compassion and communication go a long way.”