Complex Workers Compensation Claims: High Risk, High Dollar 

When a workplace injury occurs, most cases follow a predictable path: medical treatment, recovery, and return to work. 

But some claims are different. They require more attention, more resources – and incur significantly more costs. These high-risk, high-dollar workers compensation claims can have lasting impacts on both the injured worker and your business. 

Understanding how to navigate these complex claims can help you better support your employees and protect your bottom line. 

What sets these claims apart, and how can employers manage them effectively? We’re joined by MEM’s Manager of Medical Services Lyndi Barthel and Claims Operations Manager Shannon Fox to answer these questions. Together, they bring decades of experience managing the most challenging work comp cases. 

What makes a work comp claim “high-risk” or “high-dollar” 

High-risk work comp claims stand out from typical cases due to their complexity and potential for significant costs. 

Medical complexity plays a major role. Cases can involve multiple medical providers, extended recovery periods, surgeries, and uncertainty about whether the employee will return to work at all. Medical treatment can extend far into the future. The potential for litigation and the likelihood of prolonged time away from work elevate a claim’s risk level. 

All these factors – medical complexity, potential for litigation or extended indemnity – can cause claim costs to skyrocket. Controlling claim costs is a goal that you, the business owner, share with the work comp carrier, since they can affect your premium calculation. 

➡️ A note about complex claims: In this conversation, we’re talking about claims management strategies to achieve the best outcomes for everyone involved. It’s important to remember that the injured workers in these cases have experienced a severe injury – maybe one that will impact them for the rest of their lives. That’s an outcome that no one wants. The absolute best way to protect people and avoid high-dollar claims is to prevent employees from getting injured in the first place with a thoughtful and robust workplace safety program. 

Top cost drivers in complex claims 

What drives costs up in these high-dollar claims? Here are the top factors that contribute to claim complexity and cost: 

• Medical treatment costs: Surgical procedures, extended hospital stays, specialized equipment, and ongoing rehabilitation 
• Lost time from work: Wage replacement 
• Mental health components: Mental well-being affects recovery timelines across many injury types 
• Prescription medications: Multiple medications and specialized treatments can add substantial costs 
• Legal involvement: Attorney fees, depositions, expert witnesses, and litigation expenses 

Fox identified the mental health component as particularly significant. “The mental component that has been added to many of our claims has been significant since COVID,” she remarked. “It seems as if that mental component has just skyrocketed.” 

Common injury types that lead to complex claims 

Certain types of workplace injuries are more likely to result in high-dollar, complex claims: 

• Falls from heights: Consistently rank among the most serious, and can lead to lasting medical conditions like traumatic brain injuries 
• Motor vehicle accidents: Present unique challenges when extensive, affecting multiple body systems 
• Spinal cord injuries: Often require specialized, long-term care and rehabilitation 
• Burns: Include treatment at specialized centers and extended recovery periods 

These injury types share common characteristics: They often affect multiple body systems, require specialized treatment, and may result in permanent impairments that affect the employee’s ability to return to their previous role. 

Complicating factors beyond the initial injury 

While the initial injury determines the baseline complexity of a claim, additional factors can complicate the recovery process. 

Injuries that happen at work can be affected by pre-existing health conditions outside your control. Comorbidities such as diabetes, hypertension, and heart issues can extend healing time and increase treatment complexity. 

➡️ Here’s an example: If an employee sustains a foot injury, their healing time and treatment requirements may be significantly extended if they have diabetes or other circulatory issues. This is one reason we advocate for every workplace safety program to include a wellness component. 

Communication barriers can also play a role. Poor health literacy can prevent employees from fully understanding their recovery plan. Language barriers may complicate treatment coordination. Additionally, when injured workers have multiple treating physicians, the coordination becomes more challenging and can slow the recovery process. 

With so many moving pieces, even seemingly straightforward injuries can evolve into complex, costly claims that need specialized attention. 

What to expect from your carrier on high-risk claims 

When a high-risk or high-dollar claim develops, your work comp carrier should respond with additional resources and specialized attention. 

In these cases, carriers typically shift from a single-adjuster approach to involving additional expertise. At MEM, claims representatives work with technical services, and field service managers may be brought in. When appropriate, subrogation specialists ensure all potential recovery avenues are explored. 

“When claims enter into the organization with factors that are extenuating,” Fox explained, “nurse case managers are on top of them, just making sure that they utilize their resources effectively.” This team-based approach ensures that experts from multiple areas examine each claim to make sure important details aren’t overlooked. 

The role of nurse case management 

Nurse case management becomes particularly crucial in high-dollar claims. These registered nurses, who specialize in work comp injuries, help coordinate all aspects of medical care and facilitate communication between the various providers and stakeholders. 

Barthel emphasized the importance of this coordination: “It is critically important to involve experts in each area to help identify and eliminate any risks.” The goal is to ensure injured workers receive appropriate medical care while facilitating their recovery efficiently. 

Centers of excellence for severe injuries 

For catastrophic injuries (e.g. traumatic brain injuries, spinal cord injuries resulting in paralysis), your carrier may recommend treatment at specialized centers of excellence. These facilities provide the highest level of care for severe injuries, even if they’re located far from the injured worker’s home. 

“Although we know it is a higher cost to send individuals to a center of excellence,” Barthel said, “our injured workers do better when we allow them to have the highest level of care at the right time in the claim.” 

While sending someone to a center of excellence in another state adds immediate costs and may mean families need to temporarily relocate, studies consistently show better outcomes when injured workers receive specialized care early in their recovery. 

Early warning signs to watch for 

Recognizing when a claim may be heading toward increased complexity is key to earlier intervention and better outcomes. Fox identified several red flags that indicate a claim is becoming more challenging than initially expected. 

Checklist: Early warning signs of complex claims 

🚩	Employee reports worsening condition despite extensive treatment
🚩	Frequent missed medical appointments
🚩	Poor communication or lack of response from the injured worker
🚩	Confusion about job duties or return to work expectations
🚩	Employee expresses feeling unsupported throughout the process
🚩	Multiple treating physicians with conflicting recommendations
🚩	Underlying health conditions affecting recovery timeline

“If an employee is not improving throughout the medical process,” explained Fox, “if they’re saying that it’s getting worse, even though treatment has been extensive, that could be a red flag.” 

Other critical warning signs include frequent missed appointments and communication breakdowns. When employees repeatedly cannot attend appointments for various reasons or stop responding to inquiries, claims can quickly become more complex. 

Communication is key 

Effective communication throughout the claims process can make the difference between a smooth recovery and a complex, costly claim. Employers should maintain regular contact with injured workers, checking on their progress and ensuring they understand their role in the return to work process. 

Can you ask for updates on your employee’s recovery? The short answer is yes; employers are entitled to medical information about work-related injuries and treatment. Fox noted that in her years of handling claims, she’s never encountered an employer trying to push these boundaries; they typically focus on information directly related to the claim. 

Building and maintaining trust with injured workers is essential. When employees feel supported throughout the recovery process, they’re more likely to communicate openly and work toward a timely return to work. 

Geographic and regulatory challenges 

Location significantly impacts how claims develop and what resources are available for treatment. In rural areas, access to specialty care can mean longer recovery times simply due to the distance workers must travel for treatment. Metropolitan areas typically offer more provider options, but at higher costs. 

Rural vs. metro care considerations 

Factor	Rural areas	Metro areas
Provider access	Limited specialists, longer travel times	Multiple specialists available
Treatment costs	Generally lower base costs	Higher service rates
Recovery impact	Travel requirement may delay care	More options, faster scheduling
Coordination	Fewer providers to manage	Complex provider networks

The work environment also influences claim dynamics. Different industries, like agriculture or trucking, pose different challenges for claims management. A truck driver traveling through different regions may face varying medical costs and regulations depending on where an injury occurs. 

Managing care across state lines 

The laws around an employer’s right to direct medical care vary by state. For example, in Missouri, an employer can direct an injured worker to a specific provider. If the employee declines the directed care, any care they choose is at their own cost. In Illinois, an injured worker has more choice in medical providers but may still be limited within a network. 

Each state also has different rules and regulations for processing medical bills. Some states have fee schedules that determine exactly what can be charged for various services. Other states operate on “usual and customary” billing, where providers can determine appropriate charges based on regional standards. 

These differences between states require careful navigation, but the focus remains on ensuring injured workers receive the best level of care for their specific injury. When providers aren’t available locally, virtual care options may be considered for follow-ups when appropriate. 

So what? The business impact of high-dollar claims 

If your work comp carrier covers these expenses, why should you care how high they rise? 

Because claim costs impact your premium. The premium calculation has three components: payroll, work classifications, and experience modification factor (e-mod). 

Your e-mod represents your company’s claims history. If you have higher claim costs than expected for a typical company like yours – whether from many small claims or one large claim – your e-mod will increase, and so will your premium. 

“For smaller businesses, one large claim can have a real impact on their premium… and their budgeting for years to come,” Fox explained. 

Beyond insurance costs, when an employee is severely injured, it impacts the business in other ways: 

• Lost productivity: Work stops for investigations and incident response 
• Overtime costs: Other employees cover additional duties and shifts 
• Decreased morale: Employees feel less safe at work 
• Higher turnover: Employees leave for safer environments, creating recruiting and training costs 

These broad business impacts are why it’s so important to invest in injury prevention and early intervention. 

📍 Read next: 4 Proven Ways to Reduce Your Workers Compensation Costs > 

How employers can minimize claim complexity 

Luckily, there are strategies to minimize the likelihood that injuries will develop into high-cost, complex claims. 

At MEM, we’ve seen firsthand that investing in comprehensive safety programs provides the best return. If injuries do occur, having strong processes in place can significantly impact outcomes. 

Top strategies to minimize costs: 

• Stay engaged with injured workers throughout their recovery 
• Treat injured workers as people, not burdens 
• Report incidents promptly using proper reporting procedures 
• Direct medical care when possible 
• Implement modified duty programs to bring workers back at reduced capacity 
• Maintain clear communication about expectations and return-to-work processes 
• If recovery progress stalls, consider a second medical opinion 

The success of these tactics boils down to one thing: staying involved. “When you see the employer involved,” Fox explained, “it’s usually followed by an injured worker who wants to heal, a return to work faster than when an employer is not engaged.” 

Navigating complex claims with confidence 

Managing high-risk work comp claims requires understanding, patience, and the right support system. The most important factor in successful outcomes is communication – with injured workers and your claims team. 

“Stay engaged,” Barthel emphasized. “Rely upon the experts that we have here at MEM to help manage the claim, between our claims representatives and our excellent nurse case management team.” 

Remember: Preventing injuries through strong safety programs remains the best strategy. But when complex claims arise, having the right partnership and approach can lead to positive outcomes for everyone involved. 

Prepare your organization to handle complex claims with confidence. Download our free claims management kit so you have it when you need it. 

Frequently asked questions: high-dollar claims 

What should I do if an employee isn’t improving despite ongoing treatment? 

If an employee’s condition continues to worsen or fails to improve despite extensive treatment, contact your claims representative immediately. This may indicate the need for a second opinion, different treatment approach, or additional specialists. Early intervention when progress stalls can prevent claims from becoming more complex and costly. 

Can I stay informed about my employee’s medical treatment without violating HIPAA? 

Yes, because the injury is work-related, employers are entitled to obtain relevant medical information about the treatment and recovery process. The key is focusing on information directly related to the claim rather than broader personal health matters. Your claims team can guide you on what information is appropriate to request and receive. 

How do high-dollar claims affect my future premiums? 

High-dollar claims can significantly impact your experience modification factor (e-mod), particularly for smaller businesses. Your e-mod compares your company’s losses to other similar businesses, and large claims can result in higher premiums for several years. However, investing in safety programs and effective claims management can help improve your e-mod over time. 

How is MEM’s approach to complex claims different from other carriers? 

MEM takes a collaborative team approach to high-risk claims, involving multiple departments and specialists rather than relying on a single adjuster. We focus intently on medical outcomes, provide personalized attention, and provide in-house expertise rather than outsourcing critical services. Our nurse case management and access to centers of excellence demonstrate our commitment to achieving the best possible outcomes. 

When should I consider sending an injured worker to a center of excellence? 

Centers of excellence are typically recommended for severe injuries such as traumatic brain injuries, spinal cord injuries, or complex cases requiring specialized care. While the upfront costs may be higher, studies show that injured workers achieve better outcomes when they receive the highest level of care at the right time in their recovery. Your claims team will evaluate whether a center of excellence is appropriate for your specific situation.