Delayed reporting of workplace injuries can raise comp claim costs up to 51%Reprints
Employers can help reduce their workers compensation claim costs by encouraging injured employees to report workplace accidents as soon as possible, but they also should not have rules that punish workers for reporting claims late.
Experts say strict reporting deadlines can cause workers to hide their injuries, allowing an untreated condition to worsen or encouraging workers to hire an attorney to avoid repercussions because they delayed reporting they were hurt.
“You don't want injured workers to feel like they somehow have to hide if an injury occurred because they for some reason missed this mandatory reporting period,” said Eddy Canavan, vice president of workers compensation practice and compliance at third-party administrator Sedgwick Claims Management Services Inc. in Riverside, California.
A study by the National Council on Compensation Insurance Inc. released last month showed that delayed injury reporting can increase comp claim costs up to 51%.
Median costs for occupational injuries were the lowest, $13,120, for claims reported within two weeks and were higher for claims brought two weeks or longer after an accident, according to NCCI's analysis of 2010 and 2011 data, the latest available. Claims made the day of an accident often involve serious injuries that require immediate medical care and insurer notification, NCCI said.
John Robertson, director and senior actuary at NCCI in Boca Raton, said lower costs for claims reported within two weeks of an accident likely reflect less severe injuries that don't heal on their own.
“It might not be immediately obvious that there is an injury that should get medical attention,” Mr. Robertson said.
Costs may spike a few weeks after an accident because injured workers are more likely to seek attorney assistance with their workers comp claim then, he said.
Attorneys were involved in 12.8% of claims made the day of an accident, rising to 31.7% for claims made four weeks or more later, according to NCCI data.
Glen Pitruzzello, vice president of workers' compensation and group benefits claim practices at Hartford Financial Services Group Inc. in Hartford, Connecticut, completed a study in 2000 with findings similar to NCCI's and agreed that claims that are reported within 24 hours tend to be more severe.
“A more expensive claim — one that is a little more significant and has much more definition around when and where it occurred in the workplace — begets a more immediate report to the insurance carrier,” Mr. Pitruzzello said.
Early reporting allows employers to better investigate by collecting evidence and interviewing witnesses soon after it happens, Sedgwick's Mr. Canavan said. Fast reporting also allows employers to help injured workers understand the process, such as how they will receive medical care and wage replacement payments, and alleviate fears that could lead them to hire an attorney, he said.
“You're easing their concerns,” Mr. Canavan said. “You're letting them know that somebody cares about them.”
Workers may wait to report seemingly minor sprains, strains or other injuries in the hope they will heal on their own, said Pamela F. Ferrandino, New York-based national casualty practice leader of placement at Willis North America Inc.
Encouraging employees to report such injuries as soon as possible to their supervisor can keep them from developing into costlier claims that, for example, could require surgery instead of physical therapy, she said.
“Any reporting delays inhibit our ability to start the employee on the road to recovery and may allow a minor injury to fester and become a serious and costly problem,” Jim Wucherpfen-nig, vice president of workers compensation at insurer Travelers Cos. Inc., said in a statement to Business Insurance.
Experts say reporting an injury within the first 24 to 48 hours after a workplace accident is optimal to help keep workers comp costs down.
While early reporting is best to manage workers comp costs, experts say employers should avoid being punitive in their reporting policies, which could backfire if an employee feels they could face repercussions for missing a reporting deadline.
Tom Ryan, workers compensation market research leader of Marsh L.L.C.'s Workers' Compensation Center of Excellence in New York, said employers should discuss and encourage early reporting with employees and investigate ways to reduce lag time for claims that appear weeks after an accident.
“If there are cases that do, in fact, go beyond that period of time, address those case by case,” he said.
Mr. Ryan said there also are situations where an injured worker reports an accident quickly, but the supervisor waits several days to report it if the injury did not appear to be severe or the worker was treated by an in-house occupational health clinic.
He and Sedgwick's Mr. Canavan said employers should tell their TPA or insurer about such incidents in a “report-only” format, which alerts them to an accident without turning it into a formal comp claim. They say doing so can help claims handlers prepare to manage a potential claim, even if an injury is minor. “We really encourage our clients to report their claims, even as just an incident, because at least we have it on record,” Mr. Canavan said.