Printed from BusinessInsurance.com

Losing track of comp injuries hurts employers

Posted On: Aug. 16, 2015 12:00 AM CST

Ongoing underreporting of occupational injuries opens employers to risks outside the workers compensation system in addition to obscuring the lessons that can be learned through it.

In a recent survey by the New Hampshire Division of Public Health Services, the state agency found that nearly half of workers injured on the job received treatment outside the state workers comp system.

Of those who reported they were “injured at work seriously enough to seek medical advice or treatment” in the survey of 280 respondents released in June, only 53.4% said workers comp paid for that treatment. The remaining 46.6% said group or personal health insurance, Medicare and Medicaid were among the methods used to pay for the treatment in 2012 and 2013.

Despite the relatively small sample size, the division's findings are similar to “multiple studies that have been done in California, Massachusetts and also Washington state that document the undercounting of injuries,” said Deborah A.P. Hersman, president and CEO of the Itasca, Illinois-based National Safety Council.

“Nothing can be learned from an injury that isn't reported,” a spokeswoman for the Occupational Safety and Health Administration said in an email.

OSHA tightened its injury and illness reporting requirements Jan. 1, ordering companies to report all work hospitalizations, amputations and eye losses within 24 hours.

The revised rule could “help us get better data on some of this information rather than it being estimates,” Ms. Hersman said.

Previous studies have found that “undercounting appears to be worse in organizations that use injury data to evaluate the performance of those responsible for maintaining the injury data,” she said. “So there's oftentimes a downward pressure within organizations to limit the number of reports, and we've seen organizations try to skirt this in a number of different ways,” such as limiting the kind of medical treatment workers get.

One way third-party administrator Broadspire Services Inc. can detect possible underreporting is by looking at a company's data, said Joel Raedeke, Chicago-based vice president of consultative analytics.

A high percentage of severe indemnity claims and a low percentage of medical-only claims can mean less severe injuries aren't being filed under workers comp, he said. But the pattern also can lead to a false positive depending on the nature of the business, as injured employees might be off the job longer if light-duty positions aren't available to them.

Underreporting can also occur at certain locations without being a centralized problem. By flagging this, risk managers can make sure companies “establish the right kind of culture at the local level,” he said.

In addressing the financial implications, the New Hampshire survey said underreporting workers comp injuries can result in “a substantial financial burden falling on private and government insurers, as well as on individual families paying for treatment costs out of pocket.”

“The more injuries an employer has to claim, the higher their (workers comp) premiums. So there may be less of an incentive to make sure everybody reports an injury,” said study author Karla R. Armenti, Concord, New Hampshire-based principal investigator at the state's Division of Public Health Services.

Though claims can cause workers comp premiums to increase and require employers to pay medical and indemnity benefits, employers still reach into their pockets when workers are treated under a group health plan, said James R. Thornton, director of environmental health and safety at Newport News, Virginia-based Huntington Ingalls Industries Inc., a shipbuilding company with more than 39,000 employees globally.

“It's kind of a left pocket-right pocket (situation),” Mr. Thornton said. “In either scenario, the employer is going to incur costs.”

However, “from a liability standpoint, if an employee does sustain an injury on the job and files it as a workers comp claim ... the employer avoids the possibility of third-party lawsuits, which in this day are much more expensive,” he said.

In addition to the protection offered by workers comp exclusive remedy provisions, most employers want workers who are hurt or witness on-the-job injuries to alert their supervisors so they can intervene and prevent future accidents, Mr. Thornton said. When workers do not report an accident or work through their pain, that can worsen the injury, he said.

Educating workers about their benefits is important, since temporary and part-time workers might not know they're covered under workers comp, Ms. Armenti said.

There are “checks and balances” in place, she added, noting that some private insurers will send a letter asking whether an event was work-related.

Employers should regularly communicate the reporting process and “make sure suspected or actual workplace injuries are evaluated and treated,” Mr. Thornton said. “If you complete that cycle ... you constantly reinforce to others the behavior you expect.”