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Failing to pay adequate attention to an employee immediately after he or she is injured can quickly result in expensive, tough-to-close workers compensation cases, veteran risk managers say.
Among other factors also blamed for average claims remaining open longer than expected while their costs balloon are the growing incidence of worker obesity and related co-morbidities, Medicare set-aside mandates that complicate settlements as well as litigation, observers say.
But failing to assign adequate resources to a newly reported claim, or assuming such claims will be appropriately handled, often is cited by experienced risk managers and other workers comp professionals as the major reason why otherwise typical employee injury cases spiral into legacy claims that defy resolution.
“In many instances, it's claims that don't get the necessary full-court-press attention from day one and they end up floundering without any specific direction,” said Mike Kenitz, Midwest regional practice leader for strategic outcomes practices at Willis North America Inc. in Pittsburgh.
“Before you know it, time erodes and you lose control,” Mr. Kenitz said.
Peggy Crook, McLean, Va.-based director of global claims risk management services for Hilton Worldwide Inc., said hiring an outside auditor 10 years ago to review workers comp cases helped her gain a better understanding of how claims escalate when assumptions are made that they will be a medical-only claim.
“One thing that was surprising to me…was they found that our monster claims, which is what we call them, started out as medical-only” injury cases, Ms. Crook said.
Medical-only claims result from injuries expected to require only limited medical attention without the employer having to pay indemnity benefits since the injured worker remains on the job while recuperating. The vast majority of workers comp claims—at least the start—are medical-only claims, experts say.
“Medical-only claims tend to fall below people's radar," Ms. Crook said. “It is assumed that they will be closed within 90 days, that there is no lost time and (that such claims require only) nominal medical treatment.”
But “you have to pay attention to medical-only claims,” Ms. Crook said, “because if they are not managed properly (from the start), they can turn into larger claims.”
Not acting immediately can push injured workers down a path that turns otherwise ordinary claims into larger problems, others agree.
Employers that fail to personally contact workers immediately after they report an injury “is huge” and can cause claims to “go sideways quick,” said Laurie Ogsaen, workers compensation manager in McMinnville, Ore., for Evergreen International Aviation Inc., an air freight and aviation services company that operates across 38 states.
Legitimately injured workers are often “in the dark” and possibly fearful of the workers comp system, Ms. Ogsaen said. Because they don't understand how workers comp operates, they may even fear that making a claim could cost them their job.
“Usually, the first thing they do is listen to their friends or their roommates at home who say, ‘Oh, they are not calling you. You better call an attorney. I think you have benefits due to you. You would be surprised what you can get,'” Ms. Ogsaen said.
“The first thing they do (then) is get an attorney and get a new doctor, or doctors, and get taken off work immediately, and it is usually immediately,” Ms. Ogsaen said. “If they don't hear from the employer, they are going to get a temporary total disability slip.”
“The clock starts ticking from the time the accident happens,” Mr. Kenitz said of the potential for a typical workplace injury escalating into an expensive claim.
Failure to learn early on specific facts about an injured worker also can cause claims to remain open longer and “maybe not even close whatsoever,” said Charles F. Martin, managing director in the risk consulting practice at Marsh USA Inc. in Norwalk, Conn.
A claimant's age; health conditions such as obesity, diabetes or heart problems; salary; and previous claims history are important factors to learn about early in the in a claim. Failing to get such information quickly diminishes the employer's chances of properly managing the claim, he said.
For example, health conditions may indicate that the worker's recovery will require managed care resources or nurse case management services as well as closer communications with the claims adjuster so the claim doesn't “turn sour,” Mr. Martin said.
Similarly, failing to implement measures to identify potentially problematic claims earlier—by using tools such as predictive modeling—invites trouble, Mr. Martin said.
“Part of it is not having a plan up front and not being able to identify the claim as a potential problem up front,” Mr. Martin said. “For example, if you didn't investigate it properly, then you likely came to a poor compensability decision; and if (the employer has) accepted a claim that is not compensable, or perhaps even fraudulent, then you probably are accepting a claimant that knows the system that knows how to be out on comp.”