So You Think You Have a Best Practices Workers’ Compensation Program?

Midwest Employers Casualty Company David Parker, Practice Leader Phil Giljum, Regional Account Manager June 1, 2012

Learning Objectives
• What is “Best Practices” and who defines it? • Why is it important to always strive for Best Practices when you will probably never get all the way there • Key components, too many to count • Is your program at Best Practices level?

Best Practices
Officially, Best Practices is:
• A method or technique that has consistently shown results superior to those achieved with other means • Used as a Benchmark

• Something that evolves to become better as improvements are discovered
• A standard or set of standards as defined by many sources, often a person or organization having had positive success using them (ISO, OSHA, MECC, accreditation agencies, etc)

Best Practices
Unofficially, Best Practices is:
• Always evolving and the list keeps growing • Realizing that not everything fits well for every organization • Something that someone says it is • Something that works • Probably impossible to achieve fully

Is all of the above and then some…

If it is nearly impossible to ever get all the way to Best Practices level completely, why bother?
• Self Insurance. It‟s your money! • Required for certain accreditations • Sets the tone for company culture of caring for its employees • Enhances marketing advantages

• Improves employee recruitment and retention

Key Components of Best Practices Programs
• Can be different depending on your respective industry
• Will be different depending on your company culture

• Too many components to count or review today
• In order to be completely effective it requires visible and real commitment at all levels, from top management down

Key Components of Best Practices Programs
• Program Coordination • Employee Health and Wellness • Safety and Loss Prevention • Claims Administration (includes Medical Management) • Medical Management • Return to Work Programs • Data Management, Benchmarking, Goal Setting

Program Coordination
• Who has oversight for the Workers‟ Compensation program internally?
• Are they well respected, highly motivated, knowledgeable about WC issues and laws, possess excellent communication skills, empowered to influence culture and company decisions? • Who are their supporting players within your organization? (HR, finance, safety team/committee, management, supervisors, peer employees)

Program Coordination
• Are all the players trained and retrained regularly on workers‟ compensation issues and laws, along with your company policies and who does the training?
• Who are your insurance partners: insurance agents, claims administration company, excess insurance carrier, attorneys, managed care, other vendors • How often do you meet with them and why?

• Do you utilize them for education, training, keeping you up to date on current issues and changing laws?

Program Coordination
• Do your insurance partners make resources available to you? • Do they follow Best Practices standards and how do you know? • What is your process of monitoring their work on your behalf?

Program Coordination
Management Commitment:
• Visible presence sets tone: reinforces that employee safety is a top priority for the organization • Attend safety team/committee meetings • Discuss workers‟ compensation results and success stories at company meetings

Program Coordination
Management Commitment:
• Author and issue the official workers‟ compensation policy statement • Get well cards, encourage employee suggestions, lead by example

• Did I mention? Be visible, very visible!

Program Coordination
• Where do the funds come from to cover the workers‟ compensation claim and program costs? • Partial or fully funded and what do you include in the calculations? Annual actuarial analyses?

• Include Indirect Costs when evaluating the Total Cost of Risk of your workers‟ compensation program

Program Coordination
• Consideration of Profit or Operating Margins • How do you make your business case to finance and top management as it relates to funding? • Cost Allocation

Employee Health and Wellness
• Keeping in mind the basic obligation to ensure workers‟ physical abilities are equal to the duties they are expected to perform, you may wish to:
‒ Hire quality individuals to start ‒ Continue with Health Risk Assessments, but make sure to include family members and then link success to achievement of outcomes like weight reduction, blood pressure, smoking cessation, etc. ‒ Include mental and marital promotion in programs ‒ Consider having PT or industrial clinic physician on site a few days a week

Employee Health and Wellness
• Acknowledge the Aging Workforce and address issues of productivity, workplace injuries and institutional knowledge • Institute a “Movement in the Workplace” program as employees on average will sit 9.3 hours each day.
People who sit 6 or more hours each day are 40% more likely to die within 15 years than a person who sits 3 hours per day. (Stanford Center on Longevity)

• Use stairways instead of elevators • Consider treadmill workstations, encourage standing when reading documents, or attending meetings

Employee Health and Wellness
• Create workplace and personal policies to discourage unhealthy behaviors such as smoking and alcohol use, fast food, medication compliance, staying indoors for most recreation • Exercise classes on site and funding of gym memberships

• Provide employees with newsletters and booklets involving medical self care tips
• Institute simple stretching exercises at regular intervals at work can help to ensure employees are prepared to respond to work situations

Safety and Loss Prevention
• Realize that training and education are different. Education is information taught, while training is observing in practice the information that was taught • Supervisory and peer observation • Provide training to
– new employees, experienced employees, aging employees, supervisors – when new equipment is involved, new policies implemented, after an injury occurs that is specific to that injury cause or body part involved, when near misses reported, change in work assignment

Safety and Loss Prevention
• Constant review of back injury, slip/trip/fall and motor vehicle policies as they are the costliest

• Enforce your own policies and procedures
• Ask management to lead by example • Make use of vendor partners and their resources as employees may be more likely to value coming from an outside source • Develop and regularly use self inspection checklists

Safety and Loss Prevention
• Discuss importance of safety in the interview process with potential employees
• Keep it creative and visible by using posters and handouts that are eye catching, witty or simple. Change topics frequently and at least every month • “Dear John” or “Stall Street Journal” in the bathrooms where you have a captive audience

• Consider incentives if it makes sense for your culture but make sure that they are linked to outcomes and or include suggestions for improvement

Safety and Loss Prevention
• Insist on neat workspaces • Is most effective when top management is visibly committed to promoting a safety culture that says we value and care about our employees • Is always being modified and reviewed • Works best when it involves employees and their input as they know the job the best • Should not be afraid to share results while respecting privacy of the injured employees

• Recognize the role of the Supervisor as crucial!

Safety and Loss Prevention
• Your supervisors hold your checkbook in their hands as they are the face of the organization, especially after an injury occurs
• Supervisors are crucial to controlling claim costs by being empathetic to the injured work and getting the claims process put into motion by reporting the injury internally immediately after it occurs

• Must fully support your Return To Work program
• Have a big say in whether a claim becomes litigated

Safety and Loss Prevention
Supervisors and Accident Investigation:
• Don‟t hesitate to ask questions and don‟t rely only on TPA to conduct investigation • Keep disposable/digital cameras on hand for photos • Critical to get to the ROOT CAUSE. Don‟t settle for the first answer or thought as the root cause. An easy way to get to the root cause is by using the “5 Whys” method. Keep asking “Why” until you can‟t ask any longer Components Task, Material, Environment, Personnel, Management

Safety and Loss Prevention
Supervisors and Accident Investigation:
• Root Cause Identification leads to Corrective Action • Start with root cause and then define the Action Plan to help correct or eliminate the weakness • Create ownership by assigning tasks with due dates • Track and monitor progress and make sure to communicate any new related policy to employees • Require completed supervisory accident investigation and corrective action plan forms for all injuries • Don‟t forget NEAR MISSES as part of this process

Claims Administration
• Important to get all claims reported to your claims servicing company immediately after the injury. Claim costs go up with every passing day. So even if you have only minimal information, report the injury to your TPA as soon as possible. Best Practices, while difficult, would be within 24 hours • Let your TPA be the bad guy when it comes to compensability decisions

• Gain an understanding of workers‟ compensation regulations and case law from your attorneys who actually handle your claims

Claims Administration
• Hold regular file reviews with your TPA to include open claims, settlements and large payments made • Establish guidelines for reserving and settlement authority where appropriate • Ask your TPA claim handlers or supervisors to visit your facilities to gain a better understanding of your operations and job hazards • Attend settlement or trial sessions on your claims if allowed by presiding authority • Position complex or high dollar claims for defense or settlement

Claims Administration
• Utilize all available managed care options available especially since medical costs are expected to be nearly 60% of every dollar spent on your claims • Participate in prescription drug review programs • Train internal staff on first aid basics and consider hire of nurse employee to conduct initial triage of non-emergency type injuries • Be aware of “employee referral” network

Claims Administration
• Try to understand Medicare Set Aside process • Ask your attorneys to provide educational sessions annually to your internal staff on WC basics and changing laws

• Aggressively pursue suspected fraudulent claims
• Trend and track your injuries and use information gained to direct loss prevention and training

• Ask supervisors to contact employees weekly while off work and frequently upon their return to work

Claims Administration
• Send supervisors to emergency room visits to ensure information being shared properly while also promoting your caring culture towards employees • Reinforce to employees the need to report all injuries immediately, regardless of whether treatment sought

Return to Work Programs
• Are the most effective counter to a host of moral hazards that keep employees from returning • Are the only immediate and effective balance to full salary continuation programs • Strongly influence the cost of medical

• Provides an employee for 1/3 of the cost – you would already be paying 2/3 for them to sit at home (if they just „sit at home‟)
• Require physicians to focus upon work restrictions instead of just “off work”

Return to Work Programs
• Understand the cost implications of allowing workers to be off work when light duty work can always be found and can be beneficial to both employee and the organization • It is easier to say “we can‟t take them back until they are fully able to do the job” than it is to find meaningful light duty work • Remember that the goal is to get injured workers back to their pre-injury job • Effective programs should be communicated and supported by top management as part of “WE CARE” culture

Return to Work Programs
Best Practices traits include:
• Written transitional duty plan agreed to by employee in writing which include start and end dates • Uniformly applied through all departments which may require light duty jobs to be cross departmentalized • Involves meaningful work that actually needs to be done and is beneficial to the organization • Creation of a bank of those same meaningful jobs with written job descriptions which can then be given to treating providers at time of office visit creating proactive position rather than reactive

Return to Work Programs
• Require treating provider come out to visit your facilities to gain understanding of job types and hazards along with physical requirements

• Importance of employee to the organization is stressed repeatedly
• Utilize individualized functional assessments if necessary along with analysis of physical requirements of job in question to then use to inform treating providers in consideration of light duty • Ask employees to come into facility to pick up TTD check as compared to mailing • Communication both internally and externally is key

Data Management
So now your organization is doing all the right things. • How do you know? • Do you collect data and if so, from what sources? • How often do you want new data sets?

• What do you do with this data?
• What benchmarking methods will you use?

• What goals will you set?
• How much data will you share with employees?

Data Management
Data sources include:
• Claims servicing company (TPA)
• Internal systems and reporting forms • OSHA logs

• Excess workers‟ compensation carrier
• Treating providers • Managed care providers • Insurance agents

Data Management
• In an effort to increase profitability or preserve operating margin, reducing the expense associated with accidents is critical • Tracking / trending of data gathered by various metrics including department, loss cause, body type, reporting lag time, average cost per claim, payroll, loss dollars, paid / incurred, department or location, age of employee, tenure of employee, job type, etc.

Data Management
• Tracking and trending of these and other data sets can give you a clearer picture of what is happening within your claims and help address allocation of future time and resources to address improvement • Tracking / trending should be done quarterly at a minimum and ideally would be done monthly and selected results should be shared with employees • Results should be communicated to senior management, safety committees, HR and everyone involved in oversight of WC including dept. management and supervisors

Data Management
• Should be used to set and communicate realistic claim frequency reduction goals as well as measure effectiveness of initiatives put into place at various points in time • Should be evaluated in such a fashion to allow for actionable and follow up items
• Benchmarking your program against yourself is fine. Benchmarking your program against your peers is Best Practices

Data Management
• Ask your insurance partners what kind of benchmarking data sets are available to you
• Talk to your industry peers, review their websites, attend conferences and roundtables, read blogs as you need to know what others are doing that is perceived as producing positive results • Industry specific benchmarking availability

• Research Best Practices standards for your industry and perform related self assessment

So how does your program compare to Best Practices?
• Your organization is the best judge of what Best Practices standards to strive to achieve, and…
• These standards are judged to be Best Practices for a reason, because… • They have produced positive results for someone at some point in time, so… • Have you done a self assessment of the Best Practice standards most important to your organization? • Remember, you are self insured for a reason. They are your employees, their claims are your claims, and it is your organization‟s money being spent

MECC Online Services
Safety Library
A collection of industry specific, safety resources in an easy to use and customizable online format

Research Link
A medical/research reserving and return to work tool that includes 300 of the most common work related injuries

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Over 100 industry specific online safety courses – many available in Spanish

Web Events
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For more information or to obtain a Username & Password Email: Call: 1-877-975-2667 (ask to speak with a Client Services Coordinator)

David Parker Practice Leader 636-449-7247

Phil Giljum Regional Account Manager 636-449-7242

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