Workers Comp Mediations – Are They Worth Time and Cost?

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Workers Comp Mediations – Worth The Time and Expense?

I recently attended what I totaled to be my 60th+ Workers Comp mediations. The mediation lasted over 10 hours. I thought to myself on the way back to the office – Are Workers Comp mediations really worth the time and effort when a few phone calls among the parties would suffice?

Three Workers Comp Mediations Icon
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As most of my readers already know, there are some states that order mediations when a Workers Comp lawsuit is filed against the employer and their carrier or TPA. The one that I recently attended was a voluntary mediation due to the many complexities of the file.

The mediator is the key to successful or unsuccessful mediations. If the mediator was not top notch, then the mediation would have not settled the file.

I have seen where the employer did not attend the mediations and just let the carrier or TPA handle the matter. This blog is dedicated to Workers Comp savings. One way for an employer to spend more $ than they should have is to not attend the mediations.

It is completely your money being spent if you are self insured. If your company is not self insured, the mediation costs and the settlement amounts will usually be added back into your E-Mod or X-Mod. A large settlement can affect your E-Mod for up to four years.

Picture of Agreement Workers Comp Mediations Shaking hands
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One of the other benefits to the employer attending the mediation is to humanize the process. The injured employee will realize they are not just suing a carrier or TPA, but have brought suit against their employer. Another benefit is that if the carrier or TPA needs settlement authority, many phone calls and confusion can be avoided.

Mandatory mediations as I had previously mentioned sometimes will require all parties to stop and look at the file to see if a settlement amount can be derived and the file can be closed – especially on smaller files.

The other side of the coin is that I have been to a mandatory mediation that settled for less than the expenses of the mediator and attorneys. Settling small files at mediation does not seem the best use of the Workers Comp mediation process.

The bottom line is the mediation process follows the 80/20 rule. Eighty percent of the mediations I have been involved with were necessary in settling the file. Twenty percent were not successful or were more of a cost factor than the settlement itself.

I will cover the elements of a successful mediation next time.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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