Six Quick Methods To Lower Workers Comp Costs (Part I)
The Six Workers Comp Costs reduction methods are listed in two articles. My last article post pointed out that there are six ways to save on Workers Comp costs.
1. Filing First Reports of Injury (FROI) Timely – Insurance companies measure how long it takes an employer to report a claim by filing a FROI. The measurement is known as lag time. Lag times are reported to the adjuster handling the claims. As an employer, would you not want the person setting your reserves to have a favorable opinion of your company’s Workers Comp program? Filing a FROI very late is basically asking for a large reserve on the file in question and other files in the future. Most insurance carriers have an online reporting system. If they do, use it as much as possible.
2. Physician Network – Your company should have two different general practitioners and the preferred specialists (orthopedists, etc.) that you wish to treat your injured employees. This will vary from state to state on the legal requirements. Studies have shown that even if the employee has the choice of treating doctors, they will often treat with the suggested physician. This is a critical cost saver. If the claims adjuster knows you have a medical treatment network in place, your reserves will tend to be lower. The medical network is not necessarily the one that gives you a discount for using their facility.
3.Treat injured employees as regular employees. This recommendation seems to lower the incidence rate of attorney involvement. The best way that some of our clients have found to initiate the contact is with a phone call followed up with an e-card. E-card services such as Hallmark and American Greeting charge $13 a year or less for a year of sending an unlimited amount of e-cards. If employees can access their company email, this gives them a sense of still being in the company.
4.Return To Work Program (RTWP) – we often see where new clients have a return to work program down on paper. The follow through on this recommendation is the key. All supervisory employees need to understand that your company or organization has a RTWP in place. As mentioned in the previous two recommendations, the claims adjuster that is setting your reserves should also know you have a RTWP in place. The adjuster will realize you will bring an injured employee back to work when setting the reserves on the file. Your physician network should also know you have a RTWP in place. Employers end up paying big premiums when the treating physician writes an employee out of work for an extended period of time.
5. Know how and exactly when your E-Mod (X-Mod, Ex-Mod, EMR) and audited premiums are calculated each year. Even if you follow each one of my other five recommendations, your company needs to understand how your E-Mod was calculated. There are dozens of posts on how your E-Mod is calculated in this blog. Use the search box on the right margin to find them. The same can be said for the audited premiums. We receive many phone calls and emails from companies that just received a premium audit bill. That is almost too late to try to contain the premiums.
6. Your company must adopt some type of reduction program ASAP. You may have a written plan, but that does not mean it has been adopted and used in your company or organization. The fastest way to reduce your Workers Comp budget is by simply paying attention to it. When I look back through the client we have helped, the one thing that I always notice is companies that make Workers Comp a priority sees a reduction in their E-Mod.
Workers Compensation is not the most exciting subject. I will just post on the first three of the six as not to have a boring blog. How long after being in the insurance business did I come up with these three – less than one year – and I always have talked about these three over and over again for 25 years.
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