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Home » Archives for June 2012

Archives for June 2012

North Carolina HB 237 – Media Wants Veto Due To Access Ban

June 28, 2012 By JL Risk Management Consultants

North Carolina HB 237 – Reporter Concern on Access

The North Carolina HB 237 is very important for enforcing the Workers Comp insurance requirement in the Tarheel State.

Picture Of Reporter North Carolina HB 237 And Businessman

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In the past week, Workers Compensation based North Carolina House Bill 237 – HB 237 – amendment was the subject of a few of my posts. One interesting point that was mentioned is the reporters were very concerned the Legislature was going to disallow access to the records that brought this whole matter to light in the first place.

Why would the Legislature add in what was basically a sealed record clause? In one of the links to an article in my prior posts on HB 237, the reporter even asked some of the legislators why this clause existed:

The North Carolina Industrial Commission shall take such steps, including obtaining software or software licenses, as are necessary to be able to receive and process such information from the Bureau. The records provided to the North Carolina Industrial Commission under this section shall be confidential and shall not be public records as that term is defined in G.S. 132-1.

 

Woman Reporter North Carolina HB 237 Holding Pen And Notepad

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The reporter was never really given a direct answer. A very small error can easily occur when any state or federal governing body is hammering out laws that are very specific to a situation.

 

Consulting with a Workers Comp expert on this matter may have avoided what could possibly be a veto of a great amendment in my opinion. Then again, this was more of an issue of privacy than a Workers Compensation issue.

 

Governor Perdue is still negotiating the NC budget. The amendments to HB 237 are still pending for her veto or approval. The original HB 237 from 2011 was a great start to Workers Compensation reform.

©J&L Risk Management Inc Copyright Notice

Filed Under: North Carolina Tagged With: amendment, Governor Perdue, house bill, record, software licenses

No XMod On Premium Audit Bill – Reader Question

June 27, 2012 By JL Risk Management Consultants

Reader Question – No XMod On Premium Audit Bill

A reader question came in this week concerning the lack of an XMod on the premium audit bill.

Xmods or X-Mods are WCIRB’s equivalent of an E-Mod (EMod). The WCIRB is California’s equivalent of the NCCI. The full names of the acronyms are listed at the end of this post. This same question could also apply to E-Mods or Mods in states other than CA.

Emoticons with big question mark at the back No XMod On Premium Audit Bill

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You will not necessarily see an Xmod on your carrier’s premium audit bill. However, the X-Mod is critical in calculating your Workers Compensation bill. The premium audit report is often enclosed with the bill or very likely came under separate cover.

Most standard premium audit reports will have the X-Mod on the last page. If the XMod is different than the XMod on your original policy, you may want to question what caused the change. A caveat is to make sure that if you question the change of the XMod your company may receive an even higher bill.

You may want to call in a workers comp premium expert at that point in time. Any X-Mod changes in the same policy period is one of the Red Flags for possible overcharges on your premium. You may want to follow the link. It is one of the most read articles on this blog.

If you cannot locate your premium audit report, there should be a phone number or address on the bill. I always recommend writing the carrier (no calls or emails) to request a copy of your audit report. The fax is also a great way to request anything from your carrier.

Woman Reader Question Sitting On Her Desk

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Your company should receive the audit report in 7 – 10 days at most after your request. I recommend looking over your complete policy and audit before paying any premium audit bill. There are usually time limits on paying your insurance bill. Waiting until the date the premium bill is due to make the request is usually not a good idea.

WCIRB -Workers Compensation Insurance Rating Bureau

E-Mod/Emod/Mod/X-Mod/XMod – Experience Modification Factor

NCCI – National Council on Compensation Insurance

©J&L Risk Management Inc Copyright Notice

Filed Under: Premium audit Tagged With: acronyms, Caveat, Red Flags

North Carolina Legislature Creates Committee On Employer Compliance

June 26, 2012 By JL Risk Management Consultants

North Carolina Legislature Creates Committee

The North Carolina Legislature has passed two different amendments to House Bill 237 better known as the Workers Compensation reform act. The two amendments functioned as a way to better track employers without coverage.

Conference berlin North Carolina Legislature have a meeting

Wikimedia commons – Raimond Spekking

The amendments also created a Legislative subcommittee for employer compliance and fraud detection. The text of the Legislative Committee bill is below. The alarms went off when a reporter performed a great investigation that showed there were 30,000 employers without Workers Comp insurance coverage statewide.

Governor Perdue has not signed the ratified bill into law as of today.

SECTION 8.(a) Creation and Membership. – The Joint Legislative Committee on Workers’ Compensation Insurance Coverage Compliance and Fraud Prevention and Detection (Committee) is created. The Committee shall consist of eight members to be appointed as follows:

(1) Four members of the Senate appointed by the President Pro Tempore of the Senate.

(2) Four members of the House of Representatives appointed by the Speaker of the House of Representatives.

Picture Businessman Presentation North Carolina Legislature Conference Room

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SECTION 8.(b) Scope of Review. – The Committee shall:

(1) Review the statutes relating to workers’ compensation in the State to determine whether there are sufficient safeguards to ensure that employers comply with statutory requirements related to workers’ compensation insurance coverage and to prevent and detect fraudulent claims before the Industrial Commission.

(2) Examine the measures taken by the Industrial Commission relating to compliance with statutory requirements related to workers’ compensation insurance coverage and to fraudulent claims to determine whether the Commission is using effectively existing powers and resources relating to employer compliance and the prevention of claims fraud.

(3) Recommend any statutory changes necessary to improve or enhance the Industrial Commission’s efforts and effectiveness in securing employer compliance with statutory requirements related to workers’ compensation insurance coverage and to the prevention and detection of fraudulent workers’ compensation claims.

(4) Study any other matter related to the integrity of the workers’ compensation system that the Committee deems necessary to accomplish its purpose.

©J&L Risk Management Inc Copyright Notice

Filed Under: North Carolina Tagged With: amendment, committee, Governor Perdue

Workers Comp Enforcement Increased By North Carolina Legislature

June 25, 2012 By JL Risk Management Consultants

Workers Comp Enforcement Increase with HB 237

The Workers Comp enforcement was increased by the NC legislature this week.

The North Carolina Legislature amended House Bill 237 – known as the 2011 Workers Comp reforms.  The amendments were in response to a very inquisitive reporter discovering 30,000 employers in North Carolina were uninsured for Workers Compensation.A quick calculation using available data  140,000 properly insured companies + 30,000 uninsured  totals 170,000 total companies that should have Workers Comp coverage.

Picture of Workers Comp Enforcement Increase Meeting

(c) 123rf.com

30,000 uninsured / 170,000 total companies = approximately 18%.  In very round numbers almost 1 out of 5 companies in North Carolina was uninsured for Workers Comp.  

The applicable part of the House Bill that was changed is italicized in the next three paragraphs.  I did not include the statute numbers as it may all change, especially if the bill is vetoed.  I will come back and enter in that info if the bill is signed into law.  The amendments can be found here

Bureau to share information with the North Carolina Industrial Commission.  The Bureau shall provide to the North Carolina Industrial Commission information contained in the Bureau’s records indicating the status of workers’ compensation insurance coverage on North Carolina employers as reported to the Bureau by the Bureau’s member companies.  

The North Carolina Industrial Commission shall take such steps, including obtaining software or software licenses, as are necessary to be able to receive and process such information from the Bureau. The records provided to the North Carolina Industrial Commission under this section shall be confidential and shall not be public records as that term  is defined in G.S. 132-1. 

Badge of Workers Comp Enforcement North Carolina Industrial Commission

(c) ncci.org

The North Carolina Industrial Commission shall use the information provided pursuant to this section only to carry out its statutory duties and obligations under The North Carolina Workers’ Compensation Act. The Bureau shall be immune from civil liability for releasing information pursuant to this section, even if the information is erroneous, provided the Bureau acted in good faith and without malicious or willful intent to harm in releasing the information.”

A great article from the Raleigh News and Observer had criticized part of the House Bill 237 amendments.  The article pointed out that some of the new legislation would limit public access to the same information that a reporter used to uncover the 30,000 uninsured employers.  The part of the bill that applies to this concern is in bold type.

A caveat to everyone thinking the bill is now law.  Governor Perdue has not signed the bill yet and is reviewing it as of the time of this blog post.  I will cover the other part of the amendments next time.

©J&L Risk Management Inc Copyright Notice

Filed Under: North Carolina Tagged With: amendments, pursuant, reporter, willful intent

Assigned Risk Plans – Does My Company Need One?

June 21, 2012 By JL Risk Management Consultants

Assigned Risk Plans Are Not Voluntary

Should I have to join the Assigned Risk plans? The  Assigned Risk Plan (ARP) is not a voluntary choice. There are other names for the ARP such as risk pool. The rates in the ARP are much higher than the general voluntary marketplace. In fact, I have seen them as high as 400% more than the normal voluntary insurance marketplace.

Picture Of Man Assigned Risk Plans Maze

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The ARP is the fail-safe insurer if a company cannot find any insurance with any carrier due to

  • high E-Mods – usually 1.4 or above
  • type of business
  • unsafe workplace
  • dangerous occupations

The insurers are required to write a certain percentage of their business from the ARP. The use of the techniques on this website and blog will enable your company to get out of the ARP unless the voluntary insurance marketplace is not writing WC insurance for your type of business.

I have seen temporary employment agencies, loggers, and trucking companies have to go into the ARP as no insurance carrier would write the risks. Most carriers refer to this risk ask market risk.   

The ARP can be thought of as a safety net so that certain employers can stay in business and not face fines for lack of coverage. There are methods for removing your company from the risk pool.. Please follow the link. They do take time to have any effect.

©J&L Risk Management Inc Copyright Notice

Filed Under: Assigned Risk Plans Tagged With: face fines, lack of coverage, trucking companies

1001 Posts on Workers Comp – J&L Risk Management James J Moore

June 20, 2012 By JL Risk Management Consultants

Cutcompcosts.com Reaches 1001 Posts Total

Our Workers Comp blog totaled 1001 Posts today.   Workers Compensation can be such a boring subject. It can also be a costly subject that wrecks a company’s budget. I had a goal in 2007 when I started this blog to try to come up with 1,000 posts of mostly original material on Workers Compensation issues.

Picture of 1001 Posts Bundle of Letters and Boxes

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This is actually post 1001. I have always used Blogger as it was the one that I picked out of the air. In fact, the very first post I made disappeared for some reason. 

Please note that the commas on the 1001 Posts had to be removed as our blogging system was having trouble with it for some reason.  <My apologies>

That means I have posted on the average once every 1.75 calendar days. I calculated the time I invested as 1,500 hours. If I include the newsletter, the time spent would be closet to 1,80o hours. The newsletter has 10,000+ readers per month.  

Graphic Blog 1001 Posts Related Objects

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I have learned so much about the ins and outs of the Workers Comp system. There are going to be some great changes very soon. The blog will be converted into book form as many of the blog readers’ have pointed out the posts changes subjects almost every day. I have to agree. However, you can perform a search on any subject using the search box on the right side of the page.

Thank you for reading the posts and newsletter. There is no advertising inserted in this blog. In fact, I really do not bring up J&L’s services that often. I wanted to supply the WC community with a non-fee based and unbiased reference source. My main focus was and is to save employers $$ to preserve jobs. 

If you have any suggestions, please email me at [email protected] The best part of this blog for me was hearing from the readers.

©J&L Risk Management Inc Copyright Notice

Filed Under: Cutcompcosts Tagged With: boring subject, converted, right side, services book

Medicare Set Asides – Call In Today at 1PM Town Hall

June 19, 2012 By JL Risk Management Consultants

Workers Comp Medicare Set Asides Town Hall Today

If you handle any type of liability claim including Workers Compensation, you may want to call in today at 1 PM on Medicare Set Asides. The info is here to join in on the CMS Set Aside Town Hall.

The call-in is at 1 PM Eastern today. Please note the call-in is just not for WC. It is for all liability claims.

Vector Icons Medicare Set Asides All Liability Claims

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Even though I am under the impression that WCMSA’s are just another step in the Federalization of Workers Compensation, the rules have been published many years ago. If your company or your insurance carrier or TPA is not submitting in your claims data to the CMS, you should expect a spike in the federal fine activity. Some of the fines could be extreme.

The Federal Government usually will have a few companies they use for sacrificial lambs, so to speak. These companies are going to be heavily fined for not properly reporting their claims activity. There will likely be a flurry of press releases on these fined companies to move everyone into compliance (i.e. Willie Nelson and the IRS)

If, you, as the employer are unsure whether or not your claims are being reported properly to the CMS, I know of three companies that are very good at assisting in these matters. In my opinion, this is not the time to be complacent. If you need help, let me know.

The call into the Town Hall meeting is toll-free. The CMS has performed a series of these calls in 2012. This is the last one on their schedule.

©J&L Risk Management Inc Copyright Notice

Filed Under: Work Comp Federalization Tagged With: complacent, flurry, sacrificial lambs, spike

Premium Recovery For Fully Paid Policy Resolved By Premium Audit

June 18, 2012 By JL Risk Management Consultants

Fully Paid Policy – Premium Recovery May Not Be Fruitful

Workers Compensation premium recovery can be very complicated on a prepaid policy. Over the weekend, I received this question –

Picture of Policies Files and Calculator Premium Recovery Workers Compensation

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Our company canceled our policy in February. We had six months left before the policy ended. We have not heard from our prior carrier on refunding any of the prepaid premium. We were not on any type of payment plan. How do we go about recovering our premiums from the carrier?

My answer that I emailed back was –

  • Short-Rate Penalty – As you canceled mid-term, did your company experience a short rate penalty? Short rate penalties can be substantial.  The penalty may have been more than your leftover policy premiums. 
  • Final Premium Audit – as you mentioned you did not hear from the carrier, you should have a premium audit pending to close out the short policy year.
  • Call the customer service phone number listed on your policy.  If you call, fully document who you had spoken to and the conversation

    Picture Premium Recovery Nursing Pushing Patient

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  • You may get more than you asked for overall. If you have a final premium audit pending with a short rate penalty – your company may owe more than the premium recovery you are anticipating. The premium penalty can be 50% or more in certain cases. All of the rating bureaus have the formula on file. Please be extremely careful on the numbers that are input into the formula.
  • Calculate the short rate penalty on your own – these calculations can be cumbersome and complicated. Your company may want to calculate this number before you contact the carrier.
  • Be patient, your carrier will get around to the audit.
  • As always, if you feel that you are in over your head or that you may end up costing your company more $ by pursuing the premium recovery, you may want to call on a non-agent expert for an unbiased opinion.

©J&L Risk Management Inc Copyright Notice

Filed Under: premium recovery Tagged With: cumbersome and complicated, Prepaid premium

Statutory Employment Rears Its Ugly Head In Two States – Part I

June 14, 2012 By JL Risk Management Consultants

Statutory Employment Shocker – Part I

Statutory Employment rears its ugly head in two states this week.

 Statutory employees were really one of those under the radar subjects in Workers Compensation. South Carolina deemed a contractor as a statutory employee a few years ago. The subject seemed to not come up again until two recent cases.

Picture of Business Man with effects Employment Rears Statutory

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Pennsylvania’s statutory employment law was considered one of the most conservative when determining the employment status of a subcontractor. That stance changed this week as PA’s Supreme Court stretched the boundaries of the employee/employer relationship further than most states.

According to a very well written article, the PA Supreme Court ruled that for Workers Comp “non-premises-based contractors may be viewed as statutory employers for the purpose of claiming benefits.” The basic premise is the claimant (trucker) was an employee of another company. One of the stark parts of the ruling is what I have been warning employers about for years.  

The Ladder of Insurance (c) was applied in this case as the claimant’s direct employer had no WC insurance. The court went up the ladder to the company that had no idea the injured employee’s employer had no WC insurance. I cannot imagine the response of their WC carrier. Would they possibly deny the claim for non-coverage? That would likely initiate another lawsuit.

I have written many articles on this subject as I have seen so many employers pay claims for unknown employees. This is why certificates of insurance are golden for risk transfer between contractors and subcontractors. Ask for them or be ready to get out the checkbook.

I will cover the Missouri statutory employment case next time.

©J&L Risk Management Inc Copyright Notice

Filed Under: Statutory employees Tagged With: checkbook, radar, stark parts

Workers Comp Cancellation Notice – Why Did We Receive It?

June 13, 2012 By JL Risk Management Consultants

Employer Received Cancellation Notice Cancelling Workers Comp Policy

A Cancellation notice cancelling  a workers comp policy by a Workers Comp carrier can be a frightening experience for a business owner, Risk Manager, CFO, HR manager, or whoever internally handles the Workers Compensation claims for an employer.   

Picture Of Hand Presenting Cancellation Notice Symbol On Screen

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We received this question earlier this week from a small business owner – I received a certified return receipt letter on 06/05/2012 informing my company is being cancelled for Workers Comp insurance. What do I do now? BTW, this employer became one of our clients due to a policy mistake.

In this case, we recommend:

  1. Finding out the true cancellation date. An insurance carrier has to give your company notice from the date of receipt before the cancellation date – usually 10 or 30 days. The date will be on your notice or on a prior notice. Your policy is usually cancelled at 12:01 AM of the cancellation date.
  2. #1 does not necessarily apply if you are being cancelled for non-payment of undisputed premium
  3. Contacting your agent – we do not recommend this if you are coming up on an imminent cancellation date due to non-payment of premium. You need to talk to the insurance carrier’s collection department ASAP.

    Picture of Claims Files On The Table Cancellation Notice Employer Received

    (c) 123rf.com

  4. Searching for any additional documents from the carrier. They will have sent your company other notices. I have never seen a carrier cancel an employer out of the blue. Is there another person in the company that handled the documents? We have seen employers toss such notices thinking they were advertising.
  5. If you are in the cancellation grace period under #1, find out the reason for cancellation. There will usually be a phone number to call.
  6. Contact your agent immediately if the reason for cancellation had nothing to do with premium payment. You will need new coverage. Non-payment of premium accounts for approximately 90% of cancellation notices that we see from companies.
  7. Finding out the results of your last premium audit. If you had a premium audit and bill that went unpaid, what was the reason for the non-payment? This type of cancellation occurs usually early in the next years’ policy.
  8. Disputing the bill, except you need a valid and legal reason. If you are disputing a premium bill and are unsure if you really owe it, then you may need to bring in a premium expert.
  9. Paying the bill. You will lose your leverage if you have a valid dispute and pay the premium audit bill. However, if you owe it, pay it.

    Graphic Cancellation Notice Button

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  10. As a very last resort, contact your Department of Insurance. They usually have an ombudsman that may be able to help you. The ombudsman may actually work for the Industrial Commission or rating bureau depending on your location.

The bottom-line recommendation for cancellation notices is that you must act NOW. Some states are now assessing heavy fines for each day that your company does not have WC coverage. The worst-case scenario is an employee having an on-the-job injury and your company has to pay out-of-pocket along with hefty fines.  The cancellation notice is a ASAP priority.  

©J&L Risk Management Inc Copyright Notice

Filed Under: cancellation Tagged With: ombudsman, Worst Case Scenario

Five Days Notice May Be Yellow Flag For Premium Audits

June 11, 2012 By JL Risk Management Consultants

Five Days Notice Until Proposed Premium Audit Date

Less than five days notice cannot be enough time for a employer to prepare for a premium audit. This is a concern that we are hearing from quite a few clients, blog readers, and fellow conference attendees. Recently, premium audit notices are being emailed and faxed to businesses giving the business owners or CFO’s less than week to prepare their records for a premium audit.

Picture of Workers Holding Magnifying Glass Five Days Notice Premium Audit

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I am looking at two notices from clients as I write this post. I could understand the short notice if the business was small and/or assembling the records would not be very complicated. However, in both of the ones I am examining involve subcontractors, expense logs, and other documents that cannot be organized in time.

Five days (three business days) is a little much to ask an employer to prepare for an audit. There are premium audit guidelines usually built into every policy. If not; your state’s rating bureau is the organization (NCCI, WCIRB, etc.) that sets the premium audit rules.

The one clause that is usually in all of the rules states the audit will be conducted at a convenient time for all parties, or something along those lines.

If you feel that your company needs more time to organize your records, then fax or email a letter to the auditor that is setting his/her schedule that the premium audit date and time is not convenient. I do not recommend calling as this has led to confusion on “who said what” on rescheduling the appointment.

Graphic Five Days Notice Calendar

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It is recommended to not completely disallow the premium auditor looking over your payroll and company records. The insurance carrier will then perform an estimated audit and bill. An estimated premium bill will usually be 200 – 300% more than what is actually owed due to the very liberal rules for estimated audits.

Please note I am not blaming the Workers Comp premium auditors on their schedules. They are given very heavy schedules in today’s insurance environment. He/she is trying to fit in as many audits as can be done in a week due to internal time pressures. That is the nature of the beast on anything with Workers Comp presently.

There is no exact time frame on extending the audit date. I would think that more than four business weeks or 30 calendar days would be the maximum number of days to extend the audit date.

©J&L Risk Management Inc Copyright Notice

Filed Under: Premium Audit Schedule Tagged With: attendees, very complicated

California’s WCIRB Has New Policy Ombudsman in Place

June 7, 2012 By JL Risk Management Consultants

New Policy Ombudsman – Addie Wong

The new policy ombudsman for CA’s WCIRB is Addie Wong.   She was recently named the new ombudsman for the California Workers Compensation Insurance Rating Board (WCIRB). I thought I would add in her introduction letter and the functions of the Ombudsman position.

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Introduction Letter

California employers have a new workers’ compensation Policyholder Ombudsman. Ms. Addie Wong took over the Ombudsman position in March and has begun developing an outreach program aimed at raising awareness of the Ombudsman office and the services she offers to California employers.

Created as part of the 1993 reforms that led to open rating, the Policyholder Ombudsman is an independent position within the WCIRB and receives guidance from an oversight committee whose membership includes an insurer representative, an employer representative, and a representative from the California Department of Insurance.

The Ombudsman helps policyholders better understand the workers’ compensation system and their insurance policies, and the Ombudsman can be of assistance to policyholders in effectively resolving disputes with their insurers. “The Ombudsman’s job is to work directly with the policyholder and listen to his/her concerns and give voice to those concerns to the insurer.  

Picture Office of the Ombudsman New Policy California

Wikimedia Commons – Henryk Kotowski

The worker’s comp system is complex and employers sometimes aren’t aware of the resources that are available to them. Or, they may not understand why their insurer took a particular action. That’s where I can help,” remarked Mrs. Wong.

In the coming weeks, Ms. Wong will be reaching out to employer associations across the state making certain that policyholders are aware of the assistance she can provide. “I am excited about the opportunity to help California employers, especially small employers who may be struggling to understand the workers’ comp system. I think I can provide a valuable service.”

Functions

The Policyholder Ombudsman is available to employers (policyholders) to provide information and answers about the workers’ compensation system.

Picture Of Lady Hand Writing New Policy On Paper

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Although agents, brokers, insurance companies, attorneys, and others may represent an employer, it is not within the scope of the Ombudsman’s duties to provide assistance to these parties. They should continue to make inquiries through traditional avenues.

Employers are always entitled to receive information from the WCIRB about their loss experience, claims, classification assignments, policy contracts, rating plans, rating systems, and other information affecting the policy premium.

The Policyholder Ombudsman may facilitate matters for you with the WCIRB or your insurer but cannot make decisions on behalf of the WCIRB or your insurer. Your contact with the Policyholder Ombudsman does not constitute initiation of any dispute resolution process with the WCIRB or with your insurer.

A Caveat

As mentioned in the preceding paragraph, there are certain tasks that must be undertaken with certain time limits. Your Workers Comp insurance policy will have all of the necessary steps to commence a dispute. As Ms. Wong has noted, it is better to work things out with your insurer directly.

Graphic New Policy Document on a Clipboard

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I have written many posts on Disputing Your Premium Audit and Bill. You may want to search this blog for the word dispute using the search box on the right side of the screen. The caveat is to know if you have a valid dispute – not my company’s:

  • X-Mod/E-Mod increased dramatically
  • Premium increased sharply
  • Insurance carrier accepted an invalid claim
  • Insurance carrier paid too much on a claim

As an employer, you need to have supporting documents and numbers that validate your concerns. If not, you could end up paying more premium than before the dispute and possibly ruin the relationship with your insurance carrier. 

I have found working with the rating agencies (NCCI, WCIRB, or independent state rating bureau) to be a good experience if the research had been done properly with supporting documentation. 

One recent inquiry came from a CA medical instrument manufacturer. They had felt some of their workers were misclassified. The carrier returned to do a re-audit that ended up increasing their prior years’ premium by 23% and will increase their future premiums.

©J&L Risk Management Inc Copyright Notice

Filed Under: California, WCIRB Tagged With: Brokers, Caveat, traditional avenues

Workers Comp Narcotics – When Does 1% Equal 40% ?

June 5, 2012 By JL Risk Management Consultants

Shocking Statistics on Workers Comp Narcotics

The NCCI just released a study today on Narcotics in Workers Comp. The buzz on narcotics/opioids almost rivals fraud. I decided to read the study closely to see if there were any astounding facts.

Picture of Medicines narcotics assorted Capsules and Tablets

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The one statistic that stood out was that 40% of all narcotics in Workers Comp are consumed by 1% of the injured employees. I thought about this stat for a few minutes and came to the conclusion this was true Workers Comp sticker shock.

Along the same lines, but not as severe, 80% of all narcotics in Workers Comp is consumed by 10% of the injured employees. The report went on to say that the numbers have actually fallen a small amount over the last few years. That is amazing to me.  

As expected, Oxycontin(r) and its generic equivalent were the most prevalent narcotic. Oxycontin and its generic was the most used narcotic in 2003. Its popularity waned. However it is now the ranked #1 again for narcotic use in Workers Comp.

I wrote about the abuse of Fentanyl in California’s WC system a few months ago. There is now even a stronger replacement for Fentanyl called Fentora. I recommend clicking the above link on Fentanyl. It is an eye-opener.

The concern is that Fentora is much stronger than Fentanyl as the dose has to be reduced when compared to Fentanyl before taking it. Fentanyl is actually 75 to 100 times stronger than morphine.

Graphic Skull Made Up Capsule Narcotics Pills

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Alaska’s generic only rule in 2008 was seen as a bold move and a way to cut Workers Comp prescription costs. Oxycontin and Fentanyl/Fentora have generic equivalents. This type of rule would not eliminate narcotics being used by injured employees. Would a Pharmacy Benefit Management (PBM) program be the way to handle this conundrum?

I had seen a posting or an article somewhere today that indicated the injured employees that are taking such powerful narcotics for pain management do not ever return to work. I will find that article this evening and post on it tomorrow.

©J&L Risk Management Inc Copyright Notice

Filed Under: NCCI, Opioid Tagged With: fentanyl, Fentora, narcotic, oxycontin

Workers Comp Medical Fee Schedules – Are They Worth It?

June 4, 2012 By JL Risk Management Consultants

Medical Fee Schedules For Workers Comp

Workers Comp medical fee schedules are they worth it for the state without one to act for their constituent employers?

Missouri, New Jersey, Wisconsin, Indiana, Iowa and Virginia all have two things in common that only these six states share.

Picture Of Medical Personnel Medical Fee Schedules Pouring Medicine From Bottle

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I had written about the two things in common a few times in the past. The title does give it away.

They are the states that still do not have medical fee schedules for Workers Compensation treatment of injured employees. In 2009, I wrote this article on states without medical fee schedules. Missouri and Iowa were lower for medical costs then, but that has all changed very quickly.

I find that astounding after it has long been proven that any state without a medical fee schedule is harming businesses indirectly. The states without one were 27 – 51% higher in the cost of medical treatment. 

The main similarity is they are the most expensive states for Workers Comp medical treatment according to a recently released study on medical fee schedules. The Workers Comp Research Institute (WCRI) recently released a study titled Medical Price Index for Workers’ Compensation (MPI-WC). The WCRI studied 25 states.

Picture Medical Fee Schedules Personnel Showing Hand Gesture

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Tennessee was the best case example for using a fee schedule. Workers Comp medical treatment in Tennessee was very expensive before they enacted a fee schedule along with other reforms. Tennessee’s medical care cost for Workers Comp is now in line with most fee schedule states. It used to be one of the highest in the nation.

Wisconsin has become the bellwether for states that do not have a fee schedule. Their medical index cost was almost 200% more than the median. Wisconsin employers are feeling the effect in their Workers Comp E-mods and premiums.

The bottom line answer to the question is that Workers Comp fee schedules are beyond critical for controlling Workers Comp costs for employers. The employers in the aforementioned state should be pushing their lawmakers to pass some type of medical fee schedule very soon.

©J&L Risk Management Inc Copyright Notice

Filed Under: fee schedule Tagged With: Bellwether, Iowa and Virginia, Missouri

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James J Moore
Raleigh, NC, United States

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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J&L Risk Management Consultants Inc
14460 Falls of Neuse Road,
Suite 149305
Raleigh, NC 27614
(800) 813-1386
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