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Possible 75% Savings on Workers Comp Premium From My Studies

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Possible 75% Savings – Study Results Below

It’s possible to experience a 75% Savings according to the results of my WC studies.

Yesterday, I blogged on predictive modeling in Workers Compensation.  I had mentioned there were two studies that I performed in the recent past on a group of 7,000 and 5,000 claims respectively.   

Picture of Jar Full Of Coins With Plant 1600% Savings of Workers Comp
(c) 123rf.com

The results of the studies were:

  • Predictive claims modeling relies on psychographics and the healing time of the human body.  These two stats were so variable, no statistical conclusions could be drawn
  • Fraud in workers comp claims could not be predicted as claimant fraud was seen to be a random variable, there were no solid “red flags”
  • How the employer functioned post-injury did show some relationship to the cost of the claim.  The correlation between the action of the employer and the cost of the claim was related

The keys to Workers Comp savings lies with the employer.  I came up with the first three on the list over 20 years ago.  They saved employers a large number of claim payments.  The following is a list of the keys to Workers Comp savings proven by the two studies:

  • First Reports of Injury need to be filed ASAP.   I used to understand delays due to paperwork flow, but that has virtually been eliminated as almost all insurance carriers and TPA’s have online filing of claims.  
  • Treatment network needs to be in place.  This does not mean having a PPO network from your bill review provider.  Even if you are in a state that does not allow the employer to control the medical treatment, most employees with still go to your physician recommendation

    Picture of HSA Letter 1600% Savings with Piggy Bank and Stethoscope
    (c) 123rf.com
  • Return to work program is very critical.  The communication between your company and medical providers is very important.  Medical providers are not just physicians.  Physical therapists are also important providers.  Providing a PT with your return to work program can save you a large amount of claims $.  
  • Employee treatment has improved.  When I first came up with this list over twenty years ago, many injured employees were treated as outsiders.  This area has improved over the years as many employers have come to realize an injured employee is still an employee. 
  • Top management consideration was the latest addition to the list.  If an employer’s top management does not take their Workers Compensation seriously, the aforementioned four keys will never be taken that seriously.  This is a 100% related statistic.  

The first four keys will save an employer 400% each.  That is a 75% total savings.   They are for the most part all controllable by the employer.  I have seen an improvement in those areas over the last decade, but there is still room for more attention to those areas.

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One Response

  1. Excellent information. This site definitely explains essential concepts to its readers. Thanks for continuing to write such wonderful articles
    Establishing Business Value

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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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