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Cutting Workers Comp Costs Adds 6th Key – Adoption By Management


Cutting Workers Comp Costs Has New Key Added For Clarity

The subject of cutting workers comp costs added an obvious 6th addition to the list.  In 1989, I originally wrote and presented on what I thought were the Three Keys to Workers Compensation Savings.   I wrote the three from a claims standpoint.

Clipart of Cutting Workers Comp Costs add 6th key
(c) 123rf

Those three were:

  1. ASAP First Reports of Injury
  2. Return to Work Program
  3. Physician Network 


Subsequently, I added in Employee Treatment as a Key.  The article from yesterday contains more info on why I subsequently added in this consideration.

Recently, I added in a fifth Key to Cutting WC- Understand your Premium Audit and E-Mod.   If you are a self insured – Understand Your Loss Development Factor (LDF).

The Affordable Health Care Act has actually done more than move the subject of Workers Comp to the back burner.  It has caused employers to take it off the stove for now.  Workers Compensation is still a budget-buster that may be receiving less recognition as at least a partially controllable budget item.

The new addition to the list (Sixth)  is Adoption of the First Five in the list by Management.    With health insurance becoming more of a concern, Safety and Risk Management departments have been reduced or even eliminated in some cases.

The employer E-Mods and Self -Insured payouts will usually not show the full effect of the Risk/Safety department reduction or elimination for 3 -5 years.

Euro Money Cutting Workers Comp Costs using scisor
Wikimedia Commons – Nikowsk

If Senior Management or the Company Owners in smaller companies will not adopt any of the first five Keys in the list,  the likelihood of not paying more WC premium or self-insured payouts is almost a certainty.

I have performed statistical tests that showed the first three in the list not being instituted will cause a claim to increase by 400% per item or 1,200% if none of the first three are accomplished.

A recent study by WCRI (see yesterday’s article)  somewhat quantified #4 on the list – Employee Treatment.  WCRI quantified Employee Treatment as being a major concern in WC costs..

Understanding Your E-Mod, LDF, Premium Audits, or Self-Insured Payouts has been discussed very often in this blog.  I will not repeat the information again here.

Female Doctor Cutting Workers Comp Costs Using Laptop With Files In Table

However, if management does not adopt any of the listed cost savings procedures, identifying the areas of concerns and implementing changes “on paper” is just that – in a book that sets on someone’s shelf or as a computer file that is in the My Documents folder never to be seen again.

Now may be the time to get the book off the shelf and dust it off or dig out the computer file and see what could possibly be implemented without spending any extra cash as the plan may be sitting right in front of you.

That is why I wrote in #6 this week – to remind companies that dusting off the old WC procedures manual may be a great cost- saving move.  At least putting WC “back on the stove” will likely cause the claims and/or premium payouts to decrease in a time when every $ counts.

The addition of #6 now makes the List of Cutting Workers Comp Costs Keys:

  1. ASAP First Reports
  2. Doctor Network
  3. Return to Work program
  4. Employee Treatment
  5. Understanding Your E-Mod, Premium Audit, and LDF
  6. Adoption of #1 – #5 by Management or Ownership


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Experience Mod Predictions – Accuracy Depends on Who/Whom You Ask Most Experience Mod predictions can be a tedious process that has cofounded most people working

James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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