Archives for January 2019

Report Medical Only Claims To Carrier – Saves Later Headaches

January 24, 2019 By JL Risk Management Consultants

Report Medical Only Claims – The Devil Is In The Delay

Should I report my medical only claims to the carrier?

Public Use License – Frank Vincentz

Our newsletter and blog readers ask us this question as often as any other workers comp question. The other related question – Will my premiums increase if I report medical only claims?

Our answer is – Not reporting medical only claims will increase your premiums in the long run. A side note – most states give a 70% discount to the effect on your E-Mod when you report your medical only claims.

Claims Festering Due to Not Reporting Medical Only Claims

Claims festering was coined by me approximately 10 years ago. When an employer decides to become the adjuster on small claims, the scenario proceeds along in this fashion:

An innocuous accident occurs resulting in a small injury
The employer does not report the claim to their insurance carrier
The injured employee keeps treating and the employer pays the bill or reports it to their health insurer
The claim slowly grows and becomes more serious with little or no oversight – festering like a boil
The injured employee now has incurred multi-thousands in non-fee scheduled bills
Now, after running up a large claim, the employee starts to miss time from work
The employer decides to report it to their carrier or TPA (self insureds)
The carrier cannot investigate a claim until the first report is filed
The claims staff becomes frustrated as they likely have received Twilight Zone phone calls
Your reputation has been eroded with your carrier – Oh, it is ABC Widgets, they always report claims late
The adjuster cranks up the reserves much higher than usual due to unseen bills and for the risk of a non-adjusted claim
Claims adjuster now has to play catch up
The claim is out of control – get out the checkbook

The same scenario occurs with a self insured except you do not wreck your E-Mod, you wreck your budget for claims payments.

Six Keys for Savings

Reporting claims timely remains one of our most highly recommended keys for cutting workers comp costs. My advice is to report any claim where the employee has to stop work due to an injury. If the injured employee receives medical treatment, then they had to stop work and seek out medical care.

With online reporting, filing the first report of injury is now easier and faster. I can still remember when the fax machine hummed from incoming claims.

The bottom line – report medical only claims to your carrier.

©J&L Risk Management Inc Copyright Notice

Workers Comp Bad Faith – Adjusters Look Back Over Their Shoulders?

January 24, 2019 By JL Risk Management Consultants

Workers Comp Bad Faith – The Rarely Discussed Possibility

For many years, Workers Comp bad faith remains one of those rarely-discussed topics due to many factors. The subject rears its ugly head for what seems approximately twice per year. The worn-out catchphrase is “sent a chill over the industry.”

Public Use License Wikimedia

The reason I published this article originated with me reading an article this week containing that very phrase. My good friend Kevin Quinley was interviewed for the article. The article covered an automobile adjuster’s handling of a claim in Washington. See the Keodalah Decision

The workers compensation claimant bar has been pursuing bad claims handling as a tort for over 50 years. Yes, there have been some successes in this area.

Workers Comp Board Jurisdiction

The Workers Comp Board or Industrial Commission usually retains the authority over claims handling issues. If one looks at the current Appellate Court cases, the judge usually remands the case back to the lower court – usually the Appeals level within the respective workers compensation board or commission.

Approximately 20 years ago, an adjuster was found to have altered claims forms after obtaining signatures from the employer and employee. The changes to the forms occurred due to the adjuster wanting the claims agreement forms to be approved by the workers compensation commission. The adjuster even admitted altering the agreement forms. What happened to the case? The Court of Appeals remanded the case back to the Full Commission as they were deemed to have jurisdiction.

Exclusive Remedy

Exclusive remedy has always kept most claims issues within the board or commission’s authority. If one cannot sue their employer can they also not sue their adjuster?

Exclusive remedy is one of the underpinnings of how Workers Compensation insurance survives to this day. Exclusive remedy means that an injured claimant cannot sue his employer as a liability matter. Likewise, the employer cannot sue the employee for contributory negligence.

Structured Environment Element In Avoiding Workers Comp Bad Faith

Workers comp, overall, operates in a very structured environment. For example, making an offer to settle on a property or auto liability claim has many unknowns as to value. Offering too low (low balling) can be a path to a bad faith claim.

Workers comp bad faith remains a very structured environment. All the variables are pre-calculated from the Average Weekly Wage to a fee-schedule medical bill.

The great unknown of Workers Compensation barely exists from the way a First Report of Injury is filed to the settlement approval process.

Starve Them Out

The iciest my veins had ever felt reviewing a claim that I had taken over from a terminated adjuster was this phrase:

I am going to sit on this one and starve them out to get a quick, cheap settlement. Oh, yes that was documented in the file and could not be removed by anyone.

The file was not yet settled – back TTD and medical bill payments were inked that day along with a fine for late payment. That, to me, remains my crowning example of going down the path towards a massive bad faith claim.

Bottom Line

Even though the above passages point to a safe harbor while handling workers comp claims, no adjuster should ever think they are immune to a workers comp bad faith action against them.

©J&L Risk Management Inc Copyright Notice

Workers Comp Premium Savings Generated With Website Updates

January 17, 2019 By JL Risk Management Consultants

Workers Comp Premium Savings – Keep Your Website Updated

How can workers comp premiums savings come from updating your website? One of our clients from last year had let their website sit for a few years without updating it. What happened caused me to write this article.

workers comp premium savings picture stop sign

Wikipedia – Bidgee

During a workers comp premium audit, a premium auditor pulled up a page that said they were taking on jobs in a certain field. The company had not performed this type of work for over seven years. However, the website included a whole page dedicated to a higher risk service offering than the company was presently performing for clients.

This situation popped up many times over the last few years. I wrote an article concerning updating web pages a few years ago. If one thinks of your company’s website as a calling card and brochure, then what services that you include in your website easily compares to the days gone past.

You handed out brochures and business cards that concisely listed your services. The web pages of your website , including the long-forgotten underneath pages that no one (except possibly a wily premium auditor) ever sees when looking over your products or services.

Whenever a new client signs on with us, the first place we look to see what they do has always been their website. A parallel comparison is when you look at someone’s LinkedIn after they give you their business card.

Your company website can generate workers comp premium savings. If you have an old outdated website, here is a list of people that may construe your company to be something it is not:

Underwriter
Broker/Agent
Premium Auditor
Rating Bureau agent
Consultant (such as J&L)
Any other party in the Workers Comp arena

J&L’s website needs updating, too. The glass houses and stones euphemism applies to us. I am sure you have seen websites that need updates. Some can be very obvious.

Check the pages on your website:

About Us
Services Offered
What we do
Our other services – a real Workers Comp Savings edit is necessary if it is incorrect.
Our employees

Any web page that describes your operations needs to be exactly what you do for your marketing purposes and for Workers Comp premium savings.

©J&L Risk Management Inc Copyright Notice

NY Daily News Workers Comp Watch – Ocasio Cortez Says Woops!

January 14, 2019 By JL Risk Management Consultants

US Representative Ocasio Cortez Fined – NY Daily News Workers Comp Article

The NY Daily News Workers Comp article has been circulated around the blogosphere for mostly political means. Many of my fellow Workers Compensation bloggers publish articles that are politically-based. I try to avoid that as much as possible.

picture of ny daily news workers comp hummer traffic ticket

Wikimedia Commons – Specious

The article by Kenneth Loveth was the original source.

How could an article on forgetting to pay your workers compensation premium bill not jump off the page? Even a young Congresswoman that many consider a champion of the people (Socialist?) can forget to provide her campaign workers with the most basic of necessary benefits.

The NY Daily News workers comp article pointed out that she had forgotten to pay Workers Comp premiums for her campaign workers covering the month of April 2018.

Did she receive any special forgiveness for her campaign’s oversight? She definitely did not receive any special treatment. The New York Workers Compensation Board fined her $1,500 for going without coverage. What would have happened if one of her workers seriously injured themselves on the job?

Of course, Ocasio Cortez was excoriated by both Democrat and Republican pundits. This situation, unfortunately, rears its ugly head in the PR arena.

Tina Fey paid a similar fine when she neglected to cover her workers a few years ago. The same thing occurred as in this case. However, Ms. Fey was originally fined $79,000. The NY Workers Comp Board then realized she might have had at least partially adequate coverage.

Ms. Fey and the Board agreed that her fine should have been reduced to an unreported amount.

Both situations show two things:

Not paying your workers comp premiums will catch with you eventually
The NY Board shows no favoritism or mercy – pay premiums or pay a fine

We receive at least a call or email once per week where an employer has let their Workers Compensation lapse. J&L Risk Management Consultants cannot fix an unpaid premium bill even if some of it was disputable.

The bottom line – do not forget to pay your workers comp premiums or your company may end up creating a column for the NY Daily News Workers Comp.

©J&L Risk Management Inc Copyright Notice

2019 Self Insured Resolutions – Looking Back To 2018 2017 2016

January 9, 2019 By JL Risk Management Consultants

2019 Self Insured Resolutions Come From Prior Years

The 2019 Self Insured Resolutions analysis follows the same path as the voluntary market 2019 resolutions published last week.

picture 2019 self insured resolutions fireworks Sydney AU

Public Use License – Rob Chandler

Follow these links back to look those over for your 2019 resolutions:

The 2019 Self insured resolutions are modifications to the 2018 Resolutions. In other words, did you do the 2016 – 2018 resolutions? The 2017 and 2018 Self Insured Resolutions were:

2017 Resolutions – Still important

Obtain and know your LDF (Loss Development Factor) – still as important as ever. If you do not know where you are on the map, how can you find your way anywhere?
Working relationship with adjusters – the adjusters are spending directly out of a budget or bank account. Communicating by email (see #3) lets the adjusting staff know that your company follows the workers compensation payouts very closely.
Use email – not phone calls
Conquer Your TPA expenses – Self Insureds are sounding off on this one in late 2018 and early 2019. Many of our potential and current clients have taken notice of their sharply increased TPA expenses. Do not ignore this area!
Watch the Learning Curve for Accident Spikes – when the economy increases, so do claims. The increases are a natural result of more work hours. Safety becomes even more important.
Use online access when available
Attend A Workers Comp or Safety Conference
Subscribe to our weekly Newsletter
Obtain Your Loss Runs – you have these at your fingertips, right? If not, you are not following your claims closely enough to make an impact.
Write an article on Workers Comp.

2018 Resolutions – Finish these up

You did these in 2018, No, then what are you waiting on to Cut Your Comp Costs and fulfill your 2019 self insured resolutions?

Not being Self Insured is an option. Employers need to have a large amount of cash or equity on hand to handle claims. Reinsurance can only do so much if your company has a bad claims year or two.
Construct a Request For Proposal (RFP) – See #4 in the 2017 Resolutions. An RFP remains a great risk management technique to control TPA expenses.
Unbundle your required vendor services with multiple RFPs – still, a great method to save on claim expense payments.
Ad-hoc print your loss runs – you did obtain this ability from your TPA? No? then do something about it now.
Working relationship with adjusters – a self insured must do this from day one with their respective TPA’s adjusters. You do know their name, right? If not, find that out this week.
Each state in which you operate has its own set of minimum rules for being self-insured – for companies considering becoming self insured. One very common minimum is $500,000 of liquid assets in that state. You cannot have just $1.3 million in your HQ state and count that asset figure in every state of your operation. Each and every state must have the $500,000 (Ouch!)
An alternative to LDF’s – Loss Development Factors is SynthMods(R). We calculate those for self insureds. They are basically E-Mods instead of LDF’s. SynthMods rate your company with the Experience Mods like you were still in a regular workers comp policy. They are an alternative to LDF’s. I am calculating one now for a self insured governmental agency.
Understand all your TPA expenses. That is a holdover from above 2017 resolutions. Why does this one appear twice? Self insureds have become very aware of increasing TPA expenses – these also include the vendors the TPA uses if you have not chosen your own vendors.
Take your self insured program in- house. A very tough choice. The final result is a sharp reduction in claims handling and payment budgets. Watch the Law of Large Numbers here. You need to have a large workers comp budget to do the claims in-house.
Go back and read all the resolutions I have written. Even if the resolutions are not specifically for self insureds, you can glean great information. The resolution search is here.
Bonus – Full online access to your claims – you did obtain full access. No? Then contact your TPA today.

There are many more resolutions which could be added to the list. The bottom line is your company needs to stop and make sure all the bases are covered using the 2016 – 2018 resolutions. Yes, a serious 2016 – 2018 resolution review equates to having finished your 2019 self insured resolutions.

2019 Workers Comp Resolutions – Looking Back at 2018

January 4, 2019 By JL Risk Management Consultants

2019 Workers Comp Resolutions – Did You Keep Yours From 2018?

Your 2019 Workers Comp Resolutions likely consist of redoing your 2018 resolutions. Yes, it is that time of year to examine your old resolutions and add on a few more.

picture 2019 workers comp resolutions fireworks

Wikimedia License – Lepota

A resolutions article has appeared in the Cutcompcosts.com articles since 2010. A self insured article on resolutions will be published next week. Keeping the two (voluntary market vs. self insured) separate remains the best method to go over each year’s resolutions.

I very heavily recommend that you follow this link to the 2018 resolutions. The article is very well worth reading again or for the first time. How to accomplish each task is enumerated in that article. I would love to republish it here bu Google, Bing, and the other search engines penalize duplicate content.

2019 Workers Comp Resolutions = Voluntary Market 2018 Resolutions

Top 10 + 3 Bonus

The 2019 Workers Comp resolutions are not going to change that much for this year from 2018. I decided to list each resolution again. Check out the italicized words for any addition to the 2018 resolutions.

The 2019 workers comp resolutions are almost the same as 2018. If you completed all these congrats – if not – see the resolutions again below. Also, I have added some comments on a few of the Top 13 that wrecked Mods for some of our new clients. That is why they called or emailed us for assistance.

From last year, the Top 13 are:

Understanding the mechanics of the WC process – from the start of the policy renewal until final premium audit – read everything that has to do with the policy. Most of the process is laid out in the policy. A highlighter is your best tool. <<<Did you read your workers comp policy last year – if not, get out the highlighter or delegate the task if you do not have the time to someone that can report any questions or concerns back to you.
Following the Six Keys to Workers Comp Savings – the prior link has all of them. I have studied what cost employers premiums and not doing the Six Keys causes premiums to spike. The spike may not occur this year or the next, but not doing them will cause your premiums to increase eventually. The Keys have not changed since 1988 except that I added two additional keys in the 1990s.
Knowing where every dollar is going when you write a premium check – Old Motto – Stop Just Writing Checks
Having your Workers Comp Rating Bureau Experience Mod Worksheets at your fingertips – can often change in one year. <<Did your Workers Comp Mod increase significantly? If so, you need to find out why pronto. Why? – Because of any claim or claims that increased your Mod is likely going to hang around for three years. You cannot look at it like an aberration or just “one bad year.” Experience Mods do not work that way. If you had a bad claim last year or a number of claims, the Mod system is designed as a delayed system. Your Mod may jump significantly the second year after a bad claims year, not the first.
Retaining your WC info permanently – electronic media is the easy way to go – scans are best
Knowing the adjusters that work on your files beyond just a name.
Letting the Adjuster know that you follow the Six Keys in #2 above. <<Adjuster communication to and from the insureds fixes so many of the Workers Comp problems. J&L often fixes problems by just communicating (talking shop) with the adjuster(s).
Relating to #1 – Understanding your Unit Statistical Date to not waste time at end of the year.
Not renewing policies on January 1st or July 1st.
Reading the newsletter that J&L provides almost every week. You may sign up at the top right of this page.
Bonus – having a working relationship with your agent, not just at renewal.
Another Bonus – take any class or attend any meeting or seminar that your insurance carrier offers to you.<<Most of these carrier seminars are free if you are a policyholder with the carrier.
Last Bonus – Safety is the key to staying out of the Work Comp system. <<<The mother of all way to save on Workers Compensation premiums. Keeping an accident from happening cannot be written anywhere on a balance sheet or P&L statement. However, an Experience Modification factor of less than 1.0 DOES APPEAR on a P&L statement under Insurance Premiums Paid for 2019.

I am only going to add one to the list for the 2019 Workers Comp Resolutions compared to 2018.

If you have any questions, use the search capabilities on this blog. Almost any workers comp term has been covered in the 1,800 articles on this blog. If you cannot find an answer, email me at [email protected] No sales pitches.
Be careful of Googling your answer from anonymous/unknown sources as you may not end up with the correct answer.

Reaffirming your 2018 resolutions will be the best way to begin your 2019 Workers Comp resolutions.

Workers Comp Judicial Hellholes Report 2018 Version

January 3, 2019 By JL Risk Management Consultants

New List of Workers Comp Judicial Hellholes for 2018 – 2019

The Workers Comp Judicial Hellholes was taken from the American Tort Reform Foundation’s (ATRF) Judicial Hellholes for 2018 – 2019. The Judicial Hellholes publications that referred to Workers Compensation also appeared in 2013.

picture of devil workers comp judicial hellholes

Public Use License

I do not agree or disagree with any of the findings in the report. My main goal was to inform the blog and newsletter readers of this report. One has to judge for themselves.

A search for Workers Compensation inside the report produced two results.

If you would like to follow along, please download the report using the first link in this article. The report consists of 84 pages covering the ATRF’s Top Judicial Hellholes.

The list of the overall Judicial Hellholes are:

#1 California
#2 Florida
#3 New York City
#4 St. Louis, Missouri
#5 Louisiana
#6 Philadelphia Court of Common Pleas
#7 New Jersey Legislature
#8 Madison and St. Clair Counties, Illinois
#9 Twin Cities, Minnesota

Two Workers Compensation Entries

Pennsylvania

The first mention of the term workers compensation is at the bottom of page 35. The report heavily questions why the current Pennsylvania Governor vetoed a bill to regulate pharmacies more heavily. The report covers an astounding article by the Philadelphia Enquirer. The graphic on how a pharmacy network was used to exploit the Workers Comp system is very interesting. Download the Judicial Hellholes report. The graphic caused my jaw to hit the floor.

New Jersey

The second mention of Workers Compensation Judicial Hellholes appears on page 37. Legislation enacted in August, S. 2145, seems to have increased the amount of compensation that attorneys will receive for representing clients in New Jersey. Before the legislation was enacted, New Jersey attorneys could only bill for a percentage of what their representation increased the file, not from the full value of the case. S. 2145 now allows for fees based on the full value of the case.

West Virginia – not in the 2018 report

West Virginia appeared in the 2013 Hellhole article. The state did not appear in this issue for Workers Compensation. The Mountain State’s Supreme Court controversy stole most of the thunder this year. West Virginia did appear on a Watch List for their Supreme Court problems.

Reforms

From my days as full time claims handler, I have noticed a large number of reforms that have been enacted over the last 30 years. Some of the states that I would have listed as a workers comp judicial hellhole have eliminated many of the concerns through legislation.