Workers’ Comp Program Fixes – Three Areas To Consider
Most Workers’ Comp program fixes originate in three areas. Let’s cover those three in this article.
- Safety and Risk Management means not having to worry about the next two in this list
- The exact moment the accident occurs at your company or organization
- Post-accident risk management and loss reduction.
Safety and Risk Management – The Best One of the Workers’ Comp Program Fixes
Safety remains one of the great “unknown workers’ comp program fixes of all. Many Risk Managers have beaten their heads on their desks trying to qualify and quantify proving the existence of the black swan. I heavily suggest reading the passage from that link. The passage below was taken from the linked page so that you do not have to flip through many screens.
The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying that presumed black swans did not exist – a saying that became reinterpreted to teach a different lesson after black swans were discovered in the wild.
The theory was developed by Nassim Nicholas Taleb to explain:
- The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
- The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
- The psychological biases blind people, both individually and collectively, to uncertainty and to a rare event’s massive role in historical affairs.
Unlike the earlier and broader “black swan problem” in philosophy (i.e. the problem of induction), Taleb’s “black swan theory” refers only to unexpected events of large magnitude and consequence and their dominant role in history. Such events, considered extreme outliers, collectively play vastly larger roles than regular occurrences.:xxi More technically, in the scientific monograph Silent Risk’, Taleb mathematically defines the black swan problem as “stemming from the use of degenerate metaprobability”.
Please notice the bolded statement in the preceding paragraph. Is that not risk management and safety in Workers’ Comp or any other area of insurance?
Workers’ Compensation safety also enables the company to ask their carrier for Scheduled Credits to their policy. Some states allow up to 25% reductions in the premium algorithm.
Exact Moment of The Accident
Every employer or organization, no matter how small or large should have a reporting and medical referring plan of action. Two of my Six Keys to Saving On Workers’ Compensation are:
- Reporting the claim immediately to your carrier or TPA – delaying the reporting or trying to pay a small claim with cash or health insurance has never really worked for any company that I have worked with over the years. Claims festering will take care of the delay. An ignored medical-only claim that is actually a major claim ready to happen is the worst of the worst to try when starting a loss reduction program. To avoid the twilight zone phone call from a medical provider, and with the advent of online reporting, this key is now more easy to put in place.
- Immediately referring the injured worker to competent, industrial medical treatment has saved the day for many employers. Good medical treatment avoids claims festering and allows a much easier time with the following post-loss reduction strategies. Even if the State allows the employee to seek out their own medical treatment, the injured employee will usually use the services of a local physician that the employer suggests for the claim.
- A side note – I have presented and written often on this very true statement – Most of the claim is over in 48 hours. The tone for the claims has been set; the claim is now with the claims adjuster (hopefully), and the injured employee has sought medical treatment – whether directed by the company or on their own.
Post-Accident Loss Reduction
If your company or organization covers the previous section with immediacy, this area becomes so much easier to accomplish after the initial accident. The two main post-loss reduction workers’ comp program fixes are:
- Return to Work – Check my last article for coverage of the return to work program or RTWP. If you have accomplished the two previous action plan components, this one becomes much easier as your claims adjuster, rehabilitation nurse, and treating physician can easily become de facto team members to return the injured employee to gainful employment. If a recession looms, then returning the employee to work becomes an extreme cost-saving measure and benefits the employee greatly.
- Employee treatment – Do you see how the first three bullet points enhance this area? Those three actions result in an employee that feels (actually knows) that they have been treated with respect and kindness during the claims process The new term for that nowadays is employee advocacy. I do not use that term. I am an old schooler and say employee treatment. As a side note, an E-card from Hallmark is a very inexpensive yet effective way to keep an employer in touch with the injured worker. It is $13 a year for unlimited cards. All you need is the employee’s email address.
The Workers’ Comp program fixes do take some time and effort to accomplish and document for later use in case of an accident. Safety remains the elephant in the room.
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