Archives for December 2019

WCRI Aging Worker Injury Study versus My Assumptions – Who Wins?

December 20, 2019 By JL Risk Management Consultants

WCRI Aging Worker Injury Study Goes Up Against My Assumptions From Experience

Andy over at WCRI was kind enough to provide me with a recent Flash Report to read over. The WCRI aging Worker injury study covers many of the subjects I have noticed in Workers Comp claim with aging worker injuries. Let us compare my study – that I l kept in my head to the study.

vector graphic human body WCRI Aging Worker injury study

Creative Commons License 3.0 – OpenStax College

Dr. John Ruser (WCRI CEO) and Dr. Bogdan Savych performed the analysis. If you have not read any of Dr. Savych’s studies on what happens to injured employees AFTER a claim is over, you are missing out on groundbreaking info that may cause you to handle your claims or employees differently. Trust me, those studies are worth the purchase and read.

A 17-year-old study may experience a few changes to its conclusions. I will keep it as general here as possible.

NCCI has written a few studies on the aging workforce. I may circle back to their studies next week.

My Assumptions on the WCRI Aging Worker Injury Study

In 2002, I had written a report for a physical therapy firm that was attempting to find out if aging workers required any more or different types of physical therapy modalities.

For clarification, I assumed an aging worker at 62 years and older, the initial Social Security retirement age.

My discoveries were:

Older workers did not have a higher rate of injury – they were more careful and followed safety directions
Older workers as expected did have a longer healing period
Their motivation for return to work was much higher – very loyal employees
#3 above equalized #2 – older workers worked with their injuries even if on a Temporary Partial basis.
Falls were the number one cause of injury
Overall, the risk of hiring an aging worker was no more than the general public.

Recent WCRI study

I am going to quote out of their press release. Dr. John Ruser (who is a great person) made these comments:

“Our goal is to help system stakeholders consider possible challenges from changes in the age distribution of the workforce,” said John Ruser, president and CEO of WCRI. “This includes both the aging of the workforce and the entry of smaller groups of younger workers. Readers can use this information to create a balanced picture of how multiple metrics of workers’ compensation performance differ by age and how these metrics may vary with changes in external age-related factors shaping the population and the labor force.”

Aging workers recovered slightly slower, but not enough to cause a concern
The return to work period for older workers is not longer than the average injured worker
Falls were #1 cause of injury – when I reached 55, my family Dr. gave me the falls at home are the #1 injury by people over 55. I felt older that day.
#6 in my assumptions can be left to interpretation by reading the full study.

Good to Agree With WCRI

We were in agreed on most of the aging worker variables and comparisons. WCRI goes much further into the analysis. If you handle aging worker claims or are a risk manager with aging workers – the study is worth the more than reasonable $15. When you go to the WCRI website, they will also offer you a Medical Price Index study freebies. Check it out. At the end of the study, the injury rates by ages are broken down into every category one can think of in Workers’ Comp.

To learn more about this study or to purchase a copy, visit https://www.wcrinet.org/reports/wcri-flashreport-how-do-claim-costs-components-of-costs-and-worker-outcomes-differ-by-age

Even though my report was 17 years old, I think it agreed overall with the WCRI Aging Worker Injury Study.

©J&L Risk Management Inc Copyright Notice

Frontline Adjusters vs. C-Level Claims Mgmt – Great Rising Medical Survey

December 19, 2019 By JL Risk Management Consultants

Frontline Adjusters Surveyed by Rising Medical Solutions – Free Copy of Results

Rising Medical Solutions surveyed frontline adjusters, and other personnel had their turn at the mic last year. Rising invited any frontline claims personnel to take their survey last year.

pic smartphone survey frontline adjusters questions

Wikimedia Commons – AxBest

I added in an article pleading with adjusters and their support personnel to have a say versus the C-Level Claims and Risk Management personnel.

As I moved up the claims department ladder, I became distant from what was occurring at the claims desks. If you have ever read the Peter Principle, you already know this occurs in every organization.

Rachel Fikes and Rising Medical Solutions out of Chicago, IL, invited me to a one-day think-tank with mostly C-Level claims administrators. The day was an interesting take on how the upper claims echelon views adjusting and processing claims. The meeting was an eye-opener.

Their recent press release includes a link to receive a freebies copy of the survey results. Admittedly, I have not read it yet, but I will over the Holidays.

The talent crisis remains a huge concern. Claims and Risk Management departments are aging. Where will the replacements come from in 2025 and further into the future?

Annual Work Comp Benchmark Study Releases 2019 Report Comparing Claims Leader & Frontline Staff Perspectives

FRONTLINE POLLING IDENTIFIES OPPORTUNITIES TO INCREASE ALIGNMENT, CONTEND WITH TALENT CRISIS

Chicago, IL – December 17, 2019 – With an estimated 140.3 million U.S. workers receiving workers’ compensation benefits, frontline claims professionals are personally responsible for managing a total economic outlay of nearly $100 billion dollars in benefits paid annually. Coupled with the industry’s talent crisis – with an imminent mass exodus of retiring claims professionals and challenges attracting young professionals – the impact that frontline staff have on the industry’s financial viability and injured worker outcomes cannot be overstated.

Now in its seventh year, the Workers’ Compensation Benchmarking Study – for the first time ever – surveyed 1,282 members of this critical talent constituency to ascertain how their views mirror or differ from the 1,800-plus claims leaders who participated in prior research. Reprising questions from past surveys, the 2019 Report not only provides recommendations to improve overall operational performance, it also provides strategies for how to best incentivize and retain the frontline talent pool.

“We’ve got a ‘perfect storm’ threatening the workers’ compensation industry right now,” says Rachel Fikes, chief experience officer and study program director at Rising Medical Solutions. “Frontline claims professionals are the largest and most influential employee population in our industry, yet, very little research has been conducted with them to date. Adding frontline intelligence to the study’s cumulative data can help organizations advance claims management and talent practices, as well as confront the increasing stakes of attracting young professionals to our industry.”

The 2019 Report examines frontline perspectives on topics such as:

Ranking of core competencies most critical to claim outcomes
Claims functions that frontline staff spend the most time on
Effectiveness of systems / tools in managing best practices
Assessment of job meaningfulness
Investment in new hire and senior staff training, and whether it’s considered adequate
Ranking of company benefits that frontline staff most value
Understanding of advocacy-based claims models
Assessment of technology and data’s effectiveness in performing current job
Views of technology delineated by years of claims adjusting experience
Usage rates of various analytic programs
Ranking of medical management training, and whether it’s deemed adequate
Ranking of the most important provider quality measures

As in prior years, the 2019 Report will be available to all without cost or obligation as a contribution to the workers’ compensation industry. The 2019 Report may be requested here.

Please only request the report through the link. It is a free report. If the results do not look like what you would have responded, Rising Medical had the survey open for months in 2018 with invitations to all frontline adjusters and claims personnel to respond and register their opinions. If they decide to re-survey claims personnel, then jump on board and fill out the survey.

Great job Rachel and Rising Medical!

©J&L Risk Management Inc Copyright Notice

2020 Self Insured Workers’ Comp Resolutions – Staying the Course

December 17, 2019 By JL Risk Management Consultants

2020 Self Insured Workers Comp Resolutions – Not Changing Success

The 2020 Self Insured Workers Comp Resolution centers around sustaining success in your program and fixing a few issues that may be costing you dearly. Some of these resolutions come from the old resolutions.

Wikimedia Public Use – Mr. Matté

Search self-insured resolutions for suggestions from the past.

You are paying directly from your budget. Following payment patterns become critical if you have incurred several claims. Monitoring the outflows of claims payments cannot be just an exercise in reviewing a loss run. You have to dig deeper to the granular level of individual payments. Remember, the adjusters are spending directly from your accounts.
Those festering medical-only claims usually turn out to be your worst nightmares. Watch the claims closely that have no Indemnity paid but have a large amount of medical paid quickly or a building medical reserve with no closure. Claims festering becomes a ticking time bomb if these claims are not monitored.
Is your company still large enough in a state to justify self-insurance? Companies change locations quickly. Many states require a minimum of liquid assets and bonds per state, not per company. Watch the minimums in each state.
Having a working relationship with your claims adjusters becomes a must from day one. See #1 above. The adjusters in your TPA become quasi-employees as they are spending directly out of your budget. One of the first tasks we often perform in a self-insured review involves establishing which adjusters are working on what claims. Most claim adjusters welcome emailed questions if they are not vague or argumentative.
Obtaining and understanding your LDF (Loss Development Factor). Yes, your company may have gotten away from the E-Mod system. LDFs become your claims and risk management GPS. Many software packages will produce LDFs. The inputs into the equations sometimes cause confusion and skewed numbers. If you do not feel comfortable calculating your LDFs, seek out assistance.
Becoming self-insured is not a fashion statement. I have analyzed and advised many self-insureds to stay where they are in the insurance process. Just because you are now large enough to be self-insured does not mean you should take steps to leave the E-Mod system behind.
Setting your level of reinsurance can be tricky. Most potential self-insureds think that $250,000 is the only level. Many active reinsurers reinsure worker’s comp self-insureds from $100,000 per claim. Yes, the insurance is more expensive than $250,000 per claim. One has to stop and think if they would have any claims that would split between $100,000 to $250,000.
Asking the State for assistance. States have become much more helpful to self-insureds. Each state’s Department of Insurance does not want to have a bucketful of failed self-insureds on their lists. Assistance with self-insurance applications seems to have increased over the last 10 t0 15 years. Not too long ago, the process was almost a guessing game.
Looking at other insurance markets. The alternatives to self-insurance have become a cottage industry of sorts. Many consultant companies, agencies, and captive managers aligned their services as alternatives to self-insurance without incurring the full risk. These companies have quietly placed themselves in certain markets and performed well.
Intensify the use of My Six Keys. The keys have helped self-insureds very often over the last 20 years. See this page for the Six Keys. You probably already know them. The keys have not changed since the 1980s.
Medical networks become more critical to self-insureds success over the years. Having an industrial minded physician with a good bedside manner makes claims costs go down. Remember, you are spending directly out of a budgeted account. Return to work becomes tantamount to your program’s success.
Your program will likely take hits over the years. Not every year can be chalked up to a banner year. Risk is risk. Expect the best but prepare for the worst (reinsurance, medical networks, return to work program, etc.).
Keep your C-Level Executive or company owners updated on how the program progresses over time. Many times, I, as a consultant, informed the Execs what was going on in their programs. A truncated loss run with a mini claims status works most of the time. Do not operate on an island.
Watch the budget for expenses (ALAE) that are not related directly to claims payments. Private investigators, defense attorneys, rehabilitation nurses (well worth it), and other ALAE are now being paid directly out of your budget. In some states, the costs to handle and facilitate claims totaled more than the claim payouts (Ouch!)
Look at the E-Mod system for a few pointers. Even though your company pays all the workers’ compensation costs, step back from payments, and analyze the risks. The number of accidents you may have in a year may look small in total. However, the E-Mod system looks at the number of claims per year being riskier than just one disastrous claim. Any one or more of the smaller claims can turn into a huge claim. A claim is a bundle of risk. Many claims equal a snowball of risk going down the hill. Rating bureaus have adjusted their formulas to reflect an increased risk with a group of claims vs. one bad claim. Why did they adjust the numbers? They have databases that show repetitive accidents cause a higher risk for a certain employer.

I could post many more resolutions for self-insureds. Many times I write articles pointed towards non-self-insureds. This article was purely for the 2020 Self Insured Workers Comp resolutions. Good luck in 2020.

©J&L Risk Management Inc Copyright Notice

2020 Workers Comp Resolutions – Make Your List Now And Check It Twice

December 13, 2019 By JL Risk Management Consultants

2020 Workers Comp Resolutions – Starting With A Clean Slate

Your 2020 Workers Comp resolutions begin with the obvious – start the list now in late 2019. I usually build off the previous years’ lists.

blackboard 2020 workers comp resolutions blank

Public Use License -Andrzej 22

Next week, I will publish a list for self-insureds.

This year let us start with a clean slate for our 2020 Workers’ Comp resolutions and go from there.

Check the resolutions that I wrote each year for the last 10 years for ideas. You can type resolutions in the search box. The resolutions should come up in date order – newest to oldest.
Were there any surprises in your Workers Comp program? If so, find out why they occurred so they will not become worse in 2020 and beyond.
Read your current Workers Comp policies, including the endorsements. If you have questions, email your agent.
Read your current Workers Comp loss runs for ALL claims over the last 10 years. The new analytics packages examine much longer time spans than just what your E-Mod covers. If you have any questions, email your adjuster.
Dust off your claims reporting guidelines. With the smartphone society we live in – speed of information becomes very critical at the beginning of a claim.
Update and clarify your medical treatment network. Medical providers change over time. Are you using your carrier’s medical networks for additional savings? Do you know where to send injured employees with certain injuries? Does your original treating physician know where to refer your injured employees?
Create a job bank. Do your treating physicians know what jobs you offer and what light duty positions are in place if an injured employee returns to work.
Review your return to work program. Accommodating injured employees with light-duty jobs can save an employer thousands on just one claim. The days of an employer only allowing a full-duty return to work are coming to an end.
Trust of the employer before an accident causes a quicker return to work and better claims outcomes – multiple WCRI studies verified this fact over the last 5 years.
Explore alternative coverages such as PEO’s, self-insurance, captives, etc. if you must have a Mod below 1.0. Many contractors, including governmental, require that their subcontractors have an E-Mod of 1.0 or below. Having an E-Mod of 1.2 when your company needs a 1.0 can wipe out 80% of an employer’s business overnight. Unfortunately, NCCI and the other rating bureaus have become a de facto credit bureau. Is it fair?
Analyze your premium audits very closely. Does it look right? Many independent contractors are now being added into the audits. Certificates of insurance are golden in this situation.
Join and become active with an association of similar companies. For some reason, I have found over the last 25+ years that companies that join and participate in their related associations have lower Workers’ Comp costs. I have never pinpointed the exact reason.
If your company expands into other states, those states’ Workers’ Compensation rules and laws may be totally different. Local defense attorneys usually have summary cheat sheets that cover the state’s WC rules in a few pages.
Monitor any of your subrogation files using a diary system. Do not leave claims money on the table and walk away. We see this often in WC files. Make sure the adjuster writes the initial claim letter against a third party timely.
Get online access. I can tell you after reviewing claim files since the 1980s, online access to your claims saves time, aggravation, and premium dollars. A loss run lets you know what has occurred in a claim. Online access lets you know what is occurring now on your claims.

Many resolutions are employer-specific in Workers’ Comp. Feel free to add your own to the list. What are your additional 2020 Workers Comp resolutions?

©J&L Risk Management Inc Copyright Notice

Employers Cheat Themselves On Workers Comp Claims – Four Ways

December 12, 2019 By JL Risk Management Consultants

Employers Cheat Themselves On Claims Without Realizing It – Ways To Stop Now

The four ways that employers cheat themselves on Workers Comp claims cause many insureds and self-insureds to pay extra without realizing it. Follow along as I cover each of them.

Wikimedia Commons License – FaceMePLS

In summary form, the four ways are:

Adjusters time – a little secret revealed
Claims review – the timing is crucial
Ambiguous First Reports of Injury – making the adjuster scratch their heads
Self-Insureds – we only need enough reserves to make the payments this week

Adjusters’ Time – Not An Infinite Commodity

All Workers Comp adjusters work off a diary system. What does that mean to you – the employer? An adjuster spends a budgeted amount of time on each claim in their claims load.

The squeaky wheel gets the oil does not work here. The more time you as the employer wrap the adjuster’s time up with endless questions and updates (especially the dreaded phone call for an update), the less time the adjuster can spend properly adjusting the file.

No adjuster is an island. All adjusters working a diary system move from claim to claim very quickly. Workers Comp adjusters have 13 or more main tasks to perform every day. Most adjusters work 50+ hour work weeks.

Email the adjuster any questions you have after you have looked up the claim online. Ninety percent of the questions you have on your claims sit online in the adjusters’ action plans and progress notes. Take a look online. You may be surprised at what you are missing in the claims process.

Badly Timed Claim Reviews – Massive Time Waster – When Employers Cheat Themselves

No, not all claim reviews consist of an employer wasting their time. However, many end of year claims reviews may end up in smoke due to the timing of the review.

I used to go on December journeys traveling to and also to welcome employers to the claims offices to perform reviews. If the renewal was the next July 1st, then the December reviews may not be that timely.

The employer’s UNISTAT date(unless self-insured) should determine when the claims reviews should take place. The outstanding reserves peg into the Experience Modification Factor (E-Mod) 180 days after policy expiration. If your renewal date is March 1st and you are reviewing files with the claims staff in December, that may be a waste of time.

The Total Incurred would have already figured into your E-Mod on August 30th. The file reserves in December are not going to be that helpful making employers cheat themselves out of accurate figures on the reserve timing. (Ouch!)

Ambiguous First Reports of Injuries

Most states’ First Reports of Injuries (FROI) enable employers to accurately describe the injury to the claims staff. Sending in an ambiguous FROI may make the adjusting staff have to overwork a workers comp investigation at the most critical time in the file – the first 48 hours after a claim occurrence.

Wise employers will attach any police reports (car accidents) or any initial medical treatment and witness statements or at least a list of the witnesses to the claim.

Employers cheat themselves by making the adjuster spend too much time correcting or discovering the specifics of the claim. The clock is ticking. An adjuster having to decipher an FROI wastes crucial time at the start of a claim.

Self-Insureds and Stair Stepping – Dangerous Way To Pay For Claims – The Pain of IBENR

Over the years, I have received many requests from self-insured employers to increase the reserves just enough to cover the indemnity and medical payments for that week or month.

The small increases (stair-stepping) compares to using the map functions on your phone but only for five miles at a time. If an employer does not know the complete directions at the start of the claim, increasing the reserves just enough to pay a bill may end up with the self–insured employer lost in the future of the claim.

IBENR (Incurred But Enough Not Reported) a cousin IBNR (Incurred But Not Reported) exacts a heavy toll on a self-insured Workers Comp program. A wise actuary recognizes a pattern of stair-stepping. The actuary that sets your Loss Development Factor (similar to an E-Mod) usually ramps up the expected values to completely close out the claims.

Fixes For The Problems

Budget your contact time with your adjuster. Use short and direct emailed questions if needed. Calling will only cause the adjuster to have to review the file and then get back to you – Employer cheating themselves on their adjuster’s limited time.
Find your UNISTAT date ASAP. The UNISTAT date is usually 18o days after policy expiration. Use that date as your guide to do file reviews with the adjusting staff. I have written numerous articles on setting up a claims review diary in this blog. Check out those suggestions.
Completely fill out the FROI’s. One unfinished blank can be costly. Attach any initial medical treatment and list of witnesses to the accident. Be extremely verbose. The more info the adjusting staff has on hand at the first of the claim, the better the results for all, including the injured employee.
Self-insureds – set healthy and accurate reserves at the start of the claim. Reserving just enough to pay bills means you are hunting for numbers in the dark. Many analytic packages can help you with reserving. Your Third Party Administrator (TPA) will usually not allow just enough reserves to cover bills. The TPA’s and actuaries know how harmful sever under-reserving can be to a self-insurance program.

Employers cheating themselves could have been too strong of a statement. Catching your attention was the goal.

How did I come up with these four? I have been tasked with reviewing many claims this year. One night I turned off the computer in disgust and said these employers are cheating themselves and may not know it.

Now you do.