Back to basics with claims managementWritten by David Marchione 14 April 2010
As we are winding deeper into 2010, many employers are still feeling the effects of 2009 from a compensation perspective. With the economic downturn, many employers had to make difficult employment decisions. Many workers were laid off, companies were downsized or closed altogether.
From a workers’ compensation perspective, such economic activities often lead to increased costs for employers as claims management activities become more difficult and/or impossible. Consider that if an employer has one or more workers performing modified duties following a workplace injury, and they are forced to lay off workers due to a shortage of work or downsizing initiative. If those workers are at a disadvantage in the labour market, they may receive additional payments and/or services from the compensation board. This leads to increased accident costs and may result in a substantial impact for the employer in terms of their experience rating: a double-whammy, where employers have fewer workers, but end up with premium surcharges from the compensation board.
In an attempt to operate more efficiently, claims management becomes more important than ever as a cost containment measure. It is time to focus on the basics, contain costs where you can and remove costs if possible.
Although it can often be difficult to offer modified duties to workers following a workplace injury, it is important for employers to realize that such accommodation is required under human rights legislation as well as under the compensation system.
Further, employers are not required to force workers back to work, only to offer them work that is within their functional abilities. Work with the injured employee to identify any functional limitations they may have and determine what parts of their pre-injury job they can perform before moving them to something completely different. Consider accommodation by allowing discretionary breaks for stretching or rest. Follow up with the injured employee regularly to discuss their treatment, progress, and any changes required to the work. Identify any issues in dispute and advise the compensation board immediately.
Remember to exercise your right to appeal adverse decisions of the compensation board if you disagree with them. Consider appealing decisions on initial entitlement to claims, entitlement to wage loss benefits where suitable work has been offered, or decisions determining that work is not suitable. A successful appeal may result in substantial savings to the organization if accident costs are removed.
Compensation boards are often able to relieve employers of some or all of the costs of a claim where it is caused or becomes prolonged due to pre-existing medical conditions. Although this is something that should be reviewed by the compensation board during the adjudication process, it is not always done.
Consider requesting a review for cost relief, if applicable. Employers may also appeal decisions regarding cost relief, whether it be the quantum allowed or if it is denied altogether.
Be sure to thoroughly investigate incidents to determine all the facts and if any other parties were involved. If the incident was caused in whole or in part by a third party employer, consider requesting a transfer of the costs to that employer. Under the compensation system, employers are generally prohibited from suing each other, just as workers are generally prohibited from suing their employers. However, the compensation board may be able to remove some or all of the costs of an accident if the incident was caused by a negligent third party.
We are increasingly being asked to do more with less. We need to maintain quality while increasing efficiency in order to protect the bottom-line. When it comes to workers’ compensation matters, it is important to always focus on the basics: prevent accidents from occurring, and if they do occur, manage the aftermath and contain the costs.
Insurance premiums are a necessary part of business, but why pay more than we have to?
Published in Legal Columns