How to reduce annual workers’ compensation premium through limiting claim costs

Nick Principe, vice president of claims, CompManagement, Inc.

The Ohio Bureau of Workers’ Compensation calculates an employer’s annual premium based on three factors: the employer’s industry, claim costs and payroll. In order to begin to control claim costs, organizations at a minimum should have written work rules that are enforced uniformly and consistently, implement best practices for injury reporting, and have written guidelines and procedures for supervisors to follow for proper injury investigation.

“One of the most important phases in the life of a claim starts at the very beginning, when the claim is first acknowledged,” says Nick Principe, vice president of claims at CompManagement, Inc. “Every organization should have policies in place for reporting injuries, investigating and documenting accidents, offering transitional duty and having ongoing communication with injured workers.”

Smart Business spoke with Principe about what all employers should be doing when a claim occurs in their workplace.

How do I know the difference between an injury and an incident?

An injury, or claim, is when an employee seeks outside treatment instead of onsite first aid, an accident report is completed and submitted to a supervisor instead of filing an incident report, and a supervisor investigates the ‘accident’ instead of a supervisor investigating the ‘incident’ or ‘near miss.’

What is key information to communicate to an employee prior to any injuries occurring?

Make sure all employees understand the reporting protocol, such as the time frame for reporting, who should complete an accident report and to whom it should be submitted, and whether failure to comply with the company policy could result in disciplinary action.

Failure to properly report injuries also results in loss of calendar and disability days and does not allow the employer to address workplace hazards that may exist.

How do I know if a claim is compensable in Ohio?

Ohio has a ‘no-fault’ workers’ compensation system, which means injuries are compensable regardless of negligence by any party. The only exceptions to this are when an injury results from drugs and/or alcohol; a self-inflicted injury, or an injury resulting in or arising from ‘horseplay.’ With a substantial aggravation or worsening of symptoms, a pre-existing condition can be considered compensable.

Should I always certify a claim?

Claim documentation should be reviewed to determine if, as the employer, you are in agreement with the injury description and each condition listed, and then the claim may be certified. The claim should be continually monitored to ensure that only appropriate medical benefits and compensation are being paid. A valid reason for not certifying a claim is always needed. Rejecting a valid claim only delays recovery time and may increase your workers’ compensation costs. If you believe the claim is invalid, information must be gathered to support rejection of the claim.

What are some key points an employer should look for when a new claim is filed to help with the certification decision?

• Injury reporting: Watch for lapses between the date of injury and the first notice to the employer. This could indicate that the injury occurred outside of the workplace.

• Timing of the injury: Watch for injuries reported prior to holidays or before/after the weekend. Some may view an injury as an opportunity to extend a holiday, weekend or take a vacation.

• Witness statements: Watch for injuries that have no witnesses or that contain conflicting statements. This can lead to credibility issues and opportunities to reject the merits of the incident.

• Accident descriptions are subjective or vague: Watch for accident descriptions that do not paint a clear picture of what happened. You should be able to visualize the accident and draw conclusions from the description. Be on the lookout for changes to statements or inconsistencies in recollection of the accident/injury.

• Work performance: Watch for injuries following disciplinary actions. These types of injuries are often retaliatory in nature and either lack the objective evidence to support them or can be viewed as self-inflicted.

• Multiple claims: Watch for injuries to similar body parts or claims filed around the same time of the year, for example, a reinjury to the same body part or a link to outside activities such as hunting season, sports or hobbies.

How can I prevent significant ongoing costs in a claim if one does occur?

One cost containment strategy that may be utilized is developing a transitional work program. Transitional work is a cost-containment strategy for workers’ compensation that helps injured workers return to productivity in the workplace by providing modified job duties that accommodate their medical restrictions due to work-related injuries. The idea is to return an injured employee to gainful employment activities as soon as possible to avoid the so-called ‘disability trap.’ With transitional work, the injured worker receives a full paycheck with the ultimate goal of returning to his/her original job. The advantages to implementing a transitional work program include a reduction in costs associated with long-term claims, improved productivity, lower injury downtime, improved employee recovery time, increase in employee morale and a protection of your work force investment, as the loss of experienced employees will result in additional training costs associated with hiring new employees.

NICK PRINCIPE is the vice president of claims for CompManagement, Inc. Reach him at (800) 825-6755, ext. 65819, or [email protected]

Insights Workers’ Compensation is brought to you by CompManagement, Inc.