According to Kim Sharkey, vice president at The Graham Company, no business is exempt from the possibility of a workers’ compensation claim. “I think every employer in every industry has to worry about it,” she says. “Unless you’re in a firm where most of the staff is sitting behind a desk at a computer, but, even then, you have to worry about such things as carpal tunnel or other unexpected injuries. So I think it impacts everybody’s bottom line.”
Smart Business spoke with Sharkey about managing workers’ compensation claims and the accompanying costs.
What drives workers’ compensation costs and how can they be controlled once a claim arises?
As far as the claims costs themselves, they’re driven by a lot of factors, including medical costs, medical inflation, how well claims are managed by insurers and if you have a return-to-work program. When controlling costs on the back end, the biggest thing is to identify a contact within the organization that’s going to oversee the claims management process. We typically call them claims coordinators. Most of the time they’re involved with human resources type functions already, and they take on this aspect as well. That person works to establish a solid claims management program, part of which is developing relationships with physicians and providers. We help our clients set up a panel of physicians so that when a person gets injured they’re sent to an occupational health provider that knows our client’s business. The goal is to work with those providers to get the person back to work as soon as possible. Returning to work stops the ‘lost wage’ or indemnity component of a workers’ compensation claim.
Is it common for an employer to have relationships with people in the medical field?
Absolutely. We stress that our clients not only develop the panels and have them posted for the employees, but that they also get to know the providers with whom they’re working. We want them to make phone calls and visit the plants and locations so they can see the types of jobs the employees do. Medical providers need to understand the client’s return-to-work program and modified duty, which enables the employee to come back to work even if not fully recovered, and make sure that the physician sees what types of jobs are available with restrictions to get the employee back in the work place immediately.
How much control does the employer have over a workers’ compensation claim?
Ultimately, the relationships with the medical providers are key, because they control how long that employee stays off of work. They treat, rehab and manage the injury. Having the employer work with that physician to make sure that any accommodation can be made to get the employee back into the work place as soon as possible is the key to controlling that overall cost of the claim.
What if the employee is unable to return to work?
If there’s a situation where an injured employee has permanent restrictions, then there are a couple of things you can do. If the employer can accommodate those permanent restrictions and keep the employee working, that would be the first choice. If returning to work would cause an undue hardship or the work place can’t accommodate the worker’s permanent restrictions, in Pennsylvania we have to find that person a job elsewhere in order to get them off of workers’ compensation benefits. If another job is not available at the employer, then we sit down and talk about how maybe a potential settlement would be the best cost control measure. We try to help our clients with a cost benefit analysis of what happens if you can’t take the employee back, if we have to search for another job elsewhere, or if we settle the claim.
How can an employer keep tabs on injured employees?
The biggest key is that centralized coordinator. He or she is responsible for keeping in touch with employees and not just relying on the insurance company or third-party administrator. Find out how they’re doing. Let them know you’d like to have them back as soon as you can and will make a job available for them. You want to make them feel part of the company and you want to make them feel that they do have a job to which they can return. Staying on top of that goes a long way for the ultimate cost of the claim. Stay in touch with them and the physician and make sure that they’re all working together to achieve the best outcome.
Anything else an employer should know?
When accidents occur, it is critical to have solid accident investigation procedures. Ultimately you want to find out why the accident occurred, determine the root cause and then put things in place to prevent that situation from ever happening again. We do a lot of trending and analysis for our clients, analyzing where the claims are coming from and looking at the accident investigations to make sure that all types of programs are put into place to prevent the same incidents from happening. The bottom line is that employers do not want employees to get injured and they want to do whatever they can to create a safe work place.
KIM SHARKEY is vice president of The Graham Company in Philadelphia. Reach her at firstname.lastname@example.org or (215) 701-5278.