Employers frequently misunderstand how workers’ compensation should be applied in various situations. Work-place-related incidents occur daily that are of varying degrees of severity.
Smart Business spoke with David Weir, president of UPMC Work Partners, about the importance of employer familiarity with workers’ compensation and its impact on every level of the workplace.
What workers qualify for compensation?
Workers’ compensation is a state-mandated benefit that compensates a staff member who suffers a work-related injury or occupational illness.
The program was established to reimburse injured workers for lost wages and reasonable medical expenses that are a result of an occupational injury or illness. ‘Reasonable medical expenses’ typically means all costs related to an employee’s medical care such as doctor visits, X-rays, physical therapy and medications.
In Pennsylvania, employers must provide coverage for all employees, including seasonal and part-time.
What can an employer do to manage the cost of workers’ compensation premiums?
This can become complicated, particularly when a case is in litigation or complex medical issues are involved. Several basic elements comprise all well-managed programs.
- A solid loss prevention and safety program potentially can reduce the number of workers’ compensation cases. It can get tricky, but if you can keep employees from getting hurt, it is a great first step.
- Access to prompt quality care when an injury/illness occurs is critical. The key here is to establish medical panels with physicians/medical providers that have experience in the types of injuries or illness that you expect to occur. You should also cover the geographical area of your employees, and have an understanding of workers’ compensation laws, along with your company’s return-to-work policies and practices. It is important that these providers communicate with the people managing the claims.
- A structured transitional or return-to-work (RTW) policy enables the injured worker to remain in a temporary job assignment while recovering from the injury. In developing an RTW program or transitional work policy, it is recommended that you consult legal or vocational experts.
What cost-containment tools are available?
An employer can utilize a variety of tools to minimize his or her costs while still providing excellent coverage for employees.
One key tool is establishing a customized physician panel that can accommodate the type of work-related illnesses and injuries that an employer can anticipate occurring in the workplace. Under Pennsylvania law, the employee must obtain treatment from one of the physicians on the panel for the first 90 days. This arrangement ensures the employee has prompt access to medical care, minimizes time lost from work and provides preferential pricing.
Other tools include making a transitional/modified work assignment available to the injured employee, and utilizing strong pharmacy, physical therapy and diagnostic network programs.
What should an employer know about managing claims?
An important element is to use a professionally trained and experienced claims adjustor/examiner. That person needs to have a reasonable case load about 120 to 150 files. The adjustor needs an adequate support staff and a user-friendly technological system to effectively manage those files. Otherwise, what you are doing is processing claims, not managing those claims. Effectively managing claims can take weeks off the amount of time a claim stays open and can save an employer wages and/or medical dollars.
Many employers choose to have their workers’ compensation claims managed by an outside party that can oversee the entire operation.
Often, the outside party will use a team approach. The team should include claims examiners, claims technicians, nurse case managers, vocational specialists and others. But what everyone should understand is that the most important person on the team is the employee. Keeping the employee motivated and cooperative is essential in speeding recovery.
We like to call managing claims an art form. You need the right tools, you need the right experience and you need to be able to recognize its true costs.
How do you know if your workers’ compensation claims are being effectively managed?
To successfully manage workers’ compensation, you have to measure your program’s performance. If you can’t measure it, you can’t manage it. That’s as true of workers’ compensation as it is in other areas of business. You need to know what you are paying this year versus last year, the frequency of claims, the total number of lost days and the total lost production. Effectively measuring the program can identify trends, focus prevention and help create accountability for low-performing areas.
DAVID WEIR is president of UPMC Work Partners in Pittsburgh. Reach him at (412) 454-8720 or email@example.com.