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Best Practices for Effective Workers’ Compensation Claim Management

Workers Compensation Claim ManagementOver the last few years, the workers’ compensation market has experienced significant challenges. Many carriers are struggling to restore profitability for this key commercial lines product, as rising loss severity rates combined with overall medical spending have driven compensation costs higher.

According to the Federal Government’s Centers for Medicare and Medicaid Services, U.S. health care spending grew 4.3 percent in 2016 and is expected to grow 6.2 percent on average through 2022. That said, employers can help keep claim costs down by staying vigilant while effectively managing workers’ compensation claims, which can result in a less severity, lower claim amounts, and more improved outcomes.

So what are these best practices for keeping compensation claim management effective?

Early Reporting

Effective workers’ compensation claim management begins at the time of the injury. According to a report by the National Council on Compensation Insurance (NCCI), delays in reporting work-related injuries can increase workers compensation claim costs by up to 51%.

Their studies also show that injuries reported between one day and two weeks from the time of the accident have a significantly lower average claim cost than those reported after two weeks. Interestingly enough, injuries reported on the day of the injury (day zero) also have a higher average claim cost than those reported between day one and day 14, but this is likely due to the severity of the injury.

The NCCI also notes that medical cost decreases exponentially each week following an injury, indicating that indemnity cost rises faster than the medical cost for delayed claims. Similarly, claims reported immediately only involve an attorney 13% of the time, while the percentage of attorney involvement for claims reported after four weeks increases to 32%.

All these numbers point to how valuable early reporting can be in helping employers effectively investigate a workplace injury and allow them to collect helpful evidence before too much time has passed. It can also reduce the frustration an employee has when going through the process of filing a claim, decreasing the likelihood of the employee escalating the claim further.

Recovery Time for Injured Workers

Traditionally, employers will give the injured employee time to completely heal their injuries before returning to work. However, implementing a transitional work program can enable the injured employee to perform valuable work during their recovery, lessening the cost of lost time claims, and increasing overall morale for the employee as well as their peers.

The longer an injured worker is away from work, the harder it becomes for them to return. A transitional work program allows injured workers to retain their experience in the workplace and lessens the rate of turnover, lowering the potential cost of having to hire and train additional workers.

Monitor Employee Recovery

Another benefit of a transitional work program is that it makes it easier for an employer to monitor the employee’s recovery. Outside of work, a quick social media search or a phone call to check in with the employee can provide an employer with valuable information about the employee’s activities.

Employers should be aware of the restrictions placed on the injured employee by their physician and can determine whether the employee is following them or not. During the recovery process, it is important for employers to maintain frequent contact with the employee and ensure they are following the physician recommendations not only to ensure optimal recovery but also to keep claim costs down.

About ASIA Workers’ Compensation

Associated Specialty Insurance Agency, Inc. has been “The Workers’ Compensation Specialist for Brokers and Agents” for the past two decades and is committed to providing brokers and insurance agents across the East Coast with expertise and services to develop a Workers’ Compensation policy. For more information about how we can assist you with claims management, anti-fraud measures, and more call (610) 543-5510 to speak with one of our professionals.

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