Table of Contents

Mastering Workers’ Compensation Costs

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Chapter 1
Workers Compensation Insurance Basics
  • Purpose of Workers’ Compensation
  • Who Pays for Workers’ Compensation
  • Parties Involved in Workers’ Compensation
  • Benefits for the Employer
  • Independent Contractors
  • Benefits for the Employee
  • Injuries Covered
  • Determining Compensability
  • Aggravation vs. Exacerbation
  • Standard Defenses
  • How Losses Are Categorized
  • Types of Workers’ Compensation Insurance
  • How Losses Are Reported
  • Reducing Your Premium
  • Calculating Your Premium
  • How Mod Affects Your Premium
  • Good/Bad Mod Examples
  • Ways to Reduce Your Mod
  • Unit Statistical Date
  • Types of Insurance Structures
  • Voluntary Markets
  • Alternatives to Voluntary Markets
  • Collateral Requirements
This chapter will help you answer these questions:
  • Can you define the purpose of workers’ compensation?
  • Do you know who pays for workers’ comp?
  • Can you identify the seven main parties involved in the program?
  • What are the five benefits to the employer?
  • Why you need to know 10 differences between an employee and an independent contractor?
  • What are four types of benefits paid to injured workers?
  • Can you distinguish between the various types of covered injuries?
  • How is a work-related injury defined?
  • What is the difference between aggravation and exacerbation of claims?
  • Do you know the difference between statutory coverage and employer’s liability coverage?
  • How does Federal Employee’s Compensation differ?
  • There are six ways losses are categorized. Do you know them?
  • How are losses reported?
  • What is meant by “mod” and how does it affect your premium?
  • Can you name the 13 types of insurance structures?

Chapter 2
Fundamentals of Cost Containment
  • Reasons Workers’ Compensation Costs Are High
  • Who Is in Charge
  • Work Ability Form Properties
  • Who Is Responsible for Managing Workers’ Compensation Claims
  • Additional Costs
  • Who Is Responsible for Managing Workers’ Compensation Process
  • Hidden (Indirect) Costs of Workers’ Compensation
  • Calculating Workers’ Compensation Costs
  • External Obstacles to Cost Control
  • Internal Obstacles to Cost Control
This chapter will help you answer these questions:
  • What are the main two reasons workers compensation costs are high?
  • What is a Disability Certificate and what eight types of information must it include.
  • What are the eight properties of the Work Ability Form?
  • Do you know how to calculate your workers’ comp costs?
  • Do you know how much in Sales it takes to cover workers compensation?
  • Do you know how to calculate how much transitional duty saves?
  • Can you describe external obstacles to cost control?
  • Do you know the four internal obstacles to cost control?

Chapter 3
Training and Building Commitment
  • Implementing a Workers’ Compensation Program
  • Key Training Responsibilities
  • Management Awareness
  • Presenting to Supervisors
  • Conflicting Roles of Supervisors
  • Supervisors Must Be Involved
  • Develop Supervisor Guide
  • Building on Success
  • Consider Use of Tools
  • Bringing Employees on Board
  • Your Company Message
  • Workers’ Compensation Implementation Timetable
  • Facilitator’s Training Agenda
This chapter will help you answer these questions:
  • What are the four steps needed to implement a workers’ comp program?
  • Do you know how to use an Implementation Timetable and Facilitator’s Training Agenda?
  • Who are the two key groups involved in program implementation? What are their roles?
  • Do you know the four best types of employee communication tools?
  • What are the six elements of your message to employees?

Chapter 4
Injury Management Best Practices Roles and Responsibilities
  • Injury Coordinator Best Practices
  • Supervisor Best Practices
  • Employee Best Practices
  • Middle Manager Best Practices
  • Risk Manager Best Practices
  • Medical Department and Medical Director Best Practices
  • Senior Management Best Practices
  • Special Investigation Unit Director Best Practices
  • Legal Department Best Practices
This chapter will help you answer these questions:
  • Who is the pivotal implementer of a workers comp cost containment program?
  • Do you know the three major responsibilities of the injury coordinator?
  • What forms does the injury coordinator need?
  • What are the tasks of each of the following and what forms do they use?
    1. Employee
    2. Supervisor
    3. Middle Manager
    4. Risk Manager
    5. Medical Director
    6. Senior Management
  • Why is the role of the Special Investigation Unit Director important?
  • How does the Legal Department fit into your company’s injury management best practices?

Chapter 5
Reporting the Claim
  • Immediately Report All Losses
  • Critical Issues
  • Reporting Procedure
  • Intake Procedures
  • Essential Intake Considerations
  • Injury Triage
  • Employer’s First Report of Injury
  • What Is Included on the FROI
  • Completing the FROI
  • Penalties
This chapter will help you answer these questions:
  • What is the optimum time period for reporting all claims?
  • What are the four reporting procedure options?
  • How is injury triage used to insure employees receive appropriate treatment?
  • How is the Employer’s First Report of Injury completed?
  • What five pieces of information must be included on the FROI?
  • Why is it important to complete all information in the FROI?

Chapter 6
Post-Injury Response Procedures
  • Post-Injury Response Procedure Guidelines
  • Summary Steps and Format
  • Post-Injury Response Worksheet
  • Implementing Post-Injury Response on the Road
  • Sample Post-Injury Response Procedure
  • Benefits of a Consistent Post-Injury Response
This chapter will help you answer these questions:
  • Why is a post-injury guideline procedures needed?
  • Do you know your companies post injury response?
  • Why does an employer need a visible, well-written post-injury response tool?
  • What are the six summary steps of a post-injury response procedure?

Chapter 7
Communication with Employees
  • Proactive Communication
  • Reactive Communication
  • Keep Complete Record
  • Two Types of Communication
  • Employee Brochure
  • Meeting with Your Employee
  • First Day Phone Call
  • Weekly Contact
  • Weekly Meeting Guidelines
  • Scheduling Weekly Meetings
  • Reducing Attorney Involvement
This chapter will help you answer these questions:
  • What are the differences between proactive and reactive communication?
  • Do you know the elements of both formal and informal communication?
  • Why is it important to have an employee brochure?
  • What are the three most important measures to take to stay in contact with injured workers?
  • Do you know why it is important to send get-well cards to an injured employee?

Chapter 8
Working with Your Adjusters or TPA
  • Claims Adjusters
  • What Is a TPA
  • Adjuster File Assignments
  • Dedicated vs Designated Claims Units
  • Bundled and Unbundled Services
  • Deductible vs Control
  • How to Select a TPA
  • Learning About Your Claim Partners
  • Preparing for the TPA Visit
  • Meeting with Your Claims Handler
  • Chairside Visits
  • Doing a National Rollout
  • Vendor Day
  • Account Handling Instructions
  • Reviewing Open Claims with the TPA
  • Reserving Practices
  • Information Needed to Establish Reserves
  • Reserve Calculation Worksheets
  • Reasons Reserves Are Higher Than Expected
  • Verifying Reserves Accuracy
  • Plan of Action (POA)
  • How to Evaluate a TPA
  • Medical Management Quality Review
  • Quality Control File Audit
  • File Reviews and File Audits
  • Audit Timing
  • File Review Procedures
  • File Audit Procedures
  • File Audit Participants
  • MD Participation
  • How to Control Leakage
  • What Is Leakage
  • Types of Leakage
  • Causes of Leakage
  • Leakage Claim Audits
  • Leakage Identification Checklist
This chapter will help you answer these questions:
  • What is the difference between a third-party adjuster (TPA) and an insurance claims adjuster?
  • Do you know the 17 skill sets to look for when selecting a TPA?
  • What are the five steps to take before meeting with your TPA?
  • Does your company have Account Handling Instructions? How are they used?
  • Do you know how reserves are calculated?
  • How does your adjuster initiate and use a Plan of Action (POA)?
  • What is the difference between initial and subsequent POAs?
  • TPAs are evaluated using eight steps – what are they?
  • Why is it critical to have medical management quality reviews?
  • Do you know how to request a file audit and file review?
  • How is claim leakage controlled?

Chapter 9
Safety and Loss Control
  • How to Develop an Effective Safety Program
  • Initial Assessment
  • Assignment of Roles and Responsibilities
  • Record Keeping
  • What OSHA Requires
  • Select Safety Committee, Chairman, and Recording Secretary
  • Safety Committee Responsibilities
  • Safety Committee Meetings
  • Communication Methods
  • Conduct a Thorough Workplace Assessment
  • Hazard Correction/Safety Work Order Tracking System
  • Develop Written Policies, Procedures, and Programs
  • Accident Investigation Program
  • Education and Training: Employees, Supervisors, and Managers
  • Who Receives Training
  • Safety Equipment Required Signs
  • Communicate Safety Often
  • Safety Awareness Posters
  • Safe Days Posters
  • Safety Recognition and Incentive Programs
  • Employee Screening
  • Hiring Safe Employees
  • Job Analysis
  • Screening Tools
This chapter will help you answer these questions:
  • What is the one key element in an effective safety program?
  • What are the necessary steps your company must take when putting a safety committee together?
  • Why is it important to have written safety policies and procedures?
  • What are the effective ways to use safety awareness posters and recognition and incentive programs?
  • Do you know the four techniques to use when screening prospective employees?

Chapter 10
Wellness Programs
  • Wellness in the Workplace
  • Benefits of Wellness Programs
  • Incentives for Wellness
  • Negative Effects of NOT Having a Wellness Program
  • Types of Wellness Programs
  • Smoking Cessation Programs
  • Weight Control
  • Depression/Anxiety Awareness Treatment
  • Migraine Headache Management
  • Substance Abuse Treatment
  • Drug, Alcohol, and Substance Abuse Policy
  • Drug, Alcohol, and Substance Abuse Testing
  • Putting Wellness Programs into Practice
This chapter will help you answer these questions:
  • What are the benefits of having a wellness program in the workplace?
  • What are the negative aspects of NOT having a wellness program?
  • What are the five most popular employer implemented wellness programs?
  • Why is proactive planning and implementation the key to successful wellness programs?

Chapter 11
Return to Work and Transitional Duty
  • Cost Savings
  • Measuring Effectiveness of Return-to-Work Programs
  • Transitional Duty Policy Overview
  • Benefits
  • Program Goals
  • Drafting a Transitional Duty Policy
  • What to Include in a Transitional Duty Policy
  • Characteristics of Transitional Duty Assignments
  • Transitional Duty Program Pay Rate
  • Estimating the Duration of an Injury
  • Medical Treatment Guidelines
  • Medical Treatment and Comorbid Conditions
  • Using Medical Treatment Guidelines
  • Types of Transitional Duty
  • Modified Duty
  • Using Injury Treatment Guidelines to Estimate Cost Savings
  • Alternate Work
  • Alternative Off-Site Jobs
  • Non-Profit, Volunteer, or Charitable Positions
  • Transitional Duty Tips
  • Putting Return-to-Work into Action
  • How to Identify Transitional Duty Jobs
  • Employees Who Never Return to Work
  • Overlapping Benefits
  • Americans with Disabilities Act (ADA) Key Points
  • Coordinating Workers’ Compensation with Federal and State Leave Statutes
  • Workers’ Compensation, ADA, and FMLA Interactions
  • Case Study
  • Working with Unions
This chapter will help you answer these questions:
  • Does your company have a transitional duty policy (TD)?
  • What are the 11 elements of a transitional duty policy?
  • How do you measure the effectiveness of your return-to-work programs?
  • What are the nine characteristics of transitional duty assignments?
  • How do estimating injury duration, co-morbid conditions, and medical treatment guidelines effect cost savings of returning workers to work in modified duty?
  • There are four types of transitional duty. What are they?
  • Do you know how to use the transitional duty checklist?
  • Does your employer use a job bank to identify transitional duty jobs?
  • How do overlapping benefits cause disincentives to return to work?
  • Is the company aware of the complexities of the American with Disabilities Act (ADA)
  • How should your company work with unions – six important steps to take?

Chapter 12
Other Indemnity Cost Containment Services
  • Work Hardening
  • Independent Medical Evaluations (IME)
  • Before the IME
  • Customize Medical Inquiries
  • Timeframes for Scheduling and Obtaining IME
  • Functional Capacity Evaluations (FCE)
  • Retraining Programs
  • Telephonic Disability Intervention
  • Translation Services
  • Transportation Services
  • Layoff Planning
This chapter will help you answer these questions:
  • What are the six services often used to reduce indemnity costs?
  • Does your company have a layoff plan?
  • What are the 12 steps to take before a planned layoff?

Chapter 13
Directing Medical Care
  • Gain Cooperation from Medical Providers
  • Types of Doctors
  • Remote Health Services
  • Methods of Doctor Selection
  • If the Employer Can Direct Care
  • If the Employer Cannot Direct Care
  • Eleven Reasons NOT to Select a Doctor
  • Ten Considerations for Your Company Doctor
  • The PRIMARY Treating Physician (PTP)
  • Understand the PTP’s Perspective
  • Information You Need from the Doctor
  • Understanding KEY Medical Injury Terms
  • California Medical Provider Network (MPN)
This chapter will help you answer these questions:
  • Why is it important to gain the cooperation of medical providers?
  • What are the seven types of medical doctors?
  • When selecting a company physician, what 10 criteria will you look for?
  • What are the 11 reasons NOT to select a doctor?
  • What types of information do you need from the treating physician?
  • What are the advantages of creating a medical provider network (MPN)?
  • How is the state of California’s MPN different?

Chapter 14
Medical Cost Containment
  • Medical Cost Containment Services
  • Utilization Review Accreditation Commission Certification
  • Preferred Provider Organizations
  • Injury Triage
  • Telephonic Nurse Case Management (NCM)
  • Field Case Management (FCM)
  • Mental Health Registered Nursess
  • Chronic Pain Programs
  • An Aging Workforce
  • Medical Advisors and Medical Directors
  • Medical Review
  • Independent Medical Evaluation (IME)
  • Durable Medical Equipment (DME)
  • At-Home Recovery Servicess
  • Medical Bill Review
  • Medical Fee Schedules
  • Usual and Customary
  • Hospital Bill Reviews
  • Using a Diagnosis Related Groups (DRG) Review Company
  • Cost Savings Using DRG
  • Medical and Hospital Bill Review Considerations
  • Chiropractic Care
This chapter will help you answer these questions:
  • Do you know the definition of medical cost control and why it is used?
  • What are the 14 available cost containment services?
  • Are your aware of the fee structure of various cost containment services?
  • What is the Utilization Review Accreditation Commission and how is it used?

Chapter 15
Fighting Fraud and Abuse
  • When to Investigate a Claim
  • Types of Investigation
  • Red Flags of Fraud
  • Medical Terminology Used to Identify Malingering
  • Important Times to Use Surveillance
  • How to Use the Results
  • When Not to Use Investigation
  • Reviewing Investigation Reports and Videos
  • Avoid “Good Day/Bad Day” Syndrome
  • Additional Fraud Controls
This chapter will help you answer these questions:
  • Do you know how to determine the appropriate length of REAL MEDICAL disability, i.e., how long an injured worker SHOULD be out of work?
  • Does your company TAKE CHARGE of the injury process immediately after the injury — or are the employees in charge?
  • Do you know the seven reasons to investigate a workers’ comp claim?
  • Do your supervisors know the “red flags” of fraud?
  • Are you using all SIX types of investigation?
  • Do you know the FOUR times NEVER to use investigation?
  • Are your adjusters able to identify medical terminology that signifies malingering?

Chapter 16
Rehabilitating the Injured Employee
  • What Is Physical Therapy
  • What Is Physical Rehabilitation
  • What is Occupational Therapy
  • What is Vocational Rehabilitation
  • Provider Differences
  • Physical Therapy
  • Physical Therapy Management
  • Determining Rehabilitation Needs
  • Reasons for Physical Therapy
  • Measuring Outcomes
  • Doctor’s Reevaluation
  • Determining Therapy Outcomes
  • Physical Therapy Settings
  • Physical Therapy Office Characteristics
  • Physical Therapy Cost
  • Physical Rehabilitation
  • Physical Rehabilitation Networks and Specialties
  • Medical Assessments
  • Cost of Physical Rehabilitation
  • Physical Rehabilitation Facilities
  • Measuring Physical Rehabilitation Outcomes
  • Occupational Therapy
  • Occupational Therapy Management
  • Role of the Occupational Therapist
  • Use Occupational Therapy When
  • Vocational Rehabilitation
  • Use Vocational Rehabilitation When
  • Managing the Vocational Rehabilitation Process
This chapter will help you answer these questions:
  • Can you distinguish between physical therapy, physical rehabilitation, occupational therapy, and vocational therapy?
  • Do you know how to measure outcomes for these four therapies?
  • Do you know the roles performed by each type of therapist in each area?
  • How does each of these four modalities benefit injured workers and bring them back to work sooner rather than later?
  • Why should your company have a solid rehabilitation program?

Chapter 17
Managing Prescription Drug Use and Abuse
  • Pharmacy Benefits Managers
  • Reasons to Use Pharmacy Benefits Management
  • Prospective and Retrospective Components
  • Proactive Drug Management Techniques
  • Authorized Drug Formulary
  • Narcotics for Pain Control
  • Cognitive Behavior Therapy (Pain Management)
  • Pharmacogenetics Testing
  • Addiction Networks
  • Reviewing Your Program
  • Key Selection Criteria for a PBM
  • Prescription Drug Monitoring Programs
  • Toxicology Screening
  • Implementing the Program
This chapter will help you answer these questions:
  • Do you know the main component missed by risk managers in Pharmacy Benefit Management (PBM)?
  • Do you know the six reasons to use pharmacy benefit management?
  • Does your PBM program have both prospective and retrospective elements?
  • Are you implementing the eight PROACTIVE Drug Management Techniques?
  • Does your company consider the THREE PROBLEMS with narcotics for pain control and take preventative steps?
  • Can your company properly review the drug management program of your Third Party Administrator or insurance carrier?
  • Can you identify the key selection criteria for a PBM?
  • Do your supervisors know the “red flags” of drug abuse?

Chapter 18
Claims Resolution and Settlements
  • When and How to Settle a Workers’ Compensation Claim
  • Action Plan
  • Disability Rated Losses
  • Disability Scheduled Losses
  • Jurisdictional Issues
  • Local Influences
  • Include Future Medical in the Settlement
  • Selecting Physicians to Obtain a Fair Disability/Permanency Rating
  • Challenging Impairment Ratings
  • Medical Issues
  • Disputed Issues
  • Offsets Against Other Payments
  • Social Security Disability Benefit Offsets
  • Social Security Reverse Offsets
  • States with Reverse Offset
  • Prior Injury Offsets
  • Subrogation
  • Pre-existing Conditions and Second Injury Funds
  • Availability of Future Employment in the Marketplace
  • Voluntary Resignations
  • Strengths and Weaknesses of Both Sides
  • Negotiations
  • Waivers and Releases
  • Include Medicare in Release
  • Medicare Set-Asides
  • Conditional Payment and Final Demand
  • Pharmacy Component of Medicare Set-Asides
  • Structured Settlements and Annuities
  • Structured Settlement Benefits
  • Structured Settlement Vendor Selection Criteria
  • California Settlement Process
This chapter will help you answer these questions:
  • Do you know when and how to settle workers’ compensation claims?
  • Are you aware of the complex issues to consider before, during, and after a claim is settled?
  • Why is settlement of future medical costs recommended?
  • How can a company obtain fair disability/impairment ratings?
  • How can an impairment rating be challenged?
  • What is the employer’s obligation to Social Security Medicare set-asides?
  • Do you know why structured settlements are an excellent way to settle a claim?
  • Do you know when to use mediation?

Chapter 19
Federal Employees Compensation Act
  • Federal Employees and Workers’ Compensation
  • Paying for FECA Costs
  • Administering FECA Claims
  • Selection of Medical Providers
  • Medical Benefits
  • Lost Wages Federal Employees Receive
  • Permanent Disability or Death
  • Registering as a Federal Medical Provider
  • Challenges in Controlling Costs
  • Traditional Cost Control Techniques
  • Independent Medical Examinations
  • Cost Containment Vendors and Services
  • Gaining Management Commitment
  • Return-to-Work Programs
  • Federal Employees Return-to-Work: Transitional Work (before Maximum Medical Improvement)
  • Defining and Determining Maximum Medical Improvement
  • Transitional Duty Work and Assignment
  • Transitional Duty Barriers Checklist
  • Role of the DOL in Transitional Work
  • Federal Employees Return-to-Work: Alternative Work (after Maximum Medical Improvement))
  • Alternative Employment
  • Vocational Rehabilitation and Retraining
  • Difference between an Impairment and a Disability
This chapter will help you answer these questions:
  • Who pays for federal workers’ compensation claims?
  • What are the differences between federal and private sectors work comp?
  • What elements are considered for transitional duty before maximum medical improvement is reached?
  • What elements are considered for alternative employment after maximum medical improvement is reached?

Appendix A – Glossary of Abbreviations
Appendix B – Documents Referenced in Book


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