Mastering Workers’ Compensation Costs
Table of Contents (PDF)
Chapter 1
Workers Compensation Insurance Basics
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
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
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 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?
- Employee
- Supervisor
- Middle Manager
- Risk Manager
- Medical Director
- 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
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 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
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
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
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 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
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
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
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
- 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
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
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
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
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 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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