Best Practices for Your Workers’ Compensation Program

As an industry-leading Third Party Administrator (TPA) recognized for our progressive approach to claims management, we are regularly asked “What can my company do to better to control our workers’ compensation program?” Organizations have many areas of focus through which they can mitigate workers’ compensation costs. We’ve compiled a top-ten list of time-tested areas of focus that have proven to generate powerful positive results. From experience, we have found that the most successful approach is the adoption of a comprehensive program management plan rather than the integration of only one or two concepts.

There is no time like the present to assess the strengths and weaknesses of your company’s program. Worth noting is the reality that most effective workers’ compensation programs are found within companies where the importance of workers’ compensation is deeply ingrained into the overall organizational culture. This can take years of management commitment at all levels, supporting the culture through communication and focused initiatives – time to get started!

1. Safety — The most effective and successful way to avoid workers’ compensation costs.

  1. Identify areas of risk and cost drivers
  2. Implement an injury prevention program
  3. Educate
  4. Enforce

2. Pre-Employment and Hiring — Hiring the right people for the job.

  1. Employment interviews
  2. Background checks
  3. Drug screening
  4. Functional capacity testing

3. Train Supervisors and Managers — Improves awareness, consistency, participation and results.

  1. Provide training manuals and presentations
  2. Communicate programs, procedures and time frames
  3. Assist supervisors with difficult claims
  4. Support Return-to-Work initiatives
  5. Develop and communicate expectations and metrics

4. Educate Employees About their Rights and Responsibilities — Reduce litigation and improve employee satisfaction.

  1. Provide notice and information about the process
  2. Insist on compliance with procedures
  3. Expect timely reporting

5. Prompt Reporting of Claims — Early notification allows for thorough investigation, timely delivery of benefits, better management, and reduced litigation.

  1. Develop a procedure – Training material and forms
  2. Identify intake personnel – Consider Nurse In-take or Triage
  3. Identify First Aid claims

6. Thorough Investigation — Early and frequent contact identifies issues, develops rapport with the employee, reduces litigation, identifies fraud, and results in accurate and timely benefits.

  1. Index Search
  2. Predictive Model – A proactive approach to identifying issues sooner
    1. Identify 20% of claims that drive 80% of the costs
    2. Enables the examiner to apply resources to the claim faster
  3. Provide information to the claims examiner
  4. Identify witnesses
  5. Identify subrogation potential
  6. Identify potential fraud
  7. Continue regular contact with the employee

7. Return-to-Work Program — Promote early return-to-work and stay-at-work programs.

  1. On-site RTW Coordinator
  2. Published policy with training
  3. Job descriptions
  4. Communicate to physicians
  5. Limited days of modified work
  6. Accountability and metrics

8. Medical Management — Ensure the quality of care while controlling costs.

  1. Establish a Medical Provider Network (MPN) – control medical access
  2. Pharmacy Benefit Management Program (PBM) – control pharmacy costs, fraud and abuse
  3. Bill review – reduce bills below fee schedule
  4. Utilization Review – control treatment
  5. Nurse Case Management – On-site nurses
  6. Regular communication with the treating physician – actively pursue return-to-work
  7. Independent evaluations

9. Litigation Management — Strategic solutions for fast resolution and cost savings.

  1. Identify Legal Panel
  2. Timely communication and strategy
  3. Consider mediation and alternative dispute resolutions
  4. Evaluate issues and settlement value
  5. Review legal bills for appropriateness

10. Settlement and Claim Resolution — Faster resolution results in reduced costs.

  1. Regular communication with the employee, nurse case manager, physicians, attorney and employer
  2. Focused claims reviews – not just the highest value but claims where the greatest impact can be made
  3. Strategic meetings with employer and TPA to discuss claim handling, general program review, goals and objectives, and metrics to create accountability

As a Third Party Administrator of workers’ compensation claims, we would be remiss not to mention the importance of having a great claim administrator as a partner. This strategic relationship is critical to enabling organizations to solidify, validate and execute an exceptional claims management program.

11. Claim Handling — Communication, Return to Work and Cost Containment

  1. Frequent and effective communication with the injured worker and employer helps to provide peace of mind, reduce litigation and accelerate the life of the claim
  2. A skilled claim examiner can help to facilitate quicker return to work for injured workers. The examiner will know and understand the RTW capabilities of the organization and the injured worker
  3. An effective TPA will help an organization to build and maintain the most effective overall workers compensation cost containment program which will include Medical managed care, legal and investigative service providers. This program will dramatically impact the overall cost of the program