Workers’ Compensation: Timely Claims Reporting and Reducing Workplace Injuries

Taiba Solaiman

Taiba Solaiman has been a TDIC Risk Management analyst since 2007. She speaks nationally representing the company and advises dentists on professional liability risk management.

ABSTRACT: Dental practice owners might have complex feelings about workers’ compensation, and they would not be alone. While workers’ compensation coverage is an indispensable part of owning and running a business, it adds cost and impacts time management. But what is the alternative?

Workers’ compensation insurance provides benefits to employees who suffer work-related injuries and illnesses. It helps pay for medical treatment, temporary disability payments, permanent disability benefits, supplemental job displacement vouchers, vocational rehabilitation and death benefits.

In California, workers’ compensation came into effect more than a century ago. In January 1918, liability for compensation was imposed on employers “without regard to negligence,” creating what is known as a “no-fault system.” That change provided a specific benefit: Even if an employee caused their own workplace injury, they would still be eligible to receive workers’ compensation benefits.

The change also protected employers from employer-liability civil suits related to workplace injuries or illnesses.

Most common workplace injuries are preventable. Repetitive motion or ergonomic-type injuries and slips or falls are common, but by far the most frequent types of injuries in the dental office are cuts, punctures, scrapes and needlesticks.

Sharps incidents put the injured employee at risk for exposure to bloodborne pathogens such as hepatitis B, hepatitis C and HIV. According to a recent claims analysis at The Dentists Insurance Company, more than 70% of injuries reported fell into the needlestick category, making it the one of the greatest occupational hazards in the dental office.

Untimely Claims Reporting Results in Greater Indemnity Payout

How can a dental practice potentially impact the frequency and severity of workers’ compensation claims? Consider the following claims statistics.

From April 2019 to March 2020, 712 workers’ compensation claims were reported to TDIC. Of those, 442 claims were reported on time, within one day, to TDIC. Below is a breakdown of the cost associated with handling these claims:

• 136 claims involved a total indemnity payment totaling $1,609,946.02. • 58 litigated, totaling $1,233,188.85. • 78 nonlitigated totaling $376,757.17.

• 5 were incidents only (no cost).

• 301 claims involved medicalonly[1] costs totaling $210,301.30.2

Nonlitigated claims reported in an untimely manner cost more in total paid than those reported on time. A total of 270 claims were reported in an untimely manner, later than one day, to TDIC between April 2019 and March 2020. Below is a breakdown of the cost associated with handling these claims:

• 83 claims with total indemnity of $1,106,849.64 paid. • 24 litigated, totaling $625,247.47. • 59 nonlitigated, totaling $481,602.17.

• 4 incidents ($0)

• 183 claims involved medical only[1], costs totaling $112,196.47.2

Overall, the claims that were not reported on time resulted, on average, a 13% greater indemnity payout (a difference of $1,497.70 more per claim).

Litigation Resulting From Delayed Reporting Increases Costs

One reason for the increased payout: litigation costs. Delays in reporting often lead to litigation, which increases the costs exponentially. Costs of litigating claims can run from $10,000 to $20,000 per claim, and regardless of the claim’s merit or lack of, it must be defended and proceed through the workers’ compensation claims process.

Early reporting aids with cost containment and reduced exposure. The claims adjuster can work with the employee to coordinate any necessary evaluations and associated treatment early in the process with the goal of returning the employee to the workplace. Doing so keeps the employee engaged and reduces costs associated with hiring temporary staff.

California Law Requires Employers To Carry Workers’ Compensation With Some Exemptions

State laws for workers’ compensation can vary depending on the location of the business. Each state sets its premium amounts and benefits based on the state’s economy and the risks its businesses face. In most states, the requirements are based on the number of employees and type of business. Therefore, factors such as size, type and location can affect the cost for workers’ compensation coverage. Rates are calculated based on worker classification codes, payroll and experience modification number.

California employers who have at least one full- or part-time employee must carry workers’ compensation coverage. The state defines an employee as a person working for an employer, where the arrangement is expressed or implied, oral or written, for lawful or unlawful unemployment.

Certain exemptions from the requirement to have workers’ compensation coverage in California exist and include sole proprietors (who can elect to have coverage), executive officers and directors (if they fully own the business), LLC members (who don’t work in the business) and independent contractors.

Claim Reporting Requirements in California

Requirements for reporting a workrelated injury can vary from state to state and are dictated by the workers’ compensation laws within that state.

Most states generally require an employer to provide a workers’ compensation claim form to the employee within one working day after becoming aware of the workrelated injury or illness. In California, for example, Labor Code section 5401 states that once an employer has knowledge of an injury, they have only 24 hours to provide the employee with a DWC-1 claim form. (More information on state-specific workers’ compensation laws is available on the U.S. Department of Labor’s website.)

The workers’ compensation system is designed to provide an employee with the necessary treatment and evaluations to assist them with returning to the workforce as soon as reasonably prudent. An employer should not attempt to determine whether an employee should receive a medical evaluation following an incident. Failure to report an injury is a violation of the workers’ compensation regulations and can result in substantial penalties to the employer.

Reporting an injury on time is important for cost containment and exposure purposes. If not reported, an employee may see their own physician, who may make a diagnosis and provide opinions on causation that may not be accurate or necessarily work related.

Reducing Potential Workplace Injuries

An injured employee can require time off work, potentially resulting in a loss of productivity, the necessity of hiring a temporary replacement and low staff morale if additional duties need to be covered while the injured employee is out.

While a single workplace accident can have a big impact on your practice, workers’ compensation isn’t the only obligation when it comes to protecting staff. Managing risk in dental offices is critical to contributing to their health and safety, and the best way to avoid costs is by avoiding an injury.

The following recommendations can help practices increase their focus on safety and reduce potential workplace injuries:

• Develop a safety and wellness plan. This plan should cover all levels of employee safety and health with the encouragement to report hazardous practices or behavior.

• Educate staff. Train staff about the importance of following safety measures.

• Research safety vulnerabilities. Pay attention to common accidents and develop strategies to keep them from recurring.

• Provide personal protective equipment (PPE). PPE is required and must be enforced during hiring and in meetings and spontaneous monitoring.

• Have adequate staffing. Overworked employees may suffer from exhaustion and cut corners to meet or exceed expected duties.

• Don’t take shortcuts. Most accidents happen when staff members are being rushed.

• Inspect and maintain all equipment. Small repairs intended as temporary “fixes” may unnecessarily put staff and patients at risk when the equipment eventually fails.

• Monitor safety measures. Reinforce safety measures at every opportunity, in staff meetings and when hiring a new employee.

• Keep an orderly workplace. Poor housekeeping can ultimately cause serious health and safety hazards.

TDIC provides “Safety Best Practice Recommendations,” an online resource to guide dental offices with additional details.

Creating a Workplace Culture of Safety

Developing a safety culture may significantly reduce workplace accidents. Understanding the potential causes of workplace injuries is a dentist’s first step in helping to prevent them. The practice owner can then take an active role in the prevention of workplace mishaps.

Creating an environment in which employees are comfortable reporting a workplace injury also provides the opportunity to address the issue before the injury worsens or escalates into a more serious problem. Employees who understand the practice’s safety and wellness plan are better prepared to follow it and take responsibility for their own safety and that of their co-workers, especially when they are confident that their employer prioritizes their safety too.

Employees may be fearful that reporting an injury will reflect poorly on them — perhaps indicating inattentiveness. Or they might be hesitant to add more “work” to anyone’s schedule by reporting an incident at the end of a long day. Ongoing training, monitoring of safety measures and addressing potential hazards or workplace injuries promptly will set clear expectations and go a long way toward establishing a culture of safety.

That culture, like the workers’ compensation system, equally benefits the employer and employee. The alternative is just too costly for all.

REFERENCES

1. Medical only: Medical-only claims are those that involve an injury where the employee only receives medical care and treatment.

2. These costs are not included in the indemnity payment amounts.

THE AUTHOR, Taiba Solaiman, can be reached at Taiba.Solaiman@tdicins.com.