How Employers Can Reduce Workers’ Compensation Costs
The eligibility for workers’ compensation is determined via a medical records review. Here are some ways you can reduce workers’ compensation costs.
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Worker’s compensation insurance pays for medical bills as well as lost wages during the period an injured worker is unable to engage in work. The eligibility for this benefit is determined based on a medical records review. Workers’ compensation, a “no-fault” system is one of the biggest expenses affecting small businesses; coverage is required by U.S. states, and rates vary. Costs associated with a job injury can be direct as well as indirect. Direct costs comprise what you pay for your workers’ compensation insurance. Indirect costs involve those associated with adjusting work schedules, training replacement employees, investigating accidents, and putting in place corrective measures. Apart from having to handle lower employee morale and absenteeism, you stand to lose productivity and bear the expenses related to repairing damaged equipment. To reduce workers’ compensation costs, companies will have to limit claims and be diligent about their policy’s coverage. Effective Steps to Take The first thing to do is to develop a written safety control program because this will help ensure workplace safety and fewer claims, and thereby reduced workers’ compensation costs. It is best to incorporate a disciplinary program into the safety program that will hold workers responsible for breaking the rules or award them for correctly following all safety protocols. Such programs will work well only with the endorsement of top management. Responsibilities for safety enforcement in each work area should be delegated to lead workers and managers. A great way to improve safety is by holding regularly scheduled safety meetings and discussions about issues associated with the work environment. It is vital to act immediately when a claim occurs. When an employee experiences an injury on the job, or reports a work-related illness, make a report immediately. Ideally, the first report of injury should be sent within 24 hours to the insurance company so that prompt handling is ensured, and fraudulent claims prevented. Experts believe that immediate reporting of claims can reduce workers’ compensation costs. •
Delayed reporting of claims could result in additional penalties and fines for employers. A recent study by the NCCI (National Council on Compensation Insurance) shows that delayed reporting can increase the costs up to 51%. The longer a claim remains unreported, the more likely is the chance of litigation and increased overall claims costs.
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Another problem that arises when there is a delay in reporting claims is that the claims administrator will find it more difficult to accurately determine the legitimacy of the claim. With the passage of time, it becomes difficult to trace potential witnesses, witnesses may forget details, and hard evidence could be spoiled or lost. Claims not reported to the administrator immediately and end up being denied within the appropriate timelines could be considered compensable as an operation of law.
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When claims are reported immediately, medical care can be provided in a timely manner to the employee. This reduces the number of lost time days as well as the exposure for permanent disability. When quality care is provided at the right time, it also helps reduce litigation rates.
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Immediate reporting also helps determine whether there has been a safety program failure and what could have been done to prevent the accident. Forensic analysis of all accidents helps employers considerably reduce their claims frequency.
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When a claim is reported in a timely manner, the claims administrator can also provide prompt, accurate benefits to injured workers. This in turn boosts employee satisfaction and reduces the chances for litigation. Administrators can also identify potential subrogation cases and preserve evidence involving a third party.
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Immediate reporting is advantageous also because it helps enhance the company’s OSHA (Occupational Safety and Health Administration) compliance, and reduces the risk of exposure to penalties and fines.
Yet another way employers can reduce workers’ compensation program is by encouraging injured workers to return to work. The longer a claim stays open, the more expensive it becomes. Having a good return-to-work program will help injured workers get back to work at the earliest. Employers can consider allowing an employee to work part-time or light-duty hours, and this can be done after consulting with the worker’s medical provider. Return-to-work programs will help employers maintain workplace ties with injured employees, and make them feel happy and less estranged. Fraud is a major concern with regard to workers’ compensation, and can increase costs. Employers suspecting fraud must immediately report the same to the insurance company. To validate the accuracy of the claim, review your policy. A professional employer organization or PEO can also help employers manage their workers’ compensation claims and costs. They can help employers in the following ways.
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Choose a good workers’ compensation plan coverage. They can reduce premiums by negotiating competitive programs with insurance providers.
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Assess workplace safety and help design a reliable safety program
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Resolve claims efficiently when they occur
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Help implement a return-to-work program
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Manage relations with injured/sick employees
Workers’ Compensation Best Practices There are some best practices to follow that will help timely claims reporting, quick provisions of benefit, and reduced costs. •
When hiring, educate every employee that they are required to report all injuries immediately.
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The CEO as well as management staff should take care to regularly reinforce the importance of timely reporting of injuries and illnesses.
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Review your financial incentive programs to identify whether any aspect is unintentionally delaying claims reporting.
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Identify gaps in the education process by analyzing delayed reporting.
Reducing workers’ compensation costs is possible by adopting the right strategies and approaches. Medical claims review companies assisting workers’ compensation attorneys understand the importance of legal counsel when it comes to implementing best practices to reduce claims and costs.
www.mosmedicalrecordreview.com
(800) 670 2809