Claims Management

a.) What is the sequence of events when a claim is filed?

The sequence of events that should generally transpire as a result of an injury or an illness are as follows:
— Record the pertinent information regarding the injury/illness. This includes the 6 tenants of information gathering; who, what, when, where, how, and why.

— Report to your claim administrator as soon as practical. Many studies have demonstrated that there is a positive correlation between the speed at which an injury/illness is reported and the overall cost of the event. The claim administrator will create a unique identifying number and open a reserve account (anticipated claim costs for medical and indemnity).

— Review the claim periodically and investigate the cause and effect of its occurrence. This includes the not only the event itself but also includes asking the following questions:
    - Does the claim administrator have all the necessary facts to get the employee back to work as quickly as possible and bring the claim to an acceptable resolution? Close your reserve account as soon as practicable.
    - How does this injury/illness impact the workforce? And are there temporary measures that need to be taken in order to minimize the impact to productivity?
    - What is the likelihood that this type of injury/illness will happen again? Is this injury/illness a logical extension of the work environment, a symptom of a workforce that is poorly trained or careless, or an isolated occurrence that is difficult to predict?
    - Is everything being done that can be done to care for the worker and ensure that they will once again be a valuable part of your workforce?
    - Has all the necessary reporting and recordkeeping measures been completed?
    - In many companies accident prevention is a part of an employees’ job. What was the reason that the employee was not doing their job? The concept of “no-fault” insurance is based on financial responsibility not loss prevention… Whose fault is it that the injury/illness happened?

— Resolve a claim as quickly as possible. The longer a claim remains “open” the more it affects your experience. Resolution always refers to the “closure” that occurs when the causes for injury/illnesses have been identified and measures implemented to prevent them from happening again.

b.) What is subrogation and how does it occur?

Subrogation is the legal term for “standing in the shoes of”, which usually involves the representation of insurance companies seeking to recover on paid losses from liable third parties, including lien negotiation and enforcement proceedings.

Insurance companies who are obligated under their policies to pay their insured’s for property damage or casualty losses, which the insured’s have sustained, have long utilized the doctrine of subrogation. In those situations where the damages appear to have been caused by the negligence or fault of third parties, insurance companies have traditionally exercised their right of subrogation to pursue claims against the alleged third party. By virtue of their right to subrogation, the insurance companies have "stood in the shoes of" their insured’s and brought suit against the wrongdoers. Because the third parties who caused the injuries are the entities who should bear the burden for such injuries, the insurance companies' subrogation rights have generally entitled them to recover.

A related right exercised by insurance companies has been the right to reimbursement from their insured’s in those instances where the insured’s have already recovered from third party wrongdoers. Insurance policies entitling insurers to such reimbursement prevent the insured’s from a double recovery at the expense of their insurance company. This is generally referred to as coordination of benefits.

c.) What are some of the consequences of a disability that results from an occupational accident?

Disabilities can be temporary or permanent. A temporary disability is one where the employee is temporarily restricted from performing their essential duties due to an occupational injury/illness event. The goal in cases such as these are to create an effective Return to Work Program where the employee has access to transitional duties that are approved by an attending physician. These transitional duties can be as simple as flexible hours or the assignment of the employee to a special project. The key is to accommodate the employee’s disability while at the same time keeping them a member of the team. This transitional employment serves as a bridge to regular employment and most importantly helps the employee to maintain their earnings while feeling part of a greater good and that their efforts are valuable.

Permanent disabilities can occasionally occur where the employee never fully recovers from an occupational injury/illness. In cases such as these it is important to evaluate the essential job functions and the permanent restrictions detailed by the physician. In many cases, procedures can be adapted, engineering controls implemented or new techniques devised to accommodate the worker. If the restrictions however, cannot be overcome to allow the worker to perform the essential job functions attempts should be made to permanently accommodate the worker or to reassign them to a different position.

Occupational disabilities can also temporarily or permanently impact the employer’s workers’ compensation insurance costs and/or their ability to shop for a new provider. The carrier of record is responsible for the care of this employee, which can include; hospital bills, physical therapy, prescription drugs, medical/vocational rehabilitation, medical related travel. Compensation benefits can also include payments for lost work time due to temporary total disability, temporary partial disability, or permanent partial disability.

d.) When should the Reserve be closed on a claim?

As soon as practical following the attending physicians release of the worker to resume full-time duties. This is an accounting procedure between the employer and the claims administrator/carrier. Open reserves or unmanaged reserves can negatively impact a companies experience and their ability to control rising insurance costs and/or shop for a new provider. Here is a list of some reserve account management considerations:

— Open reserves on employees that have returned to work and are no longer under the care of a physician. These reserves have cobwebs and should be brought to the attention of the administrator immediately.
— Open reserves on employees that are not disabled and no longer work for the company. These should be investigated and closed appropriately.
— Reserves that are disproportionate with the injury/illness. An injury/illness that is minor should carry a reserve that is proportionate. Remember there are medical reserves and indemnity reserves (medical and wages) track both carefully and learn what is reasonable. Work with your administrator to balance their understanding of the claim with the employee’s appropriate care.
— Open reserves on cases where the employee has returned to work and is essentially fully recovered however, the attending physician has recommended a checkup in the future. This happens a great deal, when is the case closed? Has the physician released the worker back to resume their normal job duties? Is there a risk that the employee can aggravate their injury/illness by resuming full time duties? Has the reserve been adjusted to reflect the cost of the future visit expenses or is it still carrying unsubstantiated amounts for medical and indemnity? These are all questions that should be asked and managed where necessary.

e.) If frequency of accidents affects a company’s premium should all accidents be reported as a claim?

If an accident that results in an injury or illness to an employee is severe enough to require care to be administered by a qualified medical professional, in whatever capacity should be reported as a claim to your claims administrator. It is important to note that generally if the injury/illness is OSHA recordable it is probably claims reportable. There are always exceptions and if you have secured the kind of relationship with your administrator/carrier that you should, a quick call can bring to bear collaborative expertise that is considering the best interests of all the parties involved.