The National Council on Compensation Insurance Inc. (NCCI) reports that medical services now represent 60 percent of Workers' Comp claim costs. In the past, indemnity costs made up the biggest part of the Workers' Comp claim.

From provider networks to prescription plans to medical audits, there are a number of measures available to help companies contain medical costs.

But the economy will drive many employers to turn to additional measures, brokers and insurers say. Here are three strategies that work.

1. Workplace Safety

One elemental but critical step in any plan to keep medical costs down is concentrating efforts on workplace safety.

With large employers retaining big chunks of their Workers' Comp obligations under large deductible plans, they have to redouble their efforts on preventing losses in the first place, observes Mike Stankard, a Detroit-based managing director and the industrial-materials practice leader at Aon Risk Solutions.

2. Bogus Claims

While establishing a culture of safety is essential to prevent workplace injuries, employers also should be guarding against bogus claims, Stankard says.

In recent years as the economy soured, employers have faced spikes in Workers' Comp claims—not all of them legitimate—when some workers who feared layoffs or knew they were pending filed claims to secure income after their jobs were lost.

Establishing ongoing testing of various job-related physical functions, such as hearing, gives employers a baseline measure they can track and respond to quickly at the first sign of a problem—rather than after a worker has filed a claim, according to Stankard.

3. The Right Hires

Some manufacturers are seeing an uptick in orders and are rehiring, which brings up a third important element in controlling Workers' Comp costs: avoiding hiring workers who pose high claim risks.

“Data analysis tells a story of hot spots around an organization,” says Stankard. In many cases, the analysis takes employers back to the point of hire and their ability, or lack thereof, to match hires to a job. One step that can help: making sure the job description adequately characterizes the demands of the job.

Filling jobs with the workers who are best suited psychologically for those positions will help prevent injuries; it will also help prevent myriad indirect costs associated with a Workers' Comp claim, according to Scott Higgins, president of commercial accounts at Travelers, which offers clients psychological profiles of job candidates.

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3 Tips for Controlling Workers&rsquo; Comp Medical Costs

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