Poor RMs Overwhelmed By WC Claims

"Spend that extra nickel-a-day per worker on great loss control and you'll avoid having to spend thousands of dollars on claims," said Paul Stasz, manager of workers' comp at International Paper Company in Memphis, Tenn.

He added that, since claims are inevitable despite the best loss control, risk managers must have standards in place on reporting, investigating and treating the injuries.

The biggest problem in the workers' comp claims process, he said, is selective perception. "Claims are filtered through all sorts of people in a multitude of disciplines–the injured worker, the supervisor, the doctor, the insurer, and hopefully not a lawyer, all of whom have a completely different notion of how the system should work," Mr. Stasz noted.

Despite concerns over potential fraud, he said, when an accident on the job is reported, "for God's sake, show concern. That could be you or your co-worker."

Indeed, he noted that one of his assistants had recently slipped and broken her leg in three places on her way out of a conference where Mr. Stasz was making a presentation. He said he was paged–as he always is when an employee is hurt–only to discover to his dismay that the injured worker was his assistant, writhing in pain in the lobby of the very building where he was speaking. He said he immediately rushed to her aid.

Once a claim is reported and treatment begun, he said, "you must put on your detective hats. It is incumbent upon you to determine if what is claimed to have happened on the job actually did happen."

He urged that written statements be taken from the injured worker, witnesses and the worker's supervisor as soon after the incident as possible.

Data management is critical to keeping on top of workers' comp claims, he said, suggesting that when putting together a risk management information system, a company must determine:

What data do you collect?

Who collects your data, and when?

How do you access the data?

Who else in your company can access the data?

What data do you publish? "This is driven by what you want to accomplish," he said. "Financial control is different from loss control, is different from the demands of different departments within the company."

He also warned that information technology systems and the personnel who run them are not always "user-friendly." He said that IT people are "driven by a 'does it work?' mentality. They couldn't care less about the content. If the output is nonsense to you, but the data is processed at the speed of light, the IT people won't necessarily care."

He advised risk managers to be very clear and uncompromising in what data they need to manage claims effectively, and how they want it "crunched."

Marjorie Manahan, corporate risk manager for Sara Lee Baking Group in St. Louis, emphasized that formal, written policies are crucial to maintain a standard operating procedure for workers' comp claims. She said a written policy should include "essential guidelines, uniform procedures and expectations."

She said the policy then becomes the "foundation" for training supervisors, who she identified as a company's first line of defense in getting to the bottom of any workers' comp claim. "We have boot camps for all supervisors, during which they are indoctrinated with these policies so they know what to expect and how to react to workers' claims," she said.

Timely notification of a claim is critical, she stressed. "Our guidelines require employees to report injuries within the shift period and/or before leaving the workplace," she said. "Reporting an injury after a 24-hour period has passed is considered delayed reporting."

She said communication is key so workers understand the consequences of delayed reporting. "We go over these requirements with all employees as part of their basic orientation, and we make them sign off so they can't say they weren't told," she said. "We explain to every employee that if they report late, it's human nature to be suspicious; that supervisors will ask a lot more questions if reporting is delayed. We make it clear that if medical treatment is delayed for any reason, that might result in the claim's rejection."

Ms. Manahan also urged risk managers to make sure they have their act together on how to proceed if someone is hurt on the job–including something as simple as where to take an injured worker. "Identify medical facilities in advance for every one of your offices, plants and sales zones, so the supervisor knows where to take anyone who is hurt and treatment is not delayed," she said.

"Where appropriate," she added, "provide the mechanism for post-accident drug testing," making sure to comply with any federal or local laws, as well as with any collective bargaining agreements.

Other considerations cited by the two risk managers include establishing proactive return-to-work programs, complying with any government reporting mandates, as well as avoiding any employment practices violations.

In addition, risk managers must keep a scorecard on frequency and severity of claims, lost-time, light-duty days, cost per employee and per claim, as well as the claim mix between lost time versus no lost time due to injury. "That's the only way to tell how you're doing," she said.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, May 6, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.