Prompt Injury Reporting A Benefit For All

Unfortunately, national reporting delays by employers average 10-14 days according to a 2001 white paper study, First Report of Injury: Impact on Claims Costs by Anne Engleman and Patrick Vice.

Why the delay?

It doesnt seem to have much to do with difficulty in claims reporting. Online reporting, provided by many of todays leading insurance companies, has simplified the process enormously. Traditional methods like phone, mail and fax are still available, too.

The trouble with delayed reporting may have more to do with lack of education. Many employers simply arent educated on the importance of prompt reporting and early claims intervention, and they certainly dont promote its importance to their employees. Without this emphasis, both employers and employees may not realize the impact of prompt reporting.

Employer and employee attitudes are another culprit. Many would rather see how the injury develops than report it immediately. The one exception is catastrophic injuries, which are usually reported the same day. This is logical considering their devastating nature. But less severe injuries like back injuries or carpal tunnel are often reported after the injury develops adversely.

For employers who are prompt in reporting injuries, there is an enormous cost savings. The Engleman and Vice study showed that claims reported within two weeks of an injury were 18 percent more expensive than claims reported within one week. The costs increase from there, rising to as much as 45 percent if reported more than five weeks from the date of injury.

And claims like carpal tunnel and back injuries have some of the highest incremental claims costs the longer theyre not reported. The more such injuries are put on hold and medical treatment delayed, the longer the recovery time, the more extensive the time off from work, and the more expensive the claim for both the insurance company and the employer.

Prompt injury reporting is a big plus for workers comp medical providers, too, especially because it decreases the risk of litigated claims. The 2001 Vice and Engleman white paper noted that a national insurance carrier found that 22 percent of all claims were litigated when reported within 10 days of the injury. Litigated claims increased significantly to 47 percent when reported more than 31 days from the injury.

A reduction in workers comp fraud is another benefit. One of the best defenses against such illegality is prompt reporting. When an extended amount of time passes from the date of the injury, eyewitnesses are less likely to remember the incident, physical evidence is lost and an accident investigation becomes next to impossible to conduct.

Given these effects, more than 40 states have penalties for not reporting claims in timely fashion. One state in particular, Missouri, is working to amend its law in 2004 to give the Division of Workers Compensation authority to enforce sanctions against late reporters–be it employers or workers comp providers.

Several other states require insurance companies to file claims electronically. This new system will determine whether the breakdown in late reporting occurs with the employer or the insurance company by logging the exact date when each entity reports the claim.

What can insurance companies do in the meantime?

Continued education is key. Workers comp providers should communicate the benefits of prompt reporting to employers, who should, in turn, promote the benefits to employees.

Employers must understand that prompt reporting allows for the timely payment of claims benefits–a foremost concern with injured employees.

They must also understand that fast reporting ensures appropriate medical treatment is sought, which prevents, or at least controls, the adverse development of the injury.

In states like Missouri, prompt reporting will also ensure employers avoid financial penalties.

Insurance companies must also continue to make claims reporting easy. The days when every detail of the injury is needed before the claim can be reported should be long gone. Rather, todays methodology should allow for the incident to be reported, with details to follow.

Employers must come to understand what insurance companies have long known–workers comp is here for the protection of injured employees and their employers. Why not give them the best start following a workplace injury by encouraging employers to report injuries promptly? The benefits that result will be a plus for everyone involved.

Tim Jackman is vice president of claims, for Missouri Employers Mutual Insurance based in Columbia, Mo.

Reproduced from National Underwriter Edition, May 12, 2003. Copyright 2003 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.