Why Are My Workers Compensation Costs So

High?

Claim Handling Strategies

Leads Arthur J. Gallagher Risk Management Services, Inc.’s claims practice in the Midwest region and provides senior level expertise in claim negotiation and resolution to client claim problems. She has 30 years insurance claims experience and is quoted in several industry publications regarding holding down claim costs. Past Vice president-Board of Directors-West Suburban CPCU Chapter, holds CPCU and CPD designations.

Barbara Galluppi, CPCU

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Goal of Workers’ Compensation

To return the injured worker as close to their pre-injury status as possible Mentally Physically Emotionally

while protecting the interests of the insured/employer.

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Control Your Claims Destiny

Knowledge is powerThe worse the economy is the more fraud

perpetratedAdjusters have around 175 cases sometimes

more Investigations are the most critical and most

overlooked aspect of a claim and the most costly when poorly done.

Compensability Criteria

Existing employer/employee relationshipFortuitous injury or occupational diseaseArise out of the scope of employment (AOE)Occurred in the course of employment (COE)Causal relationship between employment and

the injury or disease

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Workers’ Compensation Defenses

No employer/employee relationshipNot in course and scope of employmentNo causal relationshipAssault and battery Intentionally self-inflicted injuriesSuicideStatute of limitations

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Member Participation in the Trial/Arbitration Process

Attend all trials possibleLine up employee witnessesCommunicate with counsel

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Employer/Employee Relations Can Obviate Litigation

Maintain contact and communication with injured workers

Assure them they are getting what they are entitled to

Remind them that an attorney would get a good portion of benefits

Advise to wait and see what the insurance company does for them

Work to alleviate their concerns

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“… but doctor, I lift elephants all day …”

Job Analysis

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Internal Claims Management

Have a bank of job descriptions ready to go for normal duties as well as possible transitional duty positions.

Develop relationships with clinics and physicians.Utilize all resources

Claim Administrator Risk Control Broker Work on reserve reductions where applicable.

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Internal Claims Management

First Report of Injury (Original to claim department.) This is the first

report of injury required by the state.Supervisor’s Report

This is your internal report, completed by the claimant’s immediate supervisor.

Notify Loss Control (If applicable.) Immediately correct hazard.

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Internal Claims Management

Witness Statements (If available.) Immediately talk to the injured

worker’s coworkers regarding what they saw, heard, or did not observe.

Results of Internal Site InvestigationMaintain a report of the internal findings, post

accident.Names of CoworkersPrepare a list of the employees that were in the

vicinity of the claimant on the date of incident.

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Internal InvestigationWage Statement

On lost time cases provide the insurance carrier with the injured worker’s weekly wages for the past 12 months.

List overtime wages separately. If overtime is over 50% of claimant’s straight

time, it is included in the AWW.Application for Employment

This should be kept handy for possible forwarding to the claim handler in the event of misrepresentation by the employee.

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Internal Investigation

Daily Log of Activity Phone calls, conversation with claimant, claim

administrator, physician, etc. Chronological reporting of activities regarding

claim and injured employee may be necessary and especially important should you be called to testify at a hearing

–Also aids compensability investigationCopies of All CorrespondenceSigned Medical Authorization

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Excellence vs. Mediocrity

Poor investigations are the leading

cause of lost dollars

Expectations

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Expectations

Three-point contactWitness statementsEmployee statementsEmployee interests, hobbies, family physicians,

medical historyJob descriptionsModified/transitional dutyPrompt payments

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Expectations

Verification of lost time IME’sSurveillance/activity checkMedical/vocational rehabilitationMedical cost containmentSubrogationPrior medical records

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Biggest Fraud PotentialCumulative Trauma

Priors-Trace companiesMedical history-detailedSports, hobbies, special interestsOther employees as resourceJob description/snapshot (Bank them)Normal and Transitional dutyEXACT medical restrictions

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Cumulative Trauma Claims

Obtain the EXACT medical restrictions keeping the claimant off work

Obtain the EXACT offending job duties and tasks being alleged as harmful

Medical history, including the name of the family physician

Prior medical records including Trace America search, if necessary

Sports, hobbies and special interests and other spare time activities of the claimant

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Cumulative Trauma Claims

Job description for regular and transitional dutyPrior employment history and records if possibleComparison of prior medical records with current

records to establish if the condition has changed, is truly an aggravation and to determine when any such alleged aggravation has long since resolved bringing the claimant back to the pre-injury status.

Ask the doctor to comment on causal relationship after all the information is in on prior medical and the job description is available.

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Questions & Answers

Ms. Barbara Galluppi, CPCU

Arthur J. Gallagher Risk Management Services, Inc.Two Pierce PlaceItasca, Illinois 60143630-694-5490

Barbara_Galluppi@AJG.com