3 Costly Workers’ Comp Mistakes Employers Make

top 3 costly mistakes employers make with workers comp

In our last post, we spoke with Bradley A. Powell, Managing Member of Droder & Miller about ways employers can improve their workers’ comp process.

Powell joined Droder & Miller in 1986 as a civil trial attorney, working primarily with insurance companies. He has extensive experience as a trial and appellate attorney in the fields of employment issues, workers’ compensation, personal injury and wrongful death, and business risk consulting.

In this post, we examine 3 of the mistakes employers often make when it comes to managing workers’ comp.

Mistake #1: Inability to stay on top of the workers’ comp claim

First, many employers—for a variety of reasons—are unable to keep up with some, if not many, of their claims. Many times different departments are involved or competing priorities get in the way of staying on top of claims. The result: claims are not dealt with appropriately and in a timely manner.

Powell compares managing the workers’ comp process to a mathematical formula: “If you can’t add, subtract, multiply, and divide, you can’t do calculus,” says Powell. “The first part of the claim, the allowance, is critical to what happens afterwards.”

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Mistake #2: Company policies don’t support those who really do get injured or hurt on the job

Organizations need to be set up to do the right thing – first and foremost they must put an emphasis on identifying and reducing workplace hazards proactively. Closely related to this, if an incident or injury does occur, an organization can’t start believing that every workers’ comp claim is fraudulent.

“If a claim should be allowed, and is a legitimate claim, you have to allow it. Get this person medical treatment, and then get them back to work. And don’t penalize them. That’s the key. Make certain that they receive the benefits that they’re supposed to receive,” says Powell.

Mistake #3: Lack of awareness

While employers may make mistakes in the prevention of injuries or during the accident reporting process, Powell has also seen complete neglect of claims in organizations. “Companies need to be sure that claims are being addressed at all stages of the workers’ compensation process.”

For example, if a worker had been on disability benefits for an entire year, and then the organization finds out that it was a simple ankle strain, it can be a hard hit for the company. In this example, indirect and direct costs can cost big money.

Similarly, make sure your people know some of the top signs of workers’ comp fraud or abuse. The more people can be educated and equipped to deal with such situations, the better.

How Consistency Reduces Fraud

There are two key ways to reduce workers’ comp costs: preventing incidents from occurring altogether (culture, incident and near-miss investigation, behavior-based safety practice) and then controlling the costs if an injury does occur.

When you have consistency—consistency in your process and consistency in your application—you help to control such costs.

In part, it’s because as an employer, you are taking an active role in the workers’ compensation claims. “If someone is alleging to have gotten injured, you’re involved in making certain that they receive the proper treatment. On the other hand, if someone is obviously malingering, you need to be certain that the referral to a doctor is being made to assess maximum medical improvement,” says Powell.

“It goes both ways. That’s why consistency is important: The employer is taking care of the people who need to be taken care of, and the employer is also making certain that those people that are defrauding the company, and defrauding the workers’ comp system, that they understand we are going to fight them all the way, consistently, in every single claim,” explains Powell.

Consistency Means More Informed Decision-Making

Additionally, when an organization is extremely diligent and thorough in their process and execution of that process, the company’s attorney is much better equipped to show foolproof evidence regarding the claim(s), if necessary.

For example, Powell worked with one organization that had 5 to 8 workers’ comp hearings every week. Once the company created and implemented a strict, consistent process for the collection of workers’ comp, the culture of the company began to shift. Now, there are less than ten new claims each year.

Combined with better ways for reporting and collecting information, it took a year and half, but the company was able to drastically reduce the number of claims it had. “We’ve seen significant improvement in our workers’ compensation claims. In fact, I hardly get any claims anymore,” says Powell.

“If someone’s injured, they are taken care of. They are compensated. But we have very few hearings. If they are not truly injured, we fight it all the way,” says Powell—something the workers are aware of.

“Once you are thorough and strict with how you handle workers’ comp claims, and you’re consistent with obtaining evidence, everything else falls into place. Then you can make informed decisions. But if you don’t have that information, you can’t make appropriate decisions.

Move from Fault-Finding to Fact-Finding

With iReportSource, you can move from fault-finding to fact-finding in order to improve your company’s performance, culture and the bottom line. iReport enables anyone, from anywhere, to report or collaborate, ensuring proactive reporting and quick information collection. Learn more about how iReport can help support real-time, accurate reporting here.

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