One of the most critical aspects of managing workers’ compensation claims is ensuring that injured employees receive prompt medical treatment. Unfortunately, a common procedural mistake can leave employees in a painful and detrimental limbo: the delay of care due to technicalities in insurance coverage. This issue often arises when the compensability of a workers’ compensation claim is questioned, leading to neither workers’ compensation insurance nor general health insurance covering the treatment. Understanding the importance of quickly reporting claims and reducing lag time is key to preventing such scenarios.

Mistake #1: Delayed Care Due to Uncertainty

A significant mistake in handling workers’ compensation claims is delaying medical treatment for injured employees. This delay typically occurs when there is uncertainty about whether the injury is work-related, resulting in neither workers’ compensation nor general health insurance covering the initial treatment. This can have dire consequences for the injured employee.

Example: Consider John, who reports a shoulder injury first thing on a Monday morning. During the initial investigation, it is unclear whether John’s injury is work-related. As a result, the workers’ compensation insurance carrier decides not to pay for the treatment until they determine the claim’s compensability. Simultaneously, because the injury was reported as work-related, John’s group health insurance also refuses to cover the treatment. John is left in a holding pattern, his pain worsens, and his injury deteriorates. By the time the coverage issue is resolved, John requires surgery and extensive rehabilitation.

The Solution: Pay Without Prejudice

The solution to this prevalent problem is the implementation of a Pay Without Prejudice policy. This policy authorizes payment for medical treatment up to a certain dollar amount (commonly $10,000) regardless of whether the claim will ultimately be denied. This approach ensures that injured employees receive the necessary care promptly, preventing minor injuries from escalating into major ones.

California’s Approach: The state of California has successfully implemented a Pay Without Prejudice policy as state law, mandating that the first $10,000 of every claim is authorized for payment. Initially, this policy faced controversy and skepticism. However, over time, positive results have shifted the sentiment, demonstrating the policy’s effectiveness in providing timely care to injured workers.

Mistake #2: Lag Time

Lag time is a critical challenge in the realm of workers’ compensation claims. It affects every aspect of the claim process, particularly the compensability determination. Lag time refers to the duration between the date of injury and the date the injury is reported to the employer, as well as the time taken for the employer to report the claim to the insurance carrier or third-party administrator (TPA). The longer the lag time, the more complicated and costly the claim can become.

The Solution: Improving Lag Time

1. Request Lag Time Reports: Employers should regularly request lag time reports from their carriers. These reports provide insights into how long it takes to report and process claims, highlighting areas that need improvement.
2. Establish a System: Regardless of the size of the workforce, having an efficient system in place is crucial. Different types of claims, such as report-only, medical-only, lost time, and severe injury claims, should be prioritized accordingly. Organization is key to ensuring that no claim falls through the cracks.
3. Prompt Reporting: Implement a rule that any claim involving medical treatment must have the state injury report completed and sent to the carrier/TPA within 1-2 business days. Early involvement of the adjuster can prevent the claim from spiraling out of control.
4. Complete and Accurate Information: Ensure that injury reports are filled with complete and accurate information, including details such as the injury description, treatment location, employee’s personal information, and wage records. Incomplete or incorrect information can cause delays in the claims process.
5. Stay Informed: Risk managers and HR personnel should stay informed about the workplace environment and maintain open communication with supervisors. Supervisors should promptly report injuries to ensure timely processing.
6. Be Involved: Employers must be actively involved throughout the claims process, from initial reporting to light duty management and monitoring claim progress. Regular communication with the carrier/TPA and setting goals to reduce lag time are essential.

Conclusion

Delayed care in workers’ compensation claims can have severe consequences for both employees and employers. By understanding the importance of quickly reporting claims and reducing lag time, employers can prevent minor injuries from becoming major ones and ensure the well-being of their workforce. Implementing policies like Pay Without Prejudice and streamlining reporting procedures are essential steps toward a more effective and efficient workers’ compensation system. By taking these measures, employers can protect their employees, reduce costs, and foster a safer and healthier workplace.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20{c9b670b3c77d807bdd7060c9fc0a99121cc6b184676c9335f3481a95c383dd4c} to 50{c9b670b3c77d807bdd7060c9fc0a99121cc6b184676c9335f3481a95c383dd4c}. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20{c9b670b3c77d807bdd7060c9fc0a99121cc6b184676c9335f3481a95c383dd4c} to 50{c9b670b3c77d807bdd7060c9fc0a99121cc6b184676c9335f3481a95c383dd4c}.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.com/

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.