What ‘Managing’ a Comp Claim Entails
What does it mean to manage a workers’ compensation claim? What good comes to the business owner who does so?
The second of these is the easier question to answer, so let’s start there.
As detailed in this space last week, the number of illnesses and injuries suffered on the job in California--what workers’ comp insurers call claim frequency--has remained constant in recent years. On the other hand, the cost of the average claim--claim severity, in insurance-speak--stands at $23,500, up about 30% in the last five years.
What these facts mean is clear:
* If illnesses and injuries are occurring at a constant rate even as the economy of California expands (and changes), employers probably have workplace safety by and large under control.
* If the cost of the average claim keeps going up, however, they could probably do better in managing claims--maybe a lot better.
Hence, if you want to do something about your workers’ comp costs, you attack claims management. If you succeed, the good news is that you may keep your workers’ comp costs in line even if premiums jump for other employers. And you may fatten your bottom line.
What does it mean to manage a workers’ comp claim? For starters, it means controlling the treatment given to your injured worker. State law allows you to dictate the choice of treating physician for a full year if you send the worker to one of the dozen or so health-care organizations offering workers’ comp care in California. One of these organizations, CompPartners Inc. of Irvine, operates statewide; another, Priority CompNet Inc. of Torrance now operates in Southern California and hopes to go statewide soon.
State law also allows you to pay for certain minor injuries yourself without involving your insurer. Insurers resist the practice because they fear it robs them of information on workers’ comp risks, but the employer who pays directly for the treatment of such injuries gains a crucial lever of control.
Managing the workers’ comp claim also means controlling the information it generates--a big undertaking, given the way the system moves information around now.
Indeed, those who work in the health-care industry in general and in the workers’ comp business in particular flounder in a sea of paper. The physician who treats your ailing worker fills out a report detailing the injury or illness, the probable cause, the plan of treatment, the prognosis and so on.
Massaged again and again, the information on this report goes to you, to your insurer, to the state, and to anybody else involved in healing your worker and getting him or her back on the job--specialist physicians, physical therapists, your claims administrator, the consultant who audits your claims and rides herd on your insurer, and countless others.
Every time your ailing worker gets help from anybody who stands to earn a penny from the workers’ comp system, the event generates a report that makes the rounds of many people. Indeed, any time anyone anywhere along the workers’ comp food chain does anything to anybody, somebody has to report the fact up and down the line.
Most of that reporting happens on paper, and that’s the problem.
If you begin to suspect that the murky world of workers’ comp needs to learn to spell the word “computer,” you’re absolutely right. Outside of workers’ comp, the computer makes people efficient workers and so brings down the cost of their labor, transforming information into data and speeding its flow in ways unimagined by those who formed the workers’ comp system in the early days of this century.
Workers’ comp, on the other hand, remains mired in that time, and as the next century dawns, the cost of the average claim is rising because paper moves slowly. By the time you, the employer, learn you have a claim that could be headed toward litigation, it’s often too late.
“When you’re injured on your own time, only you and your physician and your insurance company are involved,” says Ron D’Acchioli, whose Pacific Palisades company, Electronic Medical Consultants, distributes a software package designed to tame the paperwork tiger. “But when you’re hurt on the job, you suddenly have an army of participants in your claim, and all of these people need timely and accurate information on what’s happening to you. If they don’t have the information, they can’t manage the claim, and it doesn’t matter whether you get too much or too little medical attention--because in the end it’s going to cost a lot.”
The software D’Acchioli distributes, ComPro, was developed by Care Alliance Inc., whose founder, Dr. Phillip Wagner of Eureka, Calif., is a widely known expert on workers’ comp. The software seeks to control what medical professionals do for injured workers by detailing the protocols they follow for most of the illnesses and injuries suffered on the job, including broken bones, cuts, muscle strains and the like.
The software also keeps all parties in communication via modem, and it, like good accounting programming, alerts everybody involved when things don’t proceed as they should. Thus the employer knows exactly what is happening to the injured worker as it is happening--and thus can step in before the worker calls a lawyer.
Other software packages on the market include StellarNet, developed by StellarNet Inc. of San Francisco, and StolaSystem, developed by Stolas Group Inc. of Fresno.
“If you control the care given by the treating physician and keep all the parties in the workers’ comp continuum in constant contact, you get to the heart of managing workers’ comp,” D’Acchioli says. “Otherwise you play catch-up, and by the time you learn about your problem, it’s costing more money than it should. Case management means doing something now, not six months from now.”
Columnist Juan Hovey may be reached at (805) 492-7909 or by e-mail at jhovey@gte.net.
