The case of the disappearing claims

INSURED
This case involves a Southern California fit and finish contractor with a $1.2 million Workers’ Compensation annual premium. Because of financial issues, the company does not meet self-insurance requirements.

SITUATION
In 2003, the company’s Workers’ Compensation claims amounted to $535,000. Much of the difficulty in managing the claims process resulted from the fact that the company operated crews in some 50 work sites at any given time.

ASSESSMENT
WorkComp Advisors analyzed the situation and introduced improved claims management processes in 2004. In addition, the Advisors’ Claim Cost Coordinator found mistakes on the company’s Experience Modification worksheet and had them corrected plus reduced filed claims over the last two years by over $127,000 to lower their new Experience Modification Factor.

SOLUTION
In 2004 the Advisor introduced Post Hire/Pre-Placement processes; Medical Clinic Selection protocols and a Supervisor Claims Responsibility Management Program with the support of a trained management process. Supervisors and a new Workers’ Comp Claim Manager were trained in how to control claims including two critical issues:

1. The supervisors were shown the 2003 claims reports so they could see what the premium costs were doing to the company’s bottom line. They understood the message and responded by saying that Workers’ Compensation claims were costing “30 pick-up trucks a year.”

2. A process was set in place in which the supervisors became responsible for discipline, reporting all claims within 24 hours, and checking out job applicants before they were hired to determine the history of job-related injuries. The company’s new Work Comp Claim Manager effectively managed claims and monitored their Early Return-to-Work program.

RESULT
In 2005, a year after the program was put into place, Workers’ Comp claims had dropped to $13,000. The management processes plus the Supervisor Claims Management Responsibility program was then further enhanced to make certain the dramatic gains would continue:

• Each supervisor without a claim during a 12-month period receives a bonus.
• Each year, individual supervisors are given a claims budget and they must stay within that budget to qualify for the annual bonus.

Even difficult Workers’ Compensation situations such as this one can be turned around with the proper expertise and installing a process that changes the culture and delivers continuous results.