The Fundamentals of Work Comp: What Makes Your List?

Editor's note: In today's blog, Tim has a "baker's half dozen" of ideas for you. "Baker" reminds me of homemade rolls and cookies, which in turn reminds me of the rapidly approaching holidays. This is our last blog for 2008. We’ll be taking a break for the next couple of weeks, but we'll be back in the new year with more ideas to inspire work comp cost and productivity improvements. We are grateful for your readership, comments and emails and wish you and yours every blessing of the season. - Kory Wells

I am an avid goal setter. Each year in December I spend a lot of time setting specific goals for the coming year. This year, I decided to invest some time in viewing about 24 hours of material from Jim Rohn called Jim Rohn’s Weekend Leadership Event. I would strongly recommend this DVD set (and, no, Mr. Rohn doesn’t know me from a hole in the wall and I get no incentive for recommending his material).

In what I'd call a corollary to the 80-20 rule, Mr. Rohn suggests that about a half dozen facts and ideas will make 80% of the difference in any area you study. So what are those half dozen things in workers comp?

I love the way Mr. Rohn presents complex concepts in a straightforward manner. Each word he uses is carefully chosen, and the message is always precisely on target. Today, I was listening to him discuss “fundamentals.” In what I'd call a corollary to the 80-20 rule, Mr. Rohn suggests that about a half dozen facts and ideas will make 80% of the difference in any area you study. If someone says, “Let me teach you the 50 fundamentals” you need to be concerned, he believes. This concept challenged me to wonder: what are the half dozen fundamentals of controlling workers comp costs for a typical employer?

I’ve developed the following list and provide these without explanation and in no particular order. I invite you to comment, or even to suggest I’m wrong (nicely, of course):

#1 – Have robust hiring practices that include the use of a conditional offer of employment and a robust medical screening that does not let 100% of the people through.

#2 – Actively measure and intentionally improve the safety culture of the workplace.

#3 – Have a well-trained injury management coordinator with clear authority and responsibility to oversee the rapid recovery and return-to-work of any injured employees.

#4 – Train supervisors to understand the importance of their relationships with employees and to optimally manage the post-injury supervisor / employee relationship.

#5 – Have a robust return-to-work program that ALL employees are aware of (there is some hidden psychology here) that gets employees back to work before indemnity payments start - a big benefit in ERA states!

#6 – Establish and nurture a working partnership with a medical clinic that will ensure effective medical screenings and, in the case of an injury, the right treatment plan that will lead to the most rapid return to work possible.

#7 – (I’m going for a baker’s half dozen here.) Work with a WorkCompEdge Member Agency that is like-minded about these fundamentals and can help you implement needed business changes.

Are these the principles that would make your list? Perhaps more importantly, do you even have such a list? And how do you get motivated to make a list - and then do something with it? This is a dicussion we'll continue in the new year!

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Fitting the Pieces Together: Extraterritorial Issues in Work Comp

In America, we have a Uniform Plumbing Code to protect the health of the nation (not to mention the sanity of plumbers and builders) and a Uniform Commercial Code enacted in all 50 states for a standard method of dealing with business law questions involving commerce. Unfortunately, no such code exists for our nation’s employers and employees for the purposes of work comp.

Knowing how the pieces fit together is especially challenging in work comp due to the lack of a national standard.

As states passed work comp laws starting in the early 1900s, each state established its unique work comp system. This resulted in a mishmash of laws, benefits, compensability and eligibility from state to state. There are many different, non-uniform work comp laws in the United States (state, territorial and federal). The state and territorial laws, which exist in every state, Puerto Rico and the U. S. Virgin Islands, are especially non-uniform in terms of which kinds of employments are covered, dollar amounts of wage benefits payable for different kinds and degrees of disability.

The complexity of our varied work comp system presents challenges for employers in three key areas:

• Establishing proper coverage in jurisdictions in which the employer has operations or other jurisdictions the employer has employees working, living or traveling in


• Understanding what jurisdiction benefits the employee can collect


• Determining what rates (premiums) will apply. (This subject mirrors in its complexity the coverage and benefit structures of the various state and federal laws. We will briefly discuss pricing and only as it relates to extraterritorial issues).

A full article addressing these areas in detail is available to WorkCompEdge members here on our wiki in pdf format.

The hodgepodge evolution of work comp laws has resulted in uneven or nonexistent uniformity across state jurisdictions, which creates challenges for employers when confronting extraterritorial issues, including questions of coverage, benefits and pricing.

Work comp coverage in various jurisdictions may depend on where workers reside, employer operations sites, licensing, and the willingness or reluctance of carriers to accept “broad” language in the work comp policy.

On the Information Page of a work comp policy, the insurance agent for the employer must have the insurance carrier list the states the employer operates in or expects to operate in at the inception of the policy. In a separate section, states are listed where an employer expects it may have employees working but the work in those states will begin after the effective date or renewal date of the policy (with some exceptions). The policy requires that the policyholder (employer) must notify the insurance company at once if the employer begins any work in any state listed in this section. Broad wording (suggested in the full article on this topic) is recommended to assure coverage in most jurisdictions even in unforeseen circumstances.

When a state is listed on the work comp policy, essentially we have attached hundreds of pages of work comp statutes and laws and thousands of pages of case law for that state. Add multiple states and I would argue that, although the basic policy is only about six pages long, the addition of statutes and case law make the work comp policy the largest and most complex policy an employer buys.

Employees working, living, traveling in or through other jurisdictions frequently present special work comp challenges including state specific time limits, variations in benefits, state law, reciprocity agreements and other issues.

To compound the challenges, work comp pricing is often driven by pressure to minimize work comp costs. This presents risks to employers as carriers may deny claims or charge some or all of a claim back to an employer. Errors in extraterritorial issues can result in devastating financial consequences to employers.

Knowing how the pieces of work comp policy and law fit together is especially challenging due to the lack of a national standard. For agents and employers, it is critical to understand each state’s work comp laws, customs and practices and, in doing so, to secure the broadest coverage possible. They also need to understand that any claim can result in a dispute as to which benefits apply as well as other extraterritorial issues. In these cases, it is best to work through these issues constructively with employees rather than engage in a standoff.

If you're a WorkCompEdge member, I hope you'll refer to the full article on our wiki for much more depth on the subject of extraterritorial issues.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Rock on with our videos: Getting Started with WorkCompEdge

(Part 3 of the Series "Getting Started with WorkCompEdge")

Okay - because you're a dedicated reader, you already know to use the Getting Started with WorkCompEdge survey and the WorkCompEdge proposal report in ModMaster to help your company or client decide which work comp issues - and WorkCompEdge modules, if you're a member - your company should focus on first.

We admit - our training videos may not bequite as exciting as a rock concert. But they're another way we can help you rock with WorkCompEdge! Visit our training videos now

So you've utilized the survey and/or the report, identified the topic(s) which most need your attention, and now you're chomping at the bit, as we say in this part of the country, to get started with a specific module in WorkCompEdge. (Or, if you're still not a WorkCompEdge user, you're curious to see what you would do next.) But how do you know what to do within the module? And how do you know that you're not overlooking some wonderful features we envisioned and painstakingly labored to include on the site? If you're asking such questions, then you're ready for

Step 3 - Watch our introductory videos

As you've hopefully noticed by now, there are videos all over WorkCompEdge. Our spokesperson Holly starts talking as soon as you hit the site, and each of the 15 modules has its own vignette which illustrates the concepts of that module. But for this step, I'm talking about a couple of different videos, both narrated by the one, the only, the legendary Tim Coomer, our CEO.

When you have 9 minutes, watch the Introduction to WorkCompEdge video for an overview of the site's navigation, module components, goals and more.

When you have 90 minutes, watch the WorkCompEdge Quick Tour. Yes, we realize that a 90 minute quick tour is a bit of a misnomer. But what can we do? Tim's the boss. At this very moment, for example, he's blasting circa 1987 Guns N' Roses from his corner office and there's not a thing any of us can do about it. So, he calls this video a quick tour, we all call it a quick tour. Seriously, as you might expect, this video goes much more in-depth and includes an overview of each of the 15 modules.

If you don't have many minutes at all, you can still view these videos a segment at a time. They both have menu options so you can click to the parts that interest you most - or watch a little while, then come back and click in to where you left off.

Finally, this is a good time for me to mention that there are other videos to help you with specific workbooks associated with several of the modules in WorkCompEdge. Don't miss them on the WorkCompEdge WebHelp page at www.specificsoftware.com/wcehelp/. All these videos are another way we can help you rock with WorkCompEdge.

More in this series "Getting Started with WorkCompEdge: Part 1 Part 2

http://www.SpecificSoftware.com
http://www.WorkCompEdge.com

From Birds to Cats: WorkCompEdge, One Step at a Time

(Part 2 of the Series "Getting Started with WorkCompEdge")

In last week’s blog I talked about tackling work comp issues “bird by bird,” so it seems only natural that this week we should move, in some fashion, to a discussion of cats, as in, “there’s more than one way to skin a cat.” This common idiom certainly applies to the many ways you could decide which work comp issues - and WorkCompEdge modules, if you're a member - your company should focus on first.

Print a copy of the Getting Started with WorkCompEdge survey and consult with other staff before you complete it online. Don’t worry if you’re not very sure of how to answer all the questions - it's meant to be an intuitive guide to identifying the work comp issues you should focus on first.

As we discussed in the last blog, the WorkCompEdge proposal report in ModMaster provides an excellent first step - and analytical method - for determining where to start making improvements to your company’s or client’s work comp picture. But we also think there's merit in a more intuitive approach, so that brings me to

Step 2 - Answer some key questions about your company's operations in our Getting Started with WorkCompEdge survey.

This survey, located at www.specificsoftware.com/wce/survey.htm, consists of 19 questions to help a company assess its work comp strengths and weaknesses. Each “question” is really a statement with which you can strongly agree, somewhat agree, somewhat disagree, strongly disagree, or indicate neutrality. All questions have a ranking of importance which we’ve predetermined, but your positive or negative answers will, of course, further impact that ranking. Leaving a question blank is the same as a neutral response.

OK, now for the tricky part. Depending on the size and structure of your company, it may be difficult for one person to immediately answer all 19 of these questions. We have two suggestions:

1. Print a copy of the survey and consult with staff including the controller, insurance or risk manager, safety team leader, human resource personnel, and CEO to get these questions answered before you complete the survey online.
   
   
2. Don’t worry if you’re not very sure of how to answer all the questions. This is meant to be a more intuitive approach than the WorkCompEdge proposal report, so just give your gut response and move on.

When you submit the survey (using the button at the bottom of the survey page), results will be shown as a prioritized list of the WorkCompEdge modules. Whether or not you’re a WorkCompEdge member, you’re welcome to use the survey as a guide to determining the work comp issues that most need attention in your company. Give it a try - you'll be the cat's meow!

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Bird by Bird – WorkCompEdge, One Step at a Time

(Part 1 of the Series "Getting Started with WorkCompEdge")

Although I originally joined Specific Software as the programmer for ModMaster, nowadays I write words more often than I write code here at work. After I write and edit usage instructions, marketing pieces, educational information, web pages and endless emails - I then do the unthinkable, to some: I go home and write for fun. In all its forms – novel, memoir, poetry, etc. – I’m addicted to the written word.

How does this relate to you and work comp, you might ask? Well, one of my favorite books about writing is Bird by Bird: Some Instructions on Writing and Life by Anne Lamott. Believe it or not, some of the lessons in this book easily transfer to the process of improving your work comp picture. Bird by Bird got its title from an episode that Lamott relates in the book: when her brother was 10, he had to write a report on birds. He’d put it off and put if off, and now it was due the very next day. Lamott writes,

…he was at the kitchen table close to tears, surrounded by binder paper and pencils and unopened books on birds, immobilized by the hugeness of the task ahead. Then my father sat down beside him, put his arm around my brother's shoulder, and said, "Bird by bird, buddy. Just take it bird by bird."

Bird by bird. Doesn't any big project - whether it's writing a whole book, building a high-rise condo or planning to host the Olympics - loom large and unwieldly until you start breaking it into pieces? I hope that making changes to improve your work comp picture doesn't feel quite as overwhelming as those tasks, but let's face it: as the sheer number of modules (15) on the WorkCompEdge site attests, there are a lot of places you could start. How do you decide where?

Whether you're an employer or an insurance professional, here’s what you need to do:

Bird 1 - Start by learning what the mod can tell you

You probably already know that the mod is a number somewhere around 1.0, more or less, and that less is better. You hopefully know that the higher your mod is, the more you are going to pay in workers comp premium. If you’re in an industry like construction, you know that you may not be eligible to win contracts unless your mod is at least 1.0. But an analysis of your mod, which your insurance agent can do in our ModMaster software, will show you information such as:

• Your controllable mod – the amount of mod points you could save if you had no losses – and the corresponding money you could be saving on premium


• How much money you could be saving in premium for every point you trim from the mod


• How the number and severity of your losses compare to standards for your industry


• How your losses are trending, and therefore what you may anticipate for your future mod(s)

The WorkCompEdge Proposal report from ModMaster will show you or your client the top 5 or 6 areas of concern to prioritize when evaluating work comp improvement opportunities.

These factors and more are presented in the new, handy-dandy WorkCompEdge Proposal report in ModMaster, which then goes on to do some analytical behind-the-scenes crunching of that data to present the top 5 or 6 areas of concern that you should consider first. For example, if your analysis shows that loss severity is an issue, then this report is going to recommend you look at the Clock Is Ticking, Expedite Return-to-Work and Before and After an Injury modules first. If you have a frequency issue, it’s going to steer you towards the safety modules. If your mod is already great – either at or very near the minimum possible mod – then it’s going to steer you toward optimizing your costs through modules like Avoid Low Bid Mentality, Wellness, and others.

Here’s a sample of the WorkCompEdge proposal report in ModMaster. If you’re an agent, be sure to run it for your clients. If you’re an employer, be sure to ask for it from your agent. It’s a great way to decide – based on analytical data - which “bird” deserves your attention first.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Small Medical-Only Claims - To Pay or Not to Pay?

Editor's note: today we welcome commercial insurance broker and consultant Maureen Gallagher as a regular contributor to the WorkCompEdge blog and wiki. Maureen, a partner with Neace Lukens and founder of Insurance Partners Academy, will be bringing commentary, success stories and in-depth analysis on current workers compensation affairs to us on a monthly basis. Read Maureen's bio and this press release to learn more.

Will paying small medical-only bills rather than reporting them to the carrier save you money - or cost you? The answer's not simple!

The most common question an insurance agent gets from employers is whether or not they should pay (or continue to pay) small medical bills on workers compensation claims rather than submitting them to the insurance carriers for payment. The answer to this question is not simple. It can depend on several factors including:

1. Whether or not the state has approved the Experience Rating Adjustment (ERA) in their experience modification formula.

2. Whether or not the employer has expertise in paying according to the state fee or reasonable and customary schedule and/or has access to discounted medical networks as insurance carriers do.

3. Whether or not a small deductible to handle small medical claims might be more appropriate and assist in complying with state rules.

4. Understanding the state rules and penalties where the employer is located.

5. Whether or not the state of operation has a favorable alternative option for handling small medical claims.

6. How organized and detailed the employer is.

For this blog, we're going to focus on one concern related to the ERA, but a full article addressing more about ERA as well as these other factors is available to WorkCompEdge members here on our wiki in pdf format.

An Analysis of Reporting vs. Not Reporting in ERA States

Many of you do business in states which have approved the Experience Rating Adjustment (ERA) to the experience mod formula. Medical-only claims, also known as injury code 6 claims, are reduced by 70% in states where ERA is approved before they are utilized in the experience rating process. Also, the expected loss rate and discount ratio, used to compute expected losses and expected primary losses, have been changed to reflect that medical-only claims will be reduced by 70%.

Many feel the incentive to not report medical-only claims has been eliminated in states where ERA is approved. In the interest of showing that, I performed several “what if” scenarios on employers either reporting to the carrier or paying medical-only claims on their own in ERA states and its impact on the Experience Modification and the employer’s overall costs. The studies are conclusive that the employer did not save money by paying medical-only claims itself in an ERA state, particularly if the employer does not know how to apply the state fee schedule and/or has no access to discounted networks like those developed by insurance carriers. Here is an example.

No State Fee Schedule or Discounted Insurance Carrier Network Applied
	Premium	Experience Modification	Adjusted Premium
Cost (premium) where all claims were reported	$40,790.00	1.275	52,007.25
Cost (premium) where employer did not report medical-only claims	$40,790.00	1.18	48,132.20
Premium Savings due to reduction in experience modification for not reporting medical-only claims.			3,875.00
Premium savings over three years due to the reduction in the experience modification for not reporting medical-only claims			11,625.15
Medical Claims cost paid by the employer			13,981.00
Additional cost to employer due to not reporting medical-only claims			2,355.85

Conclusion

If you're a WorkCompEdge member, I hope you'll refer to the full article on our wiki for much more depth.

The variances among states dictate that there is no one, simple answer to the employer’s quandary of whether to pay small medical-only claims or turn them in to the insurance carriers for payment. An employer must weigh the advantages and disadvantages of paying small medical claims after obtaining a complete understanding of their state’s rules and laws, evaluating their staff’s ability to effectively manage their own medical bills and reviewing the insurance alternatives available that take paying small medical claims into consideration.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Thoughts about Claims Management - and the Electoral College

Barack Obama was yesterday’s winner by notable margins in both the electoral and popular votes, but those two sets of numbers (currently 349 to 163 in electoral votes and 52% to 46% in the popular vote, with a couple of states still not reported) still tell different stories. Every presidential election we are reminded that it’s the electoral vote that really counts. It is, as history and pundits remind us, possible to win the popular vote and lose the electoral vote. Now, hold on to your comments, as I'm not trying to make any political statement here, and I know we've all had our fill of polls and graphs lately. I mention these numbers as an example of the cliché: it’s all in how you slice and dice the data.

I recently met with top level claims representatives from a major insurance company to discuss some issues related to their management of several injured employee cases. These are good people striving to do a good job. They do difficult work in a challenging system.

When it comes to claims management, insurance companies and employers are looking at the data in different ways.

However, during the meeting, it suddenly occurred to me why employers – and the agents who serve them - are often at odds with insurance companies over the way injury claims are handled. We’re looking at the data in different ways. Simply put, insurance companies frequently have different goals, objectives, and measurements than employers. I was at the meeting to discuss 9 individual injured employees. They came to the meeting to explain the workings of a system that handles 20,000 injuries a year.

Insurance companies’ key measurement for workers’ compensation injuries is something called the pure loss ratio. This is the percentage of the premium dollar that goes to pay for injury costs. For example, their goal might be to spend no more than 60% of premium dollars on injury costs. Add expenses to that percentage and what remains is their profit, not counting investment income.

From the insurance company’s perspective, if they meet their goal, then their processes are working. They see the work comp world from an aggregate view, while we’re looking at specific injured employees.

Some might suggest that if insurance companies are not effectively dealing with the specific, they will not meet their overall objectives. However, there are times, as is now the case, when they are saved by legislative reforms which drive down injury costs regardless of their processes. When doctors and lawyers get reigned in by the legislature, everybody looks smart. But as the saying goes, just because you are standing on third base, that does not mean you hit a triple.

The employer’s primary objective is for the injured employee to get the best medical treatment and to get back to health and productivity as soon as possible. The insurance company’s primary objective is to meet a number. If they attain their aggregate goal, then they are not as open to improving their processes.

Thus, it is up to the employer to make sure the employee gets what is needed and is not just a set of dates and numbers “sliced and diced” in the insurance company’s claims system. The incentives are not aligned such that the employer can abdicate this critical responsibility to insurance companies.

http://www.SpecificSoftware.com
http://www.WorkCompEdge.com

Scary Work Comp Stories for Halloween

Trick or treat, WorkCompEdge blog readers. In the spirit of Halloween, this week we offer some scary stories contributed by our staff. Some are true and some are imagined, but all illustrate concepts of which employers should beware. Can you tell which is which?

Of course, we think the scariest thing of all is an employer who doesn't use WorkCompEdge!

Category 1: Do we really want this employee returning to work?

The employee who tried to siphon liquid chemicals with his mouth.

The skull and crossbones must not have been enough. Now there has to be a label that says "use an approved siphoning device."

The employee who instigated an assault that led to work comp claims for himself and another employee.

Talk about needing an improvement in corporate culture.

Category 2: They said that?

Employer: "What's wrong with putting our gear machine operators in code 8810?"

8810 is the common code for office and clerical workers. A manufacturer classifying all employees in this category would probably be charged with, let's see, falsifying business records and committing a fraudulent practice.

Employer, in incredulous tone: "That's the sixth work comp claim this employee has made?"

Needless to say, they hadn't been doing much with claims management.

Employer, on buying work comp insurance: "I went with the low bid."

Cliches are usually true. You get what you pay for.

Employer, on buying work comp insurance the next year: "I don't know why my premiums went up so much this year."

It's called experience rating. Your agent should be helping you understand it.

Agent to employer: "The mod? I really can't explain it, but I know it's better if it's low."

Time for a new agent!

Of course, we think the scariest thing of all is an employer who doesn't use WorkCompEdge! But in all seriousness, whether you're a member or not, take our Getting Started with WorkCompEdge quiz. It's nineteen questions that will help you assess the areas in which your company may be getting tricked - and what WorkCompEdge modules you should treat yourself to first.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Benchmarking Your Safety Culture

Safety is about more than programs, and measuring your safety culture is the first step in improving it. If you have trouble viewing the video above, try this link.

I recently attended a safety conference sponsored by Occupational Health & Safety Magazine in the Washington, D.C., area. One of the more powerful presentations was conducted by Bob Krzywicki, North America Operations Leader with DuPont Safety Resources.

Most of the safety-oriented presentations I’ve attended over the years have focused on a traditional safety engineering approach, such as “find a hazard and remove the hazard.” Mr. Krzywicki, however, had a different approach. He challenged the audience to think about safety performance as a corporate culture issue. He said, “Safety excellence is a cultural transformation that requires felt leadership.” Felt leadership, as implemented at DuPont, establishes safety as a core business value, starts at the top of the organization, and is felt at every level of the organization through employee involvement and accountability. Read more about DuPont’s felt leadership in this article.

In addition, Mr. Kryzwicki said a safety leadership culture can be measured and improved.

He outlined three components of safety culture used at DuPont: leadership, structure, and processes and actions.

Each component includes four elements which he calls the “12 Gifts.”

Leadership elements include:

• Management Commitment


• Policies & Principles


• Goals, Objectives, & Plans


• Procedures & Performance Standards

Structure elements include:

• Line Management Accountability& Responsibility
  
• Safety Personnel
  
• Integrated Organization
  
• Structure Motivation & Awareness

Process and Actions elements include:

• Effective Communication


• Training & Development


• Incident Investigation


• Audits & Observations

Kryzwicki asked the audience to take a leap of faith and measure their safety culture and leadership performance with perception surveys of managers, supervisors, professionals, and hourly workers. DuPont studies show the better the safety culture score, the lower the number and severity of injuries.

Those of you who are very familiar at all with the content of WorkCompEdge will know that I delighted to hear of DuPont’s experience and certainly think it’s worth emulating. Although WorkCompEdge doesn’t express safety culture in quite the same components and elements structure that DuPont uses, we definitely subscribe to the same message: safety is about more than programs, and measuring your safety culture is the first step in improving it. WorkCompEdge members can start that process today using the survey included in the module Build True Safety Culture - It's More Than the Incentive of the Month.

I am confident in DuPont’s findings and encourage employers to perform similar assessments of their own safety culture and performance now, before you attempt to polish any rough edges in the culture you may suspect exists. Although it may take some intestinal fortitude to digest the perceptions you uncover, particularly among certain segments of your employees, you need to establish a baseline of your current safety culture at all levels of your organization. Benchmarking is a critical first step to determining where you are so you can decide where you need to go.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

How Will the GFM Affect Workers Comp - and You?

If you don’t recognize the acronym “GFM,” never fear: I couldn’t resist throwing a new one out into cyberspace. AcronymFinder.com says GFM can stand for, among other things, “gaming FM (radio)”, “general field marshal,” and “global financial market,” but around the office we’re using it as a convenient way to refer to the current “global financial meltdown.” As a pilot and former rocket scientist, I find acronyms tend to lighten the subject at hand… terms such as MAD (Mutually Assured Destruction), BMDS (ballistic missile defense system), or one of my personal favorites CFIT (controlled flight into terrain) don’t seem quite as threatening if you only use the initials. So, GFM is a “lighter” way to refer to a situation that’s very serious indeed.

During this GFM, it's important to remember that historically, employees who are stressed about job security or have personal financial difficulties tend to file more workers compensation claims.

The past few weeks have been incredibly dramatic and sobering: I feel like my brain has been rewired and I'll never see the world in the same way again. Many of our staff here are thankfully young enough that we have some time for our retirement funds to recover, but most of us also have concerns at a level we’ve never had before regarding the cost of children’s college educations, major purchases and investments of any type, etc. We’re hearing from our personal and business contacts that we’re not alone. So, I thought I would survey the WorkCompEdge team and share with you how we view the impact of the GFM on workers comp - for both employers and insurance agencies. Here are some thoughts from our team:

Employers

Employers should be alert for a possible increase in workers compensation claims. Historically, employees who are stressed about job security or have personal financial difficulties tend to file more workers compensation claims. To avert such a possible increase, we have these recommendations for employers:

• Be especially vigilant at this time about nurturing supervisors’ relationships with their employees, even when there may be negative news to report. Effective, proactive communication with employees is never more critical than now, when fear and rumors can undermine a company’s culture.
  
• Pay close attention to any claims that are filed: show care and concern for the injured employee. An injured employee is often under a lot of stress, but those stresses may have extra weight in this economy and therefore lead the employee into a downward, self-defeating spiral.
  
• Even if your business is off, don’t relax your return-to-work policy. For both the financial benefit to your company and the injured employee’s recovery, it’s paramount that you get employees back on the job in some capacity. A claim that is partially due to emotional stress or depression will be greatly exacerbated by sitting at home.
  
• Finally, this is a great time to reinvigorate or launch an employee wellness program. Get your workers walking at break time; hire a massage therapist for a special on-site chair massage day; make healthy snacks and decaf beverages available in your breakroom to ward off junk food binges some research suggests may be related to stress.

WorkCompEdge modules that are particularly applicable to the above points include:

• Before and After an Injury - The Crucial Role of the Supervisor's Actions and Attitudes


• Expedite Return-to-Work - It's Critical to Health, Morale, and Your Bottom Line


• Build True Safety Culture - It's More Than the Incentive of the Month


• A New Paradigm - Promoting the Health of Your Workers
  

Agencies

Your employer clients may be hurting financially, but this may mean they’ll be open to new ideas that will make a difference. The coming months will likely be an excellent time to move away from "low bid" philosophies and demonstrate how WorkCompEdge can be an effective tool to lower costs. Use the “Learn the lessons” module to show the employer the potential savings that come with lower losses and a lower experience mod. Then, sit down with the employer and use the WorkCompEdge ModMaster report or the online survey to help map out a strategy for implementing WorkCompEdge.

It looks like we’re going to be dealing with a recession for a while. Ask yourself, “What do my employers clients need most in recessionary times?” We think that one answer is lower fixed costs and a healthy productive workforce – exactly what WorkCompEdge can deliver - but we’re very interested in hearing what you think. Through our products WorkCompEdge and ModMaster, how can we help you help them?

For All Our Readers

Whether you’re an employer, agency, or other insurance professional, it may be time to understand that the best investment you can make is in your own company and in yourself. We want to know how we can help you do that. What challenges do you think the GFM will bring to workers comp in the coming months?

Please, let us hear from you – on the blog comments or by email to me, Tim or our blog editor, Kory.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Jack Burke Interviews Tim Coomer About WorkCompEdge

Blog editor Kory Wells and Specific Software CEO Tim Coomer are both on vacation this week. They told me I was in charge, so I thought we'd try something a little different while they're gone. How about some audio for a change of pace?

Today, Jack Burke of Insurance Talk Radio...tomorrow Katie Couric, Charlie Gibson, Brian Williams...maybe even Letterman? Hey, WorkCompEdge is big...and in his interview of Specific Software CEO Tim Coomer, Jack calls it "a dynamite product." Play the audio interview now

Jack Burke, president of
Sound Marketing and host of the popular insurance programs "Audio Insurance Outlook" and "Insurance Talk Radio," recently interviewed Tim about WorkCompEdge. Listen and hear them discuss:

• a brief history of Specific Software Solutions and SIGMA Actuarial Consulting Group


• why we built WorkCompEdge


• the community aspects of WorkCompEdge


• how we're educating agencies about WorkCompEdge


• how the content of WorkCompEdge is geared toward employers but brings opportunities to agencies


• open enrollment and exclusivity options


• the cost of WorkCompEdge


• the value of WorkCompEdge


• the three main goals of WorkCompEdge


• the next step in learning more

WorkCompEdge has both a wide scope and a lot of depth. Jack calls it "...a dynamite product," and says there's "definitely a need for it in the marketplace." Whether you're new to WorkCompEdge or still evaluating it, I think this interview will help you learn about it in a new way.

Play the audio interview now

http://www.workcompedge.com/
http://www.specificsoftware.com/

Strategic Defense: The Effectiveness of Your Company’s Medical Screenings

I recently had the opportunity to review the WorkCompEdge site with the risk manager of a large corporation. It was a fascinating conversation because he had extensive experience, possessed an analytical mind (I’m partial to those), and could tell a story related to every topic within WorkCompEdge. But, for this blog, I wanted to share with you one particular insight I gained from this meeting.

If your "defense system" lets 100% of your potential new hires through, you need to be concerned.

In the Avoid Hiring Your Next Workers Comp Injury module, we discuss the importance of the post-offer, pre-employment medical screening. Bob (not his real name) shared his experiences with this method for preventing a new hire from quickly becoming your newest work comp claim. Bob verified what we thought when we developed this module: he had definitely seen situations in which an effective medical exam program made a dramatic impact on the frequency of work comp claims and resulted in verifiable long term significant savings. But, just as importantly, he had also seen cases in which the effort to screen out candidates with preexisting conditions or physical ailments or limitations was NOT effective.

This got my attention, of course. I asked Bob, “How can you tell in the early stages of a medical screening effort whether or not it's effective?” His answer, in retrospect, makes so much analytical sense that I'm almost embarrassed to admit I hadn't thought of it! “Look at the reject rates, "Bob said. "If you're passing 100% of the candidates, you have a problem.”

This reminded me of a challenge from my days of working in the defense industry. A ballistic missile delivers a number of decoys and a number of actual weapons to a target. A defense system must determine which of the missile's reentry vehicles (RVs) are real threats and which ones are not. It can’t identify everything as a threat but it also can’t decide nothing is a threat. If your defense system lets everything in, you know you have a problem! The same principle applies to the medical screening of potential new employees. If your "defense system" lets 100% of your potential new hires through, you need to be concerned. Especially in a challenging labor intensive industry, you can expect to hear a very loud boom in the near future.

So, do you know the percentage of rejects that occur with your medical screening effort? If you have multiple locations across your state or across the country, how do the reject rates compare? Does this correlate to the level of work comp claims by location? If work comp claims are particularly low in a specific location and medical rejects are high, perhaps you need to model that screening or defensive system at your other locations. What do you think? Let us know with your comments.

http://www.workcompedge.com/
http://www.specificsoftware.com/

Could We Save Money by Reporting MORE Injuries?

Much has been written about the decline of the frequency of workplace injuries over the past 15 plus years. Improved workplace safety, modular construction, cordless tools, and reductions in heavy manufacturing are some of the most popular reasons attributed to the decline.

On the surface, this sounds like a positive thing. But upon further examination, this much-celebrated decline in the number of workplace injuries may not be completely legitimate.

Does it make sense that delays in getting prompt medical care are often increasing the treatment requirements – and therefore the cost - of injuries? Increased rates of surgery and physical therapy are contributing to increased
loss severity.

The June 2008 report to Congress by the U. S. House of Representatives Committee on Education and Labor, “Hidden Tragedy: Underreporting of Workplace Injuries and Illnesses,” states that work-related injuries and illnesses in the United States are chronically and even grossly underreported.

According to the report, “as much as 69 percent of injuries and illnesses may never make it into the Survey of Occupational Injuries and Illnesses (SOII), the nation’s annual workplace safety and health “report card” generated by the Bureau of Labor Statistics (BLS). If these estimates are accurate, the nation’s workers may be suffering three times as many injuries and illnesses as official reports indicate.”

What are the causes of underreporting? According to experts:

• OSHA’s reliance on self reporting by employers. Employers have strong incentives to underreport injuries and illnesses that occur on the job.


• Twenty percent of workers— including public employees in high-risk jobs such as law enforcement, fire protection, and public works; workers on small farms employing less than 11 employees; and those who are self-employed—are not even counted by BLS.


• Work-related illnesses are difficult to identify, especially when there are long periods between exposure and illness, or when work-related illnesses are similar to other non-work-related illnesses.


• Recent changes in OSHA’s recordkeeping procedures have affected the accuracy of the count of musculoskeletal disorders (MSDs).


• Some employers are confused about reporting criteria and OSHA staff are often not well-trained to provide accurate advice.


• Workers report widespread intimidation and harassment when reporting injuries and illnesses. Immigrants are also less likely to report, as explored in last week’s blog entry by Bill Wilson.


• While they may be well-intentioned, widespread and popular safety incentive programs which provide awards for a period of time without a recordable injury, can have the effect of putting pressure on workers not to report their injuries.

Here’s what I’d like your ideas about: Do you think it’s possible that underreporting of injuries may be one of the causes of the increased severity of the injuries that are reported? In other words, are employees resistant to report an injury, and only do so when they can’t stand the pain any longer? If so, does it make sense that delays in getting prompt medical care are often increasing the treatment requirements – and therefore the cost - of injuries?

A report published just a few days ago by NCCI presents an interesting analysis of claim severity as related to the “growth in treatments per claim” over recent years. This report shows that significant contributors to increased claim costs are increased rates of surgery and physical therapy. Catastrophic injuries aside, of course, doesn’t it make sense that the longer you defer medical attention for a problem, the more likely you may need surgery and/or extensive physical therapy?

Here are just a few of the WorkCompEdge modules that relate to this topic.

• The Clock is Ticking – Things You Must Do in the First 24 Hours After an Injury


• Before and After an Injury – The Crucial Role of the Supervisor’s Actions and Attitudes


• Build True Safety Culture – It’s More Than the Incentive of the Month

Ultimately, it’s in the best interest of the employer and the injured employee to report all injuries promptly and get immediate medical treatment. It’s essential for the employer to create a culture that fosters the reporting of injuries. Education and communication is the key. Get the message out loud and clear: if you get hurt, report it. The company, the injured employee, and the employee’s family will all benefit from reporting all injuries. It's the right thing to do - and it may cost us all less in the long run.

http://www.workcompedge.com/
http://www.specificsoftware.com/

Workers Compensation and Illegal Immigrants

One of the few email discussion lists I participate in is a Yahoo! Groups list called "RiskList." Recently, the topic of discussion was illegal aliens and workers compensation. Some issues discussed include whether or not these workers are covered under workers compensation laws and what kind of impact they may be having on loss experience.

Immigrant workers may be more inclined to take risks not commensurate with their skill levels. In cost-cutting measures that played a role in their hiring to begin with, they also may not receive proper safety equipment.

This blog is an abbreviated version of a longer article available to WorkCompEdge members here on our wiki. This article addresses the issue of whether or not illegal aliens are entitled to benefits under state workers compensation laws. The purpose is not to opine about the situation from a political or social standpoint, nor to comment on construction workmanship issues that have been addressed in the press.

Of 9.3 million illegal adults in this country, 7.2 million (77%) are employed and comprise about 5% of the entire U.S. workforce. However, they comprise a far more disproportionate percentage in some industries, such as 24% of farm workers, 17% of cleaning workers, 14% of construction workers, and 12% of food preparers. Within an industry, illegal workers may comprise high percentages of specific (often more hazardous) occupations...e.g., 36% of all insulation workers and 29% of all roofing employees are estimated to be illegal aliens. In general, illegal workers tend to be younger than other workers.

Because of language barriers and lack of training and experience, some experts believe that the exposure to injury may be significantly greater for illegal aliens than other workers. According to an Associated Press story, Mexican workers are about 80% more likely to die from a work injury than native-born workers. In several Southern and Western states, these workers are four times more likely to die than U.S. citizens performing similar jobs.

Given language barriers that might interfere with effective supervision and training, along with the frequent lack of experience, there is a fear that illegal aliens may be at greater risk due to several additional compounding risk factors. For example, because of the reasons many are here, they might be more inclined to take risks not commensurate with their skill levels. In cost-cutting measures that played a role in their hiring to begin with, they may not receive proper safety equipment. And, because they are inclined to avoid attention being directed at their illegal status, they may be hired or assigned to more hazardous jobs by employers who feel they are far less likely to file workers compensation claims....

....which brings us to the topic of this article, which is to answer the question, "Are illegal aliens entitled to state workers compensation benefits?" The short answer to this (as often the case with insurance coverage questions) is, "It depends." In a significant majority of states, illegals ARE entitled to workers compensation benefits. However, this is not true in every state. In addition, the types of benefits or extent of coverage may be restricted in some states depending on a number of factors.

The arguments for and against benefits are further discussed in the full article (available to WorkCompEdge members). Whether or not an illegal alien is entitled to workers compensation benefits will be established in the state statutes or by regulatory or court decision. Are illegal aliens "employees" as defined by most state statutes? If so, are they entitled to all or some of the statutorily-prescribed benefits? In trying to answer these questions, I've constructed a state-by-state chart that references each state's statute, lists any known case law or regulatory ruling, and provides commentary on whether or not it is likely that illegals are entitled to benefits:

Workers Compensation and Illegal Aliens Chart (Word document format)

As you'll see on the chart, most states do allow illegal aliens to claim workers compensation benefits. The only state that expressly excludes benefits by statute is Wyoming. The only state that has excluded benefits across the board by court decision was Virginia, but the decision was subsequently overridden by legislation. The vast majority of other states permit at least the claiming of medical benefits by illegals. Some states (e.g., Georgia, Michigan, and Pennsylvania) attach restrictions to disability benefits. Other states (e.g., California, Nebraska, and Nevada) limit or preclude vocational rehabilitation benefits.

This chart is a work in progress, so information is not currently available for all states, but it is for most. Also, keep in mind that where case law is absent (to the best of our knowledge), any opinion about how statutory law might respond is conjecture on our part, based on how courts in other states have ruled on similar statutory wording. As statutes are reviewed and case law uncovered, this chart will be revised on an ongoing basis. If you are aware of any inaccuracies or missing information, please email corrections to me at Bill.Wilson@iiaba.net.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Is Wellness a Wildcard...Like Sarah Palin?

Editor's note: Today we're returning to our "regularly scheduled programming" after blogging yesterday about our award. Next week we'll return to our once-weekly blog schedule.

Sarah Palin was a wildcard choice...is wellness a similarly unexpected consideration in workers comp issues? Photo from the Wikimedia Commons.

Hold your rants or raves! We're not veering into political territory on this blog; I just can't pass up a good analogy. Republican, Democrat or other, almost everyone agrees that Sarah Palin was a wildcard choice as a vice presidential nominee. Now, as I think about Kory's comment in last week's blog about whether the WorkCompEdge wellness module will be largely ignored by our members, I have to acknowledge that we made our own surprise selection when we included it in the lower left hand corner of the process diagram on the WorkCompEdge home page.

We tagged the module, “A new paradigm – promoting the health of your workers.” Was including wellness in WorkCompEdge a good idea? Does it complement all of the other modules, or was it just some crazy late night selection we made to stir things up? Well, as with McCain/Palin, only time will tell. But, let me explain some of the challenges we have discovered with wellness in the workplace.

I love business. I love systems. And, I really love math. I can relate to the process thinking and math behind the various modules and strategies within WorkCompEdge. The content we developed, the tools that we provide, and the implementation plans we suggest were carefully derived from the experiences of successful employers. Wellness is similar to the other modules in that it can involve numbers on both the corporate and personal levels (How many of your employees smoke? How much weight has John Doe lost?). But wellness won't succeed based on analysis and corporate process improvement. More so than with any other program or module in WorkCompEdge (safety, claims management, supervisor training, medical relationships, etc.) wellness involves individual, self-initiated change.

We developed the wellness module easily, given our in-house health gurus and the wealth of external resources available. But will employers use it? And what can make it most effective? As a broker in St. Louis recently explained to me, wellness is about “boots on the ground.” That is, real change in individuals takes internal motivation that is often ignited and fueled by a wellness "foot soldier" - an everyman/everywoman type of health champion who inspires and leads individual employees to a better and more consistent lifestyle.

So, how does a nationwide program like WorkCompEdge put those boots on the ground? Not easily. But, let’s think outside the gym, so to speak. Can we provide the tools, techniques, and resources to train the champion? What if the WorkCompEdge focus for wellness becomes an effort to identify, train, and motivate that champion at each WorkCompEdge employer? What would this look like? Could it work? What if… we created an army of WorkCompEdge wellness foot soldiers committed to leading their organizations to a higher level of wellness, one individual at a time?

Like McCain's choice of Palin, some may argue that wellness works for the WorkCompEdge Process and is an excellent pick. Others may think we are crazy! Let me know what you think (about wellness, not about the political campaign). And be keeping an eye out for who you might tag in your office to champion this cause. I can't resist saying: this person doesn't have to be a hockey mom, and lipstick will be optional!

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

You Like Us...You Really Like Us!

When we learned this week that LexisNexis has named the WorkCompEdge blog among the top 25 workers' comp blogs of 2008, we had the urge to gush like actress Sally Field in her well-known, often-parodied Oscar acceptance speech of 1985: You like us, you really like us!

LexisNexis has named the WorkCompEdge blog among the top 25 workers' comp blogs of 2008. Read the announcement or visit the LexisNexis Workers' Compensation Law Center.

In its news release, LexisNexis stated that the top 25 blogs were selected for "a wealth of information for the workers' compensation community with timely news items, practical information, expert analysis, tips, frequent postings, and helpful links to other sites. These blogsites also show us how workplace issues interact with politics and culture. Moreover, they demonstrate how bloggers can impact the world of workers' compensation and workplace issues."

We're doing all that?

Well, we are trying to, and we're delighted that, in the short life of this blog, folks have already noticed. But that brings us to what dear old Sal really said that night at the Oscars:

"...you like me, right now, you like me!" (Emphasis is ours.)

Right now.

In other words, Sally implied, the tide of cultural favor can go in and out, as do the opportunities to earn that favor. We recognize that fact here at WorkCompEdge, and this is a good time to remind you that:

• we're committed to making not only the blog, but the entire WorkCompEdge site a "living" product that undergoes changes and enhancements in response to member needs, suggestions, and the changing market
  
• we need your ideas and feedback to make both the blog and the site thrive. (Well, actually, if you're a member, we need your money every now and then, too. But right now we're talking about valuable content.)

We're very grateful for comments here on the blog and for those you've given to our staff by email and phone. Even if you tell us something you think we might not want to hear, be assured we have open minds. We know from our 20 years of developing and supporting ModMaster software that your input leads us to create a better product.

Now, we'd still like to increase our readership of this award-winning blog, so please, consider forwarding this page to your colleages, state associations, professional groups, and clients. Tell them that subscription options are at the bottom of the page. And like Sally said, do it right now.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com