Waging The Workers’ Compensation Battle: Tips To Reduce Claims And Lower Premium
NIA’s Workers’ Compensation Specialist Offers Tips to Reduce Claims and Lower Premium

While workplace-related injury rates are now at the lowest level since the Bureau of Labor Statistics agency began tracking information in the 1970s, workers’ compensation medical costs have climbed. Reasons for the surge include increased use of newer, more expensive prescription drugs to treat injured workers and a significant rise in the cost and utilization of hospital services, particularly in critical care and the use of MRIs.

As a result, employers are looking for ways to lessen workers’ compensation costs through risk management and safety programs, which can help to reduce claims frequency and assist workers in returning to their jobs as soon as medically feasible.

“Cost savings will manifest themselves in a more favorable experience modification factor,” notes Britt Simon, a workers’ compensation attorney for The NIA Group. “The experience modification factor is a company’s actual workers’ compensation claims history reflected over a three-year period. If you have fewer claims and can control the costs associated with them, the experience modification factor will be more advantageous to the employer. This factor is an adjustment to the workers’ compensation premium.”

Three factors influence the size of the workers’ compensation premium: a company’s payroll, the classification codes assigned to the type of work, and the experience modification factor. The experience modification factor for an employer is tied to the total dollar amount of claims paid by its insurance company. A high experience modification factor results in a higher than standard premium and as such you pay more than average. A low experience modification factor results in a lower than standard premium and you pay less than average.

Risk Management and Safety Programs Can Curb Claims:

Good risk management and safety programs may reduce accidents, lessen the number and severity of claims, and eventually lower the experience modification factor. There are many types of safety programs that can be implemented to reduce the chances for a major loss and accident frequency, such as instructing employees in safety compliance, encouraging safety through employee award programs, installing new equipment to reduce the amount of manual labor, and analyzing prior injury reports to look for accident patterns.

The NIA Group specializes in designing workplace safety and risk management programs for businesses of all types and sizes, and helps companies assess their current work environment in order to identify trouble spots and make changes. “Implementing a strong safety program is not only a prudent business practice; it demonstrates to employees that their employer is serious about safety and dedicated to reducing accidents,” says Simon.

Report Claims Quickly To Lower Costs:

You can also reduce costs by reporting claims promptly, allowing insurance adjusters to investigate them in a timely fashion, and selecting appropriate medical treatment for the injured or ill employee. “It’s been proven that the sooner you rehabilitate a worker, the more quickly they return to work,” notes Simon. “Otherwise, the condition simply worsens, prolonging the rehabilitation and costing the employer additional expense to find a temporary or permanent replacement.”

Choose Physicians Carefully:

Simon also suggests companies seek workers’ compensation-sensitive physicians to conduct physical evaluations and provide a regimen of rehabilitation. “A doctor who’s focused on getting the employee back to work can schedule an appointment on Friday evening rather than during the week,” notes the attorney. “That alone can be sufficient motivation for the employee to complete rehabilitation so a Friday evening is not tied up at the doctor’s office,” he explains. Plainly, it is important to utilize a treating doctor whose goal is to cure rather then to treat.

In addition to higher premiums, the employer also loses in other areas when an employee is slow to return to work. Higher medical bills, low employee moral, added burden on remaining employees, costs of replacement labor, and potential litigation expenses incurred when a claim drags on can all reduce a company’s bottom line.

“These are some of the primary ways to control and reduce workers’ compensation costs,” notes Simon. “Companies looking for ways to reduce their workers’ compensations costs should contact their NIA broker or agent to help establish safety and risk management programs and to find ways to streamline and control the claims process.”

For more information on workers' compensation management, contact your NIA advisor or Britt Simon at 732-469-6622 or bsimon@niagroup.com.