5 Unexpected Ways Legal Fees Are Making Workers’ Comp Claims More Painful
Legal peer reviews — a service where you pay attorneys to analyze your organization’s legal work. Seems redundant, right? Well, that’s probably why a lot of workers’ comp programs don’t have them.
While peer reviews for complex medical claims have become commonplace, organizations could be unwittingly wasting money on other legal claims that forego a review.
A “bulk business” mentality and lack of understanding of the legal process in workers’ comp defense is often the culprit of unnecessary spending. Here are the five things to look out for when dealing with a legal claim in workers’ comp:
1) Not Accurately Recording the Whole Accident Story
Imagine it this way — your favorite Starbucks barista slips on a spilled drink. It is not caught on video and they don’t file a claim.
“A failure to understand and record the ‘mechanism of injury’ at the time of the accident could expose the carrier to significant financial burdens for which it is not truly liable,” said Pamela Davis, vice president of legal services for Veriten Legal.
“The description that ‘Employee X was injured while walking down the stairs’ is simply inadequate. Did the claimant put his left hand down to break his fall? Did he put his right hand down to break his fall? Did he fall down two steps? Did he fall down one step? Did he hit his head? These facts become significant when, six months after the accident, the claimant suggests that he injured a body part clearly not engaged during the accident.”
2) Third-Party Administrators Not Tracking Legal Spend
When a claim is brought to a carrier’s attention, they often enlist a third-party to handle the claim. Because it’s the carriers money at stake in an insured loss, the third-party may not track legal spend as diligently as the carrier, and this is done at the carrier’s expense.
“A TPA may not always track legal spend. Some do, of course, but even those that do are more likely to rely on software solutions which provide only so much information,” Davis said.
3) Lack of Communication Between Claims and Legal
Just like approaches to injured worker care in workers’ comp, if a claim is not handled holistically there can be gaps in its resolution.
“Unless there is an established true collaboration between the claims team and legal counsel the claims will not be handled holistically,” said Davis.
Without this relationship, problems can often rise at the beginning of a claim, such as a lack of detail during the intake of a claim, as previously discussed. Before getting a legal council involved, it is important to also establish who is actually responsible for the intake of the claim — the TPA or the carrier.
Establishing relationships between the claims and legal team can also make claims settle faster.
“The attorney must be working in tandem with the claims team, not just reaching out at the outset and then reconnecting six months later. It’s important that the two teams implement a strong working relationship, part of which involves creating and adopting a claims handling strategy from the outset. This could be the best strategy the TPA, carrier, or self-insured has to impact claim duration,” Davis said.
4) Not Understanding the Attorney Process or Business Structure
When a workers’ comp claim goes to litigation, understanding the attorney process is vital in a holistic approach. Without an open dialogue or understanding attorney practices, there is an opportunity for attorneys to over-bill and charge for unnecessary services.
“The carrier, TPA, or self-insured should have a clear understanding of the billing rates for the selected legal firms. They should also understand what tasks may be tacked on as additional charges and they should be monitoring those ‘add-ons.’ They should bring someone in to conduct a comprehensive review of at least some percentage of their bills and assess level of completion of tasks and effectiveness of strategy,” Davis said.
“Workers’ compensation claims handling might be a volume business, but the payers should not accept sub-standard performance from counsel, nor should they accept a paradigm where their work is handled like a commodity.”
5) Overburdened Claims Examiners
Unsurprisingly, COVID-19 is the number one culprit causing the current burden on claims handlers. If claims examiners are extremely overburdened, they may not respond to a claim in a timely enough manner and a claimant may receive care or compensation they aren’t entitled to.
“Carriers miss opportunities if their team fails to timely respond timely to mandates issued from the applicable workers’ compensation administrative agency. Missed dates could mean increased dollars,” Davis explained.
“Identifying claims which could blow up on you — and this is based on a review of those claims characteristics we deem most salient — is crucial to claims handling success.” &