WC Cost Control

Injury Report Lag Time Remains a Challenge

A recent study published by NCCI serves as a stern reminder of the link between accident report lag time and higher workers' comp claims costs.
By: | August 19, 2015

Workers’ compensation insurers can’t throw their resources into managing a workplace injury until they know about it.

When they eventually learn of an injury after policyholder delays in reporting it to them, the golden hour for providing optimal medical care and facilitating an ideal return-to-work scenario may be lost.

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Research results released earlier this summer by NCCI Holdings Inc. document the extent of such losses. The findings confirm the commonly-held knowledge among worker’s comp practitioners that delays in delivering appropriate medical care and applying claims-resolution best practices often drive additional, unnecessary costs.

NCCI reviewed claims data from 44 states before reaching the conclusions contained in its research brief titled “The Relationship Between Accident Report Lag and Claim Cost in Workers Compensation Insurance.” It found that the median cost of claims was lowest for injuries reported to insurers after the day when an accident occurs, but within two weeks of the incident.

Claims reported during the third week following an injury experienced cost increases that were 35 percent higher relative to those reported during week two. For those reported during week four, the median cost rises another 12 percent. It drops a bit for claims reported after week four although costs remain greater than those reported during the first two weeks.

Claims reported to insurers on the same day as an injury occurs, however, experience costs that are 25 percent more than those reported during week one.

“Claims reported on the day of injury likely include very severe injuries that require immediate medical attention,” NCCI’s research brief states. “Such claims often require extensive medical care and an extended recovery time away from work.”

“Really, it’s communication, and the sooner that communication can begin the sooner we as claims people can do our jobs.” — Glen Pitruzzello, VP of workers comp and group benefits claim practices, The Hartford

Several factors drive additional costs when claims are not promptly reported to insurers, sources said.

An injured worker may seek help from a primary, internal-medicine physician or family doctor who may not understand occupational exposures, said Adam L. Seidner, M.D., and global medical director at Travelers.

The doctor may excel at treating family ailments, yet may not be well acquainted with proven occupational-medicine practices, such as applying a sports medicine approach for treating musculoskeletal injuries.

In contrast, claims adjusters and nurse case managers can assist a worker whose injury is promptly reported to an insurer. They can help him, for example, receive treatment from an orthopedic specialist capable of providing the greatest care possible for their specific condition, Seidner said.

The risk of recidivism also increases when the injured worker doesn’t receive appropriate care, he added. They may return to the job too soon, risking reinjuring themselves.

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“Then we have to put them back in the system with the right people (providing treatment) and the medical costs really increase because we are trying to get things done correctly,” Seidner said. Medical expenses in such cases can increase 100 percent.

Seidner will speak at the National Workers’ Compensation and Disability Conference & Expo scheduled for November 11-13 at Mandalay Bay in Las Vegas.

WCWCHe will be joined by Marcos Iglesias M.D., VP and medical director at The Hartford along with Mel Belsky M.D. and medical director, workers’ comp program, for Safeway Inc. They will present a breakout session titled “The Workers’ Comp Doctor’s Prescription for Medical Intervention.”

They will discuss how opportunities to manage injuries to their optimal conclusions evaporate when claim handlers ignore medical intervention’s power. Denise Algire, director managed care & disability, corporate risk at Safeway Inc. will moderate the session.

Involvement of attorneys becomes more common as the report lag increases. Claims reported immediately involve an attorney 13 percent of the time. This increases to 32 percent for claims reported after Week 4. Source: NCCI 2015

Involvement of attorneys becomes more common as the report lag increases. Claims reported immediately involve an attorney 13 percent of the time. This increases to 32 percent for claims reported after Week 4. Source: NCCI 2015

Meanwhile, the NCCI research brief also documents that as report lag increases attorney involvement grows with 13 percent attorney participation in claims reported immediately. That jumps to 32 percent when insurers receive notification after week four.

“This suggests that the complexity of resolving a claim increases as the report lag increases,” the NCCI paper states.

Glen Pitruzzello, VP of workers comp and group benefits claim practices at The Hartford agrees that medical outcomes improve with earlier reporting of a claim.

The insurer can help the claimant navigate the medical system, connecting them with nurse case managers when necessary, and facilitating communication with the treating doctor, he explained.

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On the indemnity side, insurers can also help by explaining the benefit process to injured workers and help the employer to develop a return-to-work plan, Pitruzzello said.

“Really, it’s communication and the sooner that communication can begin the sooner we as claims people can do our jobs,” Pitruzzellos said. “Part of it is facilitating payment of necessary medical care and facilitating return to work.”

Indeed, NCCI’s findings suggest that when insurers don’t receive notice of injuries, the related claims become more complex to settle and they involve a longer period before the injured worker can return to the job.

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

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The R&I Editorial Team can be reached at [email protected]