Risk Insider: Peter Rosiere

Risk Management Safari – PIDAT Time

By: | August 1, 2014

Peter Rosiere is the vice president, Risk Management for Sodexo, Inc. He has over 30 years of industry experience including multiple engagements as the senior risk management officer for multibillion dollar companies with decentralized structures and various business models. He can be reached at [email protected]

Options are available for risk leaders looking to strengthen loss work safety programs, while sustainably reducing workers’ compensation claim expense. One strategic approach, with three-pronged impact, is post-injury drug and alcohol testing of employees (we call it PIDAT). When supported by a strong human resources non-impairment policy and good process compliance, PIDAT can serve as a way to (1) support safe work behavior; (2) successfully challenge claims, and (3) increase average claim reporting timelines in order to meet applicable statutory testing time limits.

The PIDAT challenge is to create a testing program without adding work and time to a facility manager’s day, while remaining in compliance with the often conflicting maze of federal, state, county, local and collective bargaining agreement stipulations.

In support of a drug free impairment free workplace, Sodexo accepted the PIDAT challenge beginning in 2012. A pilot testing program was established for non-union employees in California, Florida, Illinois, Missouri, Pennsylvania and Texas. Why these states? Because these states have employer supportive impairment claim defense statutes, and relatively clear testing rules and regulations. These states also represent a large percentage of our total claim frequency and related severity.

The PIDAT project requires cross-functional alignment between risk management, claims, HR, employment law, and key third party vendors engaged in the administration of our workers’ compensation claims. This strategic alignment is particularly important because not only will a positive test result in claim denial, but will also result in employee dismissal.

Key steps, focused on system integration between our reporting vendor, the testing clinic TPA, and our WC TPA were required prior to the PIDAT implementation. In addition, significant time and energy was spent developing training and reference/resource materials to ensure local operating unit management and Human Resources were trained on how the testing works and why, as well as what to do in case of a positive test result. In order to address outcomes, compliance and financial key performance indicators were developed so program effectiveness and efficiency could be monitored.

Sound simple? Not so. We quickly discovered during the planning and pilot implementation phase that necessary adjustments were required to ensure timeliness of testing, better assessment of outcomes, and greater compliance at the local level. In the first year, an estimated $4 million of claim expense was eliminated through claim denial, and most importantly, reduction in the growth of claims reported. Potential claimants may think twice before filing for the borderline incident if the outcome of a PIDAT is in question.

Early into implementation, we noted report lag time increasing to time spans just outside the testing window. To address the reporting delay, the testing trigger was changed from an event requiring medical care outside the unit to an event requiring management notification of injury, regardless of the level of care.

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