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• Keys To Minimizing Lost Productivity

Keys To Minimizing Lost Productivity

written on August 10, 2009 by COSEWorkersCompensation contributor

These days with medical costs and premiums rising, more than ever employers need to utilize ways to save on cost of claims.  Proper use of salary continuation and transition duty can help you save dollars and re-gain lost productivity.  Additionally, the BWC $15K Medical Only program offers a new option for employers reduce their overall claim costs by paying "out of pocket" the medical bills in all medical only claims.

Salary Continuation:
How can an employer impact workers' compensation claim costs?  Total claim costs include medical and compensation costs paid and any MIRA reserves set by the BWC.  MIRA reserves reflect the anticipated medical and lost time costs to be paid by the BWC in the life of a claim.  MIRA reserves are usually only set if the BWC pays lost time benefits (that is why it is important to utilize salary continuation or transitional work to avoid allowing the BWC to pay lost time benefits and set reserves).

A claim becomes lost time when an injured worker is disabled for more than seven days and becomes eligible for compensation.  The BWC will gladly pay compensation and assess a MIRA reserve for future costs.  The MIRA reserve is the anticipated medical and lost time costs to be paid by the BWC over the life of a claim.  But the employer can opt to pay salary continuation in lieu of the BWC paying compensation.  This option will keep that compensation amount out of the claim and eliminate the BWC assessment of a MIRA reserve.  The end result is potential savings for the employer because only medical costs are reflected in the claim.

What does an employer have to do when they opt to pay salary continuation?  The BWC does have some requirements.  There can be no missed paychecks, so the decision to pay salary continuation needs to be made quickly.  The employer will need to discuss with the injured worker paying salary continuation in lieu of the BWC.  The employer will then have to submit to the BWC a Salary Continuation Agreement signed by both the employer and the injured worker and a Wage Statement detailing wages earned in the year prior to the date of injury.  The BWC will include that information into the claim and suppress the MIRA reserve. 

Contact your COSE account manager at (216) 592-2270 for help in determining when salary continuation would be a benefit.  They can request a salary continuation study to show the potential premium savings if you pay wages.

Transitional Work Duties:
The ultimate goal for a work injury is return to work.  The longer an injured worker remains off work the harder it can be to achieve a successful return to work.  Transitional Work is a valuable tool in returning an injured worker back to work when they are not yet ready to return to full capacity at their original job.  Offering a modified job wil help the injured worker resume productive work while transitioning back to their original job.  The employer will benefit from the Injured Workers' contribution to the work load and workers' compensation indemnity costs will be reduced.  Lower overall claim costs will help the employer maintain lower premium costs.

How does it work?  Once the physician releases the injured worker to return to work with restrictions, the employer will determine what light job duties they can accommodate that are within the restrictions.  The detailed light duty job description is then sent to the physician for approval.  Once physician approval is received the employer must send the light duty job offer via certified mail to the injured worker including the nature of the specific job duties.  Make sure the signed certified letter receipt is received and kept on file.  If the injured worker responds and reports to work the injured worker should be paid their full wages.  If the injured worker does not respond, the employer would follow company policy regarding no show/no call and then can file a motion with the BWC requesting Temporary Total Disability compensation be terminated due to the good faith job offer.

Contact your COSE account manager for help with the transitional work process.

BWC's 15K Program Medical Only Program:
The BWC offers another cost saving program, $15,000 (15K) medical only program.   An employer enrolled in the 15K program can reduce their overall claim costs by paying "out of pocket" the medical bills in all medical only claims (claims with seven or fewer lost days from work).  The employer becomes the manager of the claim and the employer's Medical Care Organization (MCO) cannot authorize treatment or pay medical bills.  Once the employer notifies the BWC that it does not wish to pay additional bills after payment of any amount up to the 15K ($500, $1,000, $5,000 etc) or the 15K maximum has been reached then the MCO will begin processing the bills in that claim.

Employers participating in the 15K program must:

• Notify the injured worker and the health care providers that they are paying the medical bills for the injury.
• Pay all bills within thirty days of receipt.
• Notify the BWC and the Managed Care Organization (MCO) when the 15K maximum is reached.
• Maintain detailed records of the work related injuries and payment of bills for six years from the last date of bill payment.
• Report to Medicare the claims for workers' compensation claimants that are also Medicare beneficiaries.

Medicare will then be able to identify situations where medical expenses should be paid through workers' compensation rather than Medicare.  Contact your COSE account manager or BWC for more details about the 15K program.

From Sue Balodis,
COSE Compensation Services