Even as an insured company you can replicate Frontier's alert, take-charge response. In addition to physically taking an employee to your preferred clinic, you can stay in touch with the injured worker -- particularly before and after medical appointments -- and arrange to have your insurer send the employee's paycheck to you so you can hand-deliver it. And you should report the injury to your insurer as soon as possible so there will be no delay in its issuing your worker's paycheck.
Another cost-cutting strategy for insured companies concerns small injuries that require no missed work. Many states will allow you to pay the cost of such injuries out of pocket, without reporting them to either the state or your insurer. The advantage, of course, is that these accidents aren't factored into your "experience modifier," the calculation that determines next year's premiums. A word of warning: even if state law doesn't require it, you should register such injuries with your insurer on a "for reporting purposes only" basis. That way you're protected in case a very large claim from a minor incident pops up several years later.
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Form a Relationship with Your Medical Services
Supplier
Frontier sends all workers hurt during business hours to the Occupational Medical Clinic. Employees injured at work in the evening or over the weekend go to Humana Hospital's emergency room and receive follow-up care from the Occupational Clinic. There are several advantages to directing all injured workers to the same medical facility. For starters, you can often negotiate a discount -- usually around 15%. That's true even for small companies. Also, you can demand -- and get -- an un-usual level of cooperation in meeting your specific needs. For example, Lupe Gomez, an occupational-medicine coordinator at Humana, wears a beeper so she can be alerted when a Frontier employee is on the way to the emergency room. She not only smooths admittance but also follows each in-jured employee's case day by day, arranging transportation to doctors' appointments and checking that the employee shows up for them.
Finally, when you work with the same group of people all the time, it's easier to cut medical costs without compromising care. The simplest way to do that: get injured employees back to work as fast as possible. Of all the costs associated with a workplace injury, the largest is not the medical care or insurance premiums -- it's the wages paid to an absent worker.
Both Humana and the Occupational Clinic work closely with Evelyn Heckard, Frontier's claims adjuster at Augustine, to speed the treatment time whenever possible. They have the clout to get injured Frontier workers in to see an orthopedic specialist within a day or two, for example, instead of their having to wait the usual three to four weeks. If the injury is minor -- say, a fall that results in a small bruise -- the doctor can sign the necessary return-to-work order on the spot.
Other cost savings come from pure common sense. If a Frontier worker arrives at Humana's emergency room with a possible broken finger, the hospital will X-ray his or her hand. To avoid having the Occupational Clinic take its own X rays -- standard practice in the medical community -- Gomez sends over Humana's film.
In addition to their daily vigilance in caring for Frontier workers, the two medical providers prepare regular comprehensive reports for both Augustine and Frontier. Those written communications -- which Humana produces daily -- are vital for spotting patterns that wouldn't be obvious otherwise.
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Work at a Relationship with Your Claims Adjuster
Ideally, your claims handler should be the maestro who makes the state, the doctors, the worker, and its own company (the insurer) move in perfect harmony. Given the difficulty of the task, the only way that can possibly happen is if you work hard at building your relationship with the claims handler.
Small companies in particular need to make themselves heard frequently. Periodically, ask for a "loss run," which will give you a history of claims, reserves (estimates of the total cost of an injury over time), and payments. Talk over and develop an active strategy for handling every open claim. Also, review the reserves with your claims adjuster. Since reserves influence future premiums, rather than actual dollars paid out, you'll want to understand, or possibly challenge, the adjuster's rationale in setting them. If your company's operations cover a wide range of activities, you may want to audit your insurer's record of your job classifications. While he was working for Automated Temporary Service, in Bakersfield, Calif., for example, consultant Joe Ruiz found an incorrect job classification code that netted the company $30,000. If you are self-insured, you can shop for the best of this kind of service, as Frontier's Oatman did. Independent claims adjusters such as Augustine charge between 10% and 15% of annual claims for their services. Some "third-party administrators," as they are also known, will quote you a fee per claim -- such as $100 for each medical-only claim and $500 for a lost-time claim. Because constant communication is a key component of your relationship, it makes sense to look for a local adjuster.
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Provide Light-Duty Work
After an injured employee is away from work for a while, something happens. Some call it "erosion of the work ethic"; others call it laziness. Either way, the incidence of fraud and malingering increases. The single most effective change you can make to slash workers' comp costs is to institute an early-return-to-work program, in which recovering workers go back to work with their job responsibilities temporarily altered to fit their current capability. In Frontier's so-called light-duty program, a cook with a burned arm, for example, could not return to his or her regular job because burns are supposed to be kept away from heat. So Frontier would temporarily place the employee as a cashier or greeter until the arm healed. Getting people back to work early obviously saves on wages, and some experts believe it actually makes people recover faster.
