NJASBO 2015 Annual Conference
Wednesday, June 3rd
Workers’ Compensation
A Claim from Start to Finish
Key Elements
Studio 1, 9:00 a.m. to 10:15 a.m. - Clinic #3 Studio 1, 10:30 a.m. to 11:45 a.m. - Clinic #7
Session Speakers
Craig H. Wilkie, RSBA
– Area Vice President, Arthur J. Gallagher & Co.
– Executive Director SPELL JIF
– Recently Retired School Business Administrator
Slide 2
Scott C. Tennant
– Area Vice President, Arthur J. Gallagher & Co.
Session Goals
Understand what workers’ compensation is
Understand who the parties to the process are
and what role they play
Know what drives cost in the system
Know the District’s role in the process
Be a positive advocate
Be ready for the challenges
What Is Workers’ Compensation?
Workers’ Compensation Is:
Social legislation (N.J.S.A. 34:15-7, et seq.) intended
to guarantee injured worker’s specific benefits due to
a work related injury as a trade-off against a worker’s
right to sue their employer due to a work related injury
The administration of the system is through the New
Jersey Department of Labor, Division of Workers’
Compensation who has “the exclusive original
jurisdiction of all claims for workers’ compensation
benefits”
When a claim petition (litigation) is filed the matter is
adjudicated through an administrative court and these
claims are not civil court actions
Workers’ Compensation Benefits:
The statute provides three distinct benefits:
a. Medical Benefits (medical paid to plateau)
b. Temporary Disability Benefits (lost wages)
c. Permanent Disability Benefits (financial awards)
Worker rights to benefits are rarely affected by their own
negligence
Workers’ compensation benefits can continue past
employment and for life
Workers’ Compensation Responds To:
Accidents arising out of and in the course of
employment. The burden of proof that an accident
did not occur rests with the employer
Occupational disease if it is proved the disease is
characteristic of or peculiar to the work in a material
degree. The burden of proof that the workplace gave
rise to the disease rests with the employee
The workers’ compensation law
Disability (Lost Wage) Payments
Workers’ Compensation Law An employee has to be disabled
more than seven days before temporary disability benefits shall accrue.
They don’t have to be consecutive days.
The benefit applies retroactive to the first day.
The benefit changes every year based upon the Statewide Average Weekly Wage calculation and has a weekly maximum and minimum amount. The amounts are $826 and $220 for 2014 and will be $855 and $223, respectively.
Slide 8
Other Laws Affecting Disability Payments
N.J.S.A. 18A:30-2.1 provides that school district employees are entitled to full salary for up to one year following the date of injury for absences due to a workers’ compensation injury.
IRS Regulation Section 31.3121(a)(2)-1 states that wages do not include the amount of any payment made under workers’ compensation laws. The NJ Division of Pensions has
interpreted this to mean that no federal, state or FICA taxes may be withheld.
N.J.S.A. 43:15A-25.1 If a member of the retirement system receives periodic benefits payable under the Workers’ Compensation Law during the course of his active service, in lieu of his normal compensation, his regular salary deductions shall be paid to the
System Organization and How It Works
Injured Employee Employer Claim Administrator Managed Care Nurse Physician Communicate Attorney Slide 9What Is The Process?
Injured Employee
- promptly report injury
- provide a complete description of the accident
- get better
Employer
- create internal reporting policy and procedure - ensure its enforcement and communication - monitor all accident activity
- investigate accidents
- communicate with all players
Claim Administrator
- set up claim file
- determine compensability within the statute - monitor activity for breaches of the statute - pay claims as appropriate
- manage file through litigation and closure - communicate with all players
Managed Care Nurse
- monitor medical progress - speed up medical processes
- work to get injured employee back to full health as soon as possible
- communicate with all players
Physician
- see injured employee promptly
- determine if injury could have happened as described - prescribe treatment
- monitor patient progress - communicate with all players - make return to work decisions!
Attorney
- manage the litigation process - keep the employer, claim
administrator and involved physicians up to date - resolve the litigation
Cost Drivers
Know what drives costs up
Untimely reporting
Out of network doctors and personal
physicians
Disability resulting in people out of work
Litigation
Untimely Reporting
“Workplace injuries reported within ten (10) days of their occurrence cost an average of $10,172, while ones reported after thirty (30) days average $15,745, Kemper National Insurance Companies finds.
Early reporting leads to quicker treatment, while delay lets
problems fester and increases chances of litigation, says
Kemper.”
“LABOR LETTER’
THE WALL STREET JOURNAL AUGUST 10, 1993
Time is money...
Untimely Reporting
“The prompt reporting of claims is one of the easiest ways to lower your total cost of risk; the sooner we learn about the claim the quicker we can engage in medical and disability
management.
Using the 0-3 day period as the baseline, the cost of a late reported claim is
9% more if reported between 4-7 days, 20% more if reported between 1-2 weeks, 32% more if reported between 4-8 weeks, and 72% more if reported at one month or later.”
The Cost of Late Claim Reporting Liberty Mutual Group
2011
Time is money...
Cost Drivers
Out of network doctors and personal physicians
Usual and Customary pricing is much higher than in network pricing
Currently, between 50 to 70 percent of medical provider charges that are out-of-network are being paid at full price, Gaughan said.
How to Reduce Out of Network Medical Billing Costs By Denise Johnson | November 27, 2012
http://www.claimsjournal.com/news/national/2012/11/27/218052.htm
Personal Physicians are:
– Rarely trained to manage workers’ compensation claims
– Far more likely to extend time off to a patient with whom they have an established medical relationship and whom may be only one of many family members the Physician treats
Cost Drivers
Disability Costs
Direct Costs
– Medical Expenses – Lost Wages – Permanency AwardsLike an iceberg the below view (indirect) costs usually add up to much more than the in view (direct) costs.
$1
$3 - $10
Indirect Costs
– Substitutes and temporary help
– Increased payroll benefit costs
– Replace valuable employees
– Train new employees
– Reduced productivity
– Administrative paperwork
– Associated “other” liability issues
– Decline in customer satisfaction
(students, their parents and coworkers)
Cost Drivers
Workers’ Compensation Litigation
Employees who are not satisfied with their treatment
and/or believe they can get more money using an
attorney to represent them, don’t file suits they file
petitions
The assumption by the Division and its judges in
these petitions is that an injury has occurred and the
main question isn’t did an injury occur but instead how
much an injured employee deserves in settlement
Cost Drivers
Workers’ Compensation Litigation
No two workers’ compensation judges will rule the
same way given the same set of facts
The law is intended to provide relief to injured
employees and will always give the employee the
benefit of the doubt
It is up to the employer to prove that a set of facts as
provided by an employee are inaccurate
Even when there is evidence that people are
performing tasks while out of work that they have
been restricted from doing while at work due to their
injury will be given the benefit of the doubt by most
judges
Cost Drivers
Weak internal and negative systems
The number one reason for excessive increases in the
cost of workers’ compensation in districts is weak and
negative systems that do not reward desirable
behavior and ignore undesirable behavior. This results
in the appearance and belief that the employer district
allows process abusers to easily abuse the workers’
compensation system and when that happens the
number of abusers increases.
Be Hopeful - Manage the System
If you understand the system and its challenges,
you can manage the system efficiently.
Success depends upon
Knowledge of the workers’ compensation law
Knowledge of how the system is organized and works
Knowledge about how to build a policy and procedure that manages the laws and challenges
Having a positive workers’ compensation policy and
procedure actively managed that allows employees to feel the district “does the right thing”
Knowledge of how to handle difficult claim issues
Knowledge of specific tax law, pension rulings and
employment laws and how each is related to a workers’ compensation claim
The Morality Scale
out of any given 100 employees
10 of any given 100 employees -
believe it’s immoral to do anything that may hurt their employer
80 out of any given 100 employees
are undecided about how they might react to a situation and are greatly influenced by the employer’s clear desire
10 of any given 100 employees have
no moral issue with getting all they possibly can out of every situation
The Morality Scale
Your workers compensation management system will define the balance between moral and amoral behavior providing
guidance to all employees who may some day be involved in a workplace injury
Have a Positive Moral System
That encourages 90 out of any given 100 people to do the right thing
Ten wouldn’t think of doing anything to hurt their employer
Ten do nothing but think of ways to help themselves at their employer’s expense
EIGHTY are trying to figure out what they
should do
The simple truth about any given 100 people is: 90 people will do the right thing,
want the workplace to treat everyone fairly and will support policies and procedures designed to meet a positive objective
Put your philosophy in play.
District Risk Management Program Objectives
Safety and :
Claim Management
Start with Board Policy & Procedure
ANYTOWN BOARD OF EDUCATION
PROPOSED PROCEDURES FOR MODIFIED DUTY PROGRAM FOR ADOPTION
The ANYTOWN Board of Education recognizes the need to provide a safe working environment for all of its employees. Based upon that need the Board has previously adopted a safety program and has vigorously applied it district wide.
Begin by using the general rubric of safety as the basis for the policy.
It Pays to be Positive About Safety!
Emphasize SAFETY!
Counsel employees on unsafe acts
Form safety committees
Provide safety equipment
Provide safety training
Every claim avoided through safety is
money in the district’s pocket
START TODAY!
Policy & Procedure (continued)
The Board also realizes that during the course of normal work activities, an employee may experience an unavoidable accident. Given this, the Board had adopted procedures and policies for handling injuries on the job. Realizing that the adopted
procedures and policies will result in proper handling of employee care and welfare, the Board also realizes that there is a need for a modified duty program to safety return employees to work, who are injured on the job, as soon as possible.
Tie into your district policy and procedure on incident and claim reporting.
Timely Reporting
To avoid the chaos and extreme expense that results from
claims being untimely reported, adopt a district policy that requires all employees to report all injuries big and small the day they occur
There is nothing in law preventing an employer from
enforcing a reporting policy and procedure that helps ensure employee safety and health
Enforce the policy by requiring that all direct supervisors follow up a breach of the policy with the employee and document the breach and discussion to the employee file
Modified Duty
Disability (Lost Wage) Payments
There is nothing in law that bars a school district from havinga modified duty policy and program
Without a modified duty policy and program a school district will have to wait until the treating physician declares that the injured worker can return to work without restriction
A district is in sole control of a modified duty program and can choose to accept the modifications/restrictions and find a role for the employee or choose not to accept the modifications/ restrictions and send the injured employee home to
recuperate. It is not the employees choice unless the district has given the employee that right in a labor contract
Supervisor buy in on the program is critical
Policy & Procedure (continued)
Any employee who is hurt on the job must follow previously adopted procedures to have the injury properly treated by the
appropriate health care professionals. Once the proper paperwork is filed and the employee has received appropriate treatment, the Board fully expects the Worker’s Compensation doctor to file a report with the Business Office the same day. The Worker’s Compensation doctor will advise as to the nature of the injury, proper treatment of the injury and any restrictions to be placed upon the employee before he/she returns to work
Be certain to tie into the District’s expectations of your appointed physician
Policy & Procedure (continued)
In consultation with the appropriate administrative employee(s) of the district, the doctor will formulate a modified duty plan for the individual employee in question. Any assignment to modified duty will be
appropriate as to the employee’s regular job duties. Upon assignment of the modified duty, and in consultation with the Worker’s
Compensation doctor, the employee will be informed of the duty and when he/she is expected to return to work. If the employee does not return to work at the appropriate time as indicated by the Worker’s Compensation doctor, that employee will be charged for sick time until such time as the employee returns to work.
Your policy must make your workers’ compensation physician a partner in the effort and you have to educate the physician to normal job duties and possible alternative work assignments
Policy & Procedure (continued)
Any employee asked to return to work on modified duty will be given any and all reasonable tools to conduct the duty in a safe manner and to the fullest of his/her ability
Be certain to provide a safe alternative duty
The Board realizes that the employees are most valuable to the district when they are allowed to actively participate in the every day duties of the district. This procedure should result in shorter leaves of absence due to injuries, maximization of an employee’s available skills and a reduction in the use of substitute employees who may not have the same working knowledge of the injured employee
Provide a rational basis for the policy
Policy & Procedure (continued)
It would be appropriate for the Board to
adopt this procedure and implement it
immediately in order to maximize the
effectiveness of the above described
procedure
Draft, introduce, amend, adopt and implement
Establish Claim Procedures
Report claims promptly
Coordinate all claims reporting
– Require employees to report ALL injuries big and small
– Put one person in charge of the claim reporting system
Conduct prompt accident investigations
– Gather facts & interview witnesses while memories are fresh – this should be a direct supervisor
– Learn from mistakes and teach others
Direct medical care
– Select YOUR doctor -- doctor reports to you
» Familiar with Workers Comp issues
» Encourage early return to work
Establish lines of communication
Contact them immediately
Explain benefits
Stay in touch
“We care and want you back to work
as soon as possible”
Send cards or letters
Go visit them at home
Communicate with Injured Employees
Get Involved - These folks are your coworkers Don’t leave them hanging on a limb
Communicate with the Claim Adjuster
Provide job description
Have they accepted compensability?
(Why or why not)
Are benefits being paid?
(For how long - To whom)
What steps are being taken to manage medical?
Is the employee cooperating?
Has the employee obtained an attorney?
Any suggestions for early return to work?
YOU are their customer
!
Provide job description
Information about nature of injury
Plans for treatment
Any special instructions for employee
Is employee cooperating with treatment
Target date of return to work
Discussion of employee’s actual duties
Discussion of potential alternative duty
Get Involved - These folks make the return to work decision
Communicate with Physician/s
Provide job description
Information about nature of injury
Plans to expedite treatment
Any special instructions for employee?
Is employee cooperating with treatment?
Discussion of employee’s actual duties
Discussion of potential alternative duty
These folks can help compel action within the medical community
Communicate with the Managed Care Nurse
Provide information promptly
Discuss strategy
Help coordinate interrogatories
Help arrange for witnesses to be
present at court
These folks control the defense strategy in all litigated claims
Communicate with Respondent (Defense) Attorney
Be prepared to manage
challenging scenarios
Challenging Scenarios – Whispers of Fraud
What do you do if a coworker comes
to you and advises they don’t believe the injury of a different coworker
actually happened at work?
Do you know what tools your claim
administrator has at their discretion to help find out if this is true?
How would you conduct an internal
investigation to determine what the facts are surrounding the incident?
Challenging Scenarios – Going and Coming Rule
Is a fall from a big pothole on pavement while walking from where you parked to get to work on campus compensable?
– What if the parking spot is in a school district owned parking lot?
– What if the parking spot is on an adjoining public road not owned by the school district and the pothole is in the street?
– What if the parking spot is on an adjoining public road not owned by the school district and the pothole is in the school districts bus drop off
driveway?
– What if the parking spot is in a local parking garage not owned by the school district and the pothole is in the street but the school district has leased space in the parking lot specifically for use by employees to park?
