Why are Work Comp Claims So Costly?

The average cost of an indemnity claim is now over $60,000! Why?  There are many factors as to why costs are increasing so much.  These are but a few:

• Increased medical costs
• More medical procedures being requested
• Early Return to Work is not as available, due to economic times
• Litigation

One of the biggest factors we are finding to be common among large claims can be attributed to litigation.  Once an injured worker retains council, the claim starts a new life.  Many times, the injured worker is sent by their attorney to a doctor outside the carrier’s Medical Provider Network (MPN).  Though often the carriers will deny these medical payments, the claim cannot be closed until the Medical Liens placed on the carrier by these Medical Providers are taken care of.  Also — as the only way an attorney can be paid within the Work Comp system is by taking a portion of the permanent settlement — lawyers often try to prove their worth by claiming that the injuries are worse.  Some do so by sending their clients to physicians they know and sometimes adding additional injuries to the original claim.

Sounds pretty bad doesn’t it?  What can you do?

We have helped many employers avoid this mess by taking a very proactive position on what to do once a claim is made.  Most employees have no idea what to expect from the Work Comp system.  They have questions as to who will help them, what will it cost them, is their job safe, and many more.  If these questions are not answered up front, the worker may well look for answers from an outside source.  Perhaps one that is always seen on their TV or on billboards they see while driving home.  If they choose to go this way, look out!

One of our clients that has adopted our proactive approach to handling their injured workers has found that by doing so, they are saving over $300,000 per year on their Work Comp costs.  Their savings are coming from a lower Experience Mod and from the better rates we are able to get them because of their proactive involvement in the claims process.

If you are interested in seeing how such a program can benefit your company, contact me and we can discuss.

It’s your money.