Workers’ Compensation Claim Management: An Interview with Jesse Blanchard
As Vice President of Claims for Marsh in Richmond, Virginia, Jesse Blanchard works with safety professionals who manage workers’ compensation programs. His experience gives him a unique perspective on the role of the safety department as gatekeeper for worker’s compensation claims.
In this interview, Blanchard discusses the role of safety in administering workers’ compensation, and he offers his views on selecting strategies when working with claims adjusters, brokers, troubled claimants and defense attorneys. The views and opinions expressed in this interview are his own and do not reflect those of Marsh.
As a workers’ compensation claims executive, what do you believe are the most important things safety professionals can do when managing a workers’ compensation program?
Of most importance for anyone administering an employer workers’ compensation program is to commit to promptly reporting losses to the claim administrator after becoming aware of the accident/occurrence. Be sure to advise the claim administrator during the claim intake of any concerns and/or doubts you may have regarding the accident, the reported injury and any other circumstance you may believe is pertinent to the legitimacy of the claim. The goal should be to minimize the time between when an accident occurs and when it is reported to the claim administrator. Industry studies have shown that as more time lapses between the event dates and when it is reported to the claim administrator, the cost of claims increase.
Internal investigations are of critical importance. There should be a process in place to review and examine the accident and determine why it resulted in an injury. Share the results of this internal investigation with the claim administrator.
Initial medical management is important in any cost-saving initiative. The claim administrator should provide information about what an employer is allowed to do under jurisdictional rules/laws with respect to a particular medical provider or group of preferred provider organizations (PPOs). Providers should exhibit sensitivity to occupational injuries and protocols to provide return-to-work releases either at full duty or modified duty based on the severity of any injury or occupation medical condition. The variance of these rules and laws may be significant from state to state. Advantages not taken may be forfeited.
Safety professionals should understand their company’s return-to-work philosophy. They should determine whether or not a modified-duty program currently exists and if a program is not in place consult with the claim administrator and/or the broker claim contact to assist in the creation and implementation of an aggressive comprehensive program. Many “off-the-shelf” programs are available for use as is or with modifications.
When an employee’s injuries are so severe that they do not allow for a modified-duty program, someone from the place of employment should make regular contact with the injured worker. This contact may include mailing company newspapers or other communications and invitations to company functions in which the employee would ordinarily be involved. The purpose of this strategy is to reassure the injured worker of continued employment and to set an expectation for a return to work when restrictions allow.
What are the benefits of having a safety professional as a gatekeeper for workers’ compensation claim administration?
Safety professionals generally have acquired knowledge above and beyond what might normally be found in an internal claim manager, and they may be in a better position to recognize and understand the technical aspects of machinery and other details regarding workplace safety and legal compliance.
Safety professionals may also want to regularly review claim frequency and severity to recognize both positive and negative trends.
What kind of background and training is most useful for a safety staff with claim management responsibilities?
A background and/or training in the field of human resources may be helpful along with familiarity with their company’s human resource and benefits administration processes can be beneficial. Prior claim administrator exposure and attending insurance industry claim seminars are also helpful. Any initiative by the claim administrator or the safety staff to build a closer interaction should be explored and encouraged.
What should safety professionals do to stay informed of workers’ compensation statutes and law changes?
Industry seminars and formal training courses may be available. They should consult with the state workers’ compensation authority, the claim administrator and possibly defense law firms to determine what may be available. Published educational materials are available from multiple sources. For help in this effort, they should first consult with their broker contact. The U.S. Chamber of Commerce publishes an annual booklet that summarizes each state’s and U.S. territorial workers’ compensation law. Brokers or claim administrators may have this booklet. Marsh provides copies of this booklet to its clients, and I use it regularly to find quick answers to common benefit questions.
When working with claims adjusters, what suggestions can you offer that will benefit the working relationship as well as expedite the smooth handling of a claim?
Make an effort to meet and build a relationship with your designated adjusters and the claim team assigned to manage your claims. Visit the claim administrator’s office to see how their claim process works firsthand. When you know what the claim process involves it may help you more effectively and candidly communicate with the claim administrator. A team-building philosophy is essential.
What are the clues for recognizing a troubled claim or a claim with the potential to lose control?
Watch for claims that are:
The claim administrator or your broker contact should have access to lists of industry claim “red flags.”
What should the role of the broker be in troubled claims? When should safety professionals blow the whistle on the carrier or third-party administrator?
Any perceived lack of responsiveness from your claim administrator should be reported to your broker. Lack of responsiveness could be defined as not acknowledging and fully investigating claims you report as suspect, unreturned and late return of telephone calls, repeated late or unpaid medical bills and missing critical follow dates. A more detailed list of these indicators may be available from your broker contact.
What approach do you recommend to address a claim in which a claimant is represented by council as opposed to a claimant who is not?
Once a claimant is represented by legal counsel, s/he is put into a protective category that limits what can and cannot be discussed without the consent of counsel. If a claim is in litigation or if it is moving into a judicial process, it is advisable for most communications to be done through the adjuster and/or defense counsel to ensure compliance with legal and ethical standards. You do not want a claimant’s attorney to accuse you of an unfair claim practice. Advice from your claim administrator and/or defense counsel can help you properly communicate with a represented claimant.
State benefits vary by each respective state statute. With respect to safety professionals responsible for claim management, where will claim administration strategies vary when administering different claims in different jurisdictions?
State laws do vary in how claims are administered and resolved. Your claim administrator should be your guide in this regard, and any jurisdictionally specific question should be sent to the administrator directly or through your broker contact.
Some states address safety violations when they result in employee injuries. Safety professionals should educate themselves as this pertains to possible benefit reduction or declination if the proximate cause of an accident relates to the safety violation. They should report these violations when they first report the claim or as soon as possible after they are discovered.
Your company may have purchased loss control and/or safety engineering services from the applicable insurance carrier, broker or third party. Make sure you know what is available and use the services.
What is your view of early return-to-work and transitional work programs? How valuable are they to organizations and injured workers?
To help control costs, companies should promptly report claims, refer the injured worker to a preferred medical provider (where allowable) and provide an aggressive modified and/or transitional duty return-to-work program. If assistance is needed in the design and implementation of a return-to-work program, consult with your claim administrator or broker but implement a program, as it will save on your workers’ compensation claims.
How can safety professionals make the most use of workers’ compensation claim information?
Recognition and understanding of favorable or negative claim trends are essential to setting your cost-reduction goals. Access to claim administrators’ online systems will facilitate with data collection and analysis. If an online system is not available, ask the claim administrator or broker for help.
Modern electronic communications, such as voicemail and e-mail, are a relatively low-cost and rapid means to deliver and receive messages. When leaving voicemail messages, be specific and do not just ask for a call back. When sending e-mail messages, also be specific in your questions and/or responses.
NCCI reported that workers’ compensation claims have continued a five-year decline. Although this decline takes all claims into account, most of the decline was in medical-only claims and not so much in indemnity claims. This phenomenon has increased the cost of the average claim. What does this trend mean? Does frequency beget severity where there is a declining trend in frequency?
Today’s increasing cost of medical treatment has driven claim administrators to redefine what may have been classified in the past as a “small medical only” claim and to create various tiers of claim classifications. The rising costs have impacted severity and what is reported to NCCI, thereby increasing experience modifications and premiums. Many companies have entered into loss-sensitive programs with per-occurrence deductibles and annual aggregate limits, which limit premium and limit the impact of NCCI reported data. The safety professional administering their company’s claim program should know what type of program they are working under.
The question of whether frequency begets severity is not answered easily, and any answer would be a best guess. Clearly, the more accidents that occur, the better the chance that one or more of them will involve a serious injury or a fatality. In my opinion, an increasing frequency trend will result in higher severity at some point in the future.
Reviewing data alone will not tell you how to reduce costs. I am not a safety professional, but over the years, my claim experience tells me that investigating incidents to determine their root causes then finding ways to increase prevention will more favorably impact your direct and indirect workplace injury costs than any post-accident strategy.
Jesse Blanchard is Vice President of Claims for Marsh Risk Consulting. Blanchard began his insurance career in 1976, and he has held claims management positions with CIGNA Property and Casualty and Companion Property and Casualty Insurance Companies. He has significant experience in workers’ compensation claim management, and his jurisdictional experience includes all of the insured states.
Blanchard joined Marsh in January 1995 as a Claim Consultant. He assists clients with their casualty claims by providing timely advice and by facilitating good working relationships between them and their insurance carriers.
Blanchard holds a bachelor of science degree in marketing from the University of South Carolina’s School of Business Administration. He has served in an officer capacity with a number of claims-related organizations, and he was a committee member with The Southern Association of Workers’
Compensation Administrators (SAWCA) for over ten years.