Determining when employees are ready to return to work and crafting the right modified duty programs may seem like a subjective decision. For many employers, accurately assessing their employees' physical capabilities, pre- or post-injury, and placing them in the most suitable positions may at times be educated guesswork.

California workers' compensation reforms now give employers a unique opportunity to reinvigorate their companies' return-to-work procedures, create robust modified duty programs, and work more effectively with provider networks. For example, recent changes will allow permanent disability rating amounts to be increased or decreased by 15 percent, based on an offer of a work assignment for one year. The challenge for employers is to capture these savings through revamped programs, or they will see very little benefit from the recent reforms, beyond whatever reductions trickle down through workers' compensation insurance rates over time.

Employers need to place an even greater emphasis on disability management and helping injured employees return to the workplace. By combining detailed physical job descriptions, objective physical capacity testing, and rigorous return-to-work programs, employers can further reduce absences and help avoid re-injury in the critical early days of an employee's return to work.

Executives looking to capture savings from the recent California workers' compensation reforms should ask themselves the following questions:

• Is our return-to-work program as effective as it should be?
• Are both managers and supervisors actively involved in returning injured employees back to work?
• Do we ensure that employees are placed in the best-fit jobs from the very beginning?
• Are the right resources in place to help managers build appropriate modified duty assignments for employees returning to work?
• Do we have an objective and impartial means of measuring an employee's ability to perform work tasks?

"Getting employees to return to work is the No. 1 weapon in your arsenal to cut down workers' comp costs," said Stephen Bennett, managing director of Marsh Risk Consulting in Chicago. "But although employers throughout the country have been having problems with return-to-work, it has especially been a problem in California."
San Diego Union-Tribune, 04/24/04

Implemented correctly, return-to-work programs can foster a cooperative, rather than adversarial, environment between managers, employees, and service providers. Ultimately, a comprehensive program decreases the length and total cost of claims, while helping injured employees transition back to the workplace.

Objective physical-performance criteria can improve workplace safety and should play an integral role in a structured return-to-work process. The benefits are twofold. First, employers will be able to assign employees to jobs that fit their abilities and strengths, thus reducing injuries. Second, post-incident managers will have a greater ability to create modified duty assignments that appropriately match employee capabilities.

Proactive employers can begin by documenting the physical demands of each job and any related tasks. These requirements can be integrated into a post-offer employment-screening program to match individuals to appropriate jobs as well as improve post-injury medical management. In general, physical capacity testing can:

• Reduce injury frequency and severity
• Increase employee productivity
• Ensure employees are placed in positions where job demands do not exceed physical capabilities
• Establish a baseline for apportionment
• Document pre-injury conditions

Post-injury physical capacity testing can be used to determine an employee's readiness for regular, modified, or alternative duties and document patient improvement. Testing results can also help medical providers identify plateaus in a patient's progress and therefore reduce protracted and unnecessary medical treatments. The same information can also be used to establish a disability rating and/or help the employee transition back to the workplace.

Tools that provide objective data to ensure appropriate treatment for injured employees are valuable; however, a truly effective return-to-work program goes far beyond finding the right modified duty assignment. Supervisors must be actively involved in the program. Simply turning the return-to-work responsibility over to a claims manager or an insurance company may leave employees feeling alienated or confused. This may translate into less motivation or even disinclination to return to the workplace.



"The biggest savings from SB 899 could come from the provision that requires use of American Medical Association standards when determining the extent of a permanent partial disability, according to [Frank Neuhauser, project director at the Survey Research Center at the University of California]. Having AMA standards could result in lower claims and medical cost for these kinds of injuries by as much as 32 percent, resulting in a 7 percent reduction in the cost to the workers' comp system overall, he said. "
The Oakland Tribune, 4/30/04

A best practice return-to-work process holds front-line managers responsible for transitioning injured workers back to their regular, full work schedules when medically able. For many employees, relationships with their supervisors can make a crucial difference in how quickly they accept modified duty and then return to a full work schedule. Extensive training is required to provide managers with the tools, resources, and knowledge to make the program effective.

There is no doubt that recent changes in California laws and regulations will have a dramatic impact on how a business creates or revises its pre- and post-loss policies and programs in order to capture potential savings. It is critical that employers understand how these reforms will impact their workers' compensation programs. Employers looking to leverage these and other new opportunities should consider the following services:

• Absence Management
• Employee Management Program
• Physical Capacity Testing
• Workplace Productivity & Ergonomics

For information on how Marsh's Risk Consulting practice can assist you, please contact us.