The Client and Its Challenge
This transportation company faced rising workers’ compensation costs and had to identify and address the key cost drivers. That meant a thorough review of the medical management, return-to-work, and litigation management initiatives.

The Risk Consulting Solution
The client retained Marsh to facilitate the development of a new workers’ compensation process for the company as well as develop a management plan for the current third-party administrator (TPA).

Marsh completed a claims review, a perception survey that involved 1,000 participants, and interviews with management and union staff on the relevant workers’ compensation issues. The team identified 12 significant union, management, medical, legal, and TPA cost drivers that the client needed to address.

Using the information generated during the diagnostic phase, the team redesigned the workers’ compensation process, which required securing both management and union support. Key program changes included the development of a return-to-work policy that was supported by company management and cost allocation guidelines. Marsh consultants developed best practices for TPA processes and implemented a performance guarantee. Finally, information consultants helped the client select and implement a risk management information system (RMIS).

Results
The client implemented the best practices identified by Marsh and recovered more than $125,000 from the TPA for less than acceptable performance. Union leaders and management agreed on a consistent workers’ compensation process. A new TPA was retained, resulting in administrative cost savings of $500,000. Once the RMIS was installed, an allocation program assigned workers’ compensation costs to the appropriate business unit and division, encouraging ownership of the program across the organization.