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The compensability decision is absolutely critical to managing a workers' compensation claim. Rarely does this process get the time and attention it deserves. Employers have often overlooked this process. Insurers and claims adjusters have not consistently made the compensability decision by validating the relevant facts.
That practice is no longer good enough. At least 20 percent of all filed workers' compensation claims have some element of irregularity. They are not compensable due to errors, fraud, misunderstanding of the law, or the failure to determine that an injury or illness was pre-existing. The problem is only compounded further by common compensability mistakes including:
- Delayed investigations, often with a 5-7 day lag time
- Failure to gather all of the available and relevant facts
- Insufficient or flawed accident information
If workers' compensation programs are going to meet the needs of both employees and employers, compensability decisions must be both timely and accurate. Experience has shown that proactive employers that are engaged in the process have far better outcomes than those that ignore the issue.
What will you say when they ask what happened?
Executives and risk managers who are concerned with how their compensability decisions are made should ask themselves the following questions:
- Do we have the right people and processes in place to make sure we gather all relevant facts once an incident has occurred?
- Are front-line managers engaged in the fact-finding process?
- Do we have operations in California where the compensability process has become even more critical, as a result of the 2004 workers' compensation reforms?
- Do employees receive a timely response upon filing a claim? Where are the delays in the process?
Who’s looking out for you?
Marsh offers a unique set of software tools and training services designed to help engaged employers become actively involved in the compensability process, thus improving their outcomes.
Workers' Compensation FirstFactsSM was developed based on the premise that compensability investigations should "freeze the facts" immediately following an incident. The sooner the accident investigation begins, the more accurate the results will be. Employees, witnesses, supervisors, and shift leaders are likely to remember details, surroundings, and contributing factors if questions are asked within a few hours of the incident, as opposed to days later. Day-to-day supervisors and managers will always be in a better position than insurance representatives to gather relevant incident information.
The Marsh program does not place company employees in the position to make the compensability decision. Instead, it simply helps trained personnel to gather all relevant data so that the claims administrator can make an accurate and timely decision.
This revamped approach to the compensability process begins with a Marsh-led training session designed to teach company employees—generally managers, supervisors, and risk managers—how to effectively conduct a compensability investigation. Educational content focuses on the type of information the incident investigator should gather, how to effectively ask the right questions, and the basics of protecting employees' privacy rights.
FirstFacts training also includes information on how to work with employees after an accident. The most effective investigations are conducted in a cooperative, professional, and positive way.
Course work completes with training on how to use Marsh's online FirstFacts tool. This user-friendly Web-based system leads the trained manager/supervisor through the investigation process. Using pull-down menus and open-ended questions, the software tool helps the user gather relevant information from the employee, accident witnesses, and immediate supervisors or managers.
For example, FirstFacts will help examine all the relevant issues and available facts around "course and scope" of the injury. These are facts that must be validated for the claims administrator to accept or deny the claim.
Once the online questionnaire is complete, FirstFacts automatically produces an incident investigation report that is then e-mailed to the company's risk management department and claims administrator for next steps.
The final report highlights any alerts, or "red flags," for each claim. Alerts may include a delay in reporting the injury; unusual locations, dates or times of injury; unusual job activities, and other compensability-related concerns.
A FirstFacts report's usefulness extends beyond any particular individual case. Company risk managers can also use information gathered with FirstFacts to improve ongoing health and safety programs. A regular review of completed reports can help uncover accident and incident trends; information that can be integrated into ongoing health and safety programs.
Organizations do not need to make an extensive infrastructure investment in order to deploy FirstFacts. The software resides on Marsh servers, and users only need Internet access to log on and begin filing reports. The system is secure and reliable, meeting all confidentiality requirements.
If you have any questions or would like additional information, please contact us.
If you are seeking information about insurance and related services, please visit marsh.com.
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