By STEPHEN PEACOCK
Your excess workers’ compensation carrier can be a huge ally when it comes to management. The primary role of an excess carrier is to reimburse insureds for workers’ compensation benefits paid above a self-insured retention (SIR). Many do not realize, though, that their carriers also can help minimize claims exposures in large cases.
On the Same Team
Excess workers’ compensation carriers possess a unique expertise in the industry and have many resources available for their insureds because they see the worst work injuries. Claims professionals, employers, defense attorneys, and case managers work closely together to handle cases, so for your big injuries or those claims that don’t “go away,” it makes sense to bring in other experts available to you.
Traditionally, there has been a reluctance to include excess carriers because there is a belief that they shake things up and spend a lot of other peoples’ money. It’s important to understand that large workers’ compensation claims need to be handled differently from routine cases. Employers, claims professionals, and attorneys rarely have the opportunity to handle more than one or two such cases, but that is all excess carriers handle so it’s more routine for them. Recognize which claims will not close early, report them to the carrier, and be open to their suggestions and recommendations because their goals are the same as yours: Maximize claimant recovery as efficiently as possible in terms of medical, time, and cost.
Many excess policies allow carriers the opportunity to participate in claims that they believe may exceed the self-insured retention. This is not because excess carriers want to be intrusive but rather to help minimize exposure. Excess claims are high-dollar, life-altering events that often involve permanent and total disability. Medical care does not end when these injured workers reach maximum medical improvement because they need maintenance care. Physicians can’t release them. These cases need early recognition and aggressive intervention because they are different from the routine files that claims professionals normally handle. They need to be reported to the excess carrier quickly.
Monthly medical costs can be high since these injured workers usually are deeply entrenched in their care and are resigned that it will never end. Getting them out of this mindset and off the long path of medical care may be difficult and costly. Large claims can average $5,000 or $10,000 a month, and to eliminate or reduce long-standing pain management programs can cost between $50,000 and $100,000. Excess carriers understand that paying a lot in the short term for a well-conceived plan can result in considerable savings in the long term.
Unique Expertise
Excess claims analysts know how to approach large medical cases because that is all they do. In contrast to claims professionals, analysts are trained to look beyond what is stated in the medical and legal records, anticipate what is not written there, determine the likelihood of the occurrences, then handle and reserve accordingly.
You may be asking yourself, “But isn’t that what claims professionals do?” Yes, but the perspective is different. Claims professionals do not have access to such claims as analysts, so they are much more optimistic about recovery and when medical expenses will end. Excess carriers see so many claims that do not just “go away.” The medical costs remain high, and the care goes on and on.
Analysts are trained to recognize costly, long-term exposures such as high opioid usage; spinal cord stimulators and morphine pumps; the need for repeat surgeries, such as fusions and joint or prosthetic replacements; transportation; attendant care; and home modifications. Each of these can be very expensive, so addressing the reasonable need for them early in the process is critical to overall exposure to a claim. Obviously, everyone involved wants to provide the things that injured workers need when they need it, but planning ahead, when possible, is better than waiting to do an investigation in a short amount of time.
Resources and Contacts
Excess carriers have the specialized expertise and resources needed to manage complex dynamics to produce the best possible outcomes for employers and injured workers, including:
Medical Teams. Your excess carrier should have a team of in-house nurses and physicians with prior extensive catastrophic medical experience and, sometimes, actual claims handling experience. These experts have resources and contacts around the country available for assistance or consultation. They are chosen for their expertise, claims knowledge, and communication skills. They know how to handle the strange medical situations that excess carriers are exposed to every day.
Nationwide Resources. Everyone who runs a self-insured workers’ compensation program believes that they have the best doctors and medical facilities to handle medical needs. While these are fine for the normal cases, turn to your excess carrier early for the unique, complicated ones. If your carrier has a strong industry presence, its analysts will know the best specialists in the country and where the best medical facilities are located. Realize that this may necessitate moving a patient to a different facility, which can be costly, but, again, the goal is to get them into the most appropriate medical treatment early so that they can achieve the highest recovery possible.
Your carrier may have access to better price-reducing measures, too, so develop and maintain a relationship with them and use them to find exceptional physicians, specialists, and medical facilities in your area. Quiz them about how other claims programs are run, as well.
Opioids and Medical Equipment. Excess carriers have contacts with pharmaceutical companies and know the questions to ask when exploring ways to address medication dose, frequency, and type without losing quality. They are familiar with drug review programs, including those that are successful and those that are more cost effective. They purchase a lot of medical equipment and conduct research to be sure that they are top quality, durable, and competitive in price.
Bill Review. In-patient hospital bills and surgery costs can be extremely high. Bill review companies can save significant costs for employers and carriers—even after the usual state fee schedule reductions are applied. Talk to your excess carrier and explore such potential savings because they often are familiar with several bill review companies and have a good idea of what works, what doesn’t, and pricing expectations.
Home Modifications/New Homes. Modifying homes for injured workers can be difficult when more than a ramp and shower handrail are needed. Getting bids from one or two local contractors may not be appropriate. An expert contractor familiar with workers’ compensation, ADA rules, and permits can be very helpful and cost effective. Finding one that can communicate easily with claimants, physicians, and case managers is especially important.
Every general contractor will say that they can do the job, but when more extensive home modifications are needed and are completed incorrectly or poorly, you may need them to undo and then redo their work. This happens more often than you might think, so it is more cost-effective to do it right the first time, even if it might be a bit more expensive. Excess carriers can help find the right expert so problems and costs are minimized.
Sometimes it is cost-effective to purchase a new house rather than modify the old one. Excess carriers have the expertise and resources to help with such analysis in a workers’ compensation context.
Attendant Care/Assisted Living/Transportation. Injured workers sometimes need home attendant care. This can be provided professionally or through family and friends. What happens, though, when this is needed for life and a spouse is no longer physically capable of caring for the claimant? Should you do nothing and wait to see if it actually happens, or plan now for the possibility that it might happen? If there is a reasonable expectation that attendant care or an assisted living facility may be needed down the road, start planning now. Your excess carrier can help, so don’t wait to report these situations.
If settlement is not an option, your carrier might be able to help find a suitable living facility or attendant care provider at competitive prices. They might be able to help you with transportation needs as well as vans, prosthetics, wheelchairs, and other durable equipment.
Settlements. When it comes to settling claims, employers have a lot to consider. Should they settle? If so, all or just part? How much are the future medical needs? Is a Medicare Set-Aside (MSA) needed? Employers may decide not to settle because MSAs cost too much.
Medical costs are increasing at roughly 10 percent each year. Injured workers seem to require more and more treatment, and new technology is tremendously expensive when introduced. Even cost-of-living increases need to be considered. We all understand that medical costs do not decrease with time. (We may not like it, but we have to accept that reality.) Instead of doing nothing, explore ways to get the exposure reduced. Include your excess carrier for ideas. If medical costs cannot be reduced any further, maybe the claim just needs to settle, but don’t let the cost scare you away from settling.
More than just a simple, written settlement offer to an injured worker is needed in these cases. Claimants often refuse to consider settling at first because they don’t entirely understand the pros and cons. They deserve the respect and opportunity to understand the exposure and cost. The settlement offers should be clear, easy to read, and reflect the advantages and disadvantages to settling.
Consider scheduling a face-to-face meeting or mediation so that the claimants can talk directly with you, a mediator, structured settlement broker, or expert in Social Security and MSAs. Claimants often have only their attorneys and other injured workers to rely on for perspective and comparison, so having an independent expert can be helpful to getting these cases settled. Successfully settling these claims is a process and can take several months or years. Your excess carrier can guide you in this and help you navigate the unique territory surrounding these types of claims.
Excess carriers can validate with full authority and knowledge how true the cliché “The longer a workers’ compensation claim stays open, the more expensive it becomes,” really is. Indeed, these claims can become lifetime events for injured workers.
In summary, use your excess carrier as a resource. Sure, they look for ways to reduce costs in their layer, but don’t we all? They do this to save costs for their insureds, too, without minimizing the medical care claimants need. Excess carriers regularly come across strange or unique claims situations and know how to approach them. Recognize the value they can bring and include them as part of your claims team.
ABOUT THE AUTHOR, SOURCE
Stephen Peacock is a regional claims manager with Safety National Casualty Corp. He can be reached at 314-692-9524. This article originally appeared in the CLM publication WC magazine, and is reprinted here with permission.