A HOLISTIC APPROACH TO WORKERS’

COMPENSATION LOSS PREVENTION

AND CONTROL

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Andy Tolsma

INTRODUCTION

Administration of a “Holistic” Workers’ Compensation LossPrevention and Control Program is a team function thatrequires the efforts and commitment of numerous partici-pants. Corporate Leadership, Human Resources, Safety,and operational Department Managers all play a crucialrole in the process. Where one partner fails to perform asneeded, the efficacy of the entire program is under-mined.

There are three phases to the process: prevention,control, and learning from mistakes. Here again, whereone phase is not fully applied, failure can result.

Where the program is fully applied and successful, thebenefits can take the form of financial savings, improvedproductivity and even improved employee morale.

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PREVENTING LOSS

Detailed Job Descriptions:

Carefully identify physical and other demands of the essential job

functions. Also document intellectual, linguistic and other require-

ments.

Use the job descriptions as the foundation for candidate inter-

views.

Benefits:

Proper match of job requirements to candidate abilities

Matrix of physical job demands for all jobs can serve as a resource

when attempting to administer an alternative duty program when

injuries occur

Compliance with Americans with Disabilities Act

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MEDICAL SURVEILLANCE Pre-employment Physical Examinations

Exams designed to ensure physical capabilities of the candidateconform to job requirements

Pre-employment and/or Periodic Medical Surveillanceas required by corporate or regulatory agency mandate(OSHA, MSHA, DOT, etc.) Exposure-specific blood work, hearing and vision

testing, pulmonary function testing, and many others, areexamples of periodic testing that might be required

Benefits: Non-compliance can lead to fines or even more serious sanc-

tions

Can be used to detect potential occupational illness or injury atan early and even reversible stage

Helps to prevent placing an “at-risk” individual in a potentiallyhazardous setting.

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DRUG TESTING

• Create and administer a very well-documented drug testing program (which includes employee signature of understand-ing and promise to comply).

• Testing Scenarios:– “Pre-placement”: as a condition of employment (may also be a

reg-ulatory requirement like DOT)

– “Post-incident”: Where an injury, or other event, occurs that issignificant enough to requirement medical treatment or results insignificant loss of or damage to company assets, a drug test isobtained

– “For cause”: Where measureable or observable behavior suggestsimpairment

– “Random”: Should be administered “across the board” not only forcertain groups, unless stipulated by regulatory mandate (DOT test-ing, for instance)

– “Pre-promotion”: As a condition of accepting a promotion

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DRUG TESTING, CONT.

Program requirements: Thoroughly documented policy that stipulates

Who is subject to the policy

Under what circumstances testing is applied

If testing does not apply to all employees, document why (DOT requirements forinstance)

Benefits/Rationale Word “gets around” about companies that don’t test

An applicant who fails a test even when testing is known to berequired is a problem averted

Some WC carriers offer premium discounts for drug testing pro-grams

Some industries mandate testing (avoid fines or other penalties)

Some states allow WC benefits to be denied when the event isshown to result from impairment as documented by a positive drugtest

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MAINTAINING A SAFE WORK ENVIRONMENT

Implement and enforce all regulatory and corporate safety

requirements.

Research the applicable Code of Federal Regulations (CFR) Sec-

tion(s) and ensure their full adherence

Research any other industry–specific regulatory guides and ensure

full adherence

Perform frequent work site walkthroughs to ensure compliance

with all industry-specific regulations as well as to detect any new

or persistent risks for injury or illness.

Benefits:

Prevention of occupational illnesses and injuries

Prevention of fines or other sanctions resulting from non-com-

pliance to regulatory requirements

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USE OF REQUIRED SAFETY EQUIPMENT

The use of required safety gear and practices, whether

mandated by the company or by industry regulation,

must be enforced.

Hearing protection, vision protection, respiratory protection,

“tie-offs”, steel-toed foot gear are just a few examples of such

equipment

Team-lifting, spotting, and work-breaks are just a few exam-

ples of safety practices that could be implemented

Failure to comply with these requirements must result

in well-documented progressive discipline

There is no excuse for a hearing loss claim where hearing pro-

tection is required and provided but not used!

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CONTROL - WHEN ILLNESSES AND INJURIES

OCCUR

Timely notification The ill or injured worker must notify the supervisor of the event with-

in 24 hours of its’ occurrence or becoming aware of symptoms.

The supervisor must notify the WC Leader immediately upon notifi-

cation by the worker.

The WC Leader has the best opportunity to effect a positive outcome

if information is available timely

The WC Leader, in association with the worker’s supervisor when

appropriate, should interview the worker and examine the place

where the illness or injury occurred

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OCCUPATIONAL HEALTH CARE AND RTW

• Direct the ill or injured worker to a previously ident-ified health care provider (where able)– Use a provider who is willing to communicate

– Use a provider who facilitates modified duty return to work

– Use a provider who can participate in the company’s post-incident drug testing program

• Use a document that the provider completes thatstipulates any limitations resulting from the illness orinjury in terms identical to those used in the positiondescriptions– Create a matrix of job physical demands. When new limits are

defined by the provider, refer to the matrix to identifytemporary alternative duty assignments

– Update the capabilities at least bi-weekly until the baseline isachieved or Maximum Medical Improvement (MMI) is reached.

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OCCUPATIONAL HEALTH CARE AND RTW,

CONT.

Be imaginative in creation of alternative duty

assignment opportunities: Where assignment to an existing job is not possible, consider

“making one up”

Where no kind of in-house assignment is possible, consider “loan-

ing” the worker to a not-for-profit like the American Red Cross,

American Heart Association, local Food Bank, etc.

Create a consortium of employers who have positions to which

workers can be assigned until they reach a level where they can be

assigned to an in-house alternative position, return to baseline or

achieve MMI

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LEARNING FROM MISTAKES

Carefully interview the ill or injured worker and any otherpersonnel who might be able to provide insight into theevent

When feasible perform a walkthrough of the area where theinjury or illness occurred Be sure that you comply with any safety requirements and

regulations while examining the worksite to ensure that you don’tbecome subject to the same type of problem.

Carefully document the illness or injury in order that trendscan be detected and aggressive preventive measures takenwhere appropriate. Note: Where the event occurred

What the worker was doing

Were safety measures being observed

Have others been injured doing the same thing in the same place

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LEARNING FROM MISTAKES, CONT.

Report all findings and recommendations to the appropr-

iate persons: Leadership, Safety staff, Supervisors, WC

Claims Processors, etc.

Apply progressive discipline if the worker became ill or

injured due to non-compliance with required safety

equipment, apparel, processes, etc.

Create and collaborate with a committee that can deter-

mine the best practice to prevent similar illness or injury

to other employees.

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OTHER MONEY-SAVING POSSIBILITIES

Consider becoming self-insured for WC and other P & C

coverages (be sure a stop-loss policy is in place)

If fully insured, consider high deductible to reduce impact of

small cases on your insured experience modification factor

Whether self or fully-insured, consider assuming the claims

administration function, using your carrier/payer’s system in

an “Application Service Provider” (ASP) setting, or a vendor’s

system

Either assume responsibility to administer all claims entirely or

assume only the medical-only claims (those where no indemnity

expenses are incurred

Aggressively monitor and negotiate case reserves

Medical-only claims should incur no or very little reserve

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OVERALL BENEFITS OF A HOLISTIC

APPROACH TO WC LOSS PREVENTION AND

CONTROL

Occupational healthcare costs for treatment of injuries andillnesses will be reduced due to fewer injuries

Fines and other regulatory body sanctions for non-compliance willbe avoided

Less injuries and illnesses lead to fewer claims; which lead toreduced administration fees from the workers’ compensationcarrier/payer

Aggressive RTW strategies reduce indemnity costs and reduce casereserves

Self-insurance (with stop loss) or higher deductible on fully-insuredplans will reduce premiums

Full or partial self-administration can dramatically reduce the costsof the WC program by reducing the administrative fees for claimshandling. Every claim handled and every bill paid incurs anadministrative fee

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