Can I Control My Experience Mod Part 2

We previously discussed controlling the experience modification by accurately classifying employees to the appropriate job classification, therefore letting the expected losses be an accurate representation of the exposure. 

Now we want to discuss what happens once an accident has occurred.  I am sure each person reading this has a safety plan and a post accident process.  Issues like providing immediate medical attention, directing treatment to a company physician,  prompt notification to insurance companies, and accident investigation are all critical after an accident.

But let's talk in a little more detail about how to take steps to limit the cost of the claim both in real dollars spent by the insured and their carrier, as well as the dollars included in the calculation process used by NCCI.

First of all, utilizing a company physician, especially one included in a network used by the insurance carrier, can reduce costs in real dollars.  The ER is not the most cost effective choice and should be used only when necessary for the health of the injured worker.  Well prior to an accident occurring, arrange for a physician to whom injured employees must go for work related injuries.  In Indiana, the employer has that right, not the employee.  They can see their own physician at their own cost if they wish.

Prompt notification to the insurance carrier can allow you to utilize their expertise in directing treatment and utilizing network discounts.  Don't forget they are on your side in keeping real dollar costs low.

Once the immediate medical attention has been procured, and probably even before the investigation begins, you need to be thinking about cost mitigation in the form of early return to work or alternative duty programs.  While it may seem wasteful to a company to pay an employee for doing less than a whole job, it really pays off.  Here is why.

The experience modification calculation does not use all the medical costs in the calculation IF the employee receives no payments for lost wages or permanent loss of use of a body part.  In those cases with no lost wages, they only use 30% of the real dollar costs.  That is a 70% reduction in costs just by allowing for alternative duty.  

Providing alternative duty, especially in Indiana where the employee has to miss seven days of work prior to receiving an indemnity payment, can reduce future premium costs substantially.  Take for example, an insured with a $1,000 medical claim.  With no lost time, that will only reflect as $300 on the experience modification.   The impact on the experience modification may only be 1 point, but even at a $2500 premium, with that loss affecting 3 experience mofidifcations, that would be $750 of additional premium.

Alternative duty is a tricky issue to deal with, especially with the increased ADA (Americans with Disabilities Act) enforcement.  "Creating" a job for an injured worker could get you in trouble with the ADA.  That is why a formal alternative duty program needs to be created ahead of time to allow for utilization when needed.  Insurance companies, private companies like Safemetrics, and other resources are available to develop these plans.

In our next update we will talk more about how to maximize the seven days provided under Indiana law to maximize the benefit.