A description of a comprehensive lss prevention and ontrol strategy based upon many years of industry experience

1. A Holistic Approach to Workers’ Compensation Loss Prevention and Control 1 Andy Tolsma

2. Introduction Administration of a “Holistic” Workers’ Compensation Loss Prevention and Control Program is a team function that requires the efforts and commitment of numerous partici-pants. Corporate Leadership, Human Resources, Safety, and operational Department Managers all play a crucial role in the process. Where one partner fails to perform as needed, the efficacy of the entire program is under-mined. There are three phases to the process: prevention, control, and learning from mistakes. Here again, where one phase is not fully applied, failure can result. Where the program is fully applied and successful, the benefits can take the form of financial savings, improved productivity and even improved employee morale. 2

3. 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 3

4. Medical Surveillance Pre-employment Physical Examinations Exams designed to ensure physical capabilities of the candidate conform to job requirements Pre-employment and/or Periodic Medical Surveillance as 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, are examples 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 at an early and even reversible stage Helps to prevent placing an “at-risk” individual in a potentially hazardous setting. 4

6. Testing Scenarios:

7. “Pre-placement”: as a condition of employment (may also be a reg-ulatory requirement like DOT)

8. “Post-incident”: Where an injury, or other event, occurs that is significant enough to requirement medical treatment or results in significant loss of or damage to company assets, a drug test is obtained

9. “For cause”: Where measureable or observable behavior suggests impairment

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

11. “Pre-promotion”: As a condition of accepting a promotion5

12. 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 for instance) Benefits/Rationale Word “gets around” about companies that don’t test An applicant who fails a test even when testing is known to be required 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 is shown to result from impairment as documented by a positive drug test 6

13. 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 7

14. 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! 8

15. 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 9

17. Use a provider who is willing to communicate

18. Use a provider who facilitates modified duty return to work

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

20. Use a document that the provider completes that stipulates any limitations resulting from the illness or injury in terms identical to those used in the position descriptions

21. Create a matrix of job physical demands. When new limits are defined by the provider, refer to the matrix to identify temporary alternative duty assignments

22. Update the capabilities at least bi-weekly until the baseline is achieved or Maximum Medical Improvement (MMI) is reached.10

23. 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 11

24. Learning From Mistakes Carefully interview the ill or injured worker and any other personnel who might be able to provide insight into the event When feasible perform a walkthrough of the area where the injury or illness occurred Be sure that you comply with any safety requirements and regulations while examining the worksite to ensure that you don’t become subject to the same type of problem. Carefully document the illness or injury in order that trends can be detected and aggressive preventive measures taken where 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 12

25. 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. 13

26. 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 14

27. Overall Benefits of a Holistic Approach to WC Loss Prevention and Control Occupational healthcare costs for treatment of injuries and illnesses will be reduced due to fewer injuries Fines and other regulatory body sanctions for non-compliance will be avoided Less injuries and illnesses lead to fewer claims; which lead to reduced administration fees from the workers’ compensation carrier/payer Aggressive RTW strategies reduce indemnity costs and reduce case reserves Self-insurance (with stop loss) or higher deductible on fully-insured plans will reduce premiums Full or partial self-administration can dramatically reduce the costs of the WC program by reducing the administrative fees for claims handling. Every claim handled and every bill paid incurs an administrative fee 15