7 Steps to Building a Workers Comp Program

Steven J. Link


November 1, 2010

Regardless of industry, running a well-managed workers compensation program is becoming more critical than ever. When highly trained, experienced employees remain on the job, productivity rises, employee morale increases and workers comp costs fall.

Here are seven steps to follow to ensure that your program is delivering.

1. Program Coordination
At the outset, the organization needs to designate a qualified person as program coordinator. This person must be motivated, knowledgeable, highly regarded by colleagues and possess powerful communication skills. The workers comp coordinator will become responsible for managing both frequency and severity of claims and ultimately the organization's total cost of risk. For best results, the person should be empowered to make staffing and financial decisions that impact program performance.

2. Employee Health and Wellness
Employers have an obligation to ensure that workers' physical abilities are commensurate with the duties they are expected to perform. This process should begin before employees are even hired and continue throughout their employment. Businesses should also encourage employees to protect and improve their health and well-being-healthy workers are less likely to become injured and more likely to return to work promptly should an injury or illness occur.

3. Safety and Loss Prevention
An organizational culture in which safety is a priority is essential. Creating such an environment begins with a commitment to safety from the top. Senior executives must take on a very visible role and support the program through communication, examples and financial support. Creating a diverse safety committee able to effect change can also play a significant role in accident reduction efforts. All employees should be held accountable for safety and loss prevention at the workplace as a condition of employment.

4. Claims Administration
One easy way to lower claims costs is to ensure all workplace incidents are reported immediately. The sooner a claim is reported to the third party administrator, the sooner the adjuster can begin the claims management process. Industry studies have shown the more time that elapses between the time an accident occurs and the time it is reported to the claims administrator, the more costly the claim becomes. Additionally, employers need to maintain an active role in monitoring the services provided by the third party administrator. Service expectations need to be clearly defined, and performance needs to be measured and monitored on an ongoing basis. Clearly, the ability to exercise greater control over the claims administration process is one of self-insurance's greatest advantages.

5. Medical Management
Workers compensation medical costs are spiraling out of control. Managing them starts by fostering an environment of trust where workers believe their employer will do everything possible to provide prompt, quality medical care. Communication with injured employees should take place continually throughout the recovery process. Among some of the more effective techniques being employed to manage medical costs today are: preferred provider organizations, designated physicians and clinics that specialize in treating industrial injuries, independent medical evaluations, medical case management, medical bill review and pharmaceutical management.

6. Return to Work
Since the goal is to get injured workers back to their pre-injury job, the return to work program should provide transitional duty. This allows the injured employee to come back to work with the restrictions given by the treating physician and then transition the individual back into the original job as restrictions are reduced. New hires should be oriented to the program, and all employees should be aware of the employers' philosophy, structure, benefits and responsibilities. Treating physicians and independent medical examination doctors also need to stay in the loop.

7. Data Management
Tracking, trending and analyzing data is necessary to determine where, why and what types of injuries are occurring. This level of information in turn allows employers to develop and implement cost management strategies. Benchmarking data also allows an employer to measure how it is doing compared to established goals and objectives. The result is noticeably improved decision-making capabilities.

Steven J. Link is one of the founders of Midwest Employers Casualty Company (MECC). As executive vice president, Link is responsible for the development of MECC's marketing and branding initiative, and the enhancement of the company's client service strategy.