Prompt workers’ comp reporting will save money
A company’s prompt reporting of workers’ injuries can have a considerable influence on its bottom line, according to a new study by The Hartford Financial Services Group, one of the nation’s largest providers of workers’ compensation.
The study found that claims filed five or more days after an injury cost an average of 15% more for medical and income replacement benefits than similar claims that had been filed promptly, according to Richard Palczynski, senior vice president and chief actuary at the The (CT) Hartford.
"With medical and indemnity costs rising at an annual rate of 7% to 8%, controlling workers’ compensation costs has become increasingly important for companies," he says. "The Hartford’s study demonstrates that early reporting can be one of the most effective ways to keep costs in check."
Injuries fell into three categories
The Hartford analyzed more than 30,000 lost-time workers’ compensation claims over a five-year period from 1994 to 1998. The injuries fell into three categories — back injuries, carpal tunnel syndrome and other nerve disorders, and miscellaneous injuries — which represent about two-thirds of all lost-time workers’ comp. claims. The study excluded claims for open wounds, fractures, and dislocations, which already are typically reported within 48 hours of occurrence.
The analysis shows early reporting of nervous disorders such as carpal tunnel syndrome can save an average of 20% of medical and lost-time costs. Delay in reporting a back injury increases claim costs by an average of 10%, and all other injuries cost 12% more.
The study confirms the common wisdom that early reporting on workers’ compensation claims saves money and speeds an injured worker’s return to work, says Cal Hudson, The Hartford’s group senior vice president for claims.
"When policyholders report claims promptly, we can quickly institute our case management services to ensure that injured workers receive the appropriate medical care and rehabilitation services," he says.
Hudson notes that soft-tissue injuries, such as back injuries or sprains, can be particularly vulnerable to delays.
"It’s not unusual for a worker to strain his back, continue to work for several weeks, and then seek medical attention only after the injury has been aggravated and the damage intensified," he says. "Companies need to emphasize to their employees that all occupational injuries — no matter how minor — need to be reported promptly so they don’t become major problems."
Controlling workers’ compensation costs is more important now than ever, Hudson says.
"A company can do a lot to prevent injury, but it can also do a lot to keep the cost of injuries from escalating," he says. "The first step is early reporting."
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