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Putting the clamps on workers' comp claims.

Workers' compensation. Those two words can cause enormous headaches for nursing home operators. In the United States today, the dramatic rise in workers' compensation premiums poses a new and serious threat to the overburdened long-term care industry. Keeping those increases in check is key to maintaining the financial viability of a long-term care facility.

But how can nursing homes combat this growing challenge? By implementing comprehensive safety programs and claims management practices, nursing home operators can safeguard themselves from skyrocketing insurance premiums. Through these programs the number of workers' compensation claims that are made can be controlled, thus limiting the premiums paid by operators.

The Experience Modification

In order to decrease workers' comp premiums, nursing home operators must make a commitment to reducing the "experience modification" of their facility. The experience modification is the rating which most affects a facility's workers' comp premiums.

It is crucial for nursing home operators to trim their experience modification. Safety programs and claims management practices do just that, and, in the end, allow operators to eliminate not only accidents and injury but the money that is lost because of them.

Safety First

The most common questions asked when a workers' compensation claim is filed are: "How did this happen?" and "Can it happen again?"

A fully functioning safety program can answer these questions. The obvious result of such a plan is the prevention of one-the-job accidents. But, a safety program also makes possible informed investigations as to the "hows" and "whys" of workplace accidents.

The first step in assembling a safety program is an in-depth safety audit of the facility by a loss control specialist. Ideally, such a safety audit should be conducted on a quarterly basis.

The audit starts with an analysis of areas where losses have occurred, and then investigates areas where possibly dangerous trends exist. An example of a typical hazard is the staff member who suffers an injury after attempting to lift or move a resident. The safety audit will reveal the reason for this occurrence, identifying unsafe acts and conditions. With the loss control specialist's recommendations in hand, the operator can then correct the unsafe conditions.

Establishing a safety committee together with a corporate safety policy is another integral part of a successful safety program. These should allow participation by employees and will therefore demonstrate management's commitment toward safety. To ensure that all shortcomings are corrected, the safety committee should meet on a regular basis and should also develop a supervisor's accident investigation format.

An experienced professional can tailor a form to meet the individual nursing home's needs, which can lead to more detailed investigations of all accidents. These operator investigations can determine if an unsafe act or condition caused the accident, and what action was taken to prevent a reccurrence.

In addition to these "accident reports," a self-inspection procedure and form should be prepared and administered by the safety committee on a regular basis. Standard self-review of all conditions and practices can go a long way toward eliminating particularly high-problem situations, such as poor housekeeping, use of broken or poorly maintained equipment, or non-use of personal protective gear. Beyond the workers' comp benefits of review, nursing home operators can use the documented safety performance of a department as an effective management tool when conducting annual performance reviews.

After an assortment of problem conditions and actions are identified, the final portion of the safety program can be implemented, i.e., use of the information as a training aid during workshops for current and new employees. A variety of films, booklets, and seminars are available through qualified loss control specialists to assist in the development of these in-service clinics.

Once the entire program is in place, it is important to maintain employee input as well as to keep abreast of constantly changing safety regulations, including standards set forth by OSHA or state and local laws.

Eliminating accidents will obviously help lower the experience modification. What's more, the acknowledged presence of a formal safety program can lower other insurance costs facing nursing homes.

Claims Management

Further reduction in costs can result from careful management of claims made against the facility. Most claims management programs lead to lower workers' comp premiums in two ways.

To begin with, an examination of the claims that are pending, together with the current claims reporting procedure, should be completed. Many nursing homes report all claims to their insurance carriers, including minor ones - and all claims, once reported, are included in the experience modification formula, which results in high premium dollars.

One way many nursing home operators combat this is to hire a risk management consultant to manage small claims that involve no lost man-hours. Such a professional can often be retained through a nursing home's insurance broker. By doing so, the nursing home can pay smaller claims directly. While there is a fee involved, it is easily justified by the nursing home's reduced workers' compensation insurance premium in the future.

The consultant determines which claims are to be paid directly by the nursing home and which are to be reported to the insurance carrier for payment. For operators who have many small claims, a drastic reduction in the experience modification can occur as a result of this.

Second, perform a complete analysis of the facility's past three years' losses. This will help ensure that the figures used to establish the facility's current modification are accurate. Should errors be uncovered from the review, an immediate reduction in the experience modification would result and a return premium would be due to the policy holder.

In the last two years, the cost of workers' compensation premiums has soared, and the trend is expected to continue. But, by attacking the problem of workers' compensation claims using both prevention and claims management, nursing home operators can make a significant bottomline difference for their facilities.

Michael J. Bednar is director of engineering services at Essential Services and Programs, a Great Neck, New York-based service firm comprised of loss control and claims management specialists.
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Title Annotation:workers compensation
Author:Bednar, Michael J.
Publication:Nursing Homes
Date:Aug 1, 1992
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