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State Worst Offender in Camp Reporting.

Wal-Mart Challenges Most Comp Claims

WAL-MART STORES Inc., punished last month by the state of Washington for problems administering its self-insured workers' compensation program, is in good standing with the Arkansas Workers' Compensation Commission.

But it is by far the state's most aggressive self-insurer when it comes to challenging employees' claims for workers' compensation.

In the meantime, Arkansas' state government falls far short of its own standards in reporting and processing workers' compensation claims for its employees.

In the Washington case, the state moved to terminate Wal-Mart's 'participation in its self-insurance workers' compensation program, citing "failure to allow workers to file accident reports, failure to pay time-loss compensation, and delaying or prematurely terminating compensation."

Arkansas Workers' Compensation Commission records show that Wal-Mart, which also self-insures here, is within state guidelines for claims payment and reporting.

Workers' compensation insurers must file either a notice of claim payment or an intent to challenge the claim within 15 days after a work-related accident that results in lost work time for an employee. The commission standard for timely reporting of this notice, including a five-day grace period, is 80 percent.

Timely and Not

In 1998, Wal-Mart's notices were on time 91.74 percent of the time, while the average for all workers' compensation insurers was 75.72 percent, below the state standard. In 1999, Wal-Mart's second-notice timeliness rate dropped to 81.69, still above the 80 percent standard. The average for all insurers in 1999 was 75.38 percent.

One of the worst offenders among self-insured entities was the state itself. The second notice of state employee claims was received in a timely manner only 49.41 percent of the time in 1999 -- but that was an improvement over the 45.93 percent timeliness rate in 1998.

The Municipal League Workers' Compensation Trust, representing city employees around the state, filed on time only 60.87 percent of the time in 1999 and 64.76 percent in 1998.

Arkansas Workers' Compensation Commission CEO Julie Benafield Bowman attributed the poor performance to the layered nature of government bureaucracies.

"It's just a logistics thing, trying to get so many different people from so many different agencies," she said.

While deploring the late reporting, Alan McClain, director of the commission's self-insurance division, agreed that the different levels of government often slow the reporting process.

"A lot of times it was really late before it ever got to claims," he said. Noting that in many cases the employee was actually being taken care of through time off and medical care in spite of the late reporting, McClain said that, at his urging, many state agencies were improving timeliness by faxing forms.

The commission rewards companies with good on-time records, McClain said, and grades down for poor percentages on yearly commission evaluations of self-insurers.

No insurer is ever terminated from the program solely for missing the state timeliness standard, McClain said. In fact, only one self-insurer has been terminated from the program in the last three years, McClain said. That company was Rose Care Inc., a nursing home chain dropped because it no longer met self-insuring criteria.

The Challenger

Wal-Mart stands far above any other self-insurer in challenges to employee claims. In 1999, the company reported its intent to controvert claims 55.06 percent of the time -- 174 out of 316 claims. That is almost three times as often as the average for all workers' compensation insurers, which was 19.79 percent.

The company second most likely to challenge claims was StaffMark Inc. (now Edgewater Technology Inc.), with 33.96 percent.

Steve Carter, head of Wal-Mart's workers' compensation claims group, defended the company's record, saying the vast majority of Wal-Mart's claims had been "medical-only" -- meaning they involved less than seven days of missed work -- and were taken care of by the company.

Wal-Mart spokesman Bill Wertz agreed.

"A lot of things are taken care of and you never see a claim filed," he said.

"We have a very aggressive temporary alternate-duty program," Carter said, in which injured employees are encouraged to continue to work on light duty, if allowed by the attending physician. A very small percentage of lost-time claims are actually denied by the company, Carter said.

Though seemingly dogged by almost continuous warnings and citations at the hands of Washington's Department of Labor and Industries, the company has a clean record in Arkansas, McClain said.

"Our records reflect no citations, warnings and/or enforcement actions taken by the state government and the Workers' Compensation Commission. against Wal-Mart Stores, Inc. and its divisions for workers' compensation violations from 1994 to present," McClain said in response to a Freedom of Information Act request by Arkansas Business.

Also, challenging a claim does' not necessarily indicate intent to deny the claim completely.

Charlotte Wilder, an employee at a Wal-Mart store in Hot Springs, filed a claim in. 1999 that Wal-Mart challenged. But the company eventually paid her back injury claim and she returned to work, she said.

"I requested my own doctor," Wilder said when contacted last week. "They refused that" because she had already been treated by a physician recommended by the company.

The doctor dispute did not hinder her treatment, Wilder said.

"They sent me to therapy," she said. "I had no problem with them."
 Workers' Compensation Challengers
 Challenges to employee workers' compensation claims
 by self-insured entities with 50 or more claims
 Total Total Percent
Name of Entity Claims Challenged Challenged
Wal-Mart Associates Inc. 316 174 55.06
StaffMark Inc. 53 18 33.96
Arkansas Self-Insurance Trust 68 20 29.41
Public Employee Claims (State) 600 176 29.33
Aging Services Fund 83 19 22.89
Georgia Pacific Corp. 54 12 22.22
Cooper Tire & Rubber Co. 108 21 19.44
Baptist Health 53 9 16.98
Tyson Foods Inc. 56 9 16.07
Tyson Shared Services Inc. 134 16 11.94
City of Little Rock 55 6 10.91
Emerson Electric Co. 69 7 10.14
Municipal League Workers' 377 31 8.22
Compensation Trust
Association of Arkansas Counties 124 8 6.45
Workers' Compensation Trust
Arkansas School Boards 272 16 5.88
Association Workers' Compensation Trust
Total of all workers' compensation insurers 12,858 2,545 19.79
Source: Arkansas Workers' Compensation Commission
 Workers' Compensation Report Card for More Than 100 Claims
 Timeliness of workers' compensation payments or challenge
 notices by self-insured entities with more than 100 Claims:
1999 Total Percent
Company Cases Timely
Arkansas School Boards Association 272 93.36
Workers' Compensation Trust
Association of Arkansas Counties 124 89.66
Workers' Compensation Trust
Wal-Mart Stores Inc. 316 81.69
Tyson Shared Services Inc. 134 75.42
Public Employee Claims (State) 600 49.41
Municipal League Workers' Compensation Trust 377 60.87
Cooper Tire & Rubber Co. 108 73.56
Total of all Workers' Compensation insurers 12,858 75.38
1998 Total Percent
Company Cases Timely
Tyson Foods Inc. 163 95.20
Wal-Mart Stores Inc. 382 91.74
Arkansas School Boards Association 282 90.12
Workers' Compensation Trust
Association of Arkansas Counties 126 88.79
Workers' Compensation Trust
Arkansas Hospital Association 105 83.53
Workers' Compensation Self-Insurance Trust
Municipal League Workers' Compensation Trust 389 64.76
Public Employee Claims (State) 542 45.93
Total of all Workers' Compensation insurers 13,310 75.72

Source: Arkansas Workers' Compensation Commission. Report of payment or intent to controvert (challenge) is due within 15 days of date of claim.

Self-Insuring: A Good Deal, But Not for All Businesses

SELF-INSURING AGAINST workers' compensation claims can be an efficient way of doing business, but it's not for everybody. Just ask Wal-Mart Stores Inc.

The giant Bentonville retailer is known for paying close attention to the bottom line, so handling its own workers' compensation would seem a natural. But Wal-Mart, with operations in all 50 states, has only chosen to do so in Arkansas, Alabama, Florida, Ohio, West Virginia and Washington state, said Steve Carter, head of the company's workers' compensation claims group.

"In each state, we evaluate the cost benefit of self-insuring," he said.

Not every state allows self-insurance, and enrolling in some states' insurance programs can be cheaper and more efficient, Carter said.

And self-insuring can be a two-edged sword, as Wal-Mart recently discovered when it was very publicly chastised for poor claims performance and was dropped from Washington's self-insurance program. The termination will take effect in March.

More than 200 companies self-insure in Arkansas, including most of the largest employers. In addition to Wal-Mart, the list includes American Freightways Inc., Baptist Health, Cooper Tire and Rubber Co., International Paper Co., Potlatch Corp., Tyson Foods Inc., USA Truck Inc. and Whirlpool Corp. Arkansas governments are also among the largest self-insurers. State public employees file claims through the Arkansas Workers' Compensation Commission, and the Municipal League Workers' Compensation Trust files claims for local governments.

Handling, their own workers' compensation claims can save businesses time and money if done properly, said Alan McClain, director of the self-insurance division of the Workers' Compensation Commission.

"You have more direct control over your claims," McClain said. "A lot of companies just like to know that they are paying their own money. They just want to pay for what they incur as opposed to having their premium based on other people's records."

Self-insured companies are typically large employers who have safety programs in effect, McClain said.

"The cornerstone of a good self-insurance program is a good safety program," he said.

Some companies actually dropped out of the program recently, McClain said, because of plummeting premiums in the workers' compensation insurance market. According to the Workers' Compensation Commission, premiums have dropped 39 percent since 1992, largely as a result of a 1993 law signed by Gov. Jim Guy. Tucker, which made the workers' compensation market more attractive to insurance carriers.

Companies wishing to self-insure must meet the state's requirements, including the following:

* Having employees qualified in the areas of claims adjusting, underwriting, safety engineering and loss control, or a qualified contractor to provide the services.

* Having a current net worth of at least $250,000.

* Paying an application fee of $100 to the Workers' Compensation Commission.

* Submitting to state investigations of the company's financial soundness.

* Regular reporting of financial and claims data.

* Posting securities or surety bonds of at least $100,000. The security and surety bond requirement may be waived for public employers or majority-owned subsidiaries of self-insuring parent companies.
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Title Annotation:Arkansas
Comment:State Worst Offender in Camp Reporting.(Arkansas)
Publication:Arkansas Business
Article Type:Brief Article
Geographic Code:1USA
Date:Jan 8, 2001
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