ID, Close High Dollar Claims Early On, Experts Advise

Sarasota, FL (WorkersCompensation.com) – There’s a mantra that claims adjusters hear starting on day one; “Exposure grows over time,” said Stephen Peacock, AVP of Excess WC Claims at Safety National. “The longer you keep a claim open, the more expensive it gets.”

That’s why it behooves employers and payers to settle claims as early as possible — especially those that are likely to become high-dollar cases. Identifying claims with risks and hazards early on in the process, working transparently with injured workers and their attorneys, and appropriately valuing the claim are key to closing claims, according to speakers during the webinar Strategies for Retiring Old Dog Workers’ Compensation Claims, presented by Safety National.

Identifying Risky Claims

Claims involving catastrophic injuries typically involve extremely high expenses. There are also some seemingly simple claims that become long-term recoveries and involve multiple surgeries and medications — including opioids. While it may seem difficult to predict which claims may fall into the category of ‘creeping catastrophics’ there are certain indicators that can point to that direction.

“Comorbid conditions negatively impact workers’ compensation injuries, they slow recovery, delay return to work and can lead to excessive opioid usage,” Peacock said. “The combination of comorbidities with work injuries keep claimants from returning to work potentially ever again and leads to lifetime medical care.”

Hypertension, diabetes, cancer, smoking/tobacco use, and psychological issues can all dramatically affect recoveries. It’s important to identify these conditions and understand how they can influence a claim.

“For example, if a person is a smoker [and is going to have a fusion] there is a much greater probability that the fusion fails,” said Greg Glitter, president of Legacy Claim Solutions. “The biggest things we look for is utilization of experts, the folks involved — the claims handler, defense counselor. Pay attention to what the doctor says. It can be really helpful and raise some of those red flags.”

Another red flag that can derail recovery and hike up the cost of a claim is opioid use.

“Claimants on opioids are on average off work 105 days, vs. 30 days for those who don’t take opioids,” Peacock said.

Identifying these and other risks is critical to making decisions about whether to move a claim toward settlement or apply other strategies to first reduce the costs involved.

Valuing the Claim

Once a claim is identified as a good candidate for settlement the question becomes what is the appropriate amount that is fair to the payer and will ensure the injured worker’s injury-related expenses will be covered for life. It’s often as much as an art as a science.

“There’ s no formula,” Glitter said. “We don’t have a crystal ball. But we have a pretty good handle on models.”

Larger claims involving catastrophic injuries differ from smaller claims. One of the biggest cost drivers in those more expensive claims is attendant or home care. But even valuing the cost of that may not be as straightforward as it seems on paper.

“A spouse or parent may be helping to take care of someone, but may not be able to do so forever,” Glitter said.

“We have to be aware of things not necessarily written down,” Peacock added. “For example, if the spouse is the caretaker, we must understand the spouse’s health conditions and what needs may arise.”

Peacock referred to a claim that began in the 1980s, when a police officer was shot. At the time, the payers didn’t realize his family and friends were taking care of the worker. “After 25 years, they came to us and said they weren’t able to do that anymore,” he said. “Suddenly we ended up having to start providing 12 hours of home health care for him. We didn’t anticipate that 25 years ago. There [can be] a large increase in the medical value of those claims.”

Additional high-dollar items in larger claims are transportation — whether it is a vehicle that must be modified for the injured worker and replaced every few years, or that provided by taxis or other transportation companies — and home purchases and/or modifications.

Whether it is a larger or smaller claim, there are potential future medical costs that must be included. The person may need a knee or hip replacement, and those surgeries would need to be repeated in several years. “Spinal cord stimulators last 5 to 7 years,” Glitter said. “The cost of the device and implant can be upwards of $50,000 or $60,000.”

Settlement Strategies

“When it comes to settlement, always be asking ‘why,’ why doesn’t the claimant want to settle,” Peacock said. “Often it’s a misunderstanding about the process.”

Open, honest communication with the injured worker is imperative, he said. The obstacle may be the value of the settlement. “Consider making a preemptive offer so that they can think about it,” Peacock said.

Confusion about complying with Medicare requirements may be an issue for those affected. Or it could be that the injured worker’s attorney wants to hold out for more money. “You need to always be asking ‘why,’” Peacock said.

Also important is to consider the needs of the injured worker — even the simplest of things. The speakers related the case of an injured worker and his wife in the midst of negotiations for a $750,000 settlement but were upset that the adjuster had refused to pay for a set of sheets for the king-sized bed that had been ordered by the treating physician.  

“I asked for a break, went to Target and bought a $100 gift card. I told them, ‘go get some sheets, let me take care of the problem.’ It solved it,” Glitter said. “The moral of the story is something that seemed like a small issue to me, and we were talking three-quarters of a million-dollar settlement, but that was the impediment. It was about solving that problem for them, what was important for them.”

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