Protecting Your Interests in Workers’ Comp

April 1, 2014
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Ill-founded workers’ compensation claims can present a major problem for construction employers. In some companies, background checks of employees’ records have revealed pages and pages of prior workers’ compensation claims, thus identifying candidates who may view such claims as a way of life. Companies have been bankrupted due to an environment of multiple workers’ comp claims.

So it is imperative that management within a construction company develop procedures and policies for handling accidents, accident reports, and workers’ comp claims. There has to be some method to keep your organization viable while paying for bona fide injuries but not encouraging multiple claims.

The first 24 hours following an accident are critical, says Shawn Biery, a partner and attorney with Keefe, Campbell, Biery & Assoc., in Chicago. If necessary, you must stabilize an emergency situation and call for trained cleanup personnel to prevent additional injuries or exposures without unnecessarily affecting the needed accident investigation. Take photographs if appropriate, and preserve the evidence, says Biery.

You should also have a clear chain of command on all claims-this is imperative to maintain control of the investigation. Define, institute and complete an accident investigation. The report of an event or claim should be transmitted as soon as possible to a clear accident reporting protocol. Assign a responsible person to follow the claim or claims. You should also always get a HIPAA release signed. (HIPAA stands for the Health Insurance Portability and Accountability Act of 1996, which is a federal law that includes important health insurance provisions, including nondiscrimination, guaranteed renewability, guaranteed issue, and limits to benefit exclusions due to pre-existing medical conditions.)

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You might need access to all past medical information about a claimant-not just workers’ comp information. It’s impossible to tell at the outset of an accident. If the employee won’t sign a HIPAA release, just be sure to let them know it won’t go well for their claim and will create delays which would otherwise be avoided.

In the first 24 hours following an accident, you should confirm the severity of an injury and the prognosis for recovery. Should you report the accident to a claim handler within or outside the company? Usually you can determine on a preliminary basis whether your organization is best served by having the condition covered by workers’ comp or other benefit. Where possible, simply route the employee to the correct benefits. Telling an employee that a claim is denied will only make them think something is wrong and may lead them to believe they need an attorney.

And in the first 24 hours, confirm the following for the employee or their family:

  • Your organization’s claims procedures (have them contact a co-employee with all problems)
  • Your available benefits for workers’ comp or other insurance
  • That you have continuing interest in the employee’s welfare
  • That the employee or the family must stay in regular contact with you, the employer, during convalescence

Never let an employee get away. Ensure they are aware they need to stay in touch at least weekly for all conditions, whether due to work or not. You don’t always know whether a condition or absence is work-related. Involve the upper levels of management in your company. Fight for a top-down approach to managing absences.

Work with your insurance adjuster and, if appropriate, the assigned nurse to ensure continuous contact and progress reports.

Biery recommends erring on the side of thoroughness in your accident investigation. Employees learn quickly if you won’t dig for the circumstances and cause. There is a high correlation between workers’ comp experience and low accident investigation levels. And failure to investigate usually means lots of surprises as a claim works out. This creates frustration throughout the process for the company and everyone dealing with the claim management. Based on preliminary information, someone has to make a call on how much accident investigation to perform.

Your accident investigation model should include the following:

  • A hand-written statement from the employee
  • A videotape-recorded statement from the employee, using a digital camcorder or web cam if possible
  • A supervisor’s statement
  • Witness reports and statements
  • A review by an accident committee

Your accident report should be complete. The information collected should start with the time, place, and date of the injury. Obtain from the employee a statement of what happened in his or her own words. Include the nature of the injury-sprain, fracture, etc. Was there any previous injury to the affected body parts? What was the source of the injury-machines, hand tools, buildings? State the names of all witnesses and the specific work processes involved (lifting, carrying, etc.). Name all parties to whom the injury was reported. State the specific work site, and record the weather conditions at the time.

Manage your supervisors, Biery recommends. Your people on the ground are most valuable in these types of management tasks. For other than catastrophic injuries, start and keep the responsibility for investigation of safety failures and incidents on supervisors. Assign grades to incomplete accident investigation reports, and circle and return incomplete ones with required completion dates.

If you have hired someone with a pre-existing condition, set up that person’s workplace to avoid stressing the condition to the extent possible. Consider a written agreement outlining safe work practices for folks with known pre-existing conditions.

If problems develop, consider hiring an outside, independent legal defense counsel who provides strong advice in nonlitigated claims and even stronger trial experience to fight for you in litigation. In Illinois and possibly in other states, there are built-in problems with insurance carrier house counsels:

  • They sometimes can’t and many times won’t pursue workers’ comp fraud due to the technical nature of doing so.
  • They can’t and won’t deal with employee termination issues, including release and resignations.
  • They will never, ever, contradict the assigned adjuster.

You cannot fire someone for seeking workers’ compensation benefits. However, Biery recommends terminating employees who are unsafe and are injured due to unsafe practices. Make sure you document all occurrences of unsafe work, and if that lack of safety jeopardizes other employees, protect them by terminating the unsafe. In most instances, unions will back you up. They don’t want unsafe workers to endanger other workers. When someone has an injury involving a safety violation, have a sit-down meeting with them about avoiding future safety-related injuries. If such injuries occur, pay benefits and start termination proceedings. Word will travel fast.

Light duty is a critical workers’ comp money saver for an employer. The main concern is that everyone will want permanent light-duty work. So your light-duty policy must have a defined medical link. Such a policy needs to have a beginning, a middle, and an end-generally within a maximum set period of time. You may want weekly progress meetings. Obviously the purpose of light work is not to encourage injured workers to malinger and stay at home.

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Biery recommends that construction employers always set claim targets for maximum medical improvement, return to work, and claim closure. Work with your adjuster, legal counsel, or your occupational health provider to set target dates for return-to-work light duty and, later, full duty. Set a target date for claim closure via inactivity, settlement, or trial. These factors work hand-in-hand and should be viewed that way.

Keep your legal defense counsel close in all termination decisions. “Don’t be the first on your block to start a new litigation trend,” says Biery. If you are in a union environment, talk with the folks who will defend your grievances about the effectiveness of the termination approach and how to best optimize it. In non-union settings, be sure you run all decisions by your employment law counsel for an opinion on how to best proceed. For more detailed legal questions, you can contact Shawn Biery at mailto:[email protected].