workers’ compensation 101 the basics of managing the u.s. work injury system eugene f. keefe john...

WORKERS’ COMPENSATION 101

The basics of managing the U.S. work injury system

Eugene F. KeefeJohn P. Campbell, Jr.

Shawn R. Biery

Keefe, Campbell & Associates118 North Clinton Street

Suite 300Chicago, Illinois 60661

312-756-1800 312-756-1901 faxwww.keefe-law.com

Eugene F. KeefeJohn P. Campbell, Jr.

Shawn R. Biery

Keefe, Campbell & Associates118 North Clinton Street

Suite 300Chicago, Illinois 60661

312-756-1800 312-756-1901 faxwww.keefe-law.com

National Council of Self-Insurers National Council of Self-Insurers May 2011May 2011 22

Defining Workers’ CompensationDefining Workers’ Compensation

The term is misleading to all The term is misleading to all participants at every levelparticipants at every level

Best defined as state-run work Best defined as state-run work accident insurance or self-insuranceaccident insurance or self-insurance

Concept has been redefined as Concept has been redefined as work accident/disability insurancework accident/disability insurance

WC should be simple: it is only WC should be simple: it is only threethree simple benefits simple benefits


WC Benefits simplifiedWC Benefits simplified

Compensation for Compensation for medical expensesmedical expenses 40-45% of all WC costs in all world WC systems and 40-45% of all WC costs in all world WC systems and

rising constantlyrising constantly Every expectation is this will continue to riseEvery expectation is this will continue to rise

Compensation for Compensation for lost wageslost wages 30-35% of all WC costs in all systems30-35% of all WC costs in all systems

PermanencyPermanency compensation or compensation or “the settlement”“the settlement” Illinois is unusual for the many paths to receive itIllinois is unusual for the many paths to receive it Many Illinois permanency benefits are uncapped or Many Illinois permanency benefits are uncapped or

lifetime—very few states do thislifetime—very few states do this


Understanding U.S. workers’ Understanding U.S. workers’ compensation delivery systemscompensation delivery systems

Some systems are pro-activeSome systems are pro-active The applicant The applicant

Goes to a state agencyGoes to a state agency The state agency ascertains eligibility in conjunction The state agency ascertains eligibility in conjunction

with the employerwith the employer The state agency sets the amount and pays benefitsThe state agency sets the amount and pays benefits The state agency cuts it off or closes the fileThe state agency cuts it off or closes the file Forms, forms, formsForms, forms, forms

Some WC system are “reactive” and the state Some WC system are “reactive” and the state agency becomes involved when things break agency becomes involved when things break down—typically more litigation and claim costs down—typically more litigation and claim costs in reactive systemsin reactive systems


““Self-effectuating” work comp conceptsSelf-effectuating” work comp concepts

Many WC system are designed to be self-Many WC system are designed to be self-effectuatingeffectuating

As the employer, you have to learn of the As the employer, you have to learn of the accidental event in a stated timeaccidental event in a stated time

You have to investigate itYou have to investigate it You are supposed to accept/deny benefitsYou are supposed to accept/deny benefits You follow, manage and then close claimYou follow, manage and then close claim You report progress to the state agencyYou report progress to the state agency


To optimize outcomes, all U.S. To optimize outcomes, all U.S. employers should have OccHealth and employers should have OccHealth and

ER link set before injuryER link set before injury Before starting work, do search for ER and Before starting work, do search for ER and

OccHealth for each of your work sites/plantsOccHealth for each of your work sites/plants Consider WC PPO’s, if possible in your stateConsider WC PPO’s, if possible in your state Make sure the medical providers know your Make sure the medical providers know your

business, work rules and light work programbusiness, work rules and light work program Synchronize your medical release protocolSynchronize your medical release protocol Confirm you will be using triangle approachConfirm you will be using triangle approach Always get faxed medical updatesAlways get faxed medical updates


What to Do Upon Learning What to Do Upon Learning of Claim of Injuryof Claim of Injury

Where necessary, stabilize emergency situationWhere necessary, stabilize emergency situation Call for trained cleanup to prevent additional Call for trained cleanup to prevent additional

injuries/exposures without unnecessarily affecting injuries/exposures without unnecessarily affecting needed accident investigationneeded accident investigation

Preserve the evidencePreserve the evidence Have clear chain of command on all claimsHave clear chain of command on all claims Institute and complete accident investigationInstitute and complete accident investigation

Transmit report of event ASAPTransmit report of event ASAP Utilize medical authorizations in all claimsUtilize medical authorizations in all claims Assign responsible person to follow claimAssign responsible person to follow claim


Always get HIPAA/GINA Always get HIPAA/GINA compliant-release signedcompliant-release signed

Best way to check if medical release is HIPAA compliant—does it allow employee to withdraw consent?

Many managers feel WC exception to HIPAA means such releases unnecessary in WC setting

We disagree and urge all risk managers to get them You need to HIPAA release to access past medical

info, not just current WC care You need fluid access to medical records and bills If employee won’t sign or withdraws consent, no

shooting allowed


Jurisdiction - Is the Loss Covered Jurisdiction - Is the Loss Covered by the your state WC Act?by the your state WC Act?

This concept hits multi-state and/or federal This concept hits multi-state and/or federal coverage of work accidentscoverage of work accidents It is possible to get benefits from two states or It is possible to get benefits from two states or

concurrent state and federal benefitsconcurrent state and federal benefits Employer gets credit for whatever is paidEmployer gets credit for whatever is paid

Main jurisdiction conceptsMain jurisdiction concepts Injured in state; entitled to that state’s WC benefitsInjured in state; entitled to that state’s WC benefits Hired in state but injured outside state; may be Hired in state but injured outside state; may be

entitled to WC benefits while employed for that entitled to WC benefits while employed for that employeremployer

Hired outside state, injured outside state; may be Hired outside state, injured outside state; may be entitled to WC benefits if employee’s work “centered” entitled to WC benefits if employee’s work “centered” in a given statein a given state


Is this an “Employee?”Is this an “Employee?” When is it When is it employee versus independent contractoremployee versus independent contractor?? Lots of factors to choose fromLots of factors to choose from

Who has the WC insurance for risk/lossWho has the WC insurance for risk/loss ““Control” of the jobControl” of the job Tools usedTools used Method of payment—lump sum w/1099 or hourlyMethod of payment—lump sum w/1099 or hourly Uniforms/names on equipmentUniforms/names on equipment

New concern for risk managers, “misclassification” of New concern for risk managers, “misclassification” of independent contractorsindependent contractors

Most important may be who has WC insurance Most important may be who has WC insurance coveragecoverage


Total absence managementTotal absence management Always have a goal—after accident investigation, target Always have a goal—after accident investigation, target

return to work at light and full dutyreturn to work at light and full duty Never let them “get away” or disappear—confirm all Never let them “get away” or disappear—confirm all

employees need to stay in touch at least weekly for all employees need to stay in touch at least weekly for all conditions whether due to work or notconditions whether due to work or not

Remember, you don’t always know condition/absence is Remember, you don’t always know condition/absence is work-related but it costs money for employees to be offwork-related but it costs money for employees to be off

Fight for ‘top-down’ management approach in managing Fight for ‘top-down’ management approach in managing absencesabsences

Confirm for your employees they are important and need Confirm for your employees they are important and need to remain part of your organization while off workto remain part of your organization while off work


Is this an “Accident” covered by Is this an “Accident” covered by state WC Act?state WC Act?

AOO/ICOAOO/ICO; to be compensable an accident has to ; to be compensable an accident has to arise out of and happen in the course ofarise out of and happen in the course of

ICOICO is easier to understand is easier to understand At some point, an employee is working or near work or At some point, an employee is working or near work or

around their job—ICO blurs with “remoting in” and new around their job—ICO blurs with “remoting in” and new technology; accident investigation is crucialtechnology; accident investigation is crucial

AOOAOO is more difficult to ascertain is more difficult to ascertain Injury has to arise from risk associated with employInjury has to arise from risk associated with employ Employee has burden but you have to lock in facts to Employee has burden but you have to lock in facts to

avoid later manipulation by counselavoid later manipulation by counsel Repetitive trauma blurs all of itRepetitive trauma blurs all of it


Traditional Accident Traditional Accident Defenses/QuirksDefenses/Quirks

Not your state’s WC claim—other state or fed?Not your state’s WC claim—other state or fed? Not your Employee?Not your Employee? Liar, liar, pants on fire?Liar, liar, pants on fire? Horseplay?Horseplay? Failed to provide required notice of accident?Failed to provide required notice of accident? Idiopathic condition?Idiopathic condition? Statute of Limitations?Statute of Limitations? Fights--Aggressor rule?Fights--Aggressor rule? Intentional injuries to self/suicide?Intentional injuries to self/suicide? Commission of crimes?Commission of crimes? Alcohol/drug abuse causing or contributing to injury?Alcohol/drug abuse causing or contributing to injury? Safety violation?Safety violation? Fall-downs without proof of increased risk?Fall-downs without proof of increased risk?


How to “Win” WC claimsHow to “Win” WC claimsStart with accident investigationStart with accident investigation

Time, place and date of injuryTime, place and date of injury Tell me what happened in Tell me what happened in own words and languageown words and language Nature of injury (sprain, fracture, etc.)Nature of injury (sprain, fracture, etc.) State all body part(s) affectedState all body part(s) affected Any previous injury to the affected body part(s)Any previous injury to the affected body part(s) State source of injury--machines, hand tools, buildingsState source of injury--machines, hand tools, buildings State closest human to you, next closest personState closest human to you, next closest person State all witness’ namesState all witness’ names Specific work process involved (lifting, carrying, etc.)Specific work process involved (lifting, carrying, etc.) Name all parties whom was the injury reportedName all parties whom was the injury reported State specific plant or work siteState specific plant or work site Current weather conditionsCurrent weather conditions


Going to the Max—Using that Going to the Max—Using that webcam or camcorderwebcam or camcorder

First, always check your surveillance videos at siteFirst, always check your surveillance videos at site Next, turn over rocks and take statementsNext, turn over rocks and take statements Try to conduct interviews in nonadversarial settingTry to conduct interviews in nonadversarial setting Insure witness consents on tapeInsure witness consents on tape Allow the witness to talk--ask open-ended questionsAllow the witness to talk--ask open-ended questions No conclusions—follow the five sensesNo conclusions—follow the five senses Do not rush the witnessDo not rush the witness List the date, time and location of the statement List the date, time and location of the statement Safely reenact the accident/claimSafely reenact the accident/claim Take the recorded statement ASAP after the injuryTake the recorded statement ASAP after the injury If you need interview questions, send a replyIf you need interview questions, send a reply


After accident investigated, set After accident investigated, set targets for medical care and RTWtargets for medical care and RTW

If you aren’t sure of solid targeting, talk to adjuster, If you aren’t sure of solid targeting, talk to adjuster, NCM or veteran defense attorneyNCM or veteran defense attorney

Make targets reasonableMake targets reasonable Drive them to happen withDrive them to happen with

URUR IMEsIMEs SurveillanceSurveillance Weekly meetings with employeeWeekly meetings with employee

Then drive file to closure via settlement in appropriate Then drive file to closure via settlement in appropriate claimsclaims


Workers’ Compensation Workers’ Compensation TriangleTriangle

Critical first step: Complete accident investigation ASAP Critical second step: Get HIPAA authorization signed Critical third step: Have designated medical

manager/claims handler contact treating physician to confirm:

Authorization for contact on behalf of injured worker Agreement for continuing progress updates Learn diagnosis and treatment plan with

• Projected MMI

• Projected RTW modified duty

• RTW full duty


Make the Triangle WorkMake the Triangle Work

Confirm Physician’s Return to Work Projection with Confirm Physician’s Return to Work Projection with the Three Sides of the Triangle in writingthe Three Sides of the Triangle in writing

Your supervisorYour supervisor OccHealth or treating physician(s)OccHealth or treating physician(s) Your employeeYour employee

Drive All Sides of the Triangle to Make the RTW Drive All Sides of the Triangle to Make the RTW Projection a RealityProjection a Reality

Stay in constant touch with the employeeStay in constant touch with the employee Have disability checks picked up at workHave disability checks picked up at work If you don’t hear from the employee within your protocol, stop If you don’t hear from the employee within your protocol, stop

paying benefitspaying benefits


Keep your friends close; keep Keep your friends close; keep your enemies closeryour enemies closer

Normally, when you have a disputed claim, tendency is Normally, when you have a disputed claim, tendency is to avoid employee—we should actually do the oppositeto avoid employee—we should actually do the opposite

Never, ever trust the workers’ compensation system to Never, ever trust the workers’ compensation system to work in your best interests in a disputed claimwork in your best interests in a disputed claim

Stay in contact at least weeklyStay in contact at least weekly When you talk with the injured employee, check to insureWhen you talk with the injured employee, check to insure

Bills are being paidBills are being paid They are receiving disability checksThey are receiving disability checks They are progressing along expected medical They are progressing along expected medical

recovery pathrecovery path


How to Settle Claims and Get the Best How to Settle Claims and Get the Best Outcome with or without litigationOutcome with or without litigation

As targets for MMI and RTW are reached, As targets for MMI and RTW are reached, consider settlement and closureconsider settlement and closure

Litigated claims, never, ever ask for a Litigated claims, never, ever ask for a demand; do your homework and make demand; do your homework and make reasonable offers and then push for hearingreasonable offers and then push for hearing

Have solid defense attorneys provide Have solid defense attorneys provide appropriate range and values for offerappropriate range and values for offer


Have you got the time for Have you got the time for Enforced Accident Reporting??Enforced Accident Reporting??

Sign-in Sheet for Wedidn’thurtyou.com, Inc.

I am injury free and have not been involved in any work accidents or injuries other than as listed.

I am physically able to perform all work assignments without accommodation

I understand I am to report all work accidents or physical problems, no matter how minor to my supervisor immediately.

Name Date of last work injury (no matter how minor)_____________________________ ___________________________________________________________ ______________________________


Understanding Medicare/CMSUnderstanding Medicare/CMS Can’t settle WC claims any longer without considering Can’t settle WC claims any longer without considering

Medicare’s interestsMedicare’s interests Medicare approval of WC settlement for claims settling Medicare approval of WC settlement for claims settling

forfor $250,000.00$250,000.00 Reasonable expectation of impending Medicare eligibilityReasonable expectation of impending Medicare eligibility

Need to create Medicare set-aside to insure injured Need to create Medicare set-aside to insure injured worker has money to pay future medical billsworker has money to pay future medical bills

Need to submit to CMS for approval with settlement Need to submit to CMS for approval with settlement contractcontract

‘‘Super-lien’ enforcementSuper-lien’ enforcement


SummarySummary Safety first--avoid accidents at all costsSafety first--avoid accidents at all costs Have your OccHealth system in placeHave your OccHealth system in place If claim arises, move to investigate and set targetsIf claim arises, move to investigate and set targets Get authorizations and set up the WC triangleGet authorizations and set up the WC triangle

InvestigateInvestigate Contact MD for RTW/MMI goalContact MD for RTW/MMI goal Confirm goal to employee/supervisorConfirm goal to employee/supervisor Make goal happenMake goal happen

Make the targets work for youMake the targets work for you Bring the claim to closureBring the claim to closure


Keefe, Campbell & Keefe, Campbell & AssociatesAssociates

One of Illinois’ top defense trial firmsOne of Illinois’ top defense trial firms Handling defense of general liability and Handling defense of general liability and

employment law matters in Northern Illinoisemployment law matters in Northern Illinois Handling workers’ comp defense throughout Handling workers’ comp defense throughout

IllinoisIllinois 24-hour email hotline for defense information 24-hour email hotline for defense information

and advice at and advice at [email protected] Regular email updates on all Illinois and Federal Regular email updates on all Illinois and Federal

laws and appellate cases for all interested laws and appellate cases for all interested partiesparties

workers’ compensation 101 the basics of managing the u.s. work injury system eugene f. keefe john...

Documents

state agency slide

wc benefits

wc costs

world wc systems

wc ppos

forms forms

illinois permanency

self effectuating