Tips for Controlling Worker’s Comp Medical Costs

The National Council on Compensation Insurance, Inc. (NCCI) reports that medical services now represent over 60% of Worker’s Comp claim costs. In the past, indemnity costs, or the disability portion of Worker’s Comp, made up the majority of Worker’s Comp claims.

There are several ways available to help companies contain medical costs. Here are some strategies that work:

1) Workplace Safety

A critical step in a plan to keep medical costs down is concentrating efforts on workplace safety. With large employers retaining big chunks of the worker’s Comp obligations under large deductible plans, they have to redouble their efforts on preventing losses in the first place.

2) Bogus Claims

While establishing a culture of safety is essential to prevent workplace injuries, employers also should be guarding against bogus claims. In recent years as the economy went bad, employers have seen large increases in Worker’s Comp claims- not all of them legitimate- when some workers who feared layoffs or knew they were pending filed claims to secure income after their jobs were lost.

Establishing on-going testing of various job-related physical functions, such as hearing, gives employers a baseline measure they can track and respond to quickly at the first sign of a problem- rather than after a worker has filed a claim.

3) The right hires

Some companies are rehiring, which brings up a third important element in controlling Worker’ Comp costs; avoiding hiring workers who pose high claim risks. One thing that can help; make sure the job description adequately characterizes the demands of the job. Filling jobs with the workers who are best suited psychologically for those positions will help prevent injures; it will also help prevent a myriad of indirect costs associates with a Worker’s Comp claim.

Let’s face it- health costs are going to continue to increase in the current system we have. However, it is up to us to reduce the number of potential claims through creating the correct safety culture, making sure you hire the best people, and not allowing bogus claims to invade you corporate culture.

Bobby Bland PWCA, CIC
Commercial Risk Service