Jeff Bush
APEI
 Medical
Costs (Unlimited)
 Indemnity
◦Lost wages
◦Survivor benefits
◦Vocational rehabilitation

“Employees” determined by 8 AAC 45.890
 Relative nature of the work

Government contracts –AS 23.30.045 (d)
 No award without evidence –
 pay if contractor’s employee not covered

Project Owner – AS 23.30.045 (a)
 If contractor does not pay – you do
HOW ARE WORKERS’
COMPENSATION RATES SET?
•NCCI Class Codes
•Higher risk positions are charged
more
•Accuracy in reporting is important
•Loss History of the employing entity
•Experience Modifiers
•Look at losses in most recent 4 years
•Premiums set to cover expected losses
plus admin and reinsurance


Incurred Loss - anticipated total cost for
medical, indemnification and legal expense
Costs for medical treatment limited by AK
Dept. of Labor fee schedule
◦ New Fee Schedule as of 10/01/2011
◦ Pay within 30 days


Employee selects provider
Medical costs as a percent of total claims are
growing
6
8
10
Summary of Amounts Billed, Paid, and Covered by the WC Fee Schedule
Summarized by Treatment Category
Number of
Total
Procedures Amount
Billed
Billed
Surgery
148
399,579
Imaging
272
145,195
EvaluationManagement
328
90,023
Therapy
1,265
88,057
EmergencyTransport
16
37,378
Anesthesia
30
33,658
Lab
103
14,774
Chiropractic
181
12,419
Medicine
68
11,578
Supplies
56
9,574
Pharmacy
94
7,543
DME
15
6,069
Dental
4
2,084
Misc
16
1,028
Injection
24
721
Total
2,620
859,681
Difference
Total
between
Amount Billed and
Paid
Paid
% Savings
311,711 (87,868) 22.0%
123,936 (21,259) 14.6%
61,985 (28,038) 31.1%
80,458
(7,599) 8.6%
37,378
0 0.0%
31,458
(2,201) 6.5%
11,402
(3,372) 22.8%
12,038
(381) 3.1%
10,032
(1,546) 13.4%
5,978
(3,596) 37.6%
5,794
(1,749) 23.2%
3,415
(2,654) 43.7%
1,854
(231) 11.1%
1,021
(8) 0.8%
291
(430) 59.6%
698,751 (160,930)
Note: this includes procedures with treatment dates
between 1/3/11 and 9/16/11
18.7%
Additional
Amount
Amount that could % of
Allowed be Owed Amount
Under
Under
Already
2011 FS
2011 FS
Paid
486,549 174,838 56.1%
166,293
42,356 34.2%
75,385
13,400 21.6%
96,411
15,954 19.8%
37,103
(276) -0.7%
41,662
10,205 32.4%
11,938
537 4.7%
13,994
1,956 16.2%
16,895
6,863 68.4%
7,983
2,005 33.5%
5,794
0 0.0%
62,658
59,243 1734.8%
1,854
0 0.0%
1,136
116 11.4%
317
26 8.9%
1,025,973
327,222 46.8%
Three Ways:
1.
2.
3.
Reduce payroll;
Cheat, by changing mix of employees’
payroll to higher concentration in low risk
jobs; or
Reduce losses, by having fewer claims and
by reducing the cost of claims you have
We Preach Loss Control

Create a “Loss Control Culture”

Site Inspections

Training

On-line courses

Safety committees
15
HAVE EVERY EMPLOYEE ANNUALLY, AND NEW
EMPLOYEES UPON HIRE, FILL OUT A
POST OFFER OF EMPLOYMENT
QUESTIONNAIRE
FOR SECOND INJURY FUND QUALIFICATION
16
◦ Written procedure for timely
reporting of claims
◦ Training for all staff and supervisors
◦ Transitional Work Program
◦ Coordinate contacts – HR/Payroll &
Adjuster

Timeliness is very important
◦ Study by NCCI and Hartford
revealed:
 Claims reported two weeks after
occurrence had average settlement
values 18% higher
 Claims reported in third or forth
week 30% higher
 Claims reported after one month 45%
higher
 Even claims reported in days 5-7 are
noticeably higher than those
reported within 72 hours
Source: Liberty
Mutual Insurance
Co.
19

Target same day Report of Injury
◦ Signed by employee and employer
◦ Email or Fax to carrier to expedite handling

Failure to file ROI timely subject to penalty
◦ 20% on top of compensation due (AS 23.30.070)
◦ Might be charged back to the insured entity
◦ If employee is hospitalized overnight or dies,
contact your carrier immediately and notify AK
OSHA within 8 hours
◦ AK OSHA 800-770-4940
PROPERLY MANAGE AND CONTROL
LOSSES


Ensure that what caused the injury is corrected
so other employees will not suffer same type
of injury or loss
Study your accident history
◦ Pay attention to “root causes” of accidents
◦ Have a safety committee review all
accidents and recommend ways to avoid in
the future

Set up Return-to-Work program and get
injured workers back to work, even in light
duty
22

Return to work programs are one of the most
effective ways to reduce employer cost

If you have transitional
work available:
◦ Notify your insurance claims
person that work is available
◦ You will be asked to write a
letter stating job task,
requirements, hourly pay, and
date work is available

If the doctor approves and
employee refuses, benefits
can be controverted.
Greatest savings- when employees return to
their pre-disability positions with
accommodations for their physical
limitations
Under no circumstances should an
employee who is capable of returning to
work be allowed to sit at home because the
employer "didn't have anything for them to
do."