WORKERS’ COMPENSATION
101
The basics of managing
the U.S. work injury system
Eugene F. Keefe
John P. Campbell, Jr.
Shawn R. Biery
Keefe, Campbell & Associates
118 North Clinton Street
Suite 300
Chicago, Illinois 60661
312-756-1800 312-756-1901 fax
www.keefe-law.com
Defining Workers’ Compensation
The term is misleading to all
participants at every level
 Best defined as state-run work
accident insurance or self-insurance
 Concept has been redefined as
work accident/disability insurance
 WC should be simple: it is only
three simple benefits
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National Council of Self-Insurers
May 2011
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WC Benefits simplified
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Compensation for medical expenses
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Compensation for lost wages
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40-45% of all WC costs in all world WC systems and
rising constantly
Every expectation is this will continue to rise
30-35% of all WC costs in all systems
Permanency compensation or “the settlement”
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Illinois is unusual for the many paths to receive it
Many Illinois permanency benefits are uncapped or
lifetime—very few states do this
National Council of Self-Insurers
May 2011
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Understanding U.S. workers’
compensation delivery systems
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Some systems are pro-active
The applicant
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Goes to a state agency
The state agency ascertains eligibility in conjunction
with the employer
The state agency sets the amount and pays benefits
The state agency cuts it off or closes the file
Forms, forms, forms
Some WC system are “reactive” and the state
agency becomes involved when things break
down—typically more litigation and claim costs
in reactive systems
National Council of Self-Insurers
May 2011
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“Self-effectuating” work comp concepts
 Many
WC system are designed to be selfeffectuating
 As the employer, you have to learn of the
accidental event in a stated time
 You have to investigate it
 You are supposed to accept/deny benefits
 You follow, manage and then close claim
 You report progress to the state agency
National Council of Self-Insurers
May 2011
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To optimize outcomes, all U.S.
employers should have OccHealth and
ER link set before injury
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Before starting work, do search for ER and
OccHealth for each of your work sites/plants
Consider WC PPO’s, if possible in your state
Make sure the medical providers know your
business, work rules and light work program
Synchronize your medical release protocol
Confirm you will be using triangle approach
Always get faxed medical updates
National Council of Self-Insurers
May 2011
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What to Do Upon Learning
of Claim of Injury
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Where necessary, stabilize emergency
situation
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Call for trained cleanup to prevent additional
injuries/exposures without unnecessarily affecting
needed accident investigation
Preserve the evidence
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Have clear chain of command on all claims
 Institute and complete accident investigation
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Transmit report of event ASAP
Utilize medical authorizations in all claims
Assign responsible person to follow claim
National Council of Self-Insurers
May 2011
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Always get HIPAA/GINA
compliant-release signed
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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
National Council of Self-Insurers
May 2011
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Jurisdiction - Is the Loss Covered
by the your state WC Act?
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This concept hits multi-state and/or federal
coverage of work accidents
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It is possible to get benefits from two states or
concurrent state and federal benefits
Employer gets credit for whatever is paid
Main jurisdiction concepts
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Injured in state; entitled to that state’s WC benefits
Hired in state but injured outside state; may be
entitled to WC benefits while employed for that
employer
Hired outside state, injured outside state; may be
entitled to WC benefits if employee’s work “centered”
in a given state
National Council of Self-Insurers
May 2011
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Is this an “Employee?”
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When is it employee versus independent contractor?
Lots of factors to choose from
 Who has the WC insurance for risk/loss
 “Control” of the job
 Tools used
 Method of payment—lump sum w/1099 or hourly
 Uniforms/names on equipment
 New concern for risk managers, “misclassification” of
independent contractors
 Most important may be who has WC insurance
coverage
National Council of Self-Insurers
May 2011
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Total absence management
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Always have a goal—after accident investigation, target
return to work at light and full duty
 Never let them “get away” or disappear—confirm all
employees need to stay in touch at least weekly for all
conditions whether due to work or not
 Remember, you don’t always know condition/absence is
work-related but it costs money for employees to be off
 Fight for ‘top-down’ management approach in managing
absences
 Confirm for your employees they are important and need
to remain part of your organization while off work
National Council of Self-Insurers
May 2011
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Is this an “Accident” covered by
state WC Act?
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AOO/ICO; to be compensable an accident has to
arise out of and happen in the course of
 ICO is easier to understand
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At some point, an employee is working or near work or
around their job—ICO blurs with “remoting in” and new
technology; accident investigation is crucial
AOO is more difficult to ascertain
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Injury has to arise from risk associated with employ
Employee has burden but you have to lock in facts to
avoid later manipulation by counsel
Repetitive trauma blurs all of it
National Council of Self-Insurers
May 2011
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Traditional Accident
Defenses/Quirks
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Not your state’s WC claim—other state or fed?
Not your Employee?
Liar, liar, pants on fire?
Horseplay?
Failed to provide required notice of accident?
Idiopathic condition?
Statute of Limitations?
Fights--Aggressor rule?
Intentional injuries to self/suicide?
Commission of crimes?
Alcohol/drug abuse causing or contributing to injury?
Safety violation?
Fall-downs without proof of increased risk?
National Council of Self-Insurers
May 2011
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How to “Win” WC claims
Start with accident investigation
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Time, place and date of injury
Tell me what happened in own words and language
Nature of injury (sprain, fracture, etc.)
State all body part(s) affected
Any previous injury to the affected body part(s)
State source of injury--machines, hand tools, buildings
State closest human to you, next closest person
State all witness’ names
Specific work process involved (lifting, carrying, etc.)
Name all parties whom was the injury reported
State specific plant or work site
Current weather conditions
National Council of Self-Insurers
May 2011
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Going to the Max—Using that
webcam or camcorder
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First, always check your surveillance videos at site
Next, turn over rocks and take statements
Try to conduct interviews in nonadversarial setting
Insure witness consents on tape
Allow the witness to talk--ask open-ended questions
No conclusions—follow the five senses
Do not rush the witness
List the date, time and location of the statement
Safely reenact the accident/claim
Take the recorded statement ASAP after the injury
If you need interview questions, send a reply
National Council of Self-Insurers
May 2011
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After accident investigated, set
targets for medical care and RTW
If you aren’t sure of solid targeting, talk to adjuster,
NCM or veteran defense attorney
 Make targets reasonable
 Drive them to happen with
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UR
IMEs
Surveillance
Weekly meetings with employee
Then drive file to closure via settlement in appropriate
claims
National Council of Self-Insurers
May 2011
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Workers’ Compensation
Triangle
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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:
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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
National Council of Self-Insurers
May 2011
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Make the Triangle Work
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Confirm Physician’s Return to Work Projection with
the Three Sides of the Triangle in writing
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Your supervisor
OccHealth or treating physician(s)
Your employee
Drive All Sides of the Triangle to Make the RTW
Projection a Reality
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Stay in constant touch with the employee
Have disability checks picked up at work
If you don’t hear from the employee within your protocol, stop
paying benefits
National Council of Self-Insurers
May 2011
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Keep your friends close; keep
your enemies closer
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Normally, when you have a disputed claim, tendency is
to avoid employee—we should actually do the opposite
Never, ever trust the workers’ compensation system to
work in your best interests in a disputed claim
Stay in contact at least weekly
When you talk with the injured employee, check to insure
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Bills are being paid
They are receiving disability checks
They are progressing along expected medical
recovery path
National Council of Self-Insurers
May 2011
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How to Settle Claims and Get the Best
Outcome with or without litigation
As targets for MMI and RTW are reached,
consider settlement and closure
 Litigated claims, never, ever ask for a demand;
do your homework and make reasonable
offers and then push for hearing
 Have solid defense attorneys provide
appropriate range and values for offer
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National Council of Self-Insurers
May 2011
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Have you got the time for
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)
_____________________________ ______________________________
_____________________________ ______________________________
National Council of Self-Insurers
May 2011
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Understanding Medicare/CMS
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Can’t settle WC claims any longer without considering
Medicare’s interests
Medicare approval of WC settlement for claims settling
for
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$250,000.00
Reasonable expectation of impending Medicare eligibility
Need to create Medicare set-aside to insure injured
worker has money to pay future medical bills
Need to submit to CMS for approval with settlement
contract
‘Super-lien’ enforcement
National Council of Self-Insurers
May 2011
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Summary
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Safety first--avoid accidents at all costs
Have your OccHealth system in place
If claim arises, move to investigate and set targets
Get authorizations and set up the WC triangle
 Investigate
 Contact MD for RTW/MMI goal
 Confirm goal to employee/supervisor
 Make goal happen
Make the targets work for you
Bring the claim to closure
National Council of Self-Insurers
May 2011
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Keefe, Campbell & Associates
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One of Illinois’ top defense trial firms
Handling defense of general liability and
employment law matters in Northern Illinois
Handling workers’ comp defense throughout
Illinois
24-hour email hotline for defense information
and advice at ekeefe@keefe-law.com
Regular email updates on all Illinois and Federal
laws and appellate cases for all interested
parties
National Council of Self-Insurers
May 2011
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