Workers’ Compensation insurance represents one of the most significant expenses for home health care and hospice providers, particularly if there is a high incidence of claims which impacts an organization’s loss experience and the insurance premiums it pays. There are steps, however, a home health care provider can take to help minimize losses and take control over Workers’ Compensation costs.
First, let’s take a look at the costs involved with a Workers’ Compensation claim: You have direct costs, which include medical expenses (e.g. hospital care, surgery, doctor visits, physical therapy, ER visit, and/or prescription medications) and indemnity payments (lost wages) while a caregiver is not working because of an on-the-job injury or illness. You also have indirect costs as a result of a workplace incident, which can include a slowdown in patient service during and immediately after an employee injury/illness; a disruption in normal employee activities during the claim investigation period to determine how an injury or illness occurred; the need to pay overtime to other employees and/or the hiring and training of a temporary employee to accommodate for the injured caregiver who is out; greater possibility of litigation if there is a claim dispute; and the increased potential for malingering and fraud.
Now let’s take a broad look at some of the ways to control expenses associated with Workers’ Compensation insurance:
- Understand how your Workers’ Compensation insurance premium is determined: classification rate (your workplace exposures) multiplied per $100 per payroll (includes salaries, commissions, bonuses, overtime, holiday/sick/vacation pay, car allowance) multiplied by your experience modification factor (a value based on your business’s past claims experiences and how this compares with others in the same industry) plus fees and assessments (state-specific). Reducing claims and getting control over the home health care provider’s experience modification will directly impact one’s premium. We will review this in more detail in a future article.
- Work with an insurance company that offers financial strength and stability, has the expertise to identify and control occupational injuries and illnesses most common in the home health care and hospice industry, provides help in preventing incidents from occurring in the first place, and responds effectively for prompt and fair claims handling. The right carrier can also help to facilitate quality, cost-effective medical care in the states where this is permitted through the use of occupational health provider networks, utilization review, nurse case management, and other techniques. Carrier assistance in setting up a return-to-work program is also critical in getting employees back to work as soon as they are able.
- Create a safe workplace to reduce the frequency and severity of losses. This involves setting up an employee safety committee and formal patient-management and materials-handling programs, providing educational resources, implementing employee pre-screening and an ongoing training plan, and more.
- Look at the principal occupational exposures home health care and hospice workers face so that strategies can be implemented to control common industry hazards. These hazards include: physical (slips, trips and falls, overexertion, back injuries, driving accidents, etc.); physiological (occupational stress, workplace violence, verbal abuse and other forms of violence in the home or community); biological (infectious diseases, blood-borne pathogens, needle stick injury); and chemical (hazardous drugs, cleaning and sterilizing agents).
- Report Workers’ Comp claims to the insurance company immediately so that they can be managed for optimum outcomes. A delay in reporting may impact the medical treatment provided to an employee, possibly aggravating the injury, extending the pain or discomfort, and delaying a return to work. The delay also can affect the overall cost of medical treatment and the Workers’ Comp claim. According to the National Council on Compensation Insurance (NCCI), week two after the date of the incident cost an average of 18% more than claims reported during the first week; weeks three and four following the date of the incident averaged a 30% increase in claims cost; and after four weeks the costs increased an average of 45% higher.
- Set up a return-to-work program to offer employees opportunities to engage in modified-duty and alternative work assignments, which not only boosts employee morale and gets the injured worker back on the job but also helps to minimize disruption in a business’s operation.
Manchester Specialty can assist you in securing the right Workers’ Compensation insurance plan for home health care and hospice providers. Our insurance carrier partners offer an array of loss control and prevention resources as well as return-to-work plans for insureds. For more information about our programs and coverages, you or your local insurance agent can contact us today toll free at 1-855-972-9399.