Nursing Homes: Control Losses with Workers’ Comp Policies and Procedures
Posted in: Commercial Insurance
The Occupational Safety and Health Administration (OSHA) puts it bluntly: “Nursing home work can be dangerous work. What you do for a living may lead to more back injuries than working in construction, in a warehouse, or even a coal mine.” It’s no wonder, then, that discussions of workers’ compensation arouse fear in many nursing home insurance carriers.
As I discussed in my last post Nursing Homes: Avoid Costly Workers’ Compensation Claims, the first in a series on workers’ compensation in the elder care industry, nursing homes can lower their risk of claims by: (1) understanding the many sides of workers’ compensation, along with the appropriate state statutes, and (2) developing and implementing a robust set of preventive measures.
In this second post, I want to discuss one of the most important risk management measures: your workers’ comp policies and procedures. When underwriters assess your facility to determine your premium, they look for thoughtful, well-planned and executed workers’ comp policies and procedures. Those facilities that have them often pay a much lower premium due to the lower frequency and severity of claims.
Unfortunately, most insurance brokers offer little guidance, which means far too few nursing homes have policies and procedures in place. If they do, the policies are often obsolete, crucial protocols are overlooked, and no one holds the facility accountable.
What are the core components of an effective set of workers’ comp policies and procedures? Here, I walk through the essentials.
Just as job descriptions define what is expected of employees in their day-to-day job, a “job description” in your workers’ comp manual outlines employee responsibilities and defines expectations in the event of a work accident. Employees need to know what is expected of them, and they can’t rely only on verbal descriptions and informal training sessions.
Every facility needs a policy that educates employees on action steps and expectations when accidents happen; a policy for how each department head or supervisor should respond; and a policy describing the responsibilities of the person designated to report and manage claims. Establishing this level of accountability and responsibility is a must-have first step.
The details of an accident must be promptly documented. Accident details become “fuzzy” over time, and stories can change. When that happens, facilities can lose critical information that may ultimately increase the cost of the claim.
Make sure your workers’ comp policies and procedures not only explain the process but also include accident investigation forms for your employees, department head or supervisor, and witnesses to complete immediately following the accident. These forms should be available at each nurse station for timely completion, which is particularly important during night and weekend shifts because often those accidents are unreported and details of the incident become confusing later when a claim is investigated. Also, have workers who did not witness the accident (but were on site in the vicinity that day) sign forms to verify that they have not witnessed the accident. This added step locks down the specifics and prevents later misunderstanding of what happened. It also gives insurance adjusters information they may not otherwise receive, but which is crucial to determining the compensability of the claim.
When you devise your accident documenting policy, consider this three-tier approach:
- The employee involved in the accident fills out an accident report.
- The department head, charge nurse or supervisor fills out an accident report.
- Anyone the employee lists as a witness, whether that person actually witnessed the event or not, fills out a witness report form. This form, then, serves as written documentation of exactly what was witnessed — or not witnessed.
Medical costs are growing annually and now represent the most expensive part of a claim, so management of the medical aspect at the onset of a claim is extremely important.
Every state is different in the provision of medical care, and it’s important to know whether your state allows you, the employer, to direct the care and determine the healthcare providers. If so, then identify and list your “approved providers” in your policies and procedures, and ensure that your employees know where to go for the initial medical treatment following a work injury.
Approached strategically, selecting your own care providers comes with advantages. We advise our clients to establish a relationship with a few providers, get to know their office staff and care providers, and help them understand your business so they can assess whether an employee can go back to work in some capacity. This kind of relationship can result in expedited care, good communication, and a quicker return to work.
A Return to Work Program
Your employees are your number-one asset, and when they can’t come to work, your whole infrastructure suffers. This makes your return to work program an integral part of your business strategy.
“Return to work strategies and programs have traditionally been used to reduce workers’ compensation costs; however, they can do much more — they can improve productivity and morale across an organization, they can save organizations time and money, and they can protect agencies from loss of talent,” reports the United States Department of Labor’s Office of Disability Employment Policy (ODEP).
While many nursing homes and elder care facilities fail to create return to work policies because they fear the expense involved in accommodating injured employees, the reality is that these policies are highly cost effective. In fact, more than half of accommodations cost employers nothing, according to a multi-year study by the Job Accommodation Network (JAN). “The benefits employers receive from making workplace accommodations far outweigh the low cost,” with “a high percentage (57 percent) of accommodations cost[ing] absolutely nothing to make, while the rest typically cost only $500,” explains the lead author of JAN’s study, Beth Loy.
What does a strong return to work program entail? Options for “transitional duty” are a core component – employers adjust employees’ responsibilities temporarily, as specified by a doctor, to allow time for recuperation. In nursing homes, this often involves replacing physically-demanding responsibilities (such as patient lifting) with less strenuous work (taking vital signs, folding laundry, or answering call lights), or reassigning the injured employee to a different department or shift (if your state permits it) as well as not allowing them to work double shifts. It might also include a modified work schedule to promote rest and recovery.
Keep in mind that modified duty jobs are temporary, and your policy needs to indicate details like time limitations and compensation. Also list in your policy possible jobs an employee on transitional duty might perform. The more informed and supported your employees feel, the better your outcomes.
Defining your policies is only part of the job. You also need to delineate your procedures for claim management and train a designated “claims coordinator” — and your entire staff — to follow them.
When we prepare workers’ comp manuals for clients at PSA, we begin by advising them to do a clean sweep of all old forms, toolkits, and manuals — and to start from scratch. Many facilities operate with old systems and materials in place, which can result in costly mishaps. We then create a custom set of procedures to address a broad set of questions, including:
- What steps need to happen immediately following an accident, including first aid, initial medical treatment, accident reporting, and witness identification?
- At what point do you conduct a drug and alcohol test? What are the procedures?
- How should workers’ comp claims be managed? What systems need to be established?
- What forms need to be completed? What documentation needs to be maintained?
- Are forms available at each nurse’s station to allow night and weekend charge nurses to get them completed timely?
- At what interval does the claims coordinator need to contact the adjuster? Is the broker asking the right questions of adjusters to help adjudicate the claim?
- How do you monitor the progress of an injured employee? How often should an employee who is out of work be contacted?
- How do you communicate with healthcare providers? What if an attorney gets involved?
- How will you train employees both old and new?
- What information does the claims coordinator need to pass on to management, and in what timeframe?
- What role does your safety committee play in determining and addressing the root cause of the accident?
Your procedures need to cover these — and many other — aspects to serve your best interests, so be careful not to overlook even a small part.
Workers’ comp policies and procedures are complex, and not easy for facilities to compile and put in place on their own. Most insurance brokers offer little-to-no guidance, but at PSA, our Healthcare Risk Solutions Team creates workers’ compensation manuals tailored to the needs of each client and aligned with appropriate state statutes. We also train your staff members and support your facilities so they can be held accountable for implementing and maintaining the practices.
Your organization works too hard to generate income, so allowing workers’ comp expenses to raid the profits is unnecessary. Over the years, I’ve seen what can happen when workers’ comp policies and procedures are non-existent or loosely defined, and I don’t want that to happen to your facility. If you need help creating a cost-effective workers’ comp solution for your facility, reach out to me at FGiachini@psafinancial.com.