Cost-Intensive Healthcare Providers and Attorneys Account for Majority of Worker Comp Costs

[tweetmeme]After analyzing five years of claim data from the Louisiana Workers’ Compensation Corp., or LWCC, from 1998 to 2002, the researchers found that a small group of physicians, only 3.7 percent, accounted for more than 72 percent of the workers’ compensation costs. These were termed cost-intensive providers, or CIPs.   This was the findings of a study by researchers at the Johns Hopkins School of Medicine, published in the January edition of the Journal of Occupational and Environmental Medicine. 

Amazing is the only word that comes to mind!  With all the talk of healthcare reform swirling this country, it seems that America would be taking a closer look at how worker compensation claims are handled.  Employers need to take note of this study and not simply read it in passing and shake your heads in disgust only to move on to the item in the paper (or online).  The study suggests that settling claims quickly is the best solution.  It is also important to realize that the researchers do say that “Across the board, we’ve found that most physicians practice prudently.”  Which is good news, but realize this; according to the study the involvement of an attorney and the duration of the claims—greatly impacted overall claim cost.   After analyzing 36,329 claims over five years, the study found that 2 percent of these claims accounted for 32 percent of the claim costs.

According to the Johns Hopkins Gazette article detailing this study, “A 2008 study found that attorney involvement was associated with consistently higher medical, indemnity and claim handling costs.  Of nearly 7,000 claims studied, 738 claims involved attorneys.  By the study closure, 97.7 percent of claims without attorneys had been resolved.  Of those with attorney involvement, only 57.5 percent had been closed. The study found attorney presence on a claim correlated with duration, and the duration correlated with higher cost.”

Moral of the story is to do everything you can to reduce the probability of injuries occurring in the first place, and if an injury does occur, stay in contact with your injured employees, ensure that they still feel like they are part of your corporate family!  Settle the claim, institute a return to work program and communicate with injured employee weekly.

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