Friday, August 15, 2014

And I'm On The Employer's Side

A LinkedIn member wrote to me the other day in response to a blog post about rewarding positive behavior.

He said in part, "David - This is a daily fight for employers who are trying to help their injured workers so they don’t hire an attorney... Who we kidding UR is a profit center for the carriers and Sandhagen [the California case that declared UR is "mandatory" but which also said that the "mandatory" nature of UR can be fulfilled simply by the claims adjuster making a treatment authorization decision him or her self] is the excuse that keeps on giving. Funny thing is I am on the Employers’ side having to fight for simple treatments even post surgery – what a joke!"

Listen, I don't know for a fact that utilization review is a "profit center for the carriers." I don't have any data or evidence of that, though I do suspect that many UR companies are financially tied to either carriers or claims administrators.

But the sad part of the commentary is that the employer, the one paying the premiums, the one that should be able to have some direction and control over the direction any particular claim takes, gets left at the sidelines once the kickoff to the carrier occurs.

One of the biggest selling points to Oklahoma opt out is that the employer, not the insurance carrier, has so much greater control over claims administration.

If you're big enough as an employer you're going to self insure because of the greater control you have over claim management.
Bowzer just wants to get back to work...
Self insureds routinely demonstrate that their claims management experience is vastly superior to the rest of the claims world with greater reduction in claims frequency, claims duration and ultimately the business cost of a claim, than the insured market.

Insured employers generally have brokers through which they purchase their insurance and the competitive broker market should provide that claims oversight - but while that's a great service, the monthly file review (or whatever time table is generally set for reviews) is insufficient because claims decisions are made daily.

Waiting 30 days to find out that some generally accepted, low cost medical treatment procedure was denied for whatever reason is 30 days too long.
The vast majority of employers in the United States are small businesses without the resources to have someone dedicated to overseeing their insurance company, let alone conduct a claim review every 30 days.

And that's a problem.

The consumer of insurance, in this case the employer, is the customer. If the customer doesn't dispute a claim, doesn't dispute a treatment modality, wants the employee out of the system and back on the payroll, then the employer should have the luxury of making that desire an instruction to the insurance company.

Too often, however, there either is no delegation of that authority or that desire is simply not an option.

I have been in claims review meetings in my past life as a defense attorney, principally representing an employer who was not happy with the claims management of their carrier.

The lack of authority that an employer has over the claims experience was quite apparent in many of these reviews - the carrier's representatives would basically, in so many words, tell the employer that they have no say, that once a claim comes into the carrier's arms it's their business and butt out.

In some states there are "employer rights" laws, but the fact is that small and medium sized businesses don't have the time or resources to avail the remedies in those statutes, and by the time the remedies are accessed it's too late for the injured worker - damage done...

It comes down to accountability. When all is said and done, who's responsible? Who can the finger be pointed at for results? And what are the consequences?

Sure there are administrative penalties based on performance numbers that are far removed from the actual day to day handling of human lives - they are neither deterrent nor incentive.

Insurance companies market to what sells - premium cost. When was the last time you saw an advertisement for an insurance company in any line of the industry proclaim superior claims handling?


Employers need to demand what they pay for - top quality claims management with input authority from the employer. If employers would shop for that, rather than the lowest price, the claims industry would "get it."

Risk managers shouldn't have to fight for treatment for their employer's workers.

1 comment:

  1. It is important to point out that in some States. Like WA, the employer and the employee both pay for the premiums. So in WA both the employee and the employer, are the consumers. And even in those state's that only the employer pay's the premiums, I as an employee, consider those premiums being paid on my behalf, to be part of my benny's package. So there for, even in those States, both the employee and the employer are BOTH the consumers, getting fleeced by the big insurance industry. Private or government run.

    And as far as the private insurers being any better? Just take a look at Sedgwick. Not better, and even worse for the workers in many case.

    I do not want my employer in charge of my health care decisions at all. On the job, or off of it.

    I actual think you try and tell it from both sides, and are doing a great job at that. If the different sides are offended, Then your doing job well. When reporting on both sides of the issue. Your not going to be able to keep all sides happy all the time, when your telling both sides of the story.

    So keep up the great work. If your offending both sides, then your most likely reporting truth's, that neither side really want to hear, but need to.

    Thanks for report the facts to us all. Peace