Time to rethink workers’ compensation?

Workers' comp plays a key role in protecting both employers and their staff. But does it need to adapt to meet modern exposures?

Workers Comp

By Allie Sanchez

The landscape of workplace risks has experienced extreme change over the past 50 years. Experts believe that now is the time redesign workers’ compensation so that it reflects current workforce risks and is adaptable to advances in medicine and science. Industry leaders are starting to question whether the current structure of workers’ comp is meeting the needs of employers and injured workers.

“Even the U.S. Department of Labor and OSHA have recently questioned the adequacy of workers’ compensation benefits,” explains Mark Walls, vice president of communications and strategic analysis at Safety National. “Some employers are actively pushing for an alternative option to workers’ compensation because they feel workers’ compensation no longer provides suitable protection for employers and injured workers.”

Here are three ways that Walls thinks workers’ compensation needs to evolve.

Change Medical Delivery Model
Walls see the medical delivery model as the major flaw in the current system. Outcomes are often not good but costs continue to rise, which Walls attributes to the delivery model’s focus on discounts and conflict.

“Too often, medical treatment in workers’ compensation claims is used as a weapon for secondary gain,” Walls says. “Certain attorneys consistently refer injured workers to certain physicians who extend disability, perform unnecessary treatment and ultimately produce poor medical outcomes for the injured workers. These physicians producing the poor outcomes are well-known by the payers, yet they are allowed to continue to ruin the lives of injured workers so that the settlement will be larger and the attorney fee higher. This is just wrong.”

Reduce Bureaucracy
The bureaucracy that surrounds workers’ comp is complicated, costly and time-consuming, and it leaves both employers and injured staff frustrated and disillusioned. Forms vary from to state to state, which means TPAs and carriers have to be familiar with numerous sets of regulations.

“Also, why are penalties for compliance errors not based on a pattern of conduct instead of being issued with every violation?” Walls asks. “If a payer is 99%-compliant across thousands of claims, it is making every effort to comply. But mistakes happen when humans are involved, so perfection is not obtainable. The focus of compliance efforts should be ensuring that every effort is being made to comply, not simply generating revenue from every error.”

Walls believes that, in order to cut bureaucracy, regulators should rethink their administrative requirements, “with a focus on increasing efficiency, reducing redundancy and lowering the costs to both payers and the states themselves,” he says.

Eliminate Waiting Periods
Walls struggles to understand why an injured worker should have to go without pay for between three and seven days. This creates unnecessary financial problems and just adds to the stress and anxiety that the injured employee is already experiencing. “Yes, a change would result in more indemnity claims, but we are talking small dollars in additional benefits when compared with the benefit this would provide to injured workers by reducing the financial strain caused by a workplace injury,” Walls says.
 

Keep up with the latest news and events

Join our mailing list, it’s free!