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Workplace Safety Bulletin
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Insurance Companies Use of Fraud Analytics to Discourage Workers Comp Fraud
Insurers who provide workers comp understandably want to do everything possible to prevent fraud, but it can be difficult to do when claims are fraught with emotion and there's no possible way to check on every last detail of the case. Instead of just relying on people's stories entirely, it may make more sense to use fraud analytics for commercial claims to ensure that medical providers, workers and employers are telling the truth about the extent of the damages.
Right now, insurers are mainly using manually processing, and while they do see patterns that indicate fraud, the system is just not as good at showing where the problems are actually stemming from. Whether that's a specific area, hospital or industry, there's more ways out there to significantly reduce the chance of fraud. While employees may continue to come up with creative ways to trick their employers, these automated processes can use specific criteria so everyone who works in this field can start inputting their numbers for real results. The way the referrals process works right now, there's a gap in how the data is being looked at as a whole. This means people miss important factors that could signify fraud.
Medical bills and records as well as policy and pharmacy information could all provide a crucial link to giving people a way to identity bad apples in the system. The information can then be looked at as an entire compilation which could provide a framework for future cases. Currently, many people in the insurance industry have been relying on traditional methods which limits their knowledge and the face of workers comp in general. Unlicensed medical providers may write up false data or hike up procedure costs for workers comp cases, and employers may misrepresent an employee's job as being much safer than it actually is to lower their claim rates.
One estimate puts payouts of workers compensation at over $7 billion dollars a year. It's unclear just how much goes toward fraudulent claims, but there are few out there that think it's not a problem. When there's money to be made, people come up with some very interesting ways to go about getting their hands on it. It's also expected that these fake claims will continue to rise in number in the immediate future. Even if there are professionals out there who think the system works by going through each claim by hand, there's little to be lost here by at least trying out a new form of detection. Any additional insights that can be used to decrease claim payouts for the next few decades will only decrease everyone's premiums.
HMS Insurance Associates, Inc.
How to Reduce Your Liability for Workers Compensation During Worker Shortages
Worker shortages are tough for every employer. Being too selective may mean you sacrifice your deadlines to ensure you keep your quality, being too welcoming to every candidate could mean the complete reversal where quality is sacrificed instead. However, there are more dangers that come with hiring just anyone off the street - there's a much higher risk you will be scammed by them or that their inexperience will open you up to a workers comp claim. Here's what you can do to limit your liability.
Look to the Past
Hopefully you have some experience with worker shortages. You need to draw from your past, and identify the major pitfalls and mistakes that were made when you had a limited pool to select employees from. While you may not have had any claims filed before, you should be able to see the types of situations that arose from the workers' skills. Were people careless with the equipment? Did they generally need a lot more help to complete their tasks? Were they constantly asking for more money or time off without offering anything in return? These types of workers are most likely to cause you grief later on either through legitimate injuries or fake ones. This should give you an indication of how to best plan divide the workload and immediately catch problems before they start.
Interview With Care
The interview is your first chance to limit your liability. Don't take it lightly! An interview needs to be about figuring out the responsibility level of your candidate, so they have less chance of being hurt. Accidents can happen to anyone, but some people are more susceptible than others. Ask the questions you care about, and get a sense for how the structure their days. Laziness and carelessness can travel from personal to private life. While a your potential employee isn't going to admit their flaws, they will reveal clues about their personality right upfront. Don't ignore your better instincts if you sense there's a problem.
You need to find ways to advertise your opening everywhere you can: online, on community bulletin boards and through referrals. The more choices you have, the more likely it is you'll find the people you want. It can be overwhelming to have variety, but ultimately you need it to be successful. You may also want to consider switching up the tasks if you're still finding it hard to attract good people. If there are less dangerous tasks that can be done to help your best workers, then that could be a new role you carve out. Limit the responsibility of those you might consider at-risk, and you'll also limit your liability.
HMS Insurance Associates, Inc.
Workers Compensation Rates Throughout the Years: How Your Expenses Stack Up
The healthcare profession has had a lot of attention in this country, and the disparity between the rates of service has been linked to practically every argument about how to compensate doctors while protecting patients as well. Each side claims they're getting the short end of the stick, and the whole debate becomes very tiresome to both citizens and politicians alike. Workers compensation rates are directly tied to to not just how long your employees aren't able to work, but how much each injury costs insurance.
It's rare, but sometimes people lose limbs while they're on the job in high-risk working conditions. More commonly, people are more likely to claim chronic back pain due to sitting in an air-conditioned office typing at a desk for 8 hours a day. Whatever threats are you on your plate, you should know there are doctors out there who see workers compensation cases primarily as an income booster, and they'll encourage people's claims in ways they shouldn't. These doctors get the same referrals from the same attorneys in the area, and proceed to perform tests and give out excessive disability time. This ultimately doesn't help the worker because the motivations are centered around greed and not the patient's actual health. Both the lawyers and medical professionals involved have no reason to complain, but the insurance companies and legitimate doctors in the area are hurt by this as well.
This is why rates will vary in different states depending on how your insurance model works. If your employee visits a doctor and is refused treatment, then your state probably has extremely low reimbursement rates for the hospitals. Legitimate doctors are also turned off by the time delay it takes for someone to review the bill and sign off on the services as well. Having someone perform this service also costs additional funds, which can bring up the rates for the wrong people. Some have proposed that it would actually work better to have more of a network of approved doctors like a group health care plan. This way certain treatments can be pre-authorized and rates could become more standardized.
In states where there have been major reforms, like California, there has been a significant decrease in premiums. If you're wondering how your rates stack up, your best bet is to keep up with how well your state is doing at managing the laws. If you have seen your premiums only decreasing over the years, then your state is likely implementing better plans to stave off fraud and eliminate intense (and costly) bureaucratic procedures. Workers compensation rates, like the cost of medical care, see huge differences depending on the area.
HMS Insurance Associates, Inc.
Temporary Employees and Workers Comp: What You Need to Know
Taking on temporary employees is attractive to businesses because they don't have to pay full time wages or provide benefits either. There are many risks to taking on these employees though, and some aren't well known until you're faced with a problem. You don't have a chance to really check out their qualifications, and you're setting them up in an environment where they have to be more or less ready to start the job at the moment they arrive. Even if the have experience in similar situations, your company still has its own quirks and hazards. This increases the likelihood they'll make a mistake. So what do you need to know about protecting yourself when you're in need of a little extra help?
The truth of the matter is that when an employee is on your premises, then you are responsible for them. However, if you hire these workers from a temp agency, it can be argued they actually bear some of the responsibility as well. Recently Taylor Farms and the agencies they hired their workers from were both cited during an emergency situation. Workers faced injuries from chlorine gas and the blame was placed on both Taylor Farms and the temp agencies for not preparing the workers to correctly handle matters. Half of their entire workforce was full of temporary employees, so it stands to reason that many of the workers simply didn't have the time within the organization to go over all of the proper safety security measures for every situation. Again, this is a risk that every company takes who hires temp employees. In California, it's partially on the agency who actually cuts the checks to care for their employee's safety too.
It's a big move around the country to hire lots of temps, but many companies don't report their numbers, making it difficult to know how the system is really working. While some people laud the temp programs as allowing employees and employers to find the best fit before either take the real plunge, it actually seems more likely that employers would simply rather save on benefit costs and the hassle of firing an employee and risking some sort of unfair treatment claim. Because temps are often left in the dark about how long they'll be able to keep their job, they're often in the dark about what their rights are as well.
Your best bet before you hire temporary workers is to go through an agency you trust and to treat them as fairly as possible. Ensure you know the safety precautions the agency takes for their employees and how they screen the people they recommend. If you can, go through a formal interview process with the employee so you can be sure you're limiting your liability as well.
HMS Insurance Associates, Inc.
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