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Adjuster X

Citizen Kane

By: | March 3, 2014 • 3 min read
This column is based on the experiences of a group of long-time claims adjusters. The situations they describe are real, but the names and key details are kept confidential. Michelle Kerr is the editor of this column and can be reached at mkerr@lrp.com.

Cynthia Kane, 58, allegedly suffered shortness of breath due to breathing in petroleum fumes over a prolonged period. Kane had already “lawyered up,” so a statement was out of the question. Her file during her 15 years with Union Manufacturing raised no suspicions. Kane was a nonsmoker, and she had never complained to the company nurse about pulmonary problems.

I arranged to tour Kane’s work location. It was separated from the machine shop, where the actual manufacturing took place, by a floor-to-ceiling wall with glass windows. The assembly area was not particularly dirty, and I verified that the HVAC system was up to specifications and maintained twice annually.

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Kane didn’t appear to be in any distress as she did her job.

Kane’s shift ended at 5 p.m., so I returned to the plant at 4:45 that afternoon and waited in the parking lot. I followed her as she made her way home in a fairly new two-door sports car. She stopped at a dry cleaner on the way. I parked and waited nearby for 10 minutes. When she didn’t come out, I decided to
go in.

This was a large operation with the cleaning machines in the back room. There were huge fans throughout the store, but even so there was an unmistakable kerosene-like smell from the solvents used in the dry cleaning process.

At the counter, I asked the clerk about dry-cleaning bedspreads while I strained to see into the back of the store. It was evident Kane was working.

I scratched my head. Why didn’t her attorneys name the shop as a co-defendant on the claims petition? It had far greater pulmonary exposure to airborne contaminants than Union Manufacturing.

The next day, I went back to the dry cleaner and asked to speak with Kane. The flustered counter person said they had no employee by that name. I went back to the dry cleaners three more times during the next two weeks, and each time, I saw Kane’s car there.

I arranged to have a disability evaluation by a pulmonologist, who confirmed that Kane had a mild pulmonary disability (5 percent PPD rating). After reading my report, the doctor concluded the condition was not due to her work at Union Manufacturing. Kane’s attorney had a disability report rating Kane at 25 percent PPD.

I couldn’t fault Kane for wanting a part-time job to help pay for living expenses (and her sports car), but she left me no choice but to deny the claim against Union.

I called her counsel and explained that we’d have to go to trial. He was incredulous, until I explained my findings.

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“Your client didn’t tell you about her ‘under the table’ deal at Salerno’s Dry Cleaning, did she?” I asked him. “I personally observed her working there on three different occasions, and noted the smell of the dry cleaning solvent was very strong.

“I am willing to bet that exposure is the proximate cause of any pulmonary disability she has, rather than from a clean and temperature-controlled environment at Union Manufacturing Co. My examining physician agrees.”

The attorney reluctantly agreed to withdraw the petition. Kane continued to work at Union, and whether she kept her night job at the dry cleaner wasn’t my concern. A good investigation paid off and the claim against Union Manufacturing hit a snag.

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NWCDC Preview

NWCDC Presenters Offer Insights

An in-depth look at some of the breakout sessions that will presented at this year's National Workers’ Compensation and Disability Conference® & Expo.
By: | September 19, 2014 • 9 min read
Topics: NWC&DC | Workers' Comp

The 23rd annual National Workers’ Compensation and Disability Conference® & Expo takes place Nov. 19-21 at the Mandalay Bay Resort and Casino in Las Vegas. The confer­ence is produced by LRP Publications, which also publishes Risk & Insurance®.

ConferenceWith more than 30 breakout sessions scheduled, conference organizers have tried to address many of the challenges and solutions to workers’ comp and disability practitioners. Here’s an in-depth look at a handful of those sessions.

How to Reduce Costs With a Wellness Program

Friday, Nov. 21 from 10-11:15 a.m.

Work site wellness programs can improve health risk factors in employees that drive workers’ comp costs. That’s a fact that Karen Curran can prove definitively.

The director of health risk management for Pinnacol Assurance says an ongoing, five-year study of work site wellness programs implemented by policyholders of the Colorado insurer suggests that certain health issues increase the risks of an occupational injury and hike the costs of such claims.

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“Workers’ comp adjusters have known this for years and years and years, but there was no statistically valid data to support their anecdote,” Curran said. “That’s what I’m going to bring to the table.”

The study is one of the few showing that modifiable health risks and management of comorbid conditions can impact the number and cost of occupational injuries. More importantly, Curran will outline a health risk management program she says can help reduce workplace injuries and severity. A key she says is focusing on people, not just safety.

“In workers’ comp we do a great job of promoting safety measures — ladder safety, use of harnesses, focusing on slips and falls,” she said. “But think about this: You’ve done all the ladder and scaffolding safety training you can. But you have a crew of 350-pound guys, which is not unheard of, but all your ladders are rated at a 250-pound level. What risk management needs to be taking place?”

Anyone contemplating a work site wellness program can benefit from the session, she said. While wellness programs have been around for years, they are new to the workers’ comp arena.

“One of the things that I think has happened is that wellness programs have resided within health insurance,” Curran said. “Over time we’ve seen that the health of employees is impacting productivity as well as other aspects of a business. All of a sudden, risk managers and others are saying, ‘this isn’t just related to our health care benefits, we’re seeing productivity and absenteeism impacted. We need to get employees healthier because they are not at work.’”

For a wellness program to be successful, Curran advocates speaking to employees in a way that is unintrusive. As she explains, it’s a matter of combining wellness with safety.

“In every business today, workers expect to work in a safe environment. They are used to having safety meetings where people say ‘wear your goggles, hard hats.’ That’s not intrusive to a person because people understand you want them to be safe,” she said. “We’ve used that infrastructure to bring wellness into this.”

Strategies for Overcoming Operational Challenges and Benchmarking Program Performance

Wednesday, Nov. 19 from 11 a.m.-12:15 p.m.

A landmark study of claims leaders released last year gave companies a unique opportunity to measure their core competencies, best practices, technology, medical management performance, and talent development against those of their peers. With phase two of the study set to be revealed soon, organizations have a chance to drill down to the challenges they face and potential solutions. But the session will provide more than just the latest data.

“We want to really take the data and talk about it from an operational perspective,” said Denise Gillen-Algire, director of managed care and disability corporate risk for Safeway Inc. and the study’s author. “What does it mean to you and what are we doing from an organizational standpoint to drive what we are doing now or in the future?”

Joining Gillen-Algire on the panel will be Jason Beans, CEO of study-publisher, Rising Medical Solutions; Ray Jacobsen, managing director of Aon Benfield; and John Smolk, principal manager of workers’ compensation for Southern California Edison. The session will be targeted to anyone involved in managing claims.

“The study was focused on claims leaders from various industries — insurance companies, self-insured employers, third-party administrators — anyone who manages claims that would like to consider some of the operational challenges and see what options are available in terms of what their peers are doing and be able to talk about them,” Gillen-Algire said. “The focus is not just the data, but what are some of the business impacts of the results of the study and what can organizations do with the information to improve operational performance.”

The study includes key takeaways/recommendations organizations can address to improve operational performance. Included are things such as investing in talent development and alternative recruitment strategies to drive claims effectiveness. Another is to consider using predictive analytics and workflow automation, something many organizations currently do not do.

One that can be easily implemented by companies both large and small is leveraging data warehousing capabilities. That can be an easier alternative to a complete overhaul of a company’s data systems.

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“The challenges many claims organizations face is the many legacy systems and peripheral systems that help them manage daily claims. So if we use a data warehouse or some mechanism to integrate them, that’s a lot more cost effective and possible,” Gillen-Algire said. “There would be no way most small- to mid-sized companies could replace their claims systems — it’s cost prohibitive, and impacts operations for nine months to a year.”

Additional challenges that the panel will address relate to the Affordable Care Act. For phase two of the study, the 404 claims leaders included in the survey were asked questions about whether health care reform has had an impact on their operations.

‘When we included them in the survey, we didn’t anticipate much response because we figured it was too new,” Gillen-Algire said. “Surprisingly, 27 percent of respondents reported some impact on claims.”

The top answer was cost shifting to workers’ comp followed by increases in overall claims costs. Other impacts from the ACA noted were an increased number of claims and limited access to medical providers.

Health Care Reform: Strategies You Can Apply Now

Thursday, Nov. 20 from 1:30-2:45 p.m.

With 27 percent of claims leaders in a recent survey saying they are already feeling the effects of the Affordable Care Act, it is time for organizations to take action. That’s the idea behind this breakout session.

“There’s a lot of posturing and discussion around guessing, forecasting the impact of the ACA. This session will take a point/counterpoint perspective,” said Denise Gillen-Algire, director of managed care and disability corporate risk for Safeway Inc. “We will present some known data from studies/research, but will also take that information and say, ‘OK, now what do you do as claims organizations to mitigate the impact or prepare for it.’ That’s the key focus of the session.”

Gillen-Algire and William Wilt, president of Assured Research, will offer a high-level presentation targeted to workers’ comp practitioners who are concerned about the impact of ACA on their claims. They will provide the latest data as well as strategies companies can take immediately.

“One of the key strategies is how organizations think about their partnerships with physicians, because physicians and health care organizations are going to be the key to managing workers’ comp claims now, knowing that medical is almost 60 percent of claims costs,” Gillen-Algire said. “It is expected that will increase. So your relationship and how you manage physician contracts and networks is going to be important.”

Risk Financing: Selecting the Best Option for Your Company

Wednesday, Nov. 19 from 2:30-3:45 p.m.

Is retention worth the risk? That’s a question many companies are trying to answer as they seek ways to reduce their workers’ comp costs.

“The ideal target audience for the session is risk managers or CFOs from mid- to large-sized companies — companies that are big enough to consider retaining risk as part of their workers’ comp program,” said Mark Walls, vice president of communications and strategic analysis at Safety National. “

Walls will discuss the various risk financial options available and highlight the significant differences between guaranteed cost coverage, high deductible programs and self insurance. “For example, a lot of people think high deductibles and self insurance are the same thing,” he explained. “It’s really not. There are a lot of nuances that are very different. It’s really important for risk managers to understand those differences.”

The goal of the session is to help organizations find their ideal program. That may mean taking on more risk or staying with what they already have.

“The big reason to shift out of guaranteed cost coverage is the opportunity to save money,” Walls said. “Your guaranteed cost premiums are based on your anticipated losses plus built in expenses and profit for the carrier. So when you switch to some type of risk retention program, you have the ability to achieve savings not only from the expense side, but there is also a tremendous opportunity to achieve savings from your risk control practices by reducing your losses, which’ll have a direct impact to your bottom line.”

That can be a double-edged sword for some organizations, however. As Walls explained, taking on some of the risk requires a solid loss prevention program.

“If your losses go bad, are higher than expected, it could end up costing you more money,” he said. “Because of that, you’ve got to have the foundation of the very strong loss control/loss prevention program.”

Apply Post-Loss Claims Data to Structure Your Pre-Loss Safety Culture Program

Thursday Nov. 20 from 8:30-9:45 a.m.

Ten years ago, Cooper Standard Automotive had 647 open claims and reserves of up to $10 million. Today there are 121 claims with reserves under $3 million. What made for the change was looking at the company’s post loss information to prevent future injuries and changing the way things are communicated.

“I’m saying look at your loss run. Where are your costs? What department are they in?” said Patricia Hostine, global manager for workers’ compensation at Cooper Standard. “What I’m saying is, ‘look at what your payments are – pivot table – dissect them. What locations are struggling? It’s not predictive modeling; it’s just looking at what you are spending.”

Using your loss data information can help develop your brand for safety and workers’ comp. Having a brand for these programs is key.

“We don’t think about branding workers’ comp, but if you don’t have a brand, how do you know what your goals and objectives are?” Hostine said. “Branding and the workers’ comp piece never seem to be linked. I link them because if there is no brand, how do you know what your brand is? Otherwise it becomes the cost of doing business.”

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The brand piece helps improve the way the safety message is communicated. Hostine said it’s important to restructure the language and use the right message to help injured workers navigate through the workers’ comp process and return to work sooner.

“How do you reply to your stakeholders? An employee is a stakeholder. So the most basic [way to restructure language]is ‘is it an injured worker? A claimant? Is it a slug?’” she said. “He is a valued employee … when did they go from employee to claimant because they are still an employee and even better, a valued employee.”

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at riskletters@lrp.com.
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Sponsored Content by Riskonnect

A Dreaming Team

Chris Thorn of Southwest Airlines got creative with his risk management program. Now, the sky's the limit.
By: | September 15, 2014 • 4 min read
SponsoredContent_Riskonnect

Chris Thorn is known as one of the most creative risk managers in the business. After all, his risk management program hit the cover of Risk & Insurance® in March, 2012.

Now the senior manager, payments and risk, for Southwest Airlines is working with Riskonnect, a technology partner that he thinks can take his program to new heights.

“For us, it’s a platform that gives you so many different tools that if you can dream it, you can build it,” said Thorn.

Claims administration

Thorn ditched his legacy risk management information system in 2012 and started working with Riskonnect, initially using the platform solely for liability claims management.

But the system’s “do-it-yourself” accessibility almost immediately caught the eye of Thorn’s colleagues managing safety risk and workers’ compensation.

“They were seeking a software solution at the time and said, ‘Hey, we want to join the party,” Thorn recalls of his friends in safety and workers’ compensation.

SponsoredContent_Riskonnect“For us, it’s a platform that gives you so many different tools that if you can dream it, you can build it.”

–Chris Thorn, senior manager, payments and risk, Southwest Airlines

What was making Thorn’s colleagues so jealous was the system’s “smart question” process which allows any supervisor in the company to enter a claim, while at the same time freeing those supervisors from being claims adjusters.

The Riskonnect platform asks questions that direct the claim to the appropriate category without the supervisor having to take on the burden of performing that triage.

“They love it because all of the redundant questions are gone,” Thorn said.

The added beauty of the system, Thorn said, is that allows carriers and TPAs to work right alongside the Southwest team in claims files while maintaining rock-solid cyber security.

“This has sped up the process,” Thorn said.

“Any time you can speed up the process, the more success you’re going to have when you make offers to settle claims,” he said.

Policy management

Since that initial splash in claims management, the Riskonnect platform has gone on to become a rock star at Southwest in a number of other areas. And as Thorn suggests, the possibilities of the system are limited only by the user’s imagination.

SponsoredContent_RiskonnectWith a little creativity and help from Riskonnect as needed, a risk manager can add on system capabilities without having to go on bended knee to his own information technology department.

In the area of insurance policy management, for example, the Riskonnect platform as built by Thorn now holds data on all property values and exposures that can in turn be downloaded for use by underwriters.

Every time Southwest buys a new airplane, the enterprise platform sends out a notice to the airlines insurance broker, who in turn notifies the 16 or 17 carriers that are on the hull program.

Again, in that “anything’s possible” vein, the system has the capability of notifying the carriers, directly, a tool Thorn said he’s flirting with.

“It is capable of doing that,” he said.

“We’re testing out this functionality before we turn on it loose directly to the insurance companies.”

Carrier ratings

In alignment with the platform’s muscle in documenting, storing and reporting liability and property exposures, the system monitors and reports on insurance carrier financial strength.

If a rating agency downgrades a Southwest program carrier’s financial strength, for example, the system “pings” Thorn and his colleagues.

“Not only will we know about it, but we will also know all programs, present and past that they participated on, what the open reserves are for those policy years and policies,” Thorn said.

“That gives us even more comfort that we have good, solid financial backing of the insurance policies that are protecting us,” Thorn said.

Accounting interface

Like many of us, Chris Thorn didn’t set out to work in risk management and insurance. Thorn is a Certified Public Accountant, and it’s that background that allows him to take creative advantage of the Riskonnect platform’s malleability in yet another way.

With the help of the Riskonnect customer service team, Thorn added a function to the platform that allows him to calculate the cost of insurance policies on a monthly basis, enter them into a general ledger and send them over to his colleagues in accounting.

SponsoredContent_Riskonnect

“It’s very robust on handling financial information, date information, or anything with that much granularity,” Thorn said.

The sky is the limit

Thorn and Southwest are only two years into their relationship with Riskonnect and there are a number of places Thorn thinks the platform can take him that have yet to be explored, but certainly will be.

“It’s basically a repository of anything that’s risk-related, it continues to grow,” Thorn said.

SponsoredContent_Riskonnect“This has sped up the process. Any time you can speed up the process, the more success you’re going to have when you make offers to settle claims.”
–Chris Thorn, senior manager, payments and risk, Southwest Airlines

Not only have Southwest’s safety and workers’ compensation managers joined Thorn in his work with Riskonnect, business continuity has come knocking as well.

Thorn met in July with members of Southwest Airline’s business continuity team, which has a whole host of concerns, ranging from pandemics to cyber-attacks that it needs help in documenting the exposures and resiliency options for.

That Enterprise Risk Management approach will in the future also involve the system’s capability to provide risk alerts, telling Thorn and his team for example, that a hurricane or fast moving wildfire is threatening one of the company’s facilities.

Supply chain resiliency and managing certificates of insurance for foreign vendors are other areas where Thorn and his team plan to put the Riskonnect platform to good use.

“That’s all stuff that’s being worked on by us,” Thorn said.

“They’ve given us the tools, but we’re trying to develop how we’re going to use it,” he said.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Riskonnect. The editorial staff of Risk & Insurance had no role in its preparation.


Riskonnect is the provider of a premier, enterprise-class technology platform for the risk management industry.
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