Six Actions Employers Can Take to Control Runaway Workers' Compensation Medical Costs

4. Misuse and abuse of prescription drugs on the rise. Prescription drugs play a significant role in Workers' Compensation and while medications can replace expensive surgeries or other invasive procedures, they can also be abused or wrongly prescribed. Workers' Comp is particularly susceptible because it's been estimated that 55% to 75% of drug spend in Workers' Compensation is related to medications that manage pain.

The estimated number of emergency room visits related to nonmedical use of prescription painkillers increased 111% between 2004 and 2008, according to the Centers for Disease Control and Prevention. "The abuse of prescription drugs is our nation's fastest-growing drug problem," said Gil Kerlikowske, director of the Office of National Drug Control Policy.

Action: When prescriptions are suspicious and do not follow established prescription treatment guidelines, case managers reviewing claims should call doctors. Employers must also educate employees about the personal risks and work-related hazards of misusing and abusing prescription drugs. Supervisors must be trained to act early, while protecting employees' privacy, when they notice things such as unusual employee behavioral changes or an uncommon increase in absences that may be drug-related.

5. Injuries to older workers can have higher costs. While accident frequency among older workers is lower, the severity of a Workers' Compensation claim for an older worker can be significant. The BLS estimates that it takes older workers approximately two to three times longer than a younger worker to recover from an injury - an average of 20 days away from work.

Action: Since shoulders, backs, and wrists injuries have the highest musculoskeletal claim severity in older workers, take steps to identify causes of strain and fatigue through an ergonomic evaluation of workstations and workspaces, and implement corrections. Consider task rotation. A highly responsive return to work effort can benefit the employer by enabling the worker to be productive while healing.

6. Employees have a role to play in controlling medical costs. Under Workers' Compensation, employees are not faced with co-pays, deductibles or employee contributions and often assume that the insurance company pays for the cost of their injuries. There's little incentive to understand or control the costs of care.

Action: Employers are stepping up efforts to educate employees on the costs of care and how it ultimately affects the employees' compensation. When employees realize that workers' comp is a benefits cost that ties in directly to what a company can pay in compensation, they also recognize the advantage of helping reduce those costs.

Some employers are adopting the process of sending their injured employees EOBs (Explanation of Benefit Statements). This both raises the injured workers' awareness and knowledge on the services provided on their behalf as well as provides an opportunity to identify billing mistakes or fraud.

When it comes right down to it, employers have a huge stake in helping to manage Workers' Compensation claims since they are ultimately responsible for the costs incurred. By applying accepted cost control measures to Workers' Comp medical cost, they can reduce the cost of this employer-provided benefit.

Eight Red flags: when treatment is off track

1. Medical provider focuses on the injury without sufficient consideration for the medical status of the injured employee. Conditions such as obesity, diabetes and osteoporosis are known to delay recovery and complicate treatment of work-related injuries.
2. Poor communication on the part of medical provider. The provision of high-quality Workers' Compensation services requires more physician attention and time to patient education and employer communication than traditional care.
3. Treatment recommendations and/or drug prescriptions are outside of published guidelines for the injury.
4. The provider allows the employee to direct the case. Social decisions enter into determining the release to work.
5. The provider does not take the time to understand the Return to Work options.
6. The provider broadens the scope of treatment and begins treating symptoms that are unrelated to the injury.
7. The provider does not provide timely appointments or reports.
8. The injured employee does not achieve MMI within forecasted time period without sufficient justification.