WORKERS’ COMPENSATION & RETURN TO WORK PROGRAMS: 3 REASONS FOR FAILURE AND HOW TO OVERCOME THEM (PART 2)
Gary Jennings, CPCU, ARM, ALCM, AIC, ARe, SCLA
Principal of Strategic Claims Direction, LLC
In January, we began a series of blogs focusing on Return to Work (RTW) programs. As we discussed in the previous blog, the people most responsible for the overall success or failure of RTW programs are those in senior management positions. No RTW program can get off of the ground without the support of these executives. While those in senior management are responsible for setting the tone at the top, the supervisors and managers in charge of daily operations are responsible for the day-to-day success or failure of the RTW program.
REASON # 2: PROGRAMS MAY NOT CREATE REWARDS AND INCENTIVES FOR THE PEOPLE MOST RESPONSIBLE FOR ITS SUCCESS.
I once worked for a large global manufacturing company. On one occasion while training our operational personnel on workers’ compensation management, one of the regional managers told me something that I will never forget. He said, “The supervisors make more decisions in a day than I make in a month. It is hard for them to go from the problems related to day-to-day manufacturing to thinking of successful ways to handle workers’ compensation claims. “
Although he may have been exaggerating when he said the floor supervisors made more decisions in a day than he made in a month, I got his point. The supervisors’ primary responsibility is to manufacture as much product as possible, as cost effectively as possible, on a daily basis. They will deal with absent employees, malfunctioning machines, irregular raw materials, and a host of other problems. The introduction of more responsibilities, including figuring out how to fit injured employees on restricted duties into the daily pandemonium of the workplace, can slow production and result in greater cost of goods sold. Furthermore, these RTW duties will require more dedicated time from the supervisor, so long as the employee is on restricted duty.
So how do we make RTW programs a priority for supervisors?
To facilitate a successful RTW program, rewards should be associated with RTW goals when evaluating supervisors’ performances. For example, it would be counterproductive to the RTW program if the supervisor based all rewards and penalties simply on the goal of manufacturing as fast as possible. If the supervisor sets the precedent that workers’ compensation claims costs are too high and reducing employee absences is something that must be addressed, direct workers’ compensation costs and indirect costs will be reduced. As a result, the supervisor should be rewarded for enhancing the RTW program, even if the cost of goods sold increases.
The third blog will address an ongoing problem for RTW programs as well as other leadership programs that are often intended to address short-term goals rather than create a long-term benefit.
By: Gary Jennings, CPCU, ARM, ALCM, AIC, ARe, SCLA
Principal of Strategic Claims Direction, LLC
Summary of Qualifications
Gary Jennings, CPCU, ARM, ALCM, AIC, ARe, SCLE, is a property/casualty claims consultant with over 40 years of claims experience. He has worked over 20 years as a claims consultant and has served many public entity clients. Since forming Strategic Claims Direction (SCD) over 7 years ago, most of his clients have been in the public entity sector. Prior to forming SCD, Gary worked for insurers, third party administrators, corporations, independent adjusters, and two of the "Big 4" consulting firms (PwC LLP and KPMG LLP). His employment experience allows him to bring a wide range of expertise to his clients to help them develop their claims programs. Gary is a frequent speaker at professional conferences and has authored numerous articles, some of them being included in PUBLIC Risk magazine. His next PUBLIC RISK article is scheduled for October 2016.
Reponsibilities
SCD performs a wide variety of claims-related engagements. Gary leads and performs all engagements. He works throughout the United States performing:
1. Claims audits, to compare the program to leading industry practices and/or contract requirements, These audits may be to meet statutory requirements, to meet AGRiP certification, or to meet requirements set out by the board of directors or commissioners.
2. Reserve reviews to evaluate the reasonableness of reserving procedures and the estimates. This may be needed when public entity risk management programs merge, when a concern arises about reserving by a TPA or self-administered program, or to support a casualty actuarial evaluation.
3. Claims efficiency studies, which include an analysis of the claims processes to identify redundant or unnecessary steps, to determine if the claims personnel should be realigned to optimize Return on Investment (ROI), to determine if system enhancements are necessary to improve efficiency, or if other steps are needed.
4. Assistance in TPA selection, including development of the claims-related requirements, creation of a grading methodology, identifying TPAs that meet the clients' needs regarding expertise and geographic spread, evaluating proposals as received, and working throughout the TPA selection process to select the TPA that best meets the clients' needs.
5. Developing claims manuals or other procedural documentation to provide direction for public entity risk management staff, TPAs, medical management organizations, and others.
6. Provide expert testimony relative to claims handling, reserving, and excess insurance reporting.
Business Experience
Prior to forming SCD Gary worked for the following firms:
Crawford & Company - Director Technology & Process Management
KPMG LLP - Manager, Claims Consulting
PwC LLP - Director, Claims Consulting
International Paper - Supervisor, Workers' Compensation Claims
Travelers Insurance - Claims Supervisor
This broad experience from several different perspectives provides Gary with the ability to provide his clients with "real world" answers to improve their programs.
Professional Affliliations
CPCU
Georgia PRIMA
Education
BS BA - University of Tennessee, Knoxville
