Ohio Workers’ Compensation

This is the first of a series of postings regarding the MIRA  reserving system. This first posting will give a brief history of the BWC’s reserving system. Subsequent postings will look at the impact of recent changes in the reserving method on public versus private employers and analyze the efficacy of different reserving methods.

Claim reserves are estimates of future claim costs. Prior to 2002, the BWC reserved claims based on a tabular reserving method. This method took just three factors (the date of injury, the last type of compensation awarded, and the last date the claimant was off work) to calculate the reserve on the claim. This system allowed anyone with a reserve table to determine the reserve on a claim and, importantly, to project future reserves on a claim.

The drawback is that this method was not viewed as being accurate at the individual claim level. For example, it made no distinction between herniated disc claims, which could drag on for years and simple contusions or abrasions. Additionally, claims with ongoing lost time could be subject to quite high reserves. In this scenario, a claimant who happened to be off work on temporary total compensation at the wrong time of the year could have a reserve set at well over $200,000. These extravagant reserves were hard to justify and could be quite damaging to an employer.

In 2002, the BWC decided to transition from the old tabular reserving method to the new MIRA reserving system. The MIRA reserving system looks at scores of variables associated with a claim to determine the most significant cost drivers of a claim. Among the primary cost driver is the diagnosis code, which makes a distinction between, say, herniated discs and contusions. Ostensibly, the MIRA reserving system would more accurately reserve individual claims. The drawback is that the reserve calculation is hidden from employers so there is no way to determine future reserves. And other than the BWC having incorrect information, a wrong diagnosis code for example, employers can not even challenge the reserves established thru this method.

The BWC transitioned private employers from the tabular reserving method to the MIRA reserving method from 2002 to 2004 and public employers from 2003 to 2005. During this transition period reserves were calculated using both methods and the method yielding the lower total reserves for an employer was used in that employers rate calculation.

My next posting will look at the impact the switch from tabular reserves to MIRA reserves had on employers.

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Having a relationship with a provider prior to an accident occurring is a simple way to control costs and help ensure that your employee receives the necessary appropriate care.

Benefits of having a preferred provider:

• Provider will already know that you have transitional duty available and will be more likely to release an employee to restricted duty.
• Your employee will receive appropriate care and appropriate referrals.
• If your employee feels that they are being cared for, they may be less inclined to seek an attorney or respond to the marketing calls of providers that may not have your employee’s best interests first and certainly not your costs in mind.
• Having a preferred provider helps in unnecessary treatment being rendered and billed to your experience.

The provider is critical in management of the claim. By maintaining an open relationship with the provider, you increase your chances of returning an injured employee to full duty in an appropriate time frame.

Understanding the importance of the medical provider in managing a workers compensation claim can have a major impact in controlling the overall cost of the claim.

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On Wednesday, November 14th, a first in BWC history took place in the BWC’s auditorium in Columbus, Ohio.  For over three hours, sixty (60) employers and trade association representatives appeared before the members of the BWC Board of Directors’ Actuary Committee to offer public comment and input to the members of the Board in attendance.   One Hundred Fifteen (115) additional witnesses submitted written testimony only.  The Committee had requested public testimony in response to the BWC Administrator’s proposal to decrease the maximum available credibility discount to employers in the Ohio group rating program from 90% to 80%.  BWC alleges group-rated companies are actuarially being subsidized by non-group-rated companies by an estimated $200 million a year.  At the September board meeting, at the request of the Administrator, the Board had referred the matter to the Actuary Committee for study and to recommend a maximum discount percentage.

(Continued)

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The Occupational Safety and Health Administration (OSHA) requires employers to maintain records of occupational injuries and illnesses. 

Here are 10 important facts to remember:

1. Employers must maintain the Log of Work-Related Injuries and Illnesses (Form 300) and the Summary (Form 300A)
2. Records must be kept on a calendar year basis
3. If an employer has ten or fewer employees, you are NOT required to maintain the OSHA recordkeeping forms
4. Record injuries that result in death, loss of consciousness, days away from work, restricted work activity or job transfer, or medical treatment beyond first aid
5. The annual summary (300A Form) must be posted every year from February 1st to April 30th (the year following the year covered by the form)
6. An employer must retain the Log and Summary for 5 years following the year to which they pertain
7. Employees can request copies of the forms and employers must provide access or copies within the next business day
8. Work related deaths must be reported within 8 hours
9. Employers do not have to send in completed forms to OSHA unless requested to do so
10. Failure to maintain the Recordkeeping Logs and Post Log Summary will result in penalties of approximately $2,000.00  

The Bureau of Workers’ Compensation offers courses in OSHA Recordkeeping. 

For additional information, please visit www.ohiobwc.com or www.osha.gov.

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When a claim does occur go over all of your options with your partners (TPA/MCO). 
Here are some other items to keep in mind:

1. Wage continuation – contact your TPA to do a study to show cost benefits.
2. Modified Duty Off-Site (MDOS) – this can be coordinated with your TPA/MCO/Rehab provider. Offering a position at a non-profit within the injured workers’ restrictions is a good faith job offer.
3. Independent Medical Exams (IME) – consider getting your own company exam.  DID YOU KNOW:  BWC will no longer incorporate an additional allowance exam with extent of disability.  This is delaying the return to work process – you as the employer/TPA need to be aggressive.
4. Light duty/Transitional work – be flexible. 
   Work with your partners (TPA/MCO/Provider) on getting the injured worker back to some type of meaningful work.
5. Vocational rehabilitation – several different programs offered through the BWC surplus fund.  Research all of your options with your TPA/MCO. 
6. Functional capacity exam (FCE) – exam must be approved by the treating physician of record on a C9.  This exam will reveal the physical (function) as it relates to the injured workers’ job.  Work with your TPA/MCO to see if this is an option that should be considered. 

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It is hard to believe that 2007 is nearing the end.  Fall is right around the corner, the weather changing, leaves falling from the trees and yes, your yearly review of your claims experience that will make up your 2008 rates.  Unfortunately, there are few things that can be done to improve what has already happened but there are a few things to keep in mind. 

1. Settle claims – this various from claim to claim. Claims must be filed with the Bureau of Workers’ Compensation by 11-15 to impact the next year’s ratings.
2. Handicap reimbursement – impacts lost time claims that had wage continuation or TT paid out. A claim review should be completed to see if any of your lost time claims meet the BWC criteria (25 recognized conditions).
3. Review MIRA reserves – there is occasion where the BWC will set reserves in error. There should be a thorough review of your risk so that this does not occur.  If reserves are set in error – this can be corrected!

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