Friday, March 4, 2011

Does a timely First Report of Injury really matter or is it just a bureaucratic requirement?

My last post was about the requirements many jurisdictions have for timely reporting of work-injury claims to the workers’ compensation authority. I stated my reasons in support of timely reporting and compliance with whatever standard set by the jurisdiction: health and safety of other workers, timely treatment and benefits for the workers. A number of people commented to me about the post. Most agreed that there was some value in requiring employers report injuries on a timely basis but thought short legislative reporting requirements imposed by the workers’ compensation authority were simply a bureaucratic requirement. They argued there is no real harm done to the worker, the authority or the system if firms failed to comply with the first report of injury (FROI) requirements. Some also suggested that the penalties imposed and the fines collected in some jurisdictions looked more like a “money grab”.

As if in answer to these criticisms, a summary of recent research on this topic arrived in my inbox. Under the heading “Benefits of Early Reporting”, the article from the Utah Workers’ Compensation Fund noted:

· The faster the claims process is started, the lower the workers compensation costs.

· When there was a delay in reporting, there were higher medical costs, higher rates of attorney involvement and litigation, and disputes over causation, and longer than normal periods of disability for a particular injury.

· After seven days, claims costs began to escalate, and when reporting was delayed 29 or more days, the claims costs were about 45 percent higher.

· A study by a private insurer on back injuries, carpal tunnel syndrome and other nerve disorders, they discovered the claims filed five or more days after an injury cost an average of 15 percent more than similar claims filed within 48 hours

· Injuries reported within 10 days cost an average of $12,082. Injuries reported between 11 and 20 days cost $15,582, and those reported between 21 and 30 days cost $17,920 -- an increase of 48 percent more than those reported in 10 days or less.

I think this evidence is compelling. Holding employers to a timely FROI is not just a bureaucratic requirement. It has the proven potential to reduce both the human and financial costs of injury.

Regardless of any jurisdictional requirement for early reporting, getting that FROI in is a benefit to both workers and employers.


Duramerica Brokerage said...

The differences in price between a claim filed early and a claim filed late is outstanding! I've seen too many employees pay much higher than they should have just because they waited too long to file their claim.

B. Quirke said...

Later claim reporting and higher claims costs showing a nice dose response relationship in the analyses noted in the Utah Compensation Fund Article, particularly the Kemper Insurance piece. I wonder if claim severity has any role in driving this relationship, perhaps it's possible that more severe claims administratively take longer to report, or the decision is made by employer/employee to report them later?