1. Making Workers' Compensation Work: Advanced Strategies Steve Thompson, ARM, COSS sthompson@aspenrmg.com 619-294-9863 Mike Murrah mmurrah@aspermg.com Susan Wade swade@aspermg.com Heffernan Consulting | 1350 Carlback Ave, Ste. 200 | Walnut Creek, CA 94596 | Ph: 800-234-6787 | www.heffgroup.com

2. Basic strategies of WC Underwriting (how to get the very best pricing) Experience modification (how to reduce/manage) Subrogation (when to pursue) Fraud (only 10% of cases) Actively Caring Techniques Language (claimant, alleged, careless) Eliminate mystery of WC (teach employees) “Factor-out” attorneys (fact reporting, and…) Supervisors involvement (Berkeley and Intracorp studies) Investigation (how and when to conduct) Return to work (importance) Insurance and medical relationships Make a list of positives (tell your story at renewal)

3. What is your level of workers’ compensation competence Polling question 1

4. In a few words please name one or two workers’ compensation management techniques that have worked for you? Fill in chat/question box

5. How many workers’ compensation cases have you helped manage? Polling question 2

6. Nationally, combined loss ratio was 115% for 2012 * Projection for 2013 is improved due to rate increases CA, combined loss ratio was 127% - year ending 2012 * Projection for 2013 is improved due to rate increases Average CA indemnity claim in 2012= $81,000 Claim frequency has increased for 3 years in a row Cost prediction (hard market, and other increases) State of WC

7. Given the coming workers’ compensation insurance increases, what is your plan? Polling question 3

8. If a workers’ compensation designation (through online training) were available for supervisors, HR, and others, would this be something I would consider? Polling question 4

9. Statistical techniques 48-hour window CDC/NIOSH co-morbidities Demographics Actively caring claims coordination Well-designed modified duty program Understand insurer/TPA predictive modeling techniques Identifying most at risk for delay of recovery

10. Chronic pain Prolonged pain can lead to depression, anxiety, addiction WC system is very hesitant to engage “non-work related treatment” Could pain management include some psychological support Could an EAP be helpful A major cost driver

11. More… Partnership with claims service Measure and track (“failures” and success) Injury action and management plan and system High quality medical providers Early return to work and reduce lost time Relationship to wellness and workers’ compensation costs Make a commitment Controlling WC costs

12. Premium audit What are some of the best practices to ensure that Premium Audit is correct?  Documents (payroll registers/DE-6’s/1099’s  Certificates of insurance (vendors/subcontractors)  List of employees, class code, job title  Records of overtime (by employee)  Conduct internal audit of payroll/1099’s – by code  Flag all questions – discuss with auditor  Calculate premium paid, including deposit (separate out state fees)

13. Premium audit What are the most common mistakes in Premium Audit?  Absent 1099 payments (no corresponding certificate of insurance)  Misclassification employees  Under-reporting payroll  Incorrect overtime calculations

14. WC Success Open questions for a top performing WC claims adjuster – who represents employers?  What are the 3 most important things a company can do to manage it’s workers’ compensation claims costs?  What can an employer do reduce its litigated claims?  What are the most common mistakes made in claims handling?  What do see as the greatest challenges facing employers today?

15. Finding the best WC doctors A Guide to High-Value Physician Services in Workers’ Compensation http://www.acoem.org/http://www.acoem.org/ Agreement of “best practices” for uncomplicated to catastrophic injuries  Willing to accept WC patients  Best practices (quality and compassionate care)  Respect and committed to WC system  Better outcomes at better costs American College of Occupational and Environmental Medicine (ACOEM)

16. Summary: Making Workers' Compensation Work: Advanced Strategies Start with the basics Current knowledge on market, regulations, and best practices Predictive modeling (identifying most at risk for delay of recovery) Diligence in managing chronic pain (major cost drivers) Finding the best WC doctors Partnership with claims service Measure and track all results (“failures” and success) Injury action and management plan and system Early return to work and reduce lost time Relationship to wellness and workers’ compensation costs Premium audit management Avoid mistakes – implement best practices (from employer’s claims perspective) Make a commitment