The high cost of workers’ compensation is a chronic ailment in trucking, but the right medicine before and during claims will help turn agony into a mere nuisance.
Here’s today’s challenge: Identify an industry that’s a workers’ compensation nightmare.
First, because workers’ comp laws and interpretations vary considerably throughout the United States, employees should be far flung, operating in multiple states. Also, they should be unsupervised virtually all of the time: That way nobody could remind employees constantly to avoid dangerous activities. And nobody would be around to witness that work-related shoulder injury that invariably occurs early on a Monday morning.
Job descriptions should combine long periods of no physical activity with sudden bursts of exertion, such as climbing, lifting, pulling and cranking. And the supply of labor should be tight so employers couldn’t afford to be overly demanding regarding physical fitness.
Finally, the work force should be older than the national average and aging steadily. Older workers are more prone to injury, take longer to recover and are subject to degenerative ailments and diseases that, surprisingly enough, are deemed covered by workers’ comp in some states.
Time’s up. That wasn’t too hard, was it? Few industries are as primed for workers’ comp headaches as trucking. But while the very nature of trucking means that workers’ comp never will be easy, you can at least limit your exposure.
“Workers’ comp is not a win-lose situation,” says attorney Gerald Cooper, who handles trucking industry workers’ comp legal issues for Scopelitis, Garvin, Light & Hanson. “It’s loss mitigation.”
In other words, there is no solution to the workers’ comp challenge – just a series of best practices that can keep your costs as low as possible. Thorough safety training and follow-up should be a given, but savvy pre-employment screening, proactive claims management and sound return-to-work practices help limit your losses. And you might seek out your state trucking association or business groups to help the cause of workers’ comp reform in your state (See “Rehab for your state’s workers’ comp,” The Cost of Risk, page 40). Most of all, you must commit to managing the pain of workers’ comp rather than ignore it as inevitable or beyond your control.
Don’t hire your problems
Trucking companies often sow the seeds of a workers’ comp claim during the hiring process. State and federal laws and regulations don’t make it easy for employers in this area. You can’t ask, for example, whether a prospective employee has suffered a prior injury or has filed a workers’ comp claim.
While that may sound like a reasonable protection of a worker’s privacy, there’s a real trap for employers, Cooper warns. Most states are so liberal on providing workers’ comp coverage for aggravation of pre-existing injuries that employers unknowingly are hiring ticking time bombs. At PeopLease, which employs 10,000 transportation workers, about 40 percent of workers’ comp claims are aggravation of pre-existing conditions, says Chief Executive Officer D.W. Speer.
The deck is stacked against you, but you aren’t powerless. For example, it’s fully within your rights as an employer to define the specific duties and physical requirements of a job and demand that a prospective employee meet them. You might demand that a driver be able to lift 75 pounds above his head or be able to climb into and out of a truck.
By requiring an applicant to acknowledge these requirements as part of the application process, you ensure some flexibility. It won’t help you in the event you hire the individual and he later files a workers’ comp claim. But it does put you in a strong position to pass over job applicants who are likely to be injured on the job.
Just putting the physical requirements in writing is enough to discourage some people from seeking a job, Cooper says. And if the applicant certifies that he can fulfill the requirements and it’s shown during his first days that he can’t, you have grounds for dismissal.
Many fleets are going beyond self-certification and now use some degree of screening to ensure applicants truly can do what they claim. Called functional capacity testing or agility testing, this screening tool requires would-be employees to demonstrate the ability to do certain tasks that have been deemed necessary to the job. Typically, a company will hire a consultant or testing firm to establish a test that replicates tasks required for a job description.
Liberty, Mo.-based American Central Transport uses a combination of self-certification and actual agility testing during its hiring process, says President Tom Kretsinger Jr. ACT retained a medical clinic to determine the types of physical tasks that were required of drivers, and that information was used in writing a job description.
Prospective ACT employees are given conditional job offers based in part on their declarations that they can perform the tasks defined in the job description. Once on board, conditional hires are given agility tests to confirm those abilities.
Agility tests serve two purposes, Kretsinger says. “We weed out some people who can’t do the job. But we also catch people who might have limitations.” Some workers will be able to pass the functional capacity test and are hired, but they might exhibit some restrictions in their movement – the inability to raise their arms above a certain height, for example. That limitation is noted, and it helps mitigate ACT’s liability if a worker later claims that this disability was caused by his employment at ACT.
A recent court decision involving Dial Corp. provides a roadmap to businesses for design an acceptable functional capacity test, says Kevin Schmidt, vice president and general managers of WorkWell Systems, which offers physical medicine and workers’ comp screening services.
“First, the employer must accurately measure the job,” Schmidt says. For example, you shouldn’t demand the ability to lift 150 pounds if the worker never has to lift more than 75. Tests also must reflect defined job requirements accurately, Schmidt says. And companies must be consistent in testing.
Consistency means, for example, that you can’t single out applicants you think are likely to fail or likely have pre-existing injuries. And accurate job measurement means you can’t overreach by making unrealistic demands. “You have to stick to what the requirements of the job are,” Cooper says.
Being too demanding is not really an issue in trucking. “With the driver shortage, I could show you files that would make you wonder why anyone would hire the guy,” Cooper says. “There is much more pressure on personnel to hire people.”
Many larger trucking companies conduct functional capacity testing, but the practice hasn’t caught on at smaller carriers, Schmidt says. “There’s kind of a gut-level feeling that it’s better to have someone for a few weeks or months than not have them at all.”
What companies often don’t realize is that a musculoskeletal injury will cost an average of $32,000 in direct medical and indemnity alone, not counting business interruption costs, Schmidt says. “You would not knowingly buy defective tires. Why would you hire defective people?”
Maverick Transportation uses functional capacity testing through a network of providers known as WorkSTEPS. The Little Rock, Ark.-based flatbed carrier uses the testing not only to identify people who cannot meet the physical demands of the job but also to establish baseline data to evaluate claims if necessary, says John Culp, executive vice president and chief financial officer.
Maverick implemented functional capacity testing in August 2003. In that year and the two preceding years, the carrier averaged 16 workers’ comp claims a month. In 2004, that dropped to 12 a month.
Culp doesn’t claim that functional capacity testing is responsible for the improvement, but he believes it’s a major part. “If drivers cannot pass our test, they do not need to be doing this job. It is not a question of if they will get hurt, but of when they will get hurt.”
Work the claim
No amount of pre-work screening and risk management will eliminate workers’ comp claims. After all, accidents happen – or not (See “Is this for real?” page 49). So claims management is an essential element of reducing workers’ comp costs.
“The most important thing is that the claim is fully investigated immediately,” Cooper says. Employers can and should require that employees report work-related injuries immediately. By including such a mandate in its employee manual, an employer is in a better position to deal with a claim that’s not filed for months after the fact.
But recognize that in most cases, investigating claims of truck drivers won’t be easy. “There will never be a witnessed accident,” Cooper says. When team driving became popular, some carriers thought that reduced workers’ comp fraud would be a side benefit since there would be a witness to contradict nonexistent injuries. That notion ignores the dynamics of teams, Cooper adds. “Instead, you have two injuries for every accident and a witness to support both claims.”
Ideally, you should require employees to seek initial medical attention from a physician within the motor carrier’s medical network. Some states don’t give employers such blanket authority, although the ability of employers to designate the medical network is part of the growing workers’ comp reform movement throughout the United States.
But even if you can require drivers to use your network, it simply may not be possible in all cases. Unlike jobs in manufacturing or other site-limited industries, truck drivers may be hundreds of miles away from their principal place of employment when they are injured. If you can’t control the provider of initial treatment, at least have a company-approved doctor check the driver out as soon as possible thereafter.
Many businesses outsource claims handling to a third-party administrator (TPA), either on their own or through the insurance provider. Liberty, Mo.-based ACT relies on Self Insured Services Co. (SISCO), a TPA affiliated with the trucking company’s captive insurance company, to handle claims investigations.
“It helps to have people who understand the terminology and can be aggressive with the file,” says Jessica Gronau, who works in risk management for ACT. The TPA is an expert in determining whether an injury truly is related to work, and it understands the ins and outs of all the laws.
But it’s not simply a matter of turning the files over to SISCO and forgetting about them, Gronau says. “The TPA and I are in constant contact.” ACT and the TPA work claims together. For example, Gronau might handle a medical-only workers’ comp claim and bring SISCO in only if there’s an expectation of lost work time. Gronau generally conducts the initial interview with an injured employee and passes that information on to SISCO.
Gronau’s interviews cover the key details, such as how the driver started his day, what exactly he was doing at the time of the injury and so on. In addition to gathering information for managing the claim, the interview furthers a couple of important goals.
“First, it gives the employee a sense of how he might have avoided the situation,” Gronau says. “Second, it gives me an awareness of what we need to focus on in terms of training.”
Despite any frustrations managers may develop with injured workers, it’s vital to treat them with respect and deal with them as individuals, and not as case files or claims to be resolved, says James Moore, president of J&L Risk Management Consultants, which specializes in helping businesses reduce workers’ comp costs. “If [managers] contact them often and upfront and there’s a good sense that the company is concerned, that will usually keep the lawyers away,” Moore says. “If the company takes the time, it pays off.”
Trucking companies sometimes underestimate the importance of claims management. “You do everything you can to prevent the injury – testing, education and training,” says Maverick’s Culp. “How you manage the claim is equally important.” Managers must be responsive to employees and stay on top of doctor’s appointments and other activities. “Even if you have a TPA, you need to take responsibility at the corporate level. If you don’t stay on top of claims, they can just explode on you.”
Get them back to work
The time between an injury and a doctor’s release to full work duties could be weeks, months or even years. But that doesn’t mean you can’t use him in some capacity. In most cases, the employee will be released for light duty. You really may not need his services, but it’s usually to your advantage to find something for him – and not just because you are paying a big chunk of his wages.
The most important reason to put an employee to work in light duty is to prevent malingering – taking advantage of the workers’ comp system by faking the inability to work, says PeopLease’s Speer. As long as the employee remains at home, it’s often difficult for the employer to check on him and make sure he isn’t skipping doctor’s appointments, working a side job for cash under the table or engaging in chores or recreation that could aggravate his condition. “If he’s on light duty, I don’t have to do those checks,” Speer says. Plus, if a driver isn’t injured seriously, he may choose to return to driving work more quickly if he realizes that the carrier is going to make him come into the office each day.
Depending on a worker’s limitations, you can use him on light duty to do clerical work, tire pressure checks, errand running and a host of odd jobs. A driver on light duty may even be able to drive, subject to limits on duration or activity.
Often, light duty is not really meaningful work, but it does enable more supervision. But remember, the more important goal is a full return to work. “It’s better to make the driver get up every day, but make sure physical rehabilitation is not interrupted by light duty,” Cooper says.
At Boise Cascade Trucking, one of the light duty assignments is conducting a safety audit of the terminal and conducting a safety meeting for drivers at that location, says Roger Olds, general manager of the Boise, Idaho-based carrier. “They learn from it, and they don’t want to do it again.”
Boise Cascade handles light duty and return to work in a methodical way. The carrier provides an “essential function” form to the employee’s doctor so that he can indicate what specific job functions the driver can and cannot perform, says Jan Rohr, senior administration technician for Boise Cascade. Rohr requires each employee returning to work on light duty to sign a letter acknowledging that Boise Cascade has created a temporary light duty position for him.
The letter specifies the type of work, hours expected and rate of pay and acknowledges the need for time off for doctor’s appointments and recuperation. The letter also declares that the light duty position will end when the carrier either runs out of work to be done or the employee is returned to his original position. “If they decline the position, their workers’ comp pay may be affected,” Rohr says. Faced with such a structured light duty assignment, workers that are looking just to take advantage of the system often leave, she says.
Light duty is a special challenge in trucking because drivers often live far from a terminal. So many carriers try to place drivers in light duty positions at a local charity or civic organization just to get them up in the morning and out of the house. That sounds good, but it often doesn’t work as intended, Cooper says. The good employees who are injured legitimately usually work out fine, but there are plenty of troublemakers in the mix. The result, Cooper says, are increasingly unhappy charities unwilling to provide light duty positions for workers’ comp participants.
Offer a piece of the action
Ultimately, safety education, training and awareness are the most important tools for preventing injuries. But a little incentive doesn’t hurt either. Many carriers have ways to promote safety, although the focus often is strictly on preventing highway crashes. Boise Cascade Trucking has adopted an incentive program for all its personnel, including owner-operators, that rewards everyone if nobody is injured. “We’re trying to get a little peer pressure working for us,” says Olds.
Boise Cascade counts safe working days – those without a reportable injury – for each of its terminals. If a terminal logs 122 consecutive safe days, each worker at that facility gets to choose a $75 gift out of a catalog. Another 122 days brings a $150 gift, and still another 122 days brings a $300 gift. It’s not a cheap program, but the costs are just a fraction of what just a handful of workers’ comp claims would be, Olds says.
Never forget that workers’ comp is all about cutting losses, not winning a victory. There is no “silver bullet” solution, but there are numerous ways to save money. Advises attorney Cooper, “Keep your chin up, and just do it.”
Is this for real?
Suspicious claims follow familiar patterns
It probably doesn’t surprise you that a large number of workers’ comp claims are either nonexistent injuries or injuries that aren’t work-related. Proving fraud is difficult – sometimes impossible – and expensive, but employers understandably become more aggressive in adjusting claims when they suspect it. Managers often develop a “sixth sense” about potential fraud, but there are some specific indicators of possible fraud that employers should watch for, says James Moore, president of J&L Risk Management Consultants, which specializes in helping businesses reduce workers’ comp costs:
- The employee is never accessible, even by telephone.
- The employee was on some kind of disciplinary action.
- The report of the accident was not timely.
- The details of the accident are vague or contradictory.
- There are no visible injuries – all injuries are subjective.
- The injured employee is new.
- Employee changes address right after making claim.
- The accident occurred early Monday morning, shortly after the worker showed. The injury may have come from a weekend softball game or yardwork.
- The worker shuns treatment from a doctor or physical therapist. Their reluctance to seek treatment may be an attempt to cover up a phony injury.
- The employee is known to be disgruntled or knows he is about to be laid off.
- The employee or spouse have a business on the side.