Reporting Claims Later Can Double the Cost, Report Finds

A new report has found that when employers are late in reporting workers’ comp claims to their insurers, the cost of the claim often jumps by 50%.
The report by the National Council on Compensation Insurance found that claims for workplace injuries that were reported four weeks after the incident, ended up costing $19,936 on average, compared to $13,210 for claims reported one to two weeks after the injury. That’s a jump of 51%.
Interestingly, claims that were reported between one day and a week after the injury cost $13,844 on average. Claims filed three to four weeks after an injury cost $17,785.
The NCCI, which helps set rates in more than 30 states, found that claims that were reported more than two weeks after an incident were characterized by:
• A lower medical share of total claims costs.
• More attorney involvement.
• More use of lump-sum settlement payments.
• Claims that stay open longer, and that have a lower closure rate at 18 months after injury.

“These characteristics suggest that claims with a delay of more than two weeks are more complex to settle, take longer to close, and involve a longer period before the injured worker can return to work,” the NCCI wrote in its report.
Claims in which a worker’s injury was reported on the day of the accident had an average cost of $17,298 per claim, according to the NCCI.
The study said immediate reporting likely reflected higher costs because such claims tended to have “very severe injuries that require immediate medical attention,” as well as require extensive medical care and extended recovery times.
Involvement of attorneys becomes more common as the reporting lag increases. Claims reported immediately involve an attorney 13% of the time. This increases to 32% for claims reported after week four.
Claims that were delayed by more than four weeks had an average cost of $19,251, the NCCI said.

The takeaway
Delays in reporting claims will increase your costs and the potential for litigation.
Prompt reporting ensures your employee gets the proper medical care in a timely manner and can return to work more quickly, improves morale, and is effective cost management.
When you become aware of a workplace injury, you should start the claims reporting process as soon as possible. The longer you wait, the costlier the claim will be and the more chance your injured worker will enlist an attorney. Once that happens, the claim is likely to drag on for longer than usual and, as it stays open longer, the costlier it will become.
Establish a reporting protocol so all employees understand what their responsibility is when there is a workplace injury. Every employee should know to immediately report any work-related injury, no matter how small and regardless of whether they think they need medical treatment.
Every employee should know to whom they should report their injury, and there needs to be a system in place to ensure that report gets to the proper person so the next step can be determined.
If all employees are responsible for reporting injuries to their supervisor, every supervisor needs to know what their responsibilities are.