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The Impact of Late Claim Reporting

by John Conway, President, Midwest Builders’ Casualty

The late reporting of a work-related accident negatively impacts everyone involved – the employee, the employer, and the insurance carrier. The damages can be financial, physical and emotional. Avoiding or postponing the notification of a work-related accident can cause delays in accident investigation, proper medical attention and payment of benefits. The consequences of such delays may lead to potential litigation, state fines, and significant increases in the ultimate cost of the claim.

Every injury, accident and injured employee is different. However, delaying proper medical care regardless of the circumstances has the same result – increased medical costs. According to Gini Toyne, President and Senior Medical Services Consultant for Gini Toyne & Associates, a Kansas City-based nurse case management firm, “the action of not reporting or delaying the reporting of an injury is likely to result in under treatment or the need for treatment which would have been unnecessary if the injured employee had been evaluated sooner. Early reporting of injuries gives medical providers the opportunity to be proactive in treatment and the ability to be proactive is the strongest link to preventing inflated or lengthy disability.” One such example is a cut or puncture injury which goes unreported and improperly treated. The improper treatment of this relatively minor injury can result in serious infections requiring hospital admittance, multiple surgeries and extensive lost time from work. All of which could be avoided if the claim is reported timely and proper medical attention promptly administered.

Some of the most common injury types are strains or sprains, which are categorized as soft tissue injuries. These are often treated conservatively with physical therapy but the key to successful treatment is prompt attention. Leslie Borden, Employer Resource Manager for Athletic and Rehab Center (ARC) shared the outcomes for patients treated at ARC facilities and the statistics clearly demonstrate that the sooner therapy begins fewer medical appointments are required which lowers the treatment costs and reduces the number of missed days from work. Ms. Borden relates that records from over 4,000 patient referrals in 2012 show that patients starting therapy at 0 to 30 days post injury average 9.1 visits in therapy. From the same sample, those patients starting therapy 30 days or more from the date of injury average 13.3 visits with an increased cost of over $800 per patient.

For the employer, the impact of higher claims costs has a direct effect on the Experience Modification Rate (EMR). An increased EMR can put a company at a competitive disadvantage by limiting their ability to bid work. Employers might try to avoid reporting what appears to be a minor or low exposure type injury due to concerns that it will negatively impact their EMR. This is not a good strategy to follow as it can actually accelerate the medical and indemnity components of a claim. This delayed reporting can also lead to unnecessary legal involvement and potential litigation. Even if the accident and injuries are compensable and undisputed, the late reporting is a red flag to the workers’ compensation claims adjuster. Additional investigation work, such as an independent medical evaluation or legal opinions, may become necessary and can increase the chance of litigation. On average, only 22% of injuries reported within 10 days of the accident are litigated, compared to 47% of injuries that are reported more than 30 days following the accident. Additionally, in some states penalties and fines can be levied against an employer who fails to properly report an accident to their insurance carrier.

Jim Brasier, Reinsurance Account Manager for Midwest Employers Casualty Company, explains, “Timely reporting ensures specialized coordination and communication flow between the physician, the employer, the injured employee and the workers’ compensation carrier. Stronger communication of events results in better outcomes such as less time off work and less litigation. Everyone wins when claims are reported timely.” Timely communication is also essential for a complete investigation of an accident. During the investigation, the claims adjuster is not only determining if the accident and injuries are compensable but also if there are avenues to recover or help reduce the cost of the claim. If another party was at fault, a possible recovery of claim payments could be made. Additionally, if a safety violation or a drug and alcohol policy violation occurred, a denial or reduction in workers’ compensation benefits could result. Unfortunately, when accidents are reported late details are often forgotten and material evidence is discarded or lost.

The keys to a company’s successful Claims Reporting Program are the presence of a safety team, proper accident and injury documentation, clear instructions on how employees are to report accidents and injuries, and specific directions on how to submit a claim to the workers’ compensation carrier.

Top Five Consequences of Late Claim Reporting:
1) Increases the total cost of the claim including medical, lost wages, settlement and expenses.
2) Communicates to injured employees that other things are more important than their claim and its resolution.
3) Jeopardizes the investigation of the claim, which could result in lost evidence including material facts and the reliable statements of witnesses.
4) Increases the potential for litigation due to the claimant’s frustration with delayed medical care and benefits.
5) Violates some state laws that result in penalties and fines levied against the employer.

Midwest Builders’ Casualty Group is an A- rated insurance carrier specializing in providing workers compensation coverage to the construction industry throughout the Midwest. For over thirty years they have built their reputation on providing stable rates, exceptional service, and the consistent payment of dividends to qualifying policyholders. Midwest Builders’ Casualty is proud to be aligned with the AGC of Nebraska Building Chapter as a strategic partner supporting the needs of the construction community in Nebraska and surrounding states. Please contact your agent or the AGC directly for information on obtaining a quote from Midwest Builders’ Casualty or visit to learn more. MBC is available from the following:
• Arthur J. Gallagher / Grace/Mayer Insurance Agency
• Harry A. Koch Company
• Holmes Murphy
• SilverStone Group
• UNICO Group, Inc.
• Union Agency, Inc.