An integrated disability management program can work wonders for employer and employee alike, writes Peter P. Conway.
For years employers have been frustrated having to use two separate infrastructures to manage their disability programs. Traditionally, if employees are out as a result of a job-related accident or illness, one department in the organization deals with a separate set of administrators and providers established for handling workers' compensation claims. If employees are disabled for non-occupational reasons, a completely different group is involved. Besides being inefficient and costly, this method does not always offer disabled employees the best techniques nor the most consistent practices available for recovery and re-entry into the workplace. This begs the question: "Is there a better way?"
Integrated disability management provides part of the answer. This next-generation medical cost containment program bridges workers' compensation and short and long-term disability (STD/LTD). It offers employers a streamlined, co-ordinated approach for efficiently administering on and off the job injuries and illnesses and the costs involved. It allows employers to gain a more accurate understanding of their expenses. And it simplifies employee claims reporting - whether an accident or injury occurs on or off the job.
The problems inherent in dealing with separate organizations - both internal and external - can have serious side effects: fraud and abuse, redundant administrative requirements, duplicative medical care, lack of information and unnecessary costs, to name a few. Add to that, employee confusion. Employees are often at a loss to determine whether a complaint such as a sore wrist is the result of work-related carpal tunnel syndrome or a non-occupational cause . . . "Which doctor should I call?"
An integrated disability management program can address these issues, provided it contains these critical components:
* A single claims intake process.
* A carrier experienced in both workers' compensation and STD/LTD disability management.
* A consistent return to work philosophy.
* A focus on employee retention.
* Co-ordinated claims administration and medical management.
* Consolidated management information.
When designing an integrated structure, carriers must first decide whether to modify or completely rebuild their organizations. Rebuilding generally requires combining STD/LTD and workers' compensation organizations into one streamlined facility. Clearly this alternative provides the greatest opportunity for expense reductions . . . but not without risk. By its nature, the hybrid organization tends to lose the benefits of having separate nurse case manager/claim adjuster teams, and there is a risk that core competencies may be sacrificed.
The ideal solution is to create cost effective bridges between the two organizations that allow them to continue to operate as single entities - while streamlining the administrative processes. The operative words here are cost effective. The end result must be accomplished without adding steps or costly systems enhancements. To date, the industry has struggled with this challenge, but advances in technology have made this goal a reality. Today we can create the virtual organization - one point of entry, communications and interaction among departments, and a single client focus - all at reasonable cost.
A significant advantage of an integrated program stems from its return-to-work focus - long a tradition in the workers' compensation process. Successful workers' compensation techniques, including getting involved early in the process and working with the employee and his or her doctor, ensure the employee recovers as quickly as possible.
Now employers are asking: "If I can get this on the workers' comp side, why can't I get it on the non-occupational side?" and "Why can't I get this as soon as my employee is sick or injured?" They want to manage an employee's disability - whether it is due to a workplace injury, an accident at home, or an illness - so the employee can return to work as soon and as healthily as possible.
Using return-to-work approaches to disability management creates a positive outcome for both employer and employee - and gives forward-thinking employers a way to measure, better understand and control the often hidden costs of employee disabilities. It enhances provider access to integrated information and communication. And, it affords employers a more strategic view of their costs when predicting expenditures and bottom-line profits.
Data gathered through effective return-to-work administration on both workers' compensation and STD/LTD claims can help employers and employees make changes - in the workplace and outside - that help reduce injuries and illnesses on and off the job. Some employers combine wellness programs with integrated disability management processes. Others make on-the-job ergonomic improvements triggered by similar injuries or illnesses in the workplace. Still others develop transitional positions based on the abilities of employees, and offer such programs as flex-time and telecommuting as options to work-site modifications.
These changes can keep healthy employees on the job and help valuable, experienced personnel return to work in limited capacities until they are fully recovered - thus allowing them to continue to make valuable contributions to the workplace.
Employers can see savings from consistently applied return-to-work initiatives, not to mention bringing about improvements in employee relations and morale, reduction in litigation and reduction in employee absences usually associated with low morale.
Single point of contact
A single point of contact makes the integrated program work - for both employers and employees. A toll-free number is utilized to accept notification of losses for both workers' compensation and non-occupational illnesses and injuries. Co-ordination of claims administration is initiated the moment the claim is accepted via the telereporting process, with a focus on the injured or ill employee's safe and prompt return to work.
The single source reporting of claims improves data collection and analysis, which opens communication between employees, care givers, claims administrators, vocational rehabilitation specialists and employers about return-to-work options. It also opens the doors for automating processes to improve service and ensure equal application of the program.
One point of contact for employees ensures consistency, fairness and continuity in the handling of claims; improves the delivery of healthcare benefits; and eliminates gaps in pay during time off the job because of illness or injury. It allows the nurse and adjuster to work with the employer and employee immediately to influence outcomes that benefit everyone. Employees have an easier-to-use system for notification of any illness or injury, minimizing confusion and accelerating promptness of reporting.
Integration cuts costs
Traditional systems sometimes require employees to file duplicate paperwork for different claims-paying systems. Employees also find it difficult navigating through the sometimes bewildering array of healthcare considerations as they recover. This is one of the primary reasons for attorney involvement once claims are filed. Minimizing the guesswork lowers the anxiety associated with the inability to return to work.
Integrating claims-handling functions unites human resources and risk management staff in pursuit of a common goal. Co-ordination reduces chances for overpayment or underpayment of benefits, eliminating backtracking through records later when a case shifts from workers' compensation to short or long-term disability. Chances for fraud and other abuses also are greatly reduced since the same people handle employees' transitions from workers' compensation to disability payments.
Communication is key
Effective integrated disability management programs thrive on solid employer-carrier relationships strengthened by aligned return-to-work philosophies and continuous two-way communication. Proper policy and plan design depend on open communication between the employer and carrier.
Communication between employers and employees is equally critical. It is essential that employers instituting such programs explain to employees how the process works, as well as the advantages and opportunities offered through the emphasis on the consistent application of standards and focus on return to work. In addition, incentives for managers, supervisors and employees to do the right things have to be in place.
While integrated disability management takes shape today, it is important to look ahead. Most corporations are approaching the new millennium with traditional 20th century strategies and tactics. As an industry, we have focused on history.
Rather than use historical data to tell us how many injuries and illnesses employers must expect, we must use the communication lines opened by effective integrated programs to find ways to reduce injuries and illnesses - on and off the job. In addition to creating safer workplaces, integrated disability management programs may reveal lifestyle changes employees can make that keep them healthier off the job and translate into such on-the-job savings as reduced sick days and increased production.
The broad application of integrated programs gives employers a chance to improve the quality of life for their employees as well as reduce, contain and even avoid costs. It also sends a message that employers are concerned about the well-being of their employees - on and off the job.
Looking ahead, analyses of data collected as integrated disability management programs are put in place will enable providers and employers to improve how they predict, intervene and mitigate. Employers can expect their investments in today's integrated disability management processes to pay significant dividends in the future.
Peter P. Conway is president of CNA Risk Management.