Risk Management User Group

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Risk Management User Group

• November 29, 2006

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WELCOMEMichael L. Hay, CRM, CGFM, CPPM
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MEETING AGENDA

• 830 900 Healthcare Networks Jonathan Bow
• 900 930 Return to Work Gordon Leff
• FY06 Claims Update
• 930 1030 Travel Safety Officer Garry
  Parker
• 1030 1045 BREAK
• 1045 1115 SORM 200 Update Mary Loza
• 1115 1130 Training Updates Brad
  Prais
• 1130 1200 Loss Trending
  Benny Vanden Avond
• Cost of Risk

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HEALTHCARE NETWORKS

• Jonathan Bow
• Executive Director

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CLAIMS UPDATE

• Gordon Leff
• Deputy Director
• Claims Operations

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Return to Work and Stay at Work Bona Fide
Offers of Employement
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Texas Workers' Compensation Act (Labor Code,
Title 5, Subtitle A, Section 412.051)

• A program designed to assist employees who
  sustain compensable injuries to return to work

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Immediate savings when TIBS cease
Potential benefits in return-to- work program
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Other Benefits to the Employer - Direct Savings

• Productivity increases and human resources are
  utilized to the maximum extent
• Wage costs for substitute employees are saved.
• Litigation costs are normally prevented or
  reduced
• Possible reduction or ending of medical costs

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Benefits to the Employer - Indirect Savings

• Work delays and business interruptions are
  eliminated when the experienced employee returns
  to work.
• Co-workers are not required to perform extra
  duties to compensate for the absent employee.
• Communications and relations between employees
  and management are enhanced.
• Recruitment and staff training costs of new or
  substitute employees are saved.
• Goodwill and a positive image with the public and
  employees are created, as the employer is
  perceived as a caring employer

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Benefits to the Injured Workers

• Employee concerns about continued employment are
  resolved.
• Full or partial wages are earned which brings the
  employee's income closer to pre-injury wages than
  workers' compensation temporary income benefits
  alone.
• They remain active and mobile when returned to
  the productive workforce.
• Self-esteem, morale and personal security are
  maintained or restored through gainful employment
  and a productive life style.
• Stress, boredom, and depression associated with
  the injury/illness and being out of work are
  reduced or eliminated, not only for the injured
  worker, but for the family or significant others.
  
• Physical conditioning through a work-life
  discipline is maintained.

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Your front-line supervisors must be on board!
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Successful return-to-work programs

• Knowledgeable, proactive return to work
  coordinator
• Continuous education and training
• Job descriptions
• Job hazard analysis
• On-going identification of positions suitable for
  alternate duty assignments
• Written communications
• Early intervention and prompt, sympathetic regard
  
• Consistent application of a detailed return to
  work policy and procedures
• Forms
• Accurate and systematic evaluation

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You and Your front-line supervisors must be on
board!
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http//www.sorm.state.tx.us/Workers-Compensation/
Return to Work Programs

• "Position Description
• DWC 73 "Return-to-Work Status"
• SORM 85 Return To Work Policy
• Bona-fide Job Offer of Employment Notification

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Bona-Fide Offer of Employment
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First

• a) An employer or insurance carrier may request
  the treating doctor provide a Work Status Report
  by providing the treating doctor a set of
  functional job descriptions which list modified
  duty positions which the employer has available
  for the injured employee to work. The functional
  job descriptions must include descriptions of the
  physical and time requirements of the positions.

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Second

• (b) An employer may offer an employee a modified
  duty position which has restricted duties which
  are within the employee's work abilities as
  determined by the employee's treating doctor.

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Third

• In the absence of a Work Status Report by the
  treating doctor, an offer of employment may be
  made based on another doctor's assessment of the
  employee's work status provided that the doctor
  made the assessment based on an actual physical
  examination of the employee performed by that
  doctor and provided that the treating doctor has
  not indicated disagreement with the restrictions
  identified by the other doctor.

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This is Critical
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Fourth

• c) An employer's offer of modified duty shall be
  made to the employee in writing and in the form
  and manner prescribed by the Commission. A copy
  of the Work Status Report on which the offer is
  being based shall be included with the offer as
  well as the following information
• 1) the location at which the employee will
  be working
• 2) the schedule the employee will be
  working
• 3) the wages that the employee will be paid
  
• 4) a description of the physical and time
  requirements that the position will entail
  and
• 5) a statement that the employer will only
  assign tasks consistent with the employee's
  physical abilities, knowledge, and skills and
  will provide training if necessary.
• None of these elements may be overlooked and the
  offer MUST be made in writing.

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Fifth

• d) A carrier may deem an offer of modified duty
  to be a bona fide offer of employment if
• 1) it has written copies of the Work Status
  Report and the offer and
• 2) the offer
•  a) is for a job at a location which is
  geographically accessible as provided in
  subsection (e) of this section
•   b) is consistent with the doctor's
  certification of the employee's work abilities,
  as provided in subsection (f) of this section
  and
• was communicated to the employee in writing, in
  the form and manner prescribed by the Commission
  and included all the information required by
  subsection (c) of this section.

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Sixth

• (e) In evaluating whether a work location is
  geographically accessible the carrier shall at
  minimum consider
• (1) the affect that the employee's physical
  limitations have on the employee's ability to
  travel
•  (2) the distance that the employee will have to
  travel
•  (3) the availability of transportation and
•  (4) whether the offered work schedule is similar
  to the employee's work schedule prior to the
  injury.

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Seventh

• (f) The following is the order of preference that
  shall be used by carriers evaluating an offer of
  employment
•  (1) the opinion of a doctor selected by the
  Commission to evaluate the employee's work
  status
•  (2) the opinion of the treating doctor
•  (3) opinion of a doctor who is providing regular
  treatment as a referral doctor based on the
  treating doctor's referral
•  (4) opinion of a doctor who evaluated the
  employee as a consulting doctor based on the
  treating doctor's request and
•  (5) the opinion of any other doctor based on an
  actual physical examination of the employee
  performed by that doctor.

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Eighth

• (g) A carrier may deem the wages offered by an
  employer through a bona fide offer of employment
  to be Post-Injury Earnings (PIE), as outlined in
  129.2 of this title (relating to Entitlement to
  Temporary Income Benefits), on the earlier of the
  date the employee rejects the offer or the
  seventh day after the employee receives the
  offer of modified duty unless the employee's
  treating doctor notifies the carrier that the
  offer made by the employer is not consistent with
  the employee's work restrictions. For the
  purposes of this section, if the offer of
  modified duty was made by mail, an employee is
  deemed to have received the offer from the
  employer five days after it was mailed. The wages
  the carrier may deem to be PIE are those that
  would have been paid on or after the date the
  carrier is permitted to deem the offered wages as
  PIE. (Post Injury Earnings)

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Important Concept Coming Up
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• The employee may decline the employer's offer of
  an alternate duty job and remain on leave.
  However, the Texas Workers' Compensation Act
  allows income benefits to be reduced when an
  employee refuses a bona-fide offer of employment.
  This reduction in benefits is permitted
  regardless of FMLA.

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Changes in the Designated Doctor and Required
Medical Examination rulesAs of January 1, 2007
Rule 126.7 (c), the Designated Doctors role has
expanded to include the resolution of questions
regarding

• (1) impairment caused by employees compensable
  injury
• (2) the attainment of MMI
• (3) the extent of the employees compensable
  injury
• (4) whether the employees disability is a direct
  result of the work-related injury
• We are already being warned not to use this rule
  for 3 or 4, but thats a different class.
• (5) the ability of the employee to return to work
  (RTW) or
• (6) issues similar to those described in 1-5.

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Sample RTW forms are provided on SORMs website
at

• WWW.SORM.state.tx.us/Claims_Cordinator_Handbook/fo
  rms.php

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Bona Fide Offer of Employment Letter (SAMPLE)

• Delivery Confirmation Requested
• Dear (claimant)
• Our office is in receipt of medical information
  from Dr. _____________ outlining the restrictions
  under which you are able to return to work.
  Pursuant to Workers' Compensation Commission Rule
  129.6, this letter is a Bona Fide Job Offer for
  you to return to work consistent with information
  provided herein. Our office will abide by the
  physical limitations as outlined by the
  physician. The office will only assign tasks
  consistent with your physical abilities,
  knowledge and skills and will provide training if
  necessary.
• Position title 2. Hours of duty ____a.m. /
  p.m. until ____ a.m. / p.m. 3. Wages ____Hourly
  ____Weekly ____Monthly 4 Job description,
  including duty hours, and maximum physical
  requirements of the position (lifting and
  approximate lbs. approximate time stooping,
  pushing, standing, sitting, etc.) 5.Address,
  location, and approximate distance in miles from
  employees residence6.
  Beginning date of the position _________ Ending
  date of the position________
• Should you have any questions, please contact
  the undersigned below.
• Sincerely,

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For more information about return to work, please
go to SORMs website at

• http//www.sorm.state.tx.us/Workers_Compensation/R
  eturn_To_Work/return_to_work.php

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Travel Safety

• Officer Garry Parker
• Texas Department of Public Safety

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BREAK

• See you in 15 minutes

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SORM 200 DATA

• Mary Loza, ARM, AIC

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SORM 200

• The State Office of Risk Management 200 (SORM
  200) is the sole source for collecting statewide
  information from state agencies regarding their
  expenditures for risk management activities,
  insurance purchases and non-workers compensation
  claims made or settled against the agency.
• The intent of the SORM 200 is to capture costs
  associated with agency Risk Management Programs,
  and to compile information necessary for SORM to
  include the administrative costs of risk in the
  Office's biennial report to the legislature.

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SORM 200

• The SORM 200 is divided into two parts
• Part I - Risk Management Expenditures the
  intent of this section is to capture those costs
  associated with agencys direct risk management
  costs.
• Part II - Insurance and Risk Related
  Expenditures used to submit non workers
  compensation insurance information for the
  current fiscal year.

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SORM 200

• Data for SORM 200 is requested from each agency
  for online input by October 30 of each fiscal
  year.
• Database is closed on October 30 and any
  additions or corrections can only be entered by
  SORM personnel.
• Data is being analyzed for data integrity.

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Cost of RiskFY 03, 04, 05
CASH BASIS Risk Management Programs Workers Comp Claims Cost Containment Settlements Judgments Bonds, Insurance Deductibles Actuarial Services Court Costs Attorney Fees Risk Management Claims Admin Lost, Damaged Destroyed Property FY 03 27,262,588 67,571,177 1,279,956 3,512,080 11,732,279 12,000 1,901,062 6,086,276 539,687 FY 04 33,029,737 54,650,872 1,146,711 5,653,484 15,417,895 4,500 1,866,369 6,458,034 504,585 FY 05 26,171,311 52,534,024 1,380,950 4,190,858 14,934,033 13,000 971,006 6,525,055 3,103,681
ACCRUED COSTS Reserves for Future Claims Incurred But Not Reported TOTAL COST OF RISK 63,259,241 67,860,000 251,016,345 50,99,367 84,966,000 254,690,553 54,103,732 77,929,244 241,856,894
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Expenditures vs COR
FY 03 FY 04 FY 05
Cost of Risk 251,016,345 254,690,553 241,856,894
Risk Management Expenses 27,262,588 33,029,737 26,171,311
Percentage RM Expenses/COR 11 13 11
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Loss Prevention Effect Ratios
FY 03 FY 04 FY 05
RM Expenditures 27,262,588 33,029,737 26,171,311
Cost of Risk (Cash Basis) 92,880,759 85,702,449 83,652,607
Ratio COR/RM Expenditures 3.4 2.6 3.2
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Property Casualty Claims

• Virtually, any event, where damages to persons or
  property, that may cause a financial loss to the
  agency must be reported. This includes
• 1. Injuries or damages (insured or uninsured)
  automobile accidents involving agency owned
  vehicles whether owned, non-owned or hired
• 2. Agency owned vehicle damage (automobile
  physical damage) or third party vehicle damage
  (automobile liability - property damage)
• 3. Property damage which may includes
  theft/vandalism of personal property.

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Property Casualty Claims

• 4. Right to sue notices from EEOC or Department
  of Human Rights (employment practices type),
  injuries to volunteers (accident type)
• 5. Injuries to the public within/on state
  owned/managed facilities or premises (slips and
  falls).

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Auto Liability ClaimsFY 06
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Insured Auto Claims FY 06
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Uninsured Auto Claims FY 06
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EPL Claims FY 06

• Employment Practices Claims

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Uninsured EPL ClaimsFY 06
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Property ClaimsFY 06
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Uninsured Property ClaimsFY 06
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Insured Property ClaimsFY 06
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• QUESTIONS ??

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Agency Outreach Training

• Bradley Prais
• Training Specialist

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Regional Open EnrollmentResults

• 3 Completed 700 Students, 32 Agencies
• Most Popular
• Bloodborne Pathogens
• Stress Management
• Anger Conflict in the Workplace
• Problems
• Limited attendance by smaller field offices
• Limited announcements to field offices

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Sample Schedule AM
  Day 1 Day 1 Day 1 Day 2 Day 2 Day 2 Day 3 Day 3 Day 3
  Room 1 Room 2 Room 3 Room 1 Room 2 Room 3 Room 1 Room 2 Room 3
900                  
915 Stress   Notary       Office    
930     Public       Safety    
945       CPR       Supervisor's  
1000   ADSO     Accident Claims   Role Claims
1015       Investigation Coordinator   in Coordinator
1030       Vicki     Ergo Safety  
1045 Anger         in    
1100   HAZCOM Diane     Workplace    
1115 Conflict                
1130                  
1145                  
1200                  
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Sample Schedule PM
  Day 1 Day 1 Day 1 Day 2 Day 2 Day 2 Day 3 Day 3 Day 3
  Room 1 Room 2 Room 3 Room 1 Room 2 Room 3 Room 1 Room 2 Room 3
1245                  
100                  
115                  
130     Solving   Slips, Trips   Back Inj    
145   ADSO Conflict   Falls   Lifting Workplace  
200   (Cont)           Violence  
215               for  
230 Defensive     First   Claims   Managers Claims
245 Driving     Aid   Coordinator     Coordinator
300     Workplace  (Cont) Confined  (Cont) Bloodborne   (Cont) 
315     Violence Spaces   Pathegons    
330   15 Pax   Short        
345   Van            
400                  
415                  
430                
445                
500                  
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Regional Open EnrollmentsSchedule

• Harlingen February 13-15 Hosted by TSTC
• Nacogdoches June 12-14 Hosted by SFA
• Open Dates April, August, October

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New Classes

• Driving Safety 4hrs
• CPR First Aid 8hrs, Limited availability
• Office Safety 1hr
• Claims Coordinator 2 days
• Supervisors Role in Safety 3hrs

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Pinpointing your Exposures

• Loss Trending and Benchmarking through the State
  Office of Risk Management

Presented by Benny Vanden Avond SORM Risk
Management Specialist
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Risk Management Process

• Step 1 Risk Identification
• Step 2 Risk Analysis
• Step 3 Consider Alternatives
• Risk Control
• Risk Finance
• Step 4 Implement
• Step 5 Monitor

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Risk Identification Techniques

• Insurance Surveys
• Property Inspections
• Internal Resources
• External Resources

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Risk Identification through SORM

• Onsite Consultations Risk Management Program
  Reviews
• Risk Tex Articles
• Risk Management User Groups
• Insurance Policy Reviews
• Risk Evaluation and Planning System (REPS)

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Risk Identification through REPS
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Risk Identification through REPS
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Risk Identification through REPS
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Risk Identification through REPSQuestions,
Questions, Questions
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Identified Risks
Two Employees complained about indoor air quality
22 Automobile Accidents occurred in Fiscal Year
2005, but only six occurred in Fiscal Year 2006
Our agency spends 17.04 of our Risk Management
Program Expenditures on Employee Salaries
Blah, Blah, Blah
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Risk Identification through REPS

• Blah, Blah, Blah

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Identified Risks
Two Employees complained about indoor air
quality Have you had previous complaints?
22 Automobile Accidents occurred in Fiscal Year
2005, while six occurred in Fiscal Year 2006 Has
your fleet size significantly changed?
Our agency spends 17.04 of our Risk Management
Program Expenditures on Employee Salaries How
does this compare to other state agencies?
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Risk Management Process

• Step 1 Risk Identification
• Step 2 Risk Analysis
• Step 3 Consider Alternatives
• Risk Control
• Risk Finance
• Step 4 Implement
• Step 5 Monitor

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Risk Analysis Techniques

• Loss Trending
• Benchmarking

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Loss Trending (Trend Analysis)

• Loss forecasting technique that identifies past
  loss patterns and uses them to forecast future
  losses

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Loss Trending through SORM

• REPS
• Online Property and Casualty Claims Reporting
  System (OPCC)

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Loss Trending through REPS
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Loss Trending through REPS Data, Data, Data
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Loss Trending through REPS Statewide Trends

• REPS also helps SORM to conduct Statewide Loss
  Trending
• October 2006 Risk Tex Article
• Smart System REPS Helps Agencies Identify
  Risk, Helps SORM Recognize Trends

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Loss Trending through OPCC
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Loss Trending through OPCC
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Loss Trending through OPCC
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Benchmarking

• An entitys use of information about other
  entitys in the same industry to set standards
  and goals for itself

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Benchmarking through SORM

• REPS
• Cost of Risk Report (CORR)

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Benchmarking with REPS
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Benchmarking with REPS
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Benchmarking with REPS
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Benchmarking with REPS
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Benchmarking with CORR

• Agencies can use the CORR information to
  benchmark their risk management expenditure
  performance compared to statewide totals
• Individual agency expenditure data for the past
  four years is available within the RMIS section
  of the SORM website.
• Agencies should find the percentage columns
  particularly useful for benchmarking efforts.

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Benchmarking with CORR

• What
• Where
• When

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Benchmarking with CORR
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Benchmarking with CORR
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Benchmarking with CORR
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Benchmarking with CORR
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Benchmarking with CORR
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Benchmarking with CORR
F - Salaries 13,550 17.04
G Benefits 5,500 6.92
H Travel 1,200 1.51
Total Expenditures 79,500 100.00
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Summary

• Risk Analysis is a vital piece of the Risk
  Management Process
• Loss Trending and Benchmarking are just two of
  many risk analysis techniques available
• REPS, OPCC, and CORR are valuable risk analysis
  tools provided through SORM

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Risk Management User Group

• Thank you for attending
• Happy Holidays!!