Implementation of comprehensive Workers’ Compensation program saves modular home manufacturer $5,000 and lowers Experience Mod

INSURED
The company is a manufacturer of modular homes with more than 40 employees.

SITUATION
The company’s Experience Modification Factor had climbed steadily to 1.07 and management did not understand why.

ASSESSMENT
CWCAs were called in to review the claims after one of the owners attended a Workers’ Compensation cost reduction workshop sponsored by the agency.
The Advisors discovered that the insurance company had made a coding mistake with a series of claims relating to knee, shoulder and hand injuries. Some had been miscoded as indemnity claims instead of medical-only claims. Medical-only claims were discounted 70%, while claims involving indemnity and medical are charged at 100%. This coding error had driven up the company Experience Mod.

SOLUTION
The CWCA requested that the insurance company inform the rating bureau of the error and correct both the coding and the Experience Mod.
In addition, the CWCAs developed a Workers’ Comp plan for the company, including regular meetings with management to review Workers’ Comp issues, setting up mandatory safety meetings, coordinating loss control services and claims monitoring.
In addition, a relationship between the company and an occupational medical clinic was established for the treatment of job-related injuries. Working with the clinic, drug testing and recovery-at-work programs were implemented. A recovery-at-work program helps keep the injured employee focused on recovery at work and assists in reducing both medical expenses and time off the job.

RESULT
As a result of the work by the CWCAs, the company’s Experience Mod dropped from 1.07 to 1.00, netting the company a $5,000 annual premium savings, while the overall Workers’ Comp plan will produce continued cost reductions over the years.