The Indiana General Assembly passed and Gov. Pence has signed into law HB 1320, which introduces a fee schedule into Indiana’s workers’ compensation statute. Over 25 states have enacted fee schedule legislation since the mid-1990s to impose a limit or cap on medical reimbursement. Insurers generally favor fee schedules while medical providers generally oppose it. Indiana will now have a schedule set at 200% of Medicare reimbursement levels.

Prior to this passing, Indiana had relied on a “usual and customary” method, which had many pitfalls. Both the Workers’ Compensation Research Institute (WCRI) and theNational Council on Compensation Insurance (NCCI) have published studies showing how, overall, “usual and customary” states had higher comparable medical costs and higher rates of increases in cost.

The Indiana General Assembly passed and Gov. Pence has signed into law HB 1320, which introduces a fee schedule into Indiana’s workers’ compensation statute. Over 25 states have enacted fee schedule legislation since the mid-1990s to impose a limit or cap on medical reimbursement. Insurers generally favor fee schedules while medical providers generally oppose it. Indiana will now have a schedule set at 200% of Medicare reimbursement levels.

Prior to this passing, Indiana had relied on a “usual and customary” method, which had many pitfalls. Both the Workers’ Compensation Research Institute (WCRI) and theNational Council on Compensation Insurance (NCCI) have published studies showing how, overall, “usual and customary” states had higher comparable medical costs and higher rates of increases in cost.

1. Insurer investment returns

The financial crisis of 2008 caused insurers to write down their investment portfolios and reallocate seeking higher returns. However, with a prevalence of low-yielding investments, attractive returns were not possible. Furthermore, credit quality impaired insurer’s massive corporate bonds holdings. For insurers with an international footprint there was also the impact of the sovereign debt crisis in Europe and the drain on surplus caused by 2011 delivering one of the worst worldwide catastrophic loss years on record. Interest rates on 10-year treasury notes have been following a downward trend for over a decade and are now at all-time record lows. Since roughly 80% of the property-casualty industry’s bond/cash investments are in 10-year or shorter durations, most insurer portfolios will have low-yielding bonds for years to come. In addition, the recession reduced demand for workers’ comp (demand = payroll).

Unhealthy, unproductive, unengaged employees are among an employer’s largest strategic risks. Employers have seen this in health insurance rates for years. Now, the workers’ compensation insurers are starting to pay attention. Workers’ compensation insurers are coming to the realization that safety programs aren’t enough. Yes, these programs are necessary and beneficial, but they don’t address the health and wellness of each individual employee and often fail to impact employee engagement focusing instead on physical hazards (e.g. machine guarding). Insurers recognize the changing demographic of today’s employees: an aging workforce that’s retiring at an older age and more likely to be overweight. This is leading to comorbid health issues like hypertension, diabetes, and high cholesterol. Taken together, these elements have the makings of a perfect storm.

Imagine this scenario: Mary is in the supply room getting a box of paper. It falls on and injures her foot. Her employer sends an incident report to their workers’ compensation carrier. A few days later, Mary’s foot is still bothering her with an ulcer forming at the impact site. Mary gets medical treatment, but the ulcer won’t heal. Fast-forward a few months to the possibility of Mary losing her foot - a complication of untreated diabetes. Of course, this is an extreme example, but it’s one that’s becoming a trend.

Whenever we encounter a particularly shocking piece of news, we tend to assume the worst. When the videos of the West Fertilizer Co. explosion appeared on YouTube and the news of the devastation was carried across the country, it caused many people to make some wild assumptions. The fact that it occurred in the same week as the tragic events at the Boston Marathon, led many to assume some kind of connection between the two tragedies.

You can’t eliminate risk. It exists in every line of work. Whether you’re a banker or a construction worker, there are inherent risks that you must identify and manage. Most businesses will be concerned with financial risk. In construction however, risk management is even more vital as it is about keeping people safe. It’s not inconceivable that someone could die on the job. It is, therefore, important that you can plan for every eventuality.

Non-fatal

It isn’t just the potentially fatal injuries you need to be on the look-out for when making your construction risk management plan. Non-fatal injuries to the hands, arms, or legs can have a debilitating effect on a person for the rest of their life. Almost a quarter of construction site injuries are to the hands and fingers due to digits being cut off and hands being crushed or burned. Basic things like gloves and safety guards for machinery can help to avoid these kinds of accidents.

If you own, borrow, or rent recreational vehicles, you have a lot of responsibility on your hands. Everyone looks forward to having fun and no one counts on having an accident. Unfortunately, they happen and it’s important to be prepared in case one occurs.

First, have an effective risk management strategy. Protecting your assets, your vehicles, is an obvious place to start. Ensuring this protection starts with maintenance. Implementing a schedule of routine servicing and checks can guarantee the safety of your vehicles and potentially catch an issue before is poses a significant threat.

Workplace injuries are a fact of life in some industries. If you work with heavy machinery or spend your day on your feet, you are unlikely to go your entire career without injuring something. Even sitting at a desk typing all day has it’s hazards. Most business owners are very aware of the risks associated with their day-to-day business.

Something that often gets missed is the return to work plan. When people do get injured, inside or outside of work, they will eventually return. As much as you plan to avoid these injuries it’s also important to create a plan to reintegrate injured employees into your workforce.

Develop a Plan

The larger the project, the greater the risk – that much is a given. The importance of risk management, however, remains the same no matter how great or small the project. Although each comes with its own unique risks, large-scale infrastructure construction projects are particularly distinctive.

Public Influence

A large infrastructure project is likely to take place in close proximity to the general public and this poses many risks. In some cases, such as road resurfacing or constructing new sections of highway, construction must be staggered to allow for continued public use of the area.

As well as working in close proximity to the public, the risks extend to what happens when you are not working. If your site is in a public area, or easily accessible by public roads, extra security measures may need to be employed to protect the site between shifts. Public liability on large infrastructure construction projects is vitally important.

When we talk about risk management and risk assessment, the focus is often on the big issues. But it’s not the only way to look at risk assessment. When you’re working to identify every potential risk, you sometimes need to think outside the box. Well, in this case, inside the box.

Every individual product, from food to electronics, encounters risks throughout its lifespan. As the product passes through production lines, across borders, and through the hands of numerous organizations, it encounters a wide array of risks. By applying a risk assessment to the product itself, rather than the individual businesses involved we can get a unique view.