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5 MontanaStaleUbrary nil 3^"^.HI Policyholder 3 0864 1005 9644 7 Montana State Fund Focus on fraud continues New law redefines independent The Montana State Fund's Fraud Unit has billed employ- aggressive efforts to identify ers in excess of$400,000 and contractor and eliminate fraud continue. collected over $200,000 in un- Recently a former Bozeman der- or unreported premium. OnOctober 1, a law that af- "The man was convicted by a Dis- Sometime ago the State fects independentcontractor sta- State Fund trict Courtjury offelony theft Fund received a tip regarding a tus becameeffective. has for bilking the Workers' Com- tiered pricing system used by a The new law defines an in- zero pensation program of$22,000. medical provider. It proved to dependent contractor as 1) any- tolerance This isjust one ofmany ex- be true, and this provider one who renders service in the amples where a claimant falsi- charged the State Fund more course ofan occupation, 2) has for fied records and the disability than other entities. Legislation been and continues to be free fraud." in orderto receive benefits. was passed in 1993 to prevent from control ordirection, 3) is — Because ofan observant this type ofovercharging. engaged in an independently Carl Swanson, State Fund President employer and witnesses who Through this type oflegisla- established trade or profession, andCEO were willing to testify, this is tion and continual improve- and 4) has received an inde- now one ofthe twenty-four ments in our automated pro- pendent contractor's exemp- cases where a felony convic- cesses, the State Fund will con- tion for workers' compensation was successfully pros- tinue to fight every possible tion insurance from the De- ecuted. continuedonpage4 continuedonpage3 Although claimant fraud usually gets the most attention, Introducing personalized the efforts ofthe fraud preven- customer service tion and detection unit do not — stop here employer and pro- Ifyou'vecalledus recently The new team is handling vider fraud is dealt with equal with a question or a concern, nearly 1,000 calls a day. diligence. An employer who you've most likely been greeted A team concept is being ap- underreported payroll was also by a member ofthe newest plied and quality control occurs — convicted. State Fund team the Customer through routine monitoring and The Fraud Unit has saved Service Unit (CSU). on-going evaluation. over $3 million On September 5, the State Because our customer ser- In ttiis issue... by eliminating Fund began personalized "one- vice resources have been con- benefit payments stop" service with the introduc- solidated, we can provide better Focus on fraud 1 on fraudulent tion ofthe Customer Service service. Independentcontractors .... 1 claims and an- Unit. Next time you call in, please Personalized service 1 other $380,000 Our seven customer service let our customer service repre- Early return to work 2 was recovered representatives are trained to sentatives know how you feel Customersatisfaction 2 through court or- assist you with your basic Un- about our new service. We want Health care 3 Privatization 4 dered restitution. derwriting, Claim, Audit, Fraud to continue to learn and re- ^lass code rates 5 On the pre- and Loss Control questions. spond to your needs with ex- 'Q&A 6 mium side, the ceptional service. %^ Announcing Policyholder Education Workshops "^ ^ ' see backforthe one in yourarea — What you Early return-to-work pays had to say For fartoo long, employ- attention. ers have been merely apolicy- The injured person has to Last spring 3,833 Customer holder and not a participant in know that you want and need Satisfaction Surveys were controlling the costs related to him/her back at work. They mailed to policyholders injury management. need to feel valued and appre- 3,000 to randomly selected Today, we encourage you to ciated. 1,073 surveys policyholders with less become an active partner in in- The employer, employee and were than $25,000 in premium, jury prevention and manage- health care provider should completedand and 833 to those with pre- ment. Proactive return-to-work identify alternate work activi- returned. mium greaterthan programs decrease the number ties that can be carried out $25,000. oflost workdays and lower to- while the employee is regaining Thank You! Survey questions re- tal claim costs significantly. full work capacity. lated to overall customer The key to success, how- The State Fund is prepared satisfaction, as well as sat- ever, begins with the immediate to guide and support the return- isfaction with individual de- reporting ofan injury. Report- to-work process with people, partment services. The survey ing delays cost money, can programs and incentives. Our MCO instrument was developed, ad- compound the injury, and com- new network will further ministered, and the results plicate an investigation. encourage these efforts through compiled in-house. An incred- Reducing workers' compen- contacts with employers and ible number, 1,073 or 28 per- sation accident reporting time employees identifying transi- cent, ofthe surveys mailed gives employers an opportunity tional employment. were completed and returned. to positively influence the Please refer to the list below Six hundred nineteen or events that follow a workplace for a managed care organization^^ 65.2 percent ofrespondents in your area. said they were very satisfied or Prompt You really With early intervention and satisfied with overall customer assistance have to get employee support, we can im- service today, a 3 percent im- to the involved and prove the situation for every- 1 provement overthe 52.1 per- worker stay one, and keep workers' com- cent that said they were very creates a involved. pensation costs down. Through satisfied or satisfied with ser- bond of cooperation, we can help build vice one year ago. confidence that promotes a an economy that develops safe Respondents ranked cus- mentality ofpartnership. An jobs and keeps a productive tomer service representatives as effective system demands your workforce. surveyresultscontinuedonpage4 TODAY Satisfaction State Fund Managed Care Network Priority Health, Billings 1-800-297-1206 Corvel MCO, Kalispell/Whitefish 1-800-935-0660 Compwise, Great Falls 1-800-544-7723 Montana Health Systems, Bozeman 1-800-833-6662 St. Peter's, Helena 1-800-353-4663 Western Montana, Missoula 406-329-5746 VerySatisfied Dissatisfied NoOpinion Southwest MIWorkers Health Plan, Butte 406-782-9184 Satisfied VeryDissatisfied — — Health Jpi|]Care Connection between job Independent satisfaction and workers' contractor compensation claims continued Recent research links chiatrist, Hans Style is "the partment ofLabor and In- factors of stress andjob nonspecific response ofthe dustry. satisfaction to industrial body to any demand made upon According to the new law, a injuries, causing concern that it," and has been carefully as- worker is not considered an in- more employers should focus sessed as a major link to inju- dependent contractor, unless all on positive working ries. ofthe criteria are met. environments in addition to Sustained levels ofstress Furthermore, ifan employer safety. Demographics (age, can have a profound impact on fails to require proofofthe ex- education, gender, race and workers' job satisfaction emption from an independent marital status), health (fitness workers who are unhappy in contractor, under new law, the levels, strength, weight and theirjobs traditionally are off worker is considered an em- flexibility) and psychological work longer and have more ex- ployee and the employer may traits have also been tied to pensive and complicated claims be liable forwork related injury workers' compensation claims than workers who have good claims. for many years and still play a job satisfaction. The Montana State Fund, as role in determining cause and Sources ofstress may in- an insurer, consequently be- effect. clude role ambiguity, lack of comes responsible for the claim The five psychological recognition,job unsuitability, costs and may assess premium factors that have been tied to job insecurity, and/or lack of to an employer who does not accidents include: decision making authority. provide evidence of the ex- 1) General Socia—l Reducing or eliminatingjob emption. Maladjustments self dissatisfaction can be an impor- We recognize the adverse centered, immature, aggressive, tant step in reducing work re- impact this new requirement and impulsive trai—ts; lated injuries and it may be as may have on some ofour poli- 2) Impulsiveness spontane- important as the reduction of cyholders. The Fund plans to ous acts without regard to risk; "visual" hazards. educate policyholders on this — 3) Aggression acting out Considerthese ways to im- new law through mailers, trade ones anger; prove employeejob satisfac- association newsletters, and — We 4) Depression anger turned tion: seminars. intend to advise inward; and • Recognize and reward em- employers ofthe new require- 5) Control ployees ment priorto requiring addi- Sustained levels of believing he/she is • Communicate openly tional premium for independent stress have a the master of • Ensure that staffing and ex- contractors without the exemp- ^ profound one's destiny. pense budgets are adequate tion. However, auditors will impact on One question • Provide and maintain com- still require, as before, evidence ' workers' job to ask today when petitive employee benefits that an independent contractor satisfaction considering how • Give employees adequate meets conditions 1, 2 and 3. and ultimately, to reduce work control in how they do their Flexibility and acase by case job injuries. related claims is work. review are essential until em- whether a Although not covered sepa- ployers and independentcontrac- worker's state of rately under the Montana Work- tors clearly understandthe new mind exists as a major cause in ers' Compensation Act, stress requirement. workers' compensation claims. can be compensable, ifit results Ifyou havequestions, please Stress, as defined by psy- from a physical injury. callus! — Survey results continued Privatization the service that would be most useful (see story on page 1); newslet- Discussed ters were second. The survey revealed that managed care utilization is low, but awareness ofthe First Reporting Unit is high. Basic Governor Marc Racicot awareness ofthe fraud program was fairly low, however 35% ofre- recently requested that all state spondentssaidthey wouldlike agencies investigate and con- MOST USEFUL Service more information(see storyon sider potential options for page 1) privatization. responseswereaveraged{1=mostuseful,5=leastuseful) Nearly 50percentofyou who These efforts to date have 1 2 3 4 respondedtooktimetomake includedthe sale ofthe State ^^^^H^^H writtencomments. Themajority liquor stores and may encom- CustomerService mm1.6 ofcommentsrelatedtothehigh pass the privatization ofthe ^^^^H cost ofpremiums, fraud, and at- state's motor fleet, institutional Newsletters,etc. ^m1 torneyinvolvement. food services, highway de- GaietyandLossControl 1^^^^^| M' The results ofthis first Cus- signs, printing, and mailing. ^^H tomerSatisfaction survey have Privatizationcan involve Seminars/Worksfiops ^^^^^| ^^^M 3.2 providedimportantbenchmarks numerousoptions, including ^^B andwill helpuscontinueto iden- the sale ofthe State Fund. It ^^1 lealProviderNetworks ^^^^^| 36 tify areas where we needto im- could mean the creation ofa prove. Domestic Mutual ormerely 1 A big THANK YOU to all giving the StateFund more lati- who participated. We appreciate yourtaking the time to respond and tude to operate as a private car- value yourcomments. rierbyeliminating some ofits FYI...policyholders will continue to be surveyed each year in agency status. February. Otherstates areexperienc- ing similartrends. Forex- ample, since Michigan already FrdUCi continued from page 1 had an established assigned type ofworkers' compensation Disburg, are dedicated to doing risk pool forthe residual mar- fraud. just that. ket, the Michigan State Fund Our new claims processing They spend a lot oftime on was recently sold to a private system (BIS) will automati- the road and on the phone, they insurance company, represent- cally alert a claim adjuster have excellent communication ing the largest state when a claim has indications of and interrogation skills, and privatization in history. fraud. have learned to trust their "gut" Inherent in the discussions Our medical pay system instincts. has been, "what is best for (AMPS) will also help to un- When asked what they liked Montana employers and em- cover providerfraud. The re- best about being investigators, ployees." We believe we need engineering ofour Underwrit- Len and Tom both agreed that to carefully assess all options ing Department will further in- being able to make a difference while focusing on what is best corporate detection clues for for all Montanan's was top on for all ofMontana. possible premium their list. In the next few months, we 25,000 newsletters and posters fraud. They also encourage employ- will presentrecommendations wereprintedandpreparedformailing While eliminat- ers to investigate all claims to GovernorRacicot. at an estimated cost of$.30 per unit, foratotal costof$7,570. ing fraud is diffi- ask questions, get involved, and Ifyou have suggestions or Comments and suggestions are cult, the State most importantly be observant. comments about privatization, welcomed, pleasecontact Aidan My- Fund FraudInves- In addition to our investiga- pleasecontact, Aidan Myhre, hre. Editor, at444-5982. All rights reserved; reproduction tigators, Len tion staff, we also use private Industry and ConsumerAffairs is prohibited withoutpermission. Knutson and Tom continuedonpage5 director at 444-5982. Digitized by tine Internet Arciiive 2013 in http://arcliive.org/details/policyliolderpilo19stat — Study shows time is l-iow Class Codes are Rated money in workers' comp Whiletherecentrate de- account operation and adminis- crease is good news, you may trative costs and reserve devel- An analysis of lost-time wonder how we determine the opment. workers' compensation claims rates used to calculate yourpre- The result is a set ofexperi- by Kemper National Insurance mium. ence-based rates which would 30 + Days 10 Days Companies re- Although the July 1 overall be expected to develop the nec- veals that the decrease was 18%, rates for in- essary revenue to coveresti- $20,000 average forjob dividual class codes ranged mated losses. injury claim from a 0% to 33% decrease. When the payroll, premium, $15,000 costs reported See table below. and losses in a particular class $10,000 within 10 days Calculating Rates code are not sufficient to pro- was $12,082 vide credible data for estimat- $5,000 compared to A rate is calculated foreach ing the revenue to cover all those reported class code based on a review of losses, we use nationally estab- after more than the total incurred losses and the lished experience rates to deter- 30 days which total payroll in the class for mine premium. cost an average of$17,920. fouryears immediately preced- Sound complicated? Well it In 1994, Montana'sjob in- ing the date ofreview and ad- is! For those readers interested jury claims were reported on justed by an expense ratio or in learning more about the ef- average, 27 days following the loss development factor. fect class code rates have on injury. The 1995 average is The expense ratio or loss premiums, please call Customer — currently at 17.5 days great development factor takes into Service at 1-800-336-8968, and job Montana employers and they will con- employees! FY94 FY95 nect you with Our goal is to reduce the Code Classification Rate Rate Change one ofour un- average days to 15. Help us 5506 Street & Road Construction 20.12 13.48 -33% derwriting — 7219 Trucking NOC 24.31 16.29 -33% reach this goal report work 8018 Store-Wholesale NOC 8.20 5.50 -33% specialists. related injuries immediately call the State Fund First Re- 5538 Sheet Metal Install 9.24 9.24 0% porting Unit at 1-800-243- 8033 GroceryStore 5.57 5.40 -3% 9052 Hotels & Motels 8.00 7.63 -5% 9121. It will save you time and money 8017 Store- RetailNOC 2.60 2.11 -17% 8742 Outside Salesperson .95 .79 -17% 8810 ClericalOffice .57 .47 -18% Let us know We wantto provide employers FrdUCl continued from page 4 with information un topics you want mvestigators to put a case to- Together, we can eliminate to know more about. gether. Once "sufficient cause" fraud. Ifyou suspect fraud, call Ifyou have a suggestion for a has been established, the matter Fraud Coordinator Bill Visser topic we could address in a is referred to the Department of at 444-6578, call Len in Eastern future issue of The Pilot, Justice for further investigation Montana at 655-0524, orTom please write Shawna Swanz, and possible prosecution. in Western Montana at 543- Industry and Consumer Without these resources and 1296. Affairs, State Fund, 5 S. Last teamwork, a successful anti- When in doubt, call the Chance Gulch, Helena, MT, 59601 fraud program could not be Fraud Hotline at 1-800-922- orcall 406-444-6502. possible. 2873. Q MontanaState Fund Policyholder ^^ Can benefits be termi- What is the purpose of AMontanaStateAgency Education nated ifan employee does not a premium audit? 5S.LastChanceGulcti Workshop Schedule P.O.Box4759 cooperate with medical treat- Helena.MT 59604-4759 ment orreturn to work oppor- tunities? Audits accomplish several Helena January 11 BoardofDirectors things.Theymaintaintheintegrityof Kalispell January 15 Chairman theclassificadon system andensure Missoula January 16 Rick Hill ^^, The Workers' Compensa- that all employees are classified Billings January 22 Helena tionActprovidessometlexibilityin properly. They also adjustorrecon- Glendive January23 Jim Brouelette thisarea. Insurerscansuspendcom- cilethepremiumalreadypaidtothe Great Falls January30 Washington Corp. pensation benefits to an injured actual labor expenditures. In many Bozeman February 1 Missoula worker who unreasonably fails to cases, policy- Butte February 2 keep scheduled medical appoint- holders receive Tom Hom Cohagen ments, orfails tocooperate withan refunds. Audi- There will be information pre- employer on returning to modified tors pay careful sentedonclassification and rat- Dale Mahlum dutyuponreleaseby doctor. An in- attentiontotherisksassociatedwith ing,auditprocedures, indepen- Jellystone RV Pari< surerdoesceasecompensationben- aspecificoccupationorduty.Finally, dentcontractorissues, costcon- Missoula efits when release to work is pro- auditsmaintainconsistencyandfair- tainment, andmanaging andpre- Sandra Reiter videdby aphysician. nessamongallpolicyholdersanden- ventingclaims. EmpireSand & sure thatone business does notgain Registration fee is $10 per Gravel Co., Inc. an unfair competitive advantage person with lunch andmaterials Billings based on incorrect payroll assign- provided. Locations will be an- ments. nounced nextmonth. ExecutiveStaff Montana State Fund Bulk Rate PrCeasrildeSnwt,onCsEoOn 5PoSloicuythhioLladsetrCPihlaotnce Gulch USPPAoIsDtage P.O. Box 4759 Helena, MT LindaGoan Helena, MT 59604-4759 Permit#89 ExecutiveAssistant AidanMyhre Director,Industry/ ConsumerAffairs BillVisser FraudCoordinator ShawnBubb InternalAuditor MoneyButler VicePresident, Legal LarryWiedey VicePresident, Underwriting MarkBarry VicePresident, Administration/Finance JimMcCluskey VicePresident.Claim TorGudmundsen ActingVicePresident ManagementInformation Services JoanneShydian M\/orkplace ^ VicePresident.Human , Resources jnsjde^J poster I AzmiSalaymeh VicePresident,Loss Control/PremiumAudit