We have been working to find a better method of charging units for workers’ compensation expenses.  The current system was implemented in 2002 to address changes in our workers’ compensation policies as we went from a guaranteed cost program (i.e., we paid a fixed fee) to a high deductible program (i.e., costs were largely for our account).  The changes were also made to support our Claims and Transitional Duty Program (CAT Program).  The system was designed to give credits against actual costs for timely reporting and early return-to-work, as these two factors are critical to lowering workers compensation costs.

We recognize, however, that this system has been difficult to work with, as accounts experienced unexpected spikes in costs for work-related injuries and frequently, old claims.  As a result, we will be moving to a system with fixed charges for new claims only:

• All units will incur a per claim charge of $13,000 for any claim arising after January 1, 2006, regardless of the severity of the injury.  Monthly reports identifying the new claims, by location, during the accounting period will be distributed.
• The $13,000 charge represents the company’s average cost of a workers’ compensation claim system-wide and will be reviewed annually to determine if the charge should be increased or decreased based on recent claim history.
• The units will incur the per claim charge only once and no other costs associated with resolution of the claim will be charged to the unit.
• All workers’ compensation costs charged to a unit in 2006 will be reversed effective today. Instead, all units will be charged back the lesser of either their current year-to-date charges or the new $13,000 per claim charge.  Going forward, the units will be charged $13,000 for each new claim.
• The Canadian venues and the monopolistic states of Washington and Ohio will be covered by this new policy beginning January, 2007.  These venues are excluded from the 2006 charges as this otherwise would represent an unbudgeted expense.
• All venues – including the monopolistic and Canadian venues – are required to immediately complete and fax a “Report of Accident Investigation” Form to Risk Management at 864-598-8694 for every new claim.

Please note that, as we reviewed this area, no workers compensation system is perfect.  We explored charging the actual cost of the claim up to a maximum but this is difficult to manage and costly to administrate, requiring expensive custom reports.  Our review showed that the system described above has been the most effective tool balancing the goals of providing budgetary management while creating incentives to manage workers compensation claims.

As noted above, the new policy eliminates credits for timely reporting and return-to-work.  However, timely reporting and return-to-work efforts are still critical in Centerplate’s overall challenge to control workers’ compensation expenses.  While we anticipate this policy change will provide more stability for budgeting purposes, to be successful, we will need to continue to be as vigilant as possible on these fronts.

 If you have any questions, please feel free to contact Laura McKee at 864-598-8627.

Charge Back Program Questions & Answers

When does the $13,000 claim charge apply?

The $13,000 claim charge only applies to indemnity claims.  Indemnity claims are those claims where an injured employee receives Temporary Total Disability (“TTD”) benefits, commonly known as lost time.  Please note that TTD benefits are only payable after that state’s waiting period has been exceeded (normally a 3 or 7-day waiting period). Therefore, an employee who misses a day or two of work due to an injury would not qualify for TTD benefits and therefore not be considered an indemnity claim that triggers the $13,000 charge.

 Will we be charged for “notice only” claims?

No.  A “notice only” claim is not a claim at all but really a report filed for an employee injury where no treatment was necessary or where there is a concern that a claim may be filed.  If it subsequently turns into an indemnity claim, then it would be subject to the charge.  The company does pay an administrative fee for filing a “notice only” claim, so please use discretion when reporting.

Will the claim charge apply for “medical only” claims?

No.  Medical only claims are typically those where medical treatment is required but an employee misses no work or does not exceed the waiting period that provides TTD benefits.  Examples include lacerations/stitches, burns, bruises, strains, etc.   Please note the previous system charged the venues the full cost of these claims, while the new claim system will charge no fees thereby representing a financial savings.

What information will we receive each month?

Monthly reports will be distributed that identify each venue’s new indemnity claims by employee name and date of injury (“DOI”).  It will then total the number of new claims times the $13,000 claim fee to get a total monthly charge for each unit.

What if there are errors in the report?

As in the past, we will correct any errors in the following month by crediting back the $13,000 claim charge.  It is very important all venues review their respective detail and report any concerns as soon as possible. Examples include employees coded to wrong locations or to Centerplate’s account.  There can also be data errors where a claim is miscoded as an indemnity claim.  We are happy to review all concerns.