Is Your Pool Ready for a Workers' Compensation Catastrophe?

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Posted by: CMR May 17, 2024 No Comments

Catastrophic work injuries occur every day to many employers of all sizes and occupations. Regardless of the size or type of membership served, every pool faces this exposure. These life-changing claims are complex, individualistic, and require much higher standards of coordination and communication.

Not having a plan in place to respond to a catastrophic injury is not only devastating to the injured worker but also potentially to the employer. These are very complicated medical cases requiring very specialized expertise. Your third-party administrator (TPA) and insurance carriers can assist in recommending vendors and medical advisors. However, your pool should vet these vendors and help them understand your organization so you both fully comprehend the alert process.

Here, we outline steps that may mutually benefit both the pool, member and employee throughout the life of a catastrophic claim.


Planning for an incident is a two-pronged approach. The first approach requires building a team that can respond immediately to a catastrophic event. This team should include leaders who can react quickly and efficiently to provide medical advice, guidance and resources regarding:

  • The hospital admitting the injured worker.
  • Reporting the claim to the TPA and carrier.
  • Talking to the injured employee or family for support.
  • Obtaining medical records.
  • Handling the media.
  • Preserving evidence for potential third-party action.

The second approach includes building a team that will address the needs of the injured worker to achieve the best possible recovery. This more permanent team will include those in the pool who need to stay informed as well as a claims adjuster, nurse case manager (NCM), defense counsel and carrier. Additionally, any outside vendors or partners, such as catastrophic medical services or trusted medical advisors may be included.

First 24 hours

The response team will ensure that the claim is reported to a qualified adjuster through the primary pool contact. This pool contact ensures that the adjuster immediately begins handling the claim and hires a well-qualified NCM. The NCM should get to the hospital as quickly as possible to meet the injured worker and their family and begin the process of obtaining the medical records.

This is also where the employer contact for the family will step in to ease their fears, reassure them and address their concerns. Questions about compensability can be deferred to the defense attorney. Lastly, someone from the response team needs to ensure that evidence is preserved in case there is a chance of receiving financial recovery from an at-fault third party.

First week post-injury

At this time post-injury, your adjuster should be leading, making sure all members of your longer-term care team are ready and on call. Your excess or large deductible carrier should also have been notified of the injury, as they are uniquely capable of providing guidance on catastrophic claims. Your carrier will have claim managers who specialize in these complex cases. They will also typically have a medical staff with extensive intensive care unit (ICU) or emergency room experience.

Sometimes, it may be recommended that the patient be moved to a hospital that is more capable of caring for the injured worker. Your carrier will have contacts within all of the Centers of Excellence and know which location can handle the type of specialized medical care needed. This is a team approach, and while this team makes recommendations, ultimately, the injured worker or their family makes the final decision, including whether the patient will move elsewhere.  

3 weeks post-injury

By this point, the pool, member, adjuster, NCM, and carrier are in contact daily. While the frequency may decrease over time, the first three to four weeks are critical to making sure the injured worker is getting the care they need. It is extremely important that the NCM is visiting or trying to visit the injured worker every other day as well as working daily to obtain hospital records. These can take time, but are vital to thoroughly understand treatment and prognosis.

In addition to a roundtable to discuss medical status and additional needs, your pool might consider involving a specialized third party that can review medical records and provide guidance. These specialists can provide details on possible complications, recovery potential and future medical care needs. This roundtable also reviews any family issues and the strength of the family support system, all of which will be helpful in setting the initial reserve. These meetings should occur monthly but may taper over time. As discharge approaches, transportation for the injured worker will need to be determined, especially if it involves a driving service or a modified vehicle.

The hospital bills, which will be significant, will need to be tackled around this time. These may not qualify under your state’s fee schedule or reasonable and customary procedures. They will need manual review, as opposed to the more routine review process. Your carrier can compare medical records to the bills to ensure that the current procedural terminology and international classification of diseases codes are accurate and all treatments are consistently and accurately reflected.


Emergencies will occur beyond the first month of treatment, so the team should be prepared to meet more often at these times if the patient needs to be moved or is discharged.

As soon as returning home becomes possible, discussions need to begin about home modifications. A home evaluation will be needed to determine the scope of changes. If the modifications are extensive, they will take time, but patients can be discharged quickly, sometimes with very little notice, so it is important to start this process as early as you can. Standard contractors are not recommended for home modifications in catastrophic work injuries as they are not familiar with an injured worker’s physical limitations. Your carrier should have partners who can help you through this process and who can navigate the workers’ compensation laws as well as the Americans with Disabilities Act requirements.

Sometimes, within the first couple of months after an incident, the injured employee will obtain an attorney to ensure their protection. Your pool will need a defense attorney who knows how to handle these claims. If settlement ever becomes possible, it will likely exceed your retention or deductible, so include your carrier who can help navigate the complexities of the following:

  • Medicare, Medicaid, and Medicare Set-Asides.
  • Addressing medical costs to a predictable amount
  • Reduced life expectancy opinions
  • Annuity brokers and professional administrators
  • Settlement terms

Lastly, ensure that your pool pursues any third parties who may have caused the accident and injury to your employee. In some states, the injured worker has the first right to pursue, and the employer can place a lien.

In others, the employer can pursue first or together with the injured worker. Your pool may need to start early so there is enough time to explore why the accident happened. Regardless, if there is exposure in your pool’s deductible or retention being exceeded, communicate and consult with your carrier before taking action.

Contact CMR Risk & Insurance Services for risk management guidance and resources.

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Article Written By: Stephen Peacock

Author: CMR

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