The construction industry is showing a national rise in denying workers’ compensation claims filed by employees. The rate of denials rose by 7% from 2013 through 2017, according to one risk-management firm. However, about two-thirds of the rejected claims wound up getting paid within a year, which only increases costs for job providers.
Nearly $5,000 increase in costs per rejected claim
The cost of rejecting a valid workers’ comp claim adds about $5,000 when eventually paid, which represents an average 55% increase in costs. The expenses generally go up due to an increased need for medical treatment and ongoing physical therapy. That medical service likely would have concluded sooner and for much less if it was initially approved and the worker was able to obtain timely medical treatment.
Employers lose ability to provide doctors
When a worker suffers an injury while on the job, many job providers have doctors contracted to provide medical services at discounted rates. When the employer denies a claim that eventually is affirmed, the costs of medical care rise fast. The additional medical costs wind up being significant reasons for the 55% higher price paid on reinstated claims. For example, in California, rejected claims that wound up being reinstated and paid cost an average of $27,419 per claim compared to $16,833 for claims that were not challenged.
Legal costs also clip employers
Another reason that rejected claims wind up costing employers so much more is the legal cost associated with defending an invalid denial. A legal loss can add penalties and interest as well as legal costs associated with court cases. When two-thirds of rejected claims on average are reinstated, that makes it especially costly for job providers to reject valid claims. Yet that problem clearly persists.
If someone injured at work has a valid claim rejected, a Kentucky attorney who is experienced in compiling and filing successful challenges to workers’ compensation claim denials may be a helpful asset. Reversing a worker’s compensation claim might reinstate your employment and wipe out any related medical bills and similar debts.