DWC Announces 2013 Workers` Compensation Network Report

DWC Announces 2013 Workers’ Compensation
Network Report Card Results
The Pool participates in the Political Subdivision Workers’ Compensation Alliance, which contracts
directly with health care providers for the provision of workers’ compensation medical benefits to
injured employees. The mission of the Alliance is to support member pools to return injured
employees to health, work and a productive life.
The 2013 Department of Workers’ Compensation Network Report Card shows that the Alliance is
accomplishing its mission. Injured employees who accessed medical providers through the Alliance
had the highest satisfaction with medical care received, the fewest number of weeks off work and
the lowest overall medical and pharmaceutical costs.
During the 2005 legislative session, a bill was passed that allowed the creation of certified workers’
compensation health care networks. The legislation allowed political subdivisions to participate in
certified networks or enter into interlocal agreements with other political subdivisons to directly
contract with medical providers if certified networks were not available or practical. Texas
Municipal League Intergovernmental Risk Pool (TMLIRP) joined with four other local government
pools to form the Political Subdivision Workers’ Compensation Alliance (Alliance) to establish a
statewide panel of medical providers.
The five political subdivision pools that created and participate in the Alliance are:
• Texas Municipal League Intergovernmental Risk Pool
• Texas Association of Counties Risk Management Pool
• Texas Association of School Boards Risk Management Fund
• Texas Council Risk Management Fund
• Texas Water Conservation Association Risk Management Fund
Features
Network Report Card –
TMLIRP Scores High ........1
Mobile Equipment
Valuation ..............................5
Personal Liability of Elected
Officials ..............................6
Working Alone Risks..........7
Managers and Risk
Management ......................8
Newsletter Goes
Electronic...........................9
Winter Preparation...........10
Subrogation Spotlight ......11
Columns
Board Update ................... 3
Notes from the Field ..........4
Welcome New Members..... 5
Events Calendar ..............12
These five pools met on a regular basis, hired Alliance staff and began the
process of creating a panel of providers to treat injured workers in all areas
of the state of Texas. Beginning June 1, 2007, certain regions were pronounced ready to go live and by August 1, 2009, doctors and specialists
were available to treat injured workers across the entire state. The Alliance
now has approximately 8,300 providers throughout the state to provide
medical treatment to injured workers.
As part of the 2005 legislation, the legislature wanted to measure the effectiveness of certified networks and political subdivision provider panels.
The Network Report Card was created and the Texas Department of Insurance Workers’ Compensation
Research and Evaluation Group (REG) became responsible for obtaining data and surveying injured
workers to publish the results.
The most recent Network Report Card was published on September 30, 2013. This Report Card
measures certified networks with each other and claims not being handled in a network are measured
by the following performance criteria:
continued on page 2 Â
Winter
2013
Membership Matters
 “Report Card” continued from front page
• Health care costs
• Access to care
• Satisfaction with care • Utilization
• Return to work
• Health outcomes
This Report Card publishes the results
of the data obtained by the Texas Department of Insurance Workers’ Compensation REG. The report identifies
certified networks and the Alliance as
a 504 entity. The 504 reference is to
Chapter 504 of the Labor Code, which
is the specific statute that addresses
workers’ compensation for political
subdivisions.
The Report Card lists results for 21 certified networks and two 504 direct contract entities. The time frame for the
The Alliance scored the highest
satisfactory percentage for treating
injured employees.
specific injuries is June 1, 2011 through
May 31, 2012. A data call was submitted
to obtain specific claimant information
from all the participants in the Workers’
Compensation system. The Division of
Workers’ Compensation supplied medical data payment information on those
specific claims based upon carrier audits
of medical bills on approximately 100
data elements. This data was used to
determine medical costs, utilization of
care, and administrative access to care.
The University of North Texas Survey
Research Center conducted surveys of
injured workers to determine access to
care, satisfaction of care, return to work
and health outcomes.
From June 1, 2011 through May 31,
2012, there were 228,314 injured workers of which 89,178 were treated in a
certified network/504 direct contracting
panel. The remaining 139,136 injured
workers were considered non-network
claimants. The Alliance had 19,237 injured workers, the second highest claim
volume in the certified network/504 direct contracting panel totals, or approximately 22% of all network/504 panel
injured workers in the state of Texas.
Overall, the Alliance is either at the top
or close to the top in nearly every single
category. This Report Card shows that
the Alliance is successful in containing
medical costs and Alliance doctors are
getting injured workers back to work
sooner than those injured workers who
are treated outside of the Alliance, either in certified networks or outside of
networks. Credit must be given to the
Pool’s workers’ compensation members
for ensuring their injured employees
are treated by doctors on the Alliance
panel and working to return their injured employees to gainful employment. Working as a team, the Pool’s
members, claims staff, loss prevention
staff and Alliance-contracted medical
professionals are able to keep costs under control, return employees to work
and create a safe working environment
for all employees. This teamwork is essential to control costs in the workers’
compensation system and helps the
Pool to keep rates as low as possible.
The 2013 Network Report Card is
The Alliance scored the lowest
average prescription costs and also
the lowest number of prescriptions
per injured worker.
2
available through this link:
http://www.tdi.texas.gov/reports/wcre
g/documents/2013_Report_Card.pdf
The Alliance website is available
through this link:
http://www.pswca.org
TMLIRP’s Workers’ Compensation
Claims staff is available to answer questions or provide additional information.
Overall Results
• Lowest overall medical costs of all
networks and non-network claims for
both medical only claims and lost time
claims
• Lowest average professional costs and
hospital costs for medical only claims,
3rd lowest of lost time claims
• Lowest percentage of injured workers on
pharmaceuticals among all networks and
non-network claims
• Lowest overall pharmacy costs among
all networks and non-network claims
• Lowest average number of prescription
days per injured employee, 34 days
• Lowest number of prescriptions per
injured employee among all networks and
non-networks claims, 2.9 prescriptions
per employee
Survey Results
• Alliance had highest percentage of
injured workers among all networks and
non-network claims who indicated they
agreed or strongly agreed with their
treating doctor, 89% and were satisfied
with their treating doctor, 73%.
• Alliance had highest percentage of
injured workers who reported no
problem getting needed care, 76%, and
getting care quickly, 54% among all
networks and non-network claims.
• Alliance’s injured workers had the
lowest number of weeks being off work,
5 weeks, among all networks and nonnetwork claims.
• Alliance’s injured workers had the
highest physical functioning scores
among all networks and non-network
claims.
• Alliance’s injured workers had the
highest mental functioning scores among
all networks and non-network claims.
Board of Trustees Update
Each year, the October Board meeting of the TMLIRP Board of Trustees historically:
• begins the Pool’s process of formally reviewing the previous year’s financial, operating
and membership results,
• includes staff reports on preparations leading up to the presentation of the financial
audit at the January Board Meeting, and
• reviews reports on losses and other trends, ensuring that assumptions used in
developing rates remain valid.
There were a few other notable items from the October Board meeting, including the approval of the Pool’s reinsurance
intermediary contract, and an update on the implementation of the Pool’s new claims management system (Guidewire).
Membership and Preliminary Results for 2012-2013
The Pool’s fiscal year runs concurrent to most of its member municipalities’ fiscal year, October 1st through September
30th of each year. The Pool made 355 proposals during the fund year, with 263 those proposals accepted, leading to
nearly $1.5 million in new or additional contributions written. The Workers’ Compensation Fund added 50 new members
during the year; the Liability Fund also added 50 new members, and the Property Fund added 39 new members.
Preliminary financial results for the 2012-13 fiscal year indicate the Pool had an operating gain of approximately $15.3
million, less $3.2 million returned to members in the form of contribution credits.
The positive results for the year were primarily attributed to the Property Fund. Severe
weather patterns over the last year in Texas have been relatively benign compared to previous
years. There were no hurricanes, and the number of hail events was lower than expected.
The Workers’ Compensation Fund had an unusually high number of death claims (15)
during the fiscal year, nine of which were related to the explosion in the City of West.
Claims development experience in the Workers’ Compensation Fund for previous years
was relatively favorable, leading to just better than a breakeven year for the Fund.
The Liability Fund’s claims experience continues to see a slight deterioration. General liability and public officials
liability claims are developing close to what was expected, but the severity of automobile liability and law enforcement
claims is higher than expected. Like the Workers’ Compensation Fund, the Liability Fund experienced close to a breakeven
year.
Full financial results will be available after the audit is completed and accepted by the Board in January.
Approval of New Reinsurance Intermediary Contract
The Board approved a new contract with the Pool’s reinsurance intermediary, Guy Carpenter, LLC. The reinsurance intermediary oversees the placement of the catastrophe property reinsurance for the Pool with nearly 30 different domestic and
overseas reinsurers. The new agreement will reduce the Pool’s brokerage costs by at least 50%.
Guidewire Claims Management System Update
Staff presented a demonstration of the new Guidewire Claims Management System to the Board. The system is scheduled
to go live sometime in early 2014. This transition will help the Pool to identify processes intended to improve member
experience with claims, and will improve the information and reports members receive about their claims.
The next Board meeting is scheduled for January, at which time the Board will receive the annual financial audit report
and begin work on a comprehensive technology plan.
3
Membership Matters
Notes from
the Field
We have bonds on our public officials.
Isn't that the same thing as Public Officials Liability (Errors & Omissions)
coverage?
Bonds are a promise made by a surety
company to reimburse your entity if a
bonded public official commits a theft
of public funds. Some types of bonds
are required by statutes, local ordinances
Q u e s t i o n s f r om ou r m e m b e r s
wrongful termination or violations of
civil rights. Public Officials Liability
Coverage is focused on defending the
member, its employees and officials
when sued for monetary damages because of the decisions they have made
in their capacity as public officials.
Public Officials Liability Coverage will
also respond to pay covered damages
resulting from a claim.
We own handheld radios that are
signed out to individual employees
and they are not kept in our owned
facilities. What’s the best way to
cover them?
or resolutions, and specify the bond
limit required. If certain officials are
required to have bonds, those bonds
are separate from the Pool’s program.
The Pool can provide crime coverage,
which essentially serves the same purpose as long as the individuals covered
are not required by statute, resolution
or ordinance to have a bond.
In contrast, Public Officials Liability
(Errors & Omissions) coverage serves
to protect your entity against the claims
of third parties for wrongful acts committed by public officials, employees
or other covered parties. The most
common examples are for claims of
They can be covered two ways. Normally, tools and other small items
are considered contents of the
building in which they are stored.
Equipment is often put on a truck
during the day and returned to a
facility at the end of a shift.
Members can include the replacement cost value of such
equipment in the contents
value reported for the facility where the equipment is
stored at the end of a shift.
Fire Departments, Police Departments
and Public Works tend to have more
of these type devices. Those items
would be covered if there were a loss
at the storage facility or while the
equipment is being transported or
used elsewhere, such as at an emergency scene. Theft or damage at an
emergency scene is the most common
loss event and the member would be
paid for those items minus the per occurrence deductible. When radios and
other handheld communication devices remain with the employee for
ongoing use, it is more likely that
only one unit at a time is damaged or
stolen, and the per occurrence de4
ductible could be higher than the replacement cost of that one radio.
Option two would be to use a Portable
Equipment Schedule where the individual radios and other items are listed by serial number, and the Pool will
cover them with a smaller per-item
deductible. This option can be applied
to a variety of assets and works best
when items are individually assigned.
We just received the Workers’
Compensation payroll audit and it
shows payroll for Volunteers. They
don’t get paid, so where did that
payroll come from?
It’s true that volunteers are not paid actual salaries, but they do volunteer their
time. The Pool places a value on those
hours of activity as a way to recognize
the potential for workers’ compensation
claims. The Pool sets an average wage
per hour of activity based on someone
who is paid for a similar job.
With the exception of police reserve
officers, coverage for volunteers is
optional. If your entity covers volunteers for workers’ compensation, then
you are asked to keep a log of their
hours, which is then audited annually
OLUNTE ERS
along with your regular payroll. There
are 6 different types of volunteers and
each class has their own hourly rate.
If you would like to submit a question to
“Notes from the Field,” please send an
email to [email protected].
Mobile Equipment – Replacement Cost or Actual Cash
Value? Which is better for Your organization?
scheduled for $10,000. The actual replacement cost of the
ATV was $14,000. Although the Member elected
Replacement Cost coverage, the loss payment
was limited to
$10,000 – the
item’s scheduled
value.
The Pool provides coverage for physical damage to
motorized equipment that is not licensed for
on-the-road use under
Mobile Equipment
coverage. Examples
of eligible equipment
are backhoes, riding
mowers, cranes,
bobcats and even
golf carts. Many of
these items are also sometimes
referred to as
“contractor’s
equipment.”
Even if
Replacement
Cost coverage
is elected,
mobile
equipment newly
acquired within the
coverage period must
be reported within 30
days in order for
Replacement Cost
coverage to apply. If it
is not reported, loss to
this item will be
adjusted on an Actual
Cash Value basis. (Items
acquired in prior years are not covered unless scheduled.)
Similar to Real &
Personal Property,
the Pool offers two
methods of
determining payment
for a covered loss to scheduled Mobile Equipment:
Actual Cash Value or Replacement Cost.
In short, Actual Cash Value means the Pool will pay the
lesser of –
a) The cost to repair,
b) the cost to replace with like kind and quality less
deduction for depreciation, or,
c) the amount actually expended to replace.
Replacement Cost coverage has a slightly higher rate than
Actual Cash Value coverage. If you would like to consider
the cost difference, please contact your Member Services
Manager or Underwriter.
Replacement Cost has a similar definition, but provides
replacement of new for old with like kind and quality,
without deduction for depreciation. In both cases, the
maximum amount the Pool will pay is the value that is
scheduled on the Mobile Equipment schedule.
New Members!
July 1, 2013, through September 30, 2013
The difference in the depreciation condition is most
evident in a total loss where the scheduled item is either
stolen or not repairable. In this situation, Replacement
Cost would ensure that there is no deduction for
depreciation, allowing the Member to replace an item
with only the deductible subtracted from the claim
payment.
Atascosa CAD
Chambers CAD
Colorado County CAD
Combined Consumers SUD
Coupland
Fort Bend County Improvement District #24
Galveston County MUD #43
Grand Mission MUD #2
Harris County ID #9
Hockley CAD
To ensure the loss payment will cover full replacement of
an item, it is important that the value scheduled for the
equipment reflects the current replacement cost. For
example, a recent claim involved a stolen ATV that was
5
Kendall Appraisal District
Matagorda CAD
Montgomery County ESD #1
Nolan CAD
Novice
Ranch at Clear Fork Creek
MUD #1
San Augustine CAD
South Rains SUD
The Woodlands Township
Victoria CAD
Membership Matters
Personal Liability For Government Officials
Act (TTCA), which was revised by the Texas Legislature
In order to promote efficiency, governmental entities have
in 2003.1 Although the TTCA generally pertains to immunity
special defenses not available to private businesses. The
of the governmental entity, Sec. 101.106(f) provides a new
State of Texas is entitled to “sovereign immunity.” Members
statutory defense for employees sued individually.
of the Risk Pool are subdivisions of the State of Texas and
are entitled to “governmental imSec. 101.106(f) allows an emmunity.” Governmental immuBy staying current
ployee sued individually to file a
nity is a common law defense that
motion requiring the Plaintiff to
with Texas law , you
can be raised in lawsuits against
dismiss them from the suit and
the entity when it is involved in a
name the governmental entity as
can protect your govgovernmental function. However,
a defendant in their place. The
the governmental entity is a “legal
ernment officials from only requirement the employee
fiction” – a corporation evidenced
must prove is that they are being
by a piece of paper filed with the
personal liability suits. sued for an act that was done in
Secretary of State. A governmenthe course and scope of their emtal entity can only act through its
ployment – a fact that is oftenofficials and employees, and because of the nature of those
times evident from the Plaintiff’s own allegations.2 An emofficials’/employees’ duties, they are frequently the targets
ployee can use Sec. 101.106(f) as a defense against any
of lawsuits and are sued individually (personally).
common law claim recognized by the State of Texas, regardless of whether or not the governmental entity will ultiGovernment officials/employees sued individually are not
mately be immune from suit when it replaces the individual
entitled to “governmental immunity.” They are not the “Sovas the defendant in the suit. Claims against the employee
ereign.” They only work for the government. Instead they
sued individually for negligence, libel, slander, assault, bathave a defense known as “official immunity.” For the last
tery, fraud, negligent misrepresentation, false imprisonment,
several decades, official immunity was the only special detortiuous interference with a contract and any other state tort
fense available to officials/employees. In order to prevail on
must now be dismissed upon showing nothing more than
their defense of “official immunity” the individual must prove
that the individual was acting within the scope of their job
that they were (1) acting within the course and scope of their
duties. Individual defendants no longer need to rely on official
job duties, (2) involved in a discretionary decision, and (3)
immunity
and prove the three elements of that defense.
acted in good faith. Although official immunity is a valuable
defense, it is almost always necessary to go through a good
There is one glitch. Sec. 101.106(f) is only available as a
deal of formal discovery in order to develop that defense.
defense to an “employee” as defined in Sec. 101.001(2) of
Consequently, the individual defendant has to assist in rethe TTCA. That definition includes “any person, including
sponding to interrogatories and requests for the production
an officer or agent, who is in the paid service of the govof documents and submit to a deposition under oath before
ernmental unit …” As a result, unpaid elected officials and
evidence is developed to a point where a motion for summary
board members are often unable to assert this defense and
judgment can be filed on their behalf. If the trial court finds
obtain their quick dismissal from the lawsuit. It appears
that they have not proven each of the three elements of their
that it can be remedied if they receive even nominal pay
official immunity defense, they must appear for trial.
such as $10 a month. The only limitation is that the pay
can’t be in the nature of reimbursement for out-of-pocket
expenses. It must be “pay.” The Risk Pool encourages its
Members to provide at least nominal pay to its elected or
appointed officials so that they are entitled to the same protections as paid employees. The quick dismissal of such
individual defendants from a lawsuit should substantially
reduce the costs of litigation and result in savings to both
the Risk Pool and its Members.
The Risk Pool provides coverage for officials/employees
sued individually for acts within the scope of their employment, so they are spared the expense of litigation; however,
they are still burdened with the inconvenience of being the
target of a lawsuit, and the concern about personal liability
if the plaintiff makes allegations that raise coverage issues.
Two recent Texas Supreme Court decisions have dramatically limited the exposure for government officials/employees, altering decades of state law. Those decisions involve
the interpretation of Sec. 101.106(f) of the Texas Tort Claims
1 Tex. Civil Prac. & Rem. Code §101.106(f)
2 Mission Consol. Independent School Dist. v. Garcia 372 S.W.3d 629 (Tex., 2012)
6
The Risk of Working
Oftentimes, due to staffing, emergencies, or other special
needs, public entity employees are required to work alone in
the field. Examples include utility line repair personnel, road
maintenance employees, water and wastewater treatment
facility staff, and emergency responders, just to name a few.
Many of the tasks performed by these employees might seem
mundane and safe, but it is not just the task that should be
considered. The location and circumstances of the job should
also be considered as well as the “what ifs,” many of which the
employee cannot control.
Many workers’ compensation injuries and other accidents
occur each year when employees perform tasks alone rather
than with a coworker, group, or team. Examples of such
incidents include:
•
•
•
•
policy to allow for firefighter safety and accountability.
To help ensure the safety of a person working alone, consider
the following actions:
• Assess potential workplace hazards.
• Talk with employees about the assigned tasks, discussing
•
•
•
•
•
•
Workers at treatment facilities have fallen into clarifiers or
basins;
Employees were operating heavy equipment and became
pinned by the equipment, resulting in asphyxiation or
drowning;
A park employee suffered multiple bee stings and died;
An electric utility employee was electrocuted while
replacing a transformer.
Alone
exposures and solutions.
Avoid having to work alone during high risk jobs.
Take corrective action to prevent or minimize the risks of
working alone.
Provide appropriate safety training and education.
Establish a check-in procedure for staff.
Schedule high risk tasks during normal business hours or
when another worker capable of helping is present.
Report all unsafe situations, incidents, and near misses,
particularly if working alone would have increased or did
increase the severity of the situation.
When employees have no choice but to work alone,
precautions should be taken to ensure safety for the
employee. A communicative “check-in” policy is one of
those precautionary methods. These types of policies require
employees to periodically make contact, generally through
radio or telephone, to a central office contact or dispatch
center. Employees should communicate their location, type
of work being performed, and an approximate time the work
will be completed. Ideally, employees should check in every
15-30 minutes, depending upon the circumstances, and
provide updates as to the status or progress of the work at the
scene or site. Follow-up procedures should be developed
and implemented in cases where the employee fails to make
contact within the designated time period.
As seen in these examples, the causes and situations vary.
In some cases, working alone is acceptable and can be done in
a safe manner. Examples include tasks such as general
maintenance, grounds and housekeeping, and inspections, or,
when employees are significantly prepared and knowledgeable
about hazards and a determination has been made by a
supervisor that they have demonstrated the capability to work
safely and independently. However, some tasks are best
performed with a coworker or group of coworkers, in an effort
to provide the safest environment possible.
Working alone requires a support system for employees.
Consider a thorough assessment of the tasks, exposures,
employee training, and communications. In some cases, it may
be advisable to assign more than one employee to the job.
Examples of tasks that should not be performed alone include
excavations and trench work, confined space entry, working
with electricity or other energized sources, working from
elevated surfaces or heights, working with hazardous materials
or chemicals, and certain types of law enforcement contacts,
such as domestic violence calls or responses to other felonious
acts. The fire service has long recognized the hazards of
working alone, especially during active structure fires, and
many departments have implemented the “two in, two out”
Sources: TMLIRP Sample Safety Manual
“Safety of Employees Who Work Alone,” Loss Prevention
News January – March 2010
The old saying is true –
“There’s safety in
numbers!”
7
Membership Matters
cies and procedures. A supervisor must also serve in several
important roles:
Managers and supervisors are an important part of risk management,
particularly when it comes to preventing injuries and accidents that
result in lawsuits or workers’ compensation issues.
1. Planner – Planning is a primary responsibility of a supervisor.
2. Instructor – Supervisors should explain what is expected
and how it is accomplished.
3. Leader – By inspiration and example, provide motivation to
do the very best.
4. Communicator – Being able to clearly explain the message,
both verbally and in writing, is important. Express management’s goals and objectives clearly.
5. Problem Solver – Open-mindedness, analytical skills and a
willingness to dig into the details are essential to effective
problem solving.
The biggest question often asked is how do we continue to enhance our productivity while reducing accidents and injuries?
That is a good question. Accident and incident reports are not
only costly, they are also time consuming. If done correctly,
the up-front time and effort required to produce accident and
incident reports will produce long-term benefits. If these reports
produce actionable recommendations, they will save your entity
time and money in the long run by preventing accidents and
injuries. Besides managing workflow, employee safety is one
important area that supervisors should actively promote, support, and maintain.
Phrases that managers and supervisors need to know:
A loss is a sudden and destructive event. A loss exposure is the
possibility of a loss.
How do we continue to enhance productivity while reducing
accidents and injuries? To start, it is important to review activities that contribute to accidents and injuries. Look for logical
and practical methods that reduce potential risks and develop
workable solutions for accidents, near misses, and injuries. Accidents are costly to everyone due to lost time, medical expenses, repairs, and employee and equipment replacement;
plus, there is always the possibility of a lawsuit. Accidents also
often reflect negatively on the manager or supervisor.
Loss prevention aims to reduce the frequency or likelihood of
a particular loss. Loss reduction aims to reduce the severity of
a particular loss.
Similar to an accident is an incident. An incident is an accident-like occurrence, but without harm to persons or damage
to property. An incident is sometimes referred to as a “near
miss.” Incidents eventually will become losses if action is not
taken to eliminate the causes. Managers and supervisors who
are properly reviewing incidents are reducing the possibility
of injury or accidents that result in losses.
In order to control risk management issues, a supervisor must
possess knowledge of the employees’ work and responsibilities. Knowledge of how to perform the work comes from
training and education, the instructor, plus actual on-the-job
training and understanding, including knowing the local poli-
continued on page 9 Â
8
 “How Important?” continued from page 8
Identifying and correcting the causes of accidents, injuries, and
incidents is the responsibility of managers and supervisors.
Below are some questions that can help organizations avoid
operational issues that cause accidents, injuries, and incidents.
1. How is equipment selected, arranged, used, and maintained?
2. How is material selected, placed, handled, and processed?
3. How are people selected, placed, trained, and led?
These questions will identify factors that need to be reviewed.
If loss exposures are found, corrections should be implemented immediately.
eliminated. “Where,” “When,” and “Who” help in combining
and rearranging necessary details, and “How” helps to simplify
the work and determine the best way to do it.
Once supervisors have gathered the facts, they can identify the
responsible conditions and turn to the important challenge of
developing methods to eliminate and control them. Accident
investigation should be taught to all employees, keeping the
five Ws and one H in mind.
Supervisors must be responsible for making suggestions to
management to determine which corrective measures would
be appropriate, even if the actual authorization or implementation of those measures may well be beyond the scope of the supervisor’s authority. This report should become an important
management tool for use in reviewing overall circumstances,
setting necessary procedures, making budget decisions, and, if
necessary, implementing disciplinary action.
1. Why – Why did the action occur? Was the action necessary?
2. What – What useful purpose does it serve?
3. Where – Where should it be done? Should it be moved? Rearranged? Reorganized?
Every entity has a responsibility to incorporate a good risk
management program. This can be started by implementing a
practical safety and liability program that fits the needs of your
entity. Ask for assistance as these programs need to be tailored
to fit your local needs and conditions. Your TMLIRP loss prevention representative can serve as a resource to help you review
risk management at your entity.
4. When – When should it be done? Is it an issue of time?
Could it be rescheduled?
5. Who – Who is the best qualified person? Is the right person
doing the job?
6. How–How can it be done better, easier, and safer?
These six questions are the nuts and bolts of any accident investigation. “Why” and “What” help determine whether the
condition is necessary and useful. If it is not, then it can be
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That’s it!
Source: “How important is it to have managers and supervisors involved in
risk management?” Loss Prevention News, October-December 2012
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Membership Matters
Winter Preparation for Employees and Property
As the winter months approach Texas,
it is essential to remember how to prepare and protect property and employees
from potential damage from the cold.
Severe winter conditions can cause employee injuries, auto accidents, and property damage. The following cold weather
tips are some to keep in mind during
cold weather season.
Protecting Facilities
Several steps can be taken to properly
maintain facilities for year-round protection against weather-related issues.
Portable or temporary heaters should only
be used in emergency situations and never
with extension cords. Ensure adequate
ventilation, the heater is functioning properly and kept well away from combustible
materials.
Fully insulate all water pipes and replace
damaged insulation. Both copper and
PVC pipes may crack or burst when
frozen, and both types of materials need
to be thawed if they become frozen. Locate the water shut-off valve to the facility
and adequately train staff how and when
to turn off the water to a building. Make
sure shut-offs are readily identifiable and
visible. Regular, periodic testing of the
water shut-off valve should be conducted
to ensure proper working conditions when
the need arises. Exterior faucets should
be drained, hoses disconnected, and properly insulated with materials such as Styrofoam to prevent cold air from entering
the faucet opening.
Thawing Frozen Pipes
If you suspect that a pipe is frozen, make
sure the faucet is open before thawing.
Never force the valve to open. Water will
begin to flow as you treat the frozen area,
which will help to melt ice in the pipe.
Before thawing, check for broken and
cracked pipes. If this is the case, turn off
the main valve to the building until the
leak is repaired. Apply heat to the frozen
portion of the pipe by using an electric
hair dryer, a portable space heater, or
wrapping pipes with towels soaked in
hot water. Make sure that electrical cords
and appliances do not come into contact
with water. Do not attempt to use a blowtorch, kerosene or propane heater, charcoal stove, or other open flame device.
Flames present a serious fire hazard and
may release lethal carbon monoxide
fumes into the air. Apply heat until full
water pressure is restored.
Property located in South Texas demands special attention to exposed
water pipes during the winter months.
Freezing pipes can be a problem in
warmer climates where they often
run through un-insulated or under insulated attics or crawl spaces. Although some areas freeze only a few
times per year, it’s still necessary to
protect exposed water pipes.
Unoccupied or Vacant Buildings
Winterize unheated, unoccupied, or vacant buildings. Sprinklers or water lines
in unheated attics or dead air spaces near
outside walls are particularly vulnerable
to freezing, as are pipes in areas exposed
to strong winds, outside taps, and in
cooler areas. Ensure the building heating
system is turned down rather than completely off when a building is unoccupied. Even the smallest amount of warm
air circulating throughout a building may
be adequate to prevent freezing.
Generators
Ensure generators are properly maintained
and tested at actual load conditions at least
quarterly. Ensure adequate fuel supplies
are on hand and that they have been refreshed periodically.
Protecting your Employees
Strong winds and high humidity levels
can increase the dangers of the cold.
Watch for signs of cold stress and provide appropriate rest periods.Using appropriate personal protective equipment
and work practices will reduce the risk
of exposure to cold weather.
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Wear Proper Clothing
Protective clothing is the most important
way to avoid cold weather issues. The
fabric makes a difference. Cotton loses
its insulation value when it becomes
wet. Wool, silk, and most synthetics, on
the other hand, retain their insulation
value even when wet. Do not underestimate the wetting effects of perspiration.
Often, venting and removal of the
body’s sweat and heat are more important than protecting from rain or snow.
Keep a change of dry clothing available
in case clothes become wet.
Wear at least three layers of clothing, including an inner layer of wool, silk, or
synthetic material to take moisture away
from the body, a middle layer of wool or
synthetic material to provide insulation
even when wet, and an outer wind and
rain protective layer that allows some
ventilation to prevent over-heating.
Wear a hat and keep your ears and hands
warm by wearing earmuffs and gloves.
Wear good footwear that is insulated,
along with proper socks. Change wet
socks periodically if they become moist
from damp weather or sweating.
Stay Hydrated
Stay hydrated and avoid fatigue since
energy is needed to keep muscles warm.
Drink plenty of liquids, avoiding caffeine and alcohol. It is easy to become
dehydrated in cold weather.
As the temperature drops for the winter,
take precautions to protect property and
employees from the dangers of cold
weather. Keep in mind these tips for severe cold temperatures.
Sources:
“Protecting Property and Employees during
Texas Cold Weather,” Loss Prevention News,
January-March 2011
“Winter Storms: Preventing and Thawing Frozen
Pipes,” Texas AgriLife Extension Service, Texas
A&M University System, December 2005.
“Cold Stress,” Occupational Safety and
Health Administration.
Subrogation E fforts
ber. For example, if the total value of a property loss equals
$21,000 (TMLIRP’s payment to member of $20,000 + Member deductible of $1,000), and the Subrogation Department
is able to recover $21,000, then a check for the full deductible
of $1,000 would be issued to the member.
Whether dealing with a $200 dog bite, or a multi-million
dollar loss, TMLIRP believes “every dollar counts” with its
subrogation efforts. (For a more detailed explanation of what
subrogation is, please see the subrogation article in the June,
2013 edition of Membership matters, available here.)
When the Pool receives a partial recovery from a responsible
third-party, then the property deductible returned to the member is based on a proportionate share of the total loss. For
example, let us start with the same total loss value as above,
$21,000. But in this scenario, the Pool is forced to file a lawsuit to recover damages from the third-party at a cost of
$300. After a hearing, the judge only awards the Pool $15,000.
Therefore, the total recovery on this subrogation claim is
$15,000. First, the expenses of the lawsuit are deducted
($300) from the total recovery, which leaves a net recovery
of $14,700. The net recovery ($14,700) represents a 70%
recovery from the total loss value ($21,000). Therefore, the
member would be entitled to 70% of their deductible, which
in this scenario is $700.
Subrogation primarily affects the Pool’s members in two
ways: (1) by lowering contributions, and (2) returning member deductibles. This article aims to highlight those two primary benefits of subrogation by shedding light on the concept
of subrogation and its effect on member costs.
(1) Lowering Rates of Contribution
When the Pool pays for a claim on behalf of the member, and
then subrogates against a responsible third party, it has the
effect of reducing the total cost of the original claim. This reduction in claims costs helps reduce the member’s loss experience. With workers’ compensation claims, any reduction in individual claims accrues to the benefit of the member, in the
form of better experience modification factors and lower contributions in future years. (Because property claims are not experience-rated based on losses, subrogation has a lesser effect
on an individual member’s costs).
Members’ Deductibles Returned Amount – Annual Trend
For the 2012-2013 annual fiscal year, the Pool’s subrogation
efforts collected a total of $3,991,152 in subrogation recoveries. Of that, $326,834 in member property deductibles were
returned to members.
However, in both property and workers’ compensation claims,
the entire membership benefits from the offset in claims costs
provided by successful subrogation efforts. Because previous
claims are the primary determinant of future rates, the reduction
in claims costs serves to stabilize rates for all Pool members.
During the 2012-2013 fiscal year, the Pool’s subrogation efforts
recovered nearly $4 million. Consequently, the reduction in
claims costs will serve as an offset when the Pool’s rates are
developed each year.
The below chart details the annual trend in member
deductibles returned:
(2) Returning Members’ Property Deductibles
When a member experiences a typical property loss, a certain
amount is “deducted” from the loss. This “deducted” amount
is selected by the member in their agreement with the Pool
and is commonly known as the deductible. When a loss is
the result of a third-party’s actions, the Pool’s Subrogation
Department attempts to recover the entire amount of the
loss, including the member’s deductible. When the subrogation effort is successful and funds are recovered from a responsible third-party, the Pool is able to return the member’s
deductible on that particular claim.
Calculating Members’ Property Deductibles-to-Returns
When the Pool receives a full recovery from a responsible
third-party, the entire deductible is then returned to the mem-
… every dollar counts!
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The results of the Pool’s subrogation efforts provide an advantage
to members by potentially lowering contributions and returning
some of the members’ money expended on claims. However,
in order to be effective on subrogation claims, the Pool depends
heavily on the cooperation of its members. In future issues of
Membership Matters, specific types of subrogation claims will
be addressed, how those claims are handled by the Pool, and
how members can take steps to help ensure a positive subrogation recovery.
1821 Rutherford Lane, First Floor
Austin, Texas 78754
(800) 537-6655
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Membership Matters
Events Calendar
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Jan 23-24 . . . . . . . . . . . . . . TMLIRP First Quarter Board Meeting, San Marcos
Feb 7 - 9 . . . . . . . . . . . . . . TML Elected Officials’ Conference, San Antonio
April 25-26 . . . . . . . . . . . . TMLIRP Second Quarter Board Meeting, Allen
July 18-19 . . . . . . . . . . . . . TMLIRP Third Quarter Board Meeting, San Antonio
Sep 30-October 3 . . . . . . . TML Annual Conference and Exhibition, Houston
October 17-18 . . . . . . . . . . TMLIRP Fourth Quarter Board Meeting, Galveston
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