Two interesting frames of thought occur when a company denies a workers’ compensation claim.
First, the company denying the claim thinks it is saving money.
Second, the worker who filed the denied claim thinks that their converted claim will be lower than the original amount, or they won’t receive any compensation.
In actuality, nearly 70% of the companies mentioned above and workers are wrong. This is bad news for the frugal company and great news for the injured worker.
A research study performed in 2018, by the private insurance brokerage firm, Lockton, revealed that 67% of denied workers’ comp claims are converted and paid within 12 months and are 55% higher than the original amount. The downside is that injured workers must endure the financial hardship for months, but for many of them, there is a shining light at the end of the tunnel.
Workers’ comp claim denial rates shot up 20% between 2013-2017. Lockton discovered that the average claim pays out $10,153. These denied and converted claims, on average, pay $15,694.
The top 10 reasons for denied claims are:
- No medical evidence of injury
- No causal relationship between the explanation of the injury and the injury itself (the two do not match)
- Reservation of rights
- Pre-existing condition
- Idiopathic condition
- Alcohol or drug-related violation
- Non-work related (personal stress)
- Failure to report the injury on time
- Doesn’t meet the statutory definition of employee
Even though they aren’t saving much money, if any, some companies will take extreme measures to avoid paying workers compensation benefits. Lockton’s study suggests that new data is driving the denied claims, but this study may direct companies to adjust their strategies. Companies even lose more money with litigated claims, and nearly 71% of denied claims are disputed.
If you experience a work injury that calls for compensation, you likely want your money as soon as possible to cover the necessary expenses, but if you experience a denial, stay strong, and patient. Having a workers’ compensation attorney on your side can make all the difference.