Over 10 years ago, The Hartford conducted a comprehensive study showing a link between delayed reporting of injuries with increased workers' compensation costs. In its study, it found even a week's delay can increase claim costs by 10 percent.

A new NCCI study confirms that The Hartford study's findings still hold true. It also provides some nuance into the why and when costs increase due to delayed reporting is.

The Hartford Study

The Hartford analyzed more than 41,000 WC claims filed between 2000 and 2003. It only looked at lost-time claims for back injuries, carpal tunnel and other nerve disorder injuries, and miscellaneous injuries as these account for nearly two-thirds of all lost-time claims. It specifically excluded injuries like fractures and open wounds since they're inevitably reported quickly (more on this issue when looking at the NCCI study).

It found the following average cost savings if the injuries were reported within the first week over being reported later:

• Back sprain and strain injuries →  25 percent

• Carpal tunnel and other nerve disorders → 23 percent

• Miscellaneous injuries → 18 percent

The Trend Continues: NCCI Study

The NCCI study looked at claims data from 2010 – 2011, the most complete data set available. It excluded fatal, permanent disability injuries, and occupational disease injuries, but it did include catastrophic injuries and fractures, unlike The Hartford study.

Its big picture finding is that delayed reporting can increase claims cost by 51 percent.

One of its more interesting findings is that the median cost of claims reported between one day and two weeks from date of injury is appreciably lower than the median cost of claims either reported on the date of the injury or more than two weeks later.

The authors concluded this is a result of including the fractures and catastrophic injuries in their study. The more serious injuries get reported the day of injury, as they can't be ignored. Supporting this conclusion is the finding that fractures reported more than two weeks out had a lower median claim cost than those reported in the first week (as opposed to date of injury) since those were likely the least serious fractures.

In contrast, sprain, strain, contusion and laceration injuries had the lowest median claim cost if reported within a week of injury. The median claim cost for a sprain or strain reported four weeks out is 70 percent higher than if the injury had been reported during week one. Claim costs continued to rise for contusion and laceration reporting delays as well.

Thus, the danger zone is delaying reporting seems to begin the second week for the most common injuries. The identified reasons for the increased claim costs associated with delayed reporting are:

• Aggravation to an unreported injury may require more medical treatment and delay return to work, increasing both medical and indemnity costs of the claim

• Late reports of injury were associated with greater attorney involvement and lump-sum payments

• Injuries reported after two weeks are less likely to be closed at 18 months than injuries reported within the first week

Prescription

To encourage early reporting, hold managers accountable for managing the lag time in reported injuries. Experts have found that enforcing strict reporting deadlines on workers makes them more likely to report in a timely manner.

Make early reporting a positive worker experience by helping them understand the WC process, which will also help manage expectations down the line.

Lastly, report all injuries as Report Only claims, as this will speed up the processing time in case the report becomes a formal claim in the future.