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Can Absence Management Improve your ROI?

Can Absence Management Improve your ROI?

Once upon a time in a fortuitous time and place occasionally referred to as the 1990’s, one lovely lady and I took on an epic project to prove the value of Absence management. I chose those words with intent: "Absence Management," not absence tracking. I know, it’s not the career I dreamt of when I was seven either.

In the late 90’s outsourcing was just a glowing ember in the minds of employers. After the inception of the FMLA in 1993 employers gave it their best shot. After a few years, it was becoming evident that it was a bigger challenge than initially anticipated. Self-service software consisted of an Excel spreadsheet if you were lucky - most simply had calendars stuffed in a claim file with handwritten usage in each date field. Understanding and managing rolling calendars felt impossible, and the courts were overwhelmingly ruling in favor of the employees. It was a face in palm period for everyone.

We had a clear objective for this project: To ignite that ember and create a flame large enough that employers knew that FMLA management could work, and we needed to prove it beyond a reasonable doubt.

For the pilot project, we were provided with a national account of approximately 53,000 employees. An impossible task for 2 of us? Yes of course it was! It was determined that we would start with one worksite consisting of 6,000 employees. If we could prove a decent ROI (return on investment) in 6 months, we would win the deal and obtain all 53,000 employees. A huge win for a TPA entering the FMLA market. Could we do it? We sure hoped so after sequestering ourselves for months and pouring over the DOL regulations. Easy reading at its best.

"Go-Live" dates happened a bit differently at that time. There were no handy historical data uploads with scheduled follow-up tasks allowing a user to be day current on day one. No, our go-live date consisted of a Monday morning to find our "historical data" all over our office, in large cardboard boxes. These boxes were filled with hundreds and hundreds of folders filled with provider certifications and spreadsheets of the last two years of FMLA usage. I recall us looking at each other, both desperately swallowing the bitter taste of panic, each hesitantly picking up our first folder and slowly turning our backs on each other to figure out how the heck we were going to do this.

As we worked throughout the next several months, it was clear that this prestigious company had a broken process, and although they put in plenty of effort, there was little understanding of their own rights under the FMLA.

Now, 19 years later this still happens to employers more often than one would think, but it doesn’t have to. The software is so much better now, it practically does the job for you, but you still need to know the law and your rights as an employer. I spoke with a great group of HR professionals the other day, and they expressed their concern that they didn’t have the expertise to make the determinations on FMLA requests themselves. They were smart and capable, and it simply was not the case! The law can be complex, but you can do this!

If I can keep your attention for two more minutes… I’ll tell you what we found in those folders and the outcome of our pilot project.

How do you go about making a decision to approve or deny an FMLA request?

The regimen of treatment determines that for you, so don’t get caught up in the diagnosis. In fact, you aren’t legally allowed to require the diagnosis, so it shouldn’t matter to you. Although you can receive it, you can not mandate that it be provided to you, and you can not make your decision based solely on it. Simply focus on the treatment your employee is undergoing when determining what constitutes a serious health condition under the law.

What is considered a serious health condition?

Inpatient Care. According to §825.113 (a), For purposes of FMLA, a serious health condition entitling an employee to FMLA leave means an illness, injury, impairment or physical or mental condition that involves inpatient care as defined in §825.114 or continuing treatment by a health care provider.

Inpatient care means an overnight stay in a hospital, hospice, or residential medical care facility, including any period of incapacity as defined in §825.113(b), or any subsequent treatment in connection with such inpatient care.

Unless your employee has an approved intermittent FMLA claim, inpatient care is the only regimen of treatment that would allow you to approve a single absence of less than three calendar days. Your employee could spend the night in a hospital and miss just a single day, never be treated again, and be fully covered by the FMLA.

Although my intent was to simplify and not complicate this, I’d like to recommend two things Firstly, review the Bonkowski v. Oberg Industries, Inc. case and secondly, just don't terminate someone who has been in the hospital overnight regardless of the hour of admittance. Just... do not. Your employee will appreciate it, you’ll save yourself some time and money, and it's just the right thing to do.

If an employee is not out for inpatient care, they must be under "the continuing care of a health care provider." A serious health condition involving continuing treatment by a health care provider includes any one or more of the following:

Incapacity and treatment. A period of incapacity of more than three consecutive, full calendar days, and any subsequent treatment or period of incapacity relating to the same condition, that also involves:

  • Treatment two or more times, within 30 days of the first day of incapacity, unless extenuating circumstances exist
  • Treatment by a health care provider on at least one occasion, which results in a regimen of continuing treatment under the supervision of the health care provider.

Note that this section is defined to mean that the employee has seen the physician in person. It also means that weekends are included. A person could have fallen ill on a Friday evening and missed work on Monday making them "incapacitated for more than three, full calendar days." It is also very important to understand that a “regimen of continuing treatment under the supervision of a health care provider” includes prescription medication. The employee may see the physician only once in the instance they are provided a prescription.

Pregnancy or prenatal care. Any period of incapacity due to pregnancy, or for prenatal care.

Chronic conditions. Any period of incapacity or treatment for such incapacity due to a chronic serious health condition. A chronic serious health condition is one which:

  • Requires periodic visits (defined as at least twice a year) for treatment by a health care provider,
  • Continues over an extended period of time (including recurring episodes of a single underlying condition); and
  • May cause episodic rather than a continuing period of incapacity (e.g., asthma, diabetes, epilepsy, etc.).

Permanent or long-term conditions. A period of incapacity which is permanent or long-term due to a condition for which treatment may not be effective. The employee or family member must be under the continuing supervision of, but need not be receiving active treatment by, a health care provider. Examples include Alzheimer's, a severe stroke, or the terminal stages of a disease.

Conditions requiring multiple treatments. Any period of absence to receive multiple treatments (including any period of recovery therefrom) by a healthcare provider or by a provider of health care services under orders of, or on referral by, a health care provider, for:

  • Restorative surgery after an accident or injury; or
  • A condition that would likely result in a period of incapacity of more than three consecutive, full calendar days in the absence of medical intervention or treatment, such as cancer (chemotherapy, radiation, etc.), severe arthritis (physical therapy), or kidney disease (dialysis).

Once you have confirmed that your employee has met any of those above conditions, you have determined that they have a serious health condition as defined by the Department of Labor (DOL) and you’ll want to approve their FMLA request.

However, you also have the right to have the physician provide you with the dates of expected incapacity and the frequency and duration of absences if the leave is intermittent. Get them!

If the employee does not return to work on the expected date, request additional medical information from the physician. If you do not receive it, you need not extend the approval.

Requesting Recertification

If an employee significantly exceeds their intermittent absence approval, you have the right to recertify them and request an updated frequency and duration. If you do not receive this updated certification, you need not approve the excessive absences.

However, this area is gray, so I’ll offer words of caution. The frequency and duration are meant to be a “guideline.” If an employee misses one extra day, you should likely approve that absence. If a physician certifies an employee to miss two times per month for flare-ups of their condition, and they are absent seven, you should be safe to recertify and request additional information. They've either had a change in their condition, or they’re enjoying their summer at the beach. Your documentation is critical so do it!

Recertify intermittent claims annually. For chronic conditions, you have the right to obtain an updated medical certification every year for that person to continue to have the right of using FMLA. Also, recheck their eligibility on a yearly basis to make sure that they've still met the 1250 hour requirement.

That’s it. You can do it.

So, what did we find when we opened those folders?

  • Provider certifications up to 4 years old
  • Provider certifications without physicians signatures
  • Provider certifications without a regimen of treatment
  • Excessive employee absenteeism, not corresponding with the approved frequency and duration.
  • Employees who had used more than their 12 weeks of FMLA

I’m sure there was more, but hey, it’s been a really long time.

At that point, our jobs were made fairly easy. We recertified the heck out of people. One phone call and a new provider cert was in the mail, one after another, all day long for months.

Then we managed them.

We made sure people called in and reported FMLA.

We ensured that there were no patterns of absences, every Monday and Friday for example.

We made sure that they missed work in an acceptable range of what their physicians said they should be incapacitated, and we made sure they returned on the date their doctor suggested they should.
In 6 months, this group had 12 fewer employees, and they had saved 6,000 working hours.  With an average annual salary of $50,000, those numbers look quite good, don't they?

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