WC National Conversation: Political Influence, History, And Current Major WC Issues

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Video Transcript:

 
Hello, Michael Stack here. Principal of Amaxx, Founder of CompClub and co-author of Your Ultimate Guide to Mastering Workers Comp Costs.

 

I recently attended the Workers Compensation Summit, which was the start of the National Conversation hosted by Bob Wilson of WorkersCompensation.com and Judge David Langham who is the Chief Deputy Judge of the Florida Office of Judges of Compensation Claims.

 

 

National Conversation: Questions About Fairness & Adequacy of Current Workers Comp System

 

This summit was attended by thirty-nine individuals representing various stakeholders. Because there has been questions about the adequacy and fairness about the current workers compensation system, as well as the future of our industry. So, these stakeholders came together including employees who are injured workers, employers, carriers, TPAs, injured worker’s attorneys, defense attorneys, medical providers, and state regulators. These individuals came together to talk about important issues about where we are today, and where we are going as an industry. As we left that summit after two days one of our main goals was to take the information we discussed, and share it with the industry, because no national discussion is complete without your input, without your perspective. So, I have put together this series to get you up to speed quickly, and be able to join the conversation right where we left off.

 

 

3 Part Series To Get You Up To Speed

 

In this first session I will be reviewing the Pre-Summit Document, which we submitted by the 39 individuals who were in attendance. In all told there were 21 documents submitted, which contained hundreds of pages of materials to be designed as a base of knowledge prior to that discussion. What I will be doing is giving you the highlights and cliff notes from my review of that material, and my notes.

 

In the second session I will be diving into those discussions that we held over those 2 days in Dallas. I will be talking about the perspectives of the various stake holders, and the different issues that were identified. As well as the imperative issues and friction points that we identified over those 2 day lengthy discussions.

 

In the third session I will be talking about the regulatory points as well as the incentives we identified that exist and may be causing some challenges. Finally we will wrap up that session with how this conversation continues. So, without further ado, let’s get into the Pre-Summit Documents.

 

 

Session #1: Pre-Summit Documents Containing Current National Issues and Political Influence

 

1972 Report: The National Commission on State Workmen’s Compensation Laws

 

Ok, so the first report I want to walk you through is The National Commission on State Workmen’s Compensation Laws. This was completed, and submitted, in July of 1972. The first thing I want you to note in this report is who it was written by. John Burton was the Chairman of this commission. We will talk about what was involved in this study, and why I think it was important for us to understand this history as we are reflecting on our current state laws today. John Burton is a name you will want to recognize. He is going to come up a few times over the course of our discussion. John was the chair of this commission, which was a 15-member commission. To give you some context here on what this commission did.

 

I want to take you now to my notes here, and go over my notes and the things I took from this report. First opening paragraph to reference here to get the contexts is they state, “Congress went on to find, however, that in recent years’ serious questions have been raised concerning the fairness and adequacy of present workmen’s compensation laws in the light of the growth of the economy, the changing nature of the labor force, increases in medical knowledge, changes in the hazards associated with various types of employment, new technology creating new risks to health and safety, and increases in the general level of wages and the cost of living.”

 

Obviously, very applicable to the conversation that is happening today. So, while there have obviously been changes since this report was written in 1972; a lot of dynamics and politics, policies and state laws, the general nature of the state of the workers’ compensation industry at the time of the writing of this report is very similar I believe to the state of our industry today. This commission was crafted. It was 15 members during President Nixon’s era. It was June 15, 1971. They had one year to do a comprehensive analysis of the state workers compensation system. These 15 members had 11 meetings over the course of that year. They consumed 32 days with on the average, 17 Commissioners in attendance. They also held nine public hearings for a total of 18 days. A lot of time invested in the research of this particular report on the workers’ compensation industry. They also had a full-time staff of 30 employees that assisted those commissioners and they reviewed over two hundred documents that were provided to commissions by the staff. It was a significant investment in time in the analysis of the state workers’ compensation laws. I will review with you what their findings were.

 

Again, obviously very different today than it was in 1972, but a lot of parallels as to where the state of the industry was at the time. The commission had 5 main objectives of what was found in a modern workers’ compensation system. And as we opened the workers’ compensation summit in Dallas we discussed these five points and agree they are very much still very relevant in today’s system.

 

The first was the Broad Coverage of Employees and of work-related injuries and diseases. Second, the substantial protection against interruption of income. Third, a provision of sufficient medical care and rehabilitation services. Fourth, Encouragement of safety. And finally, an effective system for delivery of the benefits and services.

 

I have attached this document of my notes, which highlights some of these different points. You can see the different recommendations that were given by the Commission. There were really 32 recommendations in this summary report they gave. A couple things I want to highlight, and they noted here the essential elements of workers compensation recommendations by this commission. And, we will walk through those now.

 

And here they are here if you want to go back and take a look through this document. I have noted those numbers on there so you can get further detail on what was included on these recommendations. They recommended Compulsory Coverage, they recommended No Occupational or Numerical Exemptions to Coverage. They recommended Full Coverage for Work Related Diseases, which is still a very relevant topic for today. Full Medical and Physical Rehabilitation Services without Arbitrary Limits; again another very relevant topic today. An employee’s choice of jurisdiction of filing interstate claims. As our economy as grown and there are more companies that are national, and larger in scope, another very relevant topic. And lastly, adequate weekly cash benefits for temporary total, permanent total, and death cases, as well as not arbitrary limits on duration or sum of benefits.

 

I want to talk a few points of their conclusion here just to give you a scope on what their conclusion were and how they really projected the future. You can see here in this part 3, the future of workers compensation, which is obviously where we are today. They stated, and they concluded that State workman’s compensation laws are in general neither adequate nor equitable. This was their conclusion in 1972.

 

They go on to say, “we conclude that workman’s compensation is permanently and totally disabled, or is there a rational basis for continuing this program.” They went on to discuss getting rid of the entire system, and they defined this was still inferior to the workers compensation system as it stated.

 

A couple of challenges they have stated here I think are very relevant today too. They talked about the lack of interest, or understanding of workers compensation by the legislators, and the general public as a whole. That was one of the issues they addressed, and i will talk about in the following video. But, I think a very relevant challenge in our industry today. And even when they do try to make reforms, they don’t really have enough information, and there’s this irrational fear resulting in this competition of states where the employers are going to move their state because of the cost. I think that is a very significant issue to note, and one that is again very relevant today. They rejected the suggestion that Federal administration be submitted for State programs. One of the things they recommended was having the Federal government help the states learn from each other. What is working in on state, and sharing that information. So, that is a summary of the 1972 report.

 

I want to take you now to the next following issue, which is this issue of where we are today, and why we are having this meeting, and why the 1972 report was originally written. Which is the deterioration of the workers compensation laws, and this question today if workers compensation is a fair and adequate solution. So, a couple of documents that suggests there is interest in changing that, and there is interest at a federal level to now go back to what that discussion was in 1972 report.

 

 

Letter From Congressional Leaders To Department of Labor Dated October 20, 2015

 

So, this was a letter dated October 20, 2015. This was written by 10 members of congress; including Bernie Sanders, who is obviously one of the presidential candidates, which people of very familiar with that name. This statement goes on to reference the 1972 report in this letter to the Department of Labor.

 

They talk about the 1972 report how it was issued by President Nixon. Goes over that information as we have discussed. They gave 19 essential recommendations. Those federal standards recommended by the commission were never actually enacted but that the Department of Labor annually reported on that states reported compliance on those standards up until 2004. They stated a fact here that since 2003 Legislatures in 33 states have enacted changes to workers compensation laws that has either reduced those benefits, or made it more difficult for workers to qualify for those benefits. And today, only 7 states follow at least 15 of the commissions; 19 of the recommendations, and four states comply with less than half of them. They use this language called the race to the bottom, which not appear to be bottomless when they’re talking about the Opt-out laws. Which the next document I want to take you to references that same sentiment – that same type of language. That same type of idea.

 

 

The Status of Workers’ Compensation in the United States: A Special Report by Worker’s Injury Law & Advocacy Group (WILAG)

 

It is call The Status of Workers’ Compensation in the United States: A Special Report by Worker’s Injury Law & Advocacy Group. I want to take you through this report. It was written in November, 2015. Right around that same time it talks about the history of the grand bargain, but then goes into the sentiment of the great chipping away and really going into the deterioration of those state laws. How those 33 states have enacted laws since 2003. They have reduced those state benefits.

 

It follows them and uses that same language of the race to the bottom. They re-enforce the idea that there is this growing movement of questioning this fairness and adequacy of the workers’ compensation industry. They then go in to talk about Opt Outs; how that is a threat and the negative impacts that can come from that program.

 

 

Improving the Interaction Between the SSDI and Workers’ Compensation: John F. Burton Jr. and Xuguang (Steve) Guo

 

I want to continue along with these documents, and i want to reference… fast forward now to 2015. As I mentioned, John Burton was a name I want you to know that was a commissioner of that 1972 report. I want to take you to his conclusions and statements. We are going to get back to this idea of SSDI in the next segment. But I want to take you to his conclusions and statements in regards to reflecting on that 1972 report, and how it is relevant today.

 

This was his solution, saying that the SSDI was not cost shifting to workers’ compensation is the context to this report that he wrote. And he again references the 1972 report and those recommendations that they gave, and again which he was the commissioner in 1972 and the author of this particular report. He goes on the re-emphasize the idea of the competition between the states and how there’s that race to the bottom re-emphasizing that movement of the questioning of the adequacy of the current workers’ compensation.

 

Now, I want to take you to his conclusion of his regards to those federal stances that they gave in 1972, and why they are not applicable today. So, he writes, “Burton identifies several problems with the proposal to enact federal standards for state WC programs in the twenty-first century, which make this an unrealistic approach to help solve the current financial difficulties of SSDI.” He goes on to now state “the post-1900 developments in WC law that arguably have resulted in cost shifting to SSDI (which was the point of this paper) largely involve changes in compensability (which we just referenced there in that 1972 report as their recommendations) rules that are harder to quantify, such as requirements that the major contributing cause (MCC) of a worker’s disability must be work related.”

 

So, he talks about how that has been a significant change since they wrote that in 1972 to where things stand today. A major contributing cause is one of the elements we talked about in the Summit held in Dallas, which I will get into in my next video. The idea of a major contributing cause is essentially a 1% aggravation of an existing injury now the employer is responsible for the whole injury vs the idea that it has to be a major contributing cause or 51% contributing cause to that injury for that employer to now deem that compensable.

 

That’s one of those laws that had been enacted that were referenced in the papers by the congressmen and the WILAG paper that are now reducing those benefits or perceive to be reducing those benefits for the injured workers.

 

John now goes on to state in this particular paper, “As a result of these problems, further discussion of federal standards as a potential solution is unwarranted despite the considerable virtue of this approach.” So, the political climate, the lot of changes to where we are as a world and as a country make those recommendations, and those federal standards per John’s view and impossible and unwarranted discussion to continue to have in his mind.

 

 

SSDI & Cost Shifting to Workers’ Compensation

 

The next idea I take you to now is the idea of cost shifting from workers compensation to social security disability insurance. There are a couple of papers I want to walk you through and documents to walk you through to give you some of those different perspectives and identification of this issue, because it’s a significant one in this national conversation, and the idea or threat or potential involvement of the federal government in the states worker compensation systems.

 

 

NCCI Annual Issues 2015 Report

 

So, this document here is the NCCI Annual Issues document from 2015, and I want to highlight this little paragraph here; Social Security Disability Insurance.  In this first paragraph, they talk about the dramatic increase in the number of beneficiaries in the SSDI program as well as the fact that the trust fund is projected to become insolvent in 2016.  Obviously this is a significant issue for the federal government and a potentially motivating driving force to become involved in the workers’ compensation system particularly if there is a significant cost shifting from the workers compensation system to SSDI’s.  So, that’s what that first paragraph really references.  Then they follow up to say the SSDI could be used by detractors of the state-based system to push for an expanded federal role in workers’ compensation.

 

 

Improving the Interaction Between the SSDI and Workers’ Compensation: John F. Burton Jr. and Xuguang (Steve) Guo

 

So, now let’s talk about that and talk about if that is actually true.  I want to show you why this conversation is really happening.  And again, this goes back to John Burton’s article.  This was a paper that he wrote, this was in 2015 regarding improving the interaction between the SSDI and Workers’ Compensation Programs.  And I want to show you why this conversation is happening primarily, and you can see it really very clearly on this graph here.  You can see the negative correlation between SSDI, which is in the green, and you can see those costs really escalating every year.  While at the same time, the cost of workers’ compensation is decreasing.  So, when you look at this from a national level, very plainly in this graph, you can see that negative correlation and very easy to say, well workers comp costs are coming down and SSDI costs are going up, so obviously there is a cost shifting that is occurring there.

 

Let’s talk about two different papers now that speak to this point.  This paper was written by John Burton and is a proponent for that cost shifting and a statement that there is cost shifting that is occurring and he offers a number of different solutions in order to help prevent that.  So, one of those is discontinuing the reverse offset.  He gives four recommendations here.  Improving the design and the implementation of the offset, he talks about experience rating the SSDI program, a number of different things that are not necessarily relevant to this workers compensation conversation but the idea of cost shifting certainly is relevant.

 

 

The Effect of State Workers’ Compensation Program Changes On the Use of The Federal Social Security Disability Insurance: Melissa P. McInerney & Kosali I. Simon

 

Now, I want to take you to this paper which is the effect of state workers compensation program changes on the use of federal social security disability insurance. And this is a study that was done, specifically on this idea of is there a cost shifting that is occurring from the workers’ compensation to the SSDI program.  It was a specific study done by the National Bureau of Economic Research in April of 2010.  And, I am going to take you to their conclusion here and show you a couple of the different things that they found.  So, here is a significant point.

 

They state that ‘we find the negative correlation between measures of DI and WC receipt which appears in the aggregate national statistics (that was the graph that we just looked at, you could see that negative correlation between those two lines).’ They say, ‘that it’s not upheld at the state level, casting doubt on whether a causal link exists.’ So, when you look at those figures at the aggregate level, there’s a very clear difference, but they are stating that throughout the course of their studies that it does not hold up at the state levels. So, determining, is that actually true?  Is there a causal relationship between the two?  Here is what they found, they say that although it is possible that a causal relationship between the two programs exist, they argue that the decline in the workers’ compensation outcome is not a significant factor in the increase in the disability insurance outcomes during that same period.

 

So, throughout the course of this paper, this is a fifty-two page paper, they give back up and data on to how they came to that conclusion, but their analysis – throughout the course of their analysis and this study – was that they did not find a significant correlation between those two programs.  However; even though they made that conclusion, you can note that this paper was written in April of 2010.  And there are significant references and confusion in this conversation which was noted in that NCII Annual Issues report talking about this cost shifting idea of SSDI.

 

And again, that’s probably due to the fact that the trust fund is becoming insolvent now in 2016, so the government is now looking for ways and looking for solutions and this could be one of those ways that they are looking at which is one of the main drivers of this conversation.  And you go back to this point here, which was the congressman letter that we talked about from October 2015.  They go on to speak about the race to the bottom, but on the second page, now they talk about SSDI and how that is a contributing factor in that cost shifting between SSDI and workers compensation and how that is a contributing cause to the insolvency of that SSDI trust fund issue there.

 

 

ACOEM Letter to NIOSH Re: Prevention of Secondary Work Disability

 

And then one more example of this, we’ll talk about this letter in another minute, was a letter to NIOSH from ACOEM, which was the American College of Occupational and Environmental Medicine, Kathryn Mueller and Gary Franklin from the Washington Department of Labor, where they are also referencing this SSDI cost shifting idea.  So, a very common idea and a very big part of this conversation and a good thing to understand some of these cost drivers that are in face in place.

 

 

Research Supporting Positive Outcomes

 

So, now I want to take you to the final set of documents, which really now starts to talk about the solutions. And some evidence based medicine and research that has been completed in order to potentially solve some of these problems that we have identified.

 

 

ACOEM Guideline: Preventing Needless Work Disability By Helping People Stay Employed

 

The first document that I want to take you to is the ACOEM Guideline, preventing needless work disability by helping people stay employed.  I was very impressed by this document.  It was the best piece of research that I have seen from the medical perspective that will drive positive outcomes and integrate solutions into the system.  So, I want to give you some examples and some pull out a few points for you to note.

 

This report basically states that this report focuses on the large number of people who due to a medical condition that should normally result in only a few days of work absence, end up withdrawing from work either permanently or for prolonged periods. And this speaks to the idea, going back to the letter to NIOSH and to the CDC that five percent of injured workers are associated with 80% of cost and lost time in workers compensation systems. Five percent of injured workers are associated with 80% of cost and lost time in workers compensation systems.  It is generally agreed that the workers compensation system works for most people.  Where these questions of fairness and adequacy come in, come from the smaller percentage of cases, but obviously these smaller percentage of cases are a big piece of some of the challenges and frustrations that are occurring which is why we need to start to address these solutions throughout the course of this conversation.

 

This particular paper, written by ACOEM, speaks directly to that challenge of how do you take that small number of people that starts as a small or pretty standard run of the mill type of injury and now turns into a significant injury, having a very negative impact on that individual’s life, as well as being very costly for that employer or for that payer.

 

So, this report goes into great detail on the stay at work and return to work process.  We know from a number of studies how valuable that return to work process is in controlling workers compensation costs.  And I want to point out a couple of points here to pull out of this paper.  I would encourage you to read this in detail.  There’s a significant amount of strong information in regards to solutions from the medical perspective.

 

So, they note ‘while it has been overlooked because of the incorrect assumption that if the medical condition is promptly and properly treated, the worker will naturally return to work.’ And that is an assumption that I believe that we carry through our industry.  We look at the medical needs and say, you have a broken arm, your arm is fixed, now you should be back to work.  And this paper goes beyond that in looking really at the whole person and some of those other drivers that may be causing some of those five percent of injuries that are causing eighty percent of those costs.  It goes on to say that only a small fraction of medically excused days off work are medically necessary, meaning most people should be getting back to work very quickly, and that’s that metric or that benchmark that we incurred that’s 90-95% of workers should be back to work within 0-4 days.  And that’s what an organization should be shooting for in a strong return to work program.

 

I want to highlight this point here, is acknowledging and dealing with normal human reactions, and I think this will help to understand some of that scope as that patient now takes on that sick role or dependent patient role and after becoming ill or injured you now have that right or that freedom to receive care and be free of fault.  And I think anyone that has been sick and laying on the couch, dealing with their spouse can relate to that particular point.  And I think it’s a good one for us to now understand as we start to dissect and understand some of these solutions and how we can now integrate them into our conversation.

 

A couple more points here, to pull out from this paper.  Reduce the distortion of the medical treatment process by hidden financial agendas.   So, this is in disability cases, medical cases are often distorted, with patients often seeking a particular diagnosis or treatments to obtain or maximize benefits.  So, this goes back to that idea of this sick role, when you are an injured worker and you are wondering how do I maximize my settlement vs how do I get back to work?  And it’s that shift in mindset, which is a very real affect within an individual and a very real affect within a human being for us to consider and how do we now work towards a solution considering these obstacles.

 

A couple more points here, pay the physicians for disability prevention work to increase their professional commitment.  Sitting again, from the physician perspective, which I’ll talk about in the following video when I talk about those perspectives, is when physicians don’t consider disability prevention as part of their job.  And in the workers’ compensation space, there are many responsibilities that the physicians are asked, that are typically not in their training or not in their job description.  So, understanding that perspective and a few more points here that physicians play an important role in that return to work process is that they are typically given very little information from the employer.  They are very rarely getting job descriptions; they are very rarely interacting with that employer to get that person back to work in a timely fashion.

 

This report was completed by Dr. Jennifer Christian.  She was also in attendance at the workers’ compensation summit in Dallas.  So, she offered a lot of valuable information in regards to this paper, which leads me to my final point then which is we understand what these solutions are.  But there is a big difference between understanding a solution and having something that you can regulate.  We know that communication works.  We know that getting employees back to work works to control costs, it works to improve outcomes.  We know that developing those relationships with medical providers, providing them the information to reference and then getting the employee back to work.  Those best practices work and they have been proven both from an employer standpoint and from a medical standpoint.

 

What I want to highlight here as the last point in this particular segment is that in none of this information, we are talking about regulation, we are talking about SSDI, we are talking about the race to the bottom, very rarely, if ever, do these laws now start to talk about that person.  It’s very difficult to regulate solutions, it’s very difficult to regulate emotion behavior incentives.  The only piece that I found that references something to that degree was this one piece in the 1972 report that is talking about the proportion of lost wages.  And it’s talking about how much should be included and whether or not it’s 2/3rds or 80 percent.  But it talks about balancing those incentives between employers to improve safety within the incentives of the disabled to take full advantage of those rehabilitation services and return to work.  It’s the only piece that I found, when you are talking about regulation that now speaks to this ACOEM letter, it now speaks to those best practices in regards to return to work, in regards to motivation, and in regards to incentives.

 

 

Key Points From the Americans With Disabilities Act (ADA)

 

So, the last point now to consider is the only law that takes into account these best practices for a solution, the only law that I am aware of anyway, and that’s the Americans with Disabilities act. And I want to take you to some of these key points of the ADA because it’s starting to now regulate human behavior.  And this states that at the time of injury a referral to HR and a discussion, referred to as the interactive process regarding reasonable accommodations must occur.  Employers are required to provide reasonable accommodation to any employee or applicant with a disability unless doing so would cause undue hardship.

 

So, the three main takeaways, the three key pieces to understand in regards to the ADA are the interactive process, which simply means a discussion and a conversation, with that individual employee, interacting with that individual and discussing their disability and talking about what accommodations could occur to allow them to continue to do their job unless those would cause an undue hardship.  There is a significant amount of gray area within the ADA laws, but this is very optimistic in what it is regulating which is human behavior, regulating that interactive process, regulating that there has to be some communication with that person and regulating that that discussion can lead to potentially making an accommodation for that individual that would allow them to continue their job.  It’s a piece of legislation to be aware of as we continue our national discussion on workers compensation.

 

 

Thank You for Your Participation in The National Conversation

 

So, we’ve covered a lot of information throughout this session and in those documents.  I want to thank you for your participation and in sticking with it, as well as your interest in this national discussion.  Your participation, your thoughts are vital to the continuation of this national conversation in workers compensation.

 

As I said, in my next video, I’ll be talking about some of those perspectives from the employees, and employers, and carriers, and attorneys, and regulators, etc, that we really reveal throughout the course of those two days and in depth lengthy discussions that we had in Dallas.  Also, I’ll be divulging in those imperative issues that we identified, as well as those friction points that we identified in the system.

 

So, thanks again for your participation and remember your success in workers compensation is defined by your integrity, so be great.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

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Structured Settlements Protect Injured Workers & Save Work Comp Costs


Michael Stack:   Hello, Michael Stack here. Principal of Amaxx, founder of COMPClub, and co-author of “Your Ultimate Guide to Mastering Worker’s Comp Costs”. One of the core philosophies that I believe is that a better outcome for your injured worker will lead to lower worker’s compensation costs for your organization. Again, a better outcome for your injured worker will lead to lower worker’s compensation costs for your organization. And structured settlements certainly fall under that criteria and that philosophy. I have a special guest joining me today, the Senior Vice President of National Marketing at Ringler Associates, Duke Wolpert. Duke, thanks for joining me. I’d love for you to share with me what is a structured settlement, a little bit of context there.

 

 

What is a Structured Settlement?

 

Duke Wolpert:   Sure Mike, my pleasure. Thanks for having me today on the program. A structure settlement, essentially, is a cost-effective alternative to a lump sum settlement, a cash settlement. The series of tax-free future periodic payments, established between an insurer or self-insurer, and an injured party, a claimant or plaintiff, as part of either a worker’s compensation settlement, or a personal injury settlement.

 

They’re designed to protect and offer security to injured parties, so that they can meet their financial obligations in the future. Essentially, they bridge the gap to settlement, and any way parties can move closer to settlement by simply a change in the way the settlement is funded certainly is a step in the right direction.

 

Michael Stack: Absolutely. I agree with that, and I think these points you made are very good ones. Alternative to cash, really that lump sum settlement as an alternative to that, this point I think the tax free periodic payments in really a strong benefit to this, and then not to really be understated is that protection and security issue that really those structures offer throughout that settlement process, so thanks for sharing those point, Duke. Now, tell me, really how are these used then in the worker’s compensation space, really to leverage these benefits that you mentioned?

 

 

How Are Structured Settlements Used in Workers’ Compensation?

 

Duke Wolpert:   Yeah, what we’re seeing in the worker’s compensation space is a growing use of structured settlements, when it comes to the funding of Medicare set aside allocations. In addition to the MSA, the Medicare set aside allocation, oftentimes there are non-Medicare allowable expenses that aren’t part of the Medicare set aside allocation cost projection, that need to be quantified, and many times, we actually structure those non-Medicare allowable expenses as well as the MSA’s that we see.

 

On the indemnity side of the cases, we oftentimes are pulled into permanent and total claim scenarios, widow benefits, minors, in catastrophic claims, burns, amputations, traumatic brain injuries, for instance, are certainly cases that we’re asked to get involved in, to customize proposals that assist in meeting the financial needs of the injured parties in the future.

 

On occasion, we see situations involving injured parties with drug dependency, or competency issues, folks that for one reason or another cannot manage their own money, and there is certainly a value, the funding of those settlements with periodic payments and structured settlements.

 

Finally, the use of the structured settlement is growing in conjunction with the growth of Medicaid entitlement and the Medicaid programs in the states. In order to protect entitlements for Medicaid recipients, oftentimes the funding of the settlement has a direct correlation with their eligibility status, so the funding of a settlement would be using periodic payments, a structured settlement, certainly provides some protection to injured parties when it comes to ongoing incontinuity of Medicaid entitlement.

 

Michael Stack:   I think a couple of things that you said there … this competency issue, and we talked about it in regards to drug dependency, but I think we hear these stories so often of the lottery winners who get this huge sum of money, and a couple of years later, the people go bankrupt, and it’s just a very common story, and I think the value here is really in that protection, which we talked about in those benefits initially, and these catastrophic cases that Duke mentioned  … I think very valuable when you really put that in a context of leveraging this for those better outcomes for those injured workers, so let’s talk about that now, Duke. How do we now leverage these tools? How do we leverage this tool then in the context of really creating those better outcomes, both for the injured worker, and then creating those lower worker’s compensation costs?

 

 

How Do Structured Settlements Reduce Workers’ Compensation Costs?

 

Duke Wolpert: Absolutely. When we look at outcomes on the insurance, self-insured side, the primary payer side, oftentimes the use of structured settlements offers a reduction in the pay loss dollars in the claim, the lost dollars associated with a claim file. That oftentimes leads to improved cycle times or closing ratios for claims professionals, and what we find is that it at times avoids unnecessary expenses, especially in cases in litigation, either litigation costs or ancillary expenses related to the litigation, so clearly there’s value from a cost containment and cycle time claim inventory perspective, when it comes to the use of structured settlements.

 

Michael Stack:   I agree. Now, let’s talk about those injured workers, so we’re saving money through the use of these tools in loss dollars and the comparison of using an annuity versus a lump sum payment, and really leveraging the interest that leads to those savings. Now, let’s talk about those injured workers on that perspective and some of those benefits in creating a better outcome for them as well.

 

 

How Do Structured Settlements Lead to a Better Outcome For Injured Workers?

 

Duke Wolpert: Yeah, understanding that the plans that we develop are individually customized, they’re done that way to meet the needs of the injured parties, and every plan is a little different. In conjunction with the structuring and work up for the pricing of the Medicare set aside, there are oftentimes non-Medicare allowable expenses and other needs on the [inaudible 00:06:18] side that we need to address with the injured parties, as well as their own financial needs that will lead to the establishment of the creative design, the structured settlement proposal, and by doing that, it bridges the gap of the settlement. It gets the parties closer to resolving the claim in hand.

 

Michael Stack:   I think that really summarizes it nicely in the sense of really customizing those needs. I think when we talk about objections that injured workers might have, that would be a fear of mine certainly if I was offered a settlement, that I want to make sure that my needs are protected. As you said … I think one of the things you said there was I think was key, was it’s really individual to that individual person. Do they need some money up front to pay for certain things? How much money do they need over time? … And really customizing it to meet those needs, and as we said, at the same time saving those worker’s compensation costs for the payer organizations.

 

Duke, thanks for joining me. I’d love to just ask to share some final thoughts as we wrap up here.

 

 

A Structured Settlement Could Be the Last Check an Injured Party Ever Receives

 

Duke Wolpert: My final thought would be that we need to remember that an injured party who’s been disabled for a period of time, that receives a settlement, may not be going back to work. This could be the last check, the last payment that they receive for the rest of their lifetime, so protecting their financial future certainly is something that we want to be part of, and structured settlements absolutely do just that.

 

Michael Stack:   Yeah, I couldn’t agree more, and I think that point of really thinking that this is a last check that individual can receive is a very powerful point, and really leveraging this tool to create those better outcomes for that individual person, and as we mentioned, at the same time, lowering those worker’s compensation costs for the payer organizations. Thanks again, Duke for joining me today, and remember, your success in worker’s compensation is defined by your integrity, so be great!

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Employee’s Role In Workers’ Comp Cost Containment

We tend to think of workers’ compensation cost containment programs as an endeavor best left to the employer. While the employer must design the program, the employee also has a role.

 

However, to be successful, employees must also participate in the program. The following components must be followed by employees for the cost containment program to work.

 

 

Know What to Do In Case of Injury

 

Employees must know exactly what to do if they are injured on the job. Keep employees informed of their step-by-step responsibilities through employee brochures, safety trainings and handbooks. Supervisors should reinforce these requirements through regular meetings and during safety plan trainings at the start of every new project. The “What to Do in Case of An Accident” brochure should be posted throughout the work site and sent to every employee annually. This post-injury response training is crucial to ensuring the best possible outcomes for the employee and the employer when an injury occurs.

 

 

Sign an Acknowledgement of Responsbilities

 

All employees should be required to sign an acknowledgment form of these responsibilities. This should be done during their new employee orientation when they are given their brochure and at every safety meeting.

 

 

Know Where to Seek Medical Care

 

The employees need to know where to seek medical care in case of an injury. They should be required to seek care from the employer’s medical provider or their own primary treating physician, if allowed by law. The name, address and phone number of the employer’s medical provider should be included in the brochure and safety plans. If employees are working offsite, the name of the nearest hospital or medical provider to the offsite location should be included in the safety plan.

 

 

Keep the Employer Informed and Updated of their Condition

 

The injured worker must let the employer know their medical status and any changes in their condition. This is especially important to determine if the injured employee can return to work in any capacity. On-going contact with the injured employee allows for discovery of any problems – such as not keeping medical appointments or difficulty with healing or medications prescribed – before they get out of hand.

 

 

Complete Forms

 

The injured employee must complete all forms required by the employer truthfully. Make sure that the employee gets the Work Ability Form completed at every doctor’s visit.

 

 

Attend Weekly Meetings

 

This keeps the employer informed of their condition and any obstacles to return to work full duty. At weekly meetings the employee and employer can determine and address any reasonable accommodations the employee needs and whether the employee can return at modified duty. It also keeps the employee connected to the workplace and coworkers. If they are physically unable to get to the work site, the employer should provide transportation or have meetings by phone. One alternate means of having weekly meetings is by using computer technology such as skype, which allows the participants to see each other over the internet.

 

 

Participate in Transitional Duty

 

This must be a condition of employment. The employee must return to work in either transitional duty or full duty as soon as medically able.

 

 

Attend All Medical and Rehabilitation Appointments

 

Obviously, the injured worker must get required medical care to improve, including physical therapy. Identifying any barriers to attending medical appointments can be addressed at the weekly meetings. The employee should provide the work ability form to the supervisor or claims coordinator after each doctor’s visit.

 

The employee should perform all other tasks as required by the employer and allowable by law such. Each state is different.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Reducing Future Medicals through Medicare Secondary Payer Automation

RitaWilson

Rita Wilson, CEO, Tower MSA

…on reducing future medicals through Medicare Secondary Payer Automation

 

Handling Section 111 reporting, conditional payments, physician peer reviews, and Medicare Set-Asides in separate technology silos leaves room for errors and delays.  Organizations can resolve these problems with a Medicare Secondary Payer solution that automatically and seamlessly connects all compliance, intervention, and MSA processes from the initial identification of a Medicare beneficiary all the way through closure and settlement.

 

An all-encompassing MSP Automation Suite should:

 

  • Capture, store, and manage all data points in a paperless environment
  • Easily integrate with any claims system
  • Enable clients’ business rules to be overlaid onto the vendor’s business processing rules
  • Prompt for missing data
  • Escalate medical and pharmacy issues when triggers occur
  • Initiate and seamlessly track pre-MSA interventions
  • Drive oversight until evidence of treatment changes has been confirmed
  • Provide end-to-end visibility into claims
  • Create an audit trail for each claim
  • Benchmark CMS trends to ensure compliance

 

Tower MSA’s sophisticated technology encompasses all of the above to ensure timely, complete and accurate reporting.  It enables Tower’s legal and clinical specialists to quickly and thoroughly analyze conditional payments and negotiate appropriate reimbursements.  The system even drives and tracks pre-MSA medical and pharmaceutical interventions, which can save hundreds of thousands dollars on a single claim.  Integrating all these processes into a single system ensures 100% MSP compliance, reduces MSA costs and expedites settlements.

————————————————————————————————-

Reducing Future Medicals through Medicare Secondary Payer Automation

 

Workers’ compensation claims continue to be driven by the “cost” of medical benefits.  This is especially the case when dealing with issues of Medicare Set-asides and future medicals in workers’ compensation claims.  This has resulted in many claim management teams to seek service providers who understand this concern and have innovative solutions to satisfy Medicare’s interests.  One such solution is a complete suite of services that cover the entire life of a claim.

 

 

Barriers to Effective Medicare Secondary Payer Compliance

 

Members of the claim management team need to track the movements of files submitted for Medicare Secondary Payer compliance matters.  This is based on the nature of the work being performed by a service provider and its time-sensitive nature.  Common complaints by claim handlers include:

 

  • Lack of creative solutions on the front-end of compliance to reduce the cost of a Medicare Set-aside allocation;

 

  • Inability to track files and determine the status of work being performed; and

 

  • Ineffective communication between the parties to implement cost-saving mechanisms.

 

 

Cost Savings Starts with MSA Triage

 

The concept of “triage” was developed in World War I as a means to better assess a wounded soldiers condition and direct appropriate medical care.  This concept was such a success that it has been applied successfully to other areas, including Medicare Secondary Payer compliance.  By using an effective case triage model, a Medicare Secondary Payer service provider is able to review a case and identify barriers that may delay settlement.  The net result is real savings to the claim management team through a better reserve system and efficiency in settlements.

 

 

Effective Medicare Secondary Payer Case Management

 

An effective Medicare Secondary Payer service provider will also implement strategies for cost savings beyond the initial in-take and triage phases.  These additional steps strive for efficiency via computer-based technologies that include assistance with the following matters:

 

  • Physician peer review;

 

  • Drug utilization review; and

 

  • Clinical oversight.

 

A fully automated process should make case specific recommendations for further intervention when reasonable and necessary.  These suggestions will result in the lowest defensible Medicare Set-aside allocation.  The use of these system processes will also keep the claim handler involved in the process and allow for greater transparency.  This includes the identification of missing data elements, conditional payment searches/resolution and medical/pharmaceutical interventions.

 

 

Other Benefits to Complete Medicare Secondary Payer Automation

 

Automation of Medicare Secondary Payer compliance services offer members of the claim management team a number of benefits.  From the onset of the claim, it provides the opportunity for the client to receive front-end services that reduce costs over the life of a workers’ compensation claim.  Other attributes include:

 

  • A holistic approach that ensures consistency in Medicare Secondary Payer compliance services;

 

  • Moves the claim forward through the final step of compliance, which is Section 111 Mandatory Insurer Reporting; and

 

  • Allows for 24/7, end-to-end visibility that keeps the workers’ compensation claims team engaged and updated during the entire compliance process.

 

 

 

Conclusions

 

Medicare Secondary Payer compliance services are moving beyond providing clients with an a la carte list of services.  More advanced service providers are able to offer solutions throughout the entire life of a claim.  This also allows members of the claim management team to be active in the claim and aware of what is taking place.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Winning Workers Comp Claim Outcomes With The Team Approach

Hello, Michael Stack here, Principal of Amaxx, Founder of COMPClub and co-author of Your Ultimate Guide to Mastering Workers’ Comp Costs. Some great news was released recently, actually the Work Comp Roundup was ranked number one in the best blogs contest that was put on by WorkersCompensation.com.

 

I was super-excited about that, I was obviously very happy to hear that news, and I wanted to really say thank you. I wanted to thank the Work Comp Roundup community, I know how many demands are on your time, I know how much information is thrown at you on a day-to-day basis so to take the time to read our materials, to subscribe to our newsletter and specifically those who nominated our blog in that contest, I very much appreciate that. I very much appreciate you and want to thank you for your participation.

 

 

Winning Outcomes With The Team Approach – Managing Claims

 

For my lesson today, I want to talk about this concept of winning outcomes with the team approach and how this really functions in two different capacities in the claim side and then also how I use this on the Work Comp Roundup blog itself. Let’s talk about the claim side and how this should work in your organization and how it works to create those winning outcomes in your claims and in your work comp management program.

 

 

The technique to use here, the technique to implement and leverage is called Claims Calls or it’s also called A Claims Roundtable. The idea here is that you’re bringing together the expertise knowledge and perspective of different individuals to work together towards a winning outcome and a common goal. Again, you are bringing together the expertise, the knowledge and the perspective of different individuals to work together towards a common goal of creating a winning outcome in your individual claims.

 

 

Meet Regularly

 

Here is how this looks. You’re going to want to meet regularly. On this team that’s meeting regularly, those different perspectives, that different expertise and those different knowledge, that includes your adjuster, that includes your risk manager or a representative from your employer certainly, that includes your TPA account and case managers, and you’re also going to want a medical advisor in order to bring that medical perspective to this team that’s working together, meeting regularly towards that winning outcome, that common goal, so you are going to want to meet regularly.

 

My recommendation is that this is done weekly and you are going to set a specific time, be that Tuesday at 10:00 a.m., Thursday at 3:00 p.m., whatever that time is that works for your team, but set that time and have it on your calendars. If you are meeting monthly, that should be at a specific time, maybe it’s the first Wednesday of each month at 11:00 a.m., whatever that time is, but have it on your calendar so there is that expectation that that meeting will occur.

 

 

Share Knowledge

 

Second thing is you are going to want to come to the table, those individuals that I reference are going to want to come to the table with the right attitude of sharing that knowledge, sharing that expertise and working together towards that winning outcome, that common goal. Finally, the agenda for each one of these calls, for each one of these claims that you’re discussing, and five to ten claims is a good place to start. Obviously the more claims that you can work on together, the better the outcomes for those claims, but five to ten is a great place to start. You are going to want to discuss the status of that individual claim, where the things currently stand now. You’re going to discuss the strategy for that claim, and then finally the action steps.

 

 

Discuss Status, Strategy, and Action Steps

 

You are going to want to discuss the status, the strategy and the action steps. Then for each action step, if you are meeting again the following week, you are going to discuss the status of those action steps and where things stand and continue to work towards pushing that claim forward towards that winning outcome. That team approach, gaining those perspectives will give you the best outcomes in your claims.

 

Now as I mentioned the Work Comp Roundup blog itself recently did have a winning outcome, and I want to let you know that I also leveraged this team approach in the creation of the content on the Work Comp Roundup itself. I want to recognize those individuals, those parts of mine who very willingly and openly share their expertise and share their knowledge to help in the creation of the content itself.

 

 

Winning Outcome With The Team Approach – Work Comp Roundup Blog

 

Those individuals include the senior leadership team at Broadspire: Danielle Lisenbey, the CEO; Chief Medical Officer, Dr. Jake Lazarovic; and Senior Vice President of Medical Management, Erica Fichter. From Ringler Associates, the Senior Vice President of National Marketing, Duke Wolpert; from Express Scripts President, Steven Webb; Senior Vice President, Joe McCullison, and really the rest of the Express Scripts team on the workers’ compensation side; from Tower MSA, Rita Wilson, who is their CEO; from MedSource National President, Tony Riccardi. Last but certainly not least, the Executive Vice President at Medcor, Curtis Smith.

 

As I mentioned those individuals have very openly and willingly shared their knowledge, shared their expertise and opened up the doors of their organizations to share their best practices. Thanks again for your participation and the Work Comp Roundup community. Remember your success in workers’ compensation is defined by your integrity, so be great.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Leverage Physical Therapy Checklist To Return Employees To Work

When an employee suffers an injury to musculoskeletal system, the medical provider will frequently recommend a course of physical therapy for the employee. Self-insured employers who self handled their workers’ compensation claims need to know how to manage the physical therapy (PT). All employers can benefit from knowing how to manage PT.

 

 

Adjuster Physical Therapy Checklist

 

When the medical provider determines there is a need for physical therapy, the medical provider will advise the adjuster of the diagnosis, the modalities needed and the time frame. The adjuster, in the states where the employer/insurer controls the selection of medical providers, in turn assigns the physical therapy to a therapist provider. In states where the employee selects the medical provider, the medical provider will refer the employee to a therapy clinic of the medical provider’s choice.

 

Regardless who selects the therapy clinic, the adjuster for the employer needs to do the following:

 

  • Confirm the therapy clinic has the medical provider’s diagnosis and the amount of therapy recommended by the medical provider

 

  • Require the therapy clinic to do an initial physical therapy evaluation during the first visit by the employee and to provide a physical therapy evaluation and treatment plan following the first visit and prior to the second physical therapy visit

 

  • Provide the therapy clinic with billing information and obtain an agreement on whether each individual physical therapy session will be billed or if physical therapy sessions will be billed weekly or monthly

 

  • Discuss with the therapist the estimated time frame until the employee will increase his/her functionality

 

  • Obtain the therapist’s opinion on the possibility of the employee returning to work either full duty or modified duty

 

  • Provide the therapist with a copy of the employee’s job description

 

  • Set up with the therapist a timetable for the adjuster to follow up with the therapist

 

  • The therapy clinic should be instructed to advise the adjuster immediately if the employee cancels a physical therapy session for any reason, or is a no-show

 

 

 

Categories That Should Be Included in Physical Therapy Treatment Plan

 

When the adjuster receives the physical therapy evaluation and treatment plan following the first visit by the employee, the evaluation and treatment plan should be carefully reviewed. The following information categories should be in the treatment plan:

 

  • The diagnosis of the therapist – it should match the diagnosis of the medical provider. If not, this needs to be addressed right away.

 

  • The employee’s current physical limitations due to the injury

 

  • The employee’s prior medical history and if it will impact the physical therapy, how so?

 

  • The type of modalities the employee will receive

 

  • The frequency of the physical therapy visits per week, and the number of weeks the PT is projected to continue

 

  • The treatment goals and what is expected

 

  • The frequency the therapy clinic will report the employee’s progress to the medical provider

 

  • The self-care guidelines provided to the employee

 

 

If any of these categories are missing from the evaluation and treatment plan, the adjuster should discuss with the therapist the need for an addendum to the evaluation and treatment plan that discusses the missed categories.

 

The initial projections by the medical provider as to how long the employee will need physical therapy are not set in stone. Occasionally the employee will recover faster than expected from the injury and the physical therapy will be discontinued early.

 

 

If Additional Treatment is Requested, Consider Utilization Review

 

Sometimes the employee will recover slower than average resulting in the medical provider extending the requested physical therapy. When extended PT is requested, the adjuster needs to consider the effectiveness of the treatment. If the adjuster has any doubts about the need to continue the physical therapy treatments, the adjuster should arrange for a Utilization Review (UR). If the UR nurse rejects the need for additional physical therapy, the adjuster should ask the Utilization Review nurse to discuss the physical therapy request with the medical provider. If the UR nurse and the medical provider do not reach an agreement on the physical therapy requested, an Independent Medical Examination can assist the adjuster in determining whether to approve additional physical therapy or not.

 

Managing physical therapy is not difficult. It does take time, however when properly managed the employee’s recovery time is minimized. The PT clinic is an excellent source of information to assist the employer in returning the employee to work on modified duty, or full duty. By working with the therapist, the amount of time the employee is off work is limited to what is necessary.

 

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Is A Golf Outing Injury Covered Under Workers Compensation?

With the onset of spring, a softball game, corporate retreat and golf outing all sound like fun activities.  However, when all the attendees are employees and an injury occurs, is it covered by workers’ compensation?  “It depends” is the answer the claims adjuster or corporate counsel will give you.

 

 

Many Factors Determine Compensability

 

In order to determine if workers’ compensation is applicable, the adjuster will have to ask a lot of questions.  While the criteria may vary from state to state, the following are general guidelines to separate a workers’ compensation injury from a personal injury that is not covered by workers’ compensation.

events

 

  • Is the event employer sponsored or employee sponsored?
  • Is the event primarily financed by the employer?
  • Does the employer benefit from the event by providing training or presentations, or by making morale speeches or passing out special achievement awards?
  • Does the employer mandate attendance or is attendance voluntary?
  • Does the employer encourage attendance by making a record of attendance?
  • Were the employees paid for the time in attendance?
  • Were employees who chose not to attend required to work their regular job if not in attendance?
  • Do the employees regard the event as a fringe benefit they are entitled to?
  • Does the social event occur during normal work hours?

 

If the answer is “yes” to most of the above questions, the injury most likely will be covered by workers’ compensation.

 

 

Activity of Employee at Time of Injury Big Factor

 

However, the activity of the employee at the time of the injury is also a factor in whether or not the injury is workers’ compensation related.  For example – the corporate retreat is to be held Friday, Saturday and Sunday at a five star resort.  The sales manager arrives on Thursday night to enjoy the amenities of the resort.  While walking down the grand staircase in the hotel lobby, he trips and falls, and fractures both arms.  Even though the sales manager was required to be at the resort as a part of his job, the injury occurred while the employee was there on his own time.  The employer received no benefit from the sales manager arriving early to enjoy the amenities of the resort prior to the official start of the corporate retreat.

 

In the above example, if the same fall and injury had occurred during the course of the meeting on Saturday, while the sales manager went from one presentation to another, it would be covered by workers’ compensation.

 

When the benefit of the social event to the employer is hard to measure, any injury occurring is normally not workers’ compensation.  This is often true with sporting events such as the company softball team, bowling team, volley ball team, etc.  When the company allows the team to use the corporate name in the sports league but does not schedule the sports events, does not provide financial support and keeps no records of participation, any injury will not be covered by workers’ compensation.  When all participation is totally voluntary and the sporting event is after normal business hours, any injury that occurs is not workers’ compensation.  For example – the first basemen for the company sponsored softball team breaks his ankle sliding into home plate with the winning run in the bottom of the ninth inning.

 

 

If Social Event Being Paid in Lieu of Work, Injuries Covered

 

When the social event is company sponsored and the company encourages participation, even if attendance is voluntary, if an injury occurs during the event, it is workers’ compensation.  For example – the office Summer Picnic at the major amusement park is a huge event, and is considered a fringe benefit paid for by the employer.  It is held on a week day when the employees would otherwise be working and the employees are being paid their regular earnings while attending the Summer Picnic.  While doing the Limbo dance, the secretary injures her lower back.  The injury would be covered by workers’ compensation due to the event being paid for by the employer, the employee being encouraged to attend and the employee being paid while participating in the event.

 

Social events can result in workers’ compensation claims.  The facts surrounding the social event and the facts surrounding what the employee was doing at the time of the social event will be the determining factor in whether or not an injury is a workers’ compensation claim.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Steps To Prevent Workplace Injuries

A lot of attention is paid to handling workers compensation injuries. However, the least expensive workers’ comp claim is the workers’ comp claim that ever happens. It is important for organizations to make injury prevention equal in priority to quality and production.

 

 

Losses will occur:

 

It is recognized that certain industries and professions have high risk of injury due to the nature of the operation.  Coal mining always has the danger of collapse, black lung disease, and blasting operations.

 

Fire fighters never know when a floor will give way in a burning structure.  Medical providers are subjected to many communicable situations, needle sticks, and out of control patients.  While injuries are somewhat inevitable with these exposures, organizations need to have protocols that limit the occurrence, severity, and exposure.

 

Further, despite the best of plans anything can happen at any time for any reason.

 

 

How to begin:

 

The best place to start is by reviewing your loss history.  How, when, where, and why did the loss occur?  What was the severity of the injury?  How often do the same type injuries occur?  Are there any patterns such as Monday Morning injuries, pre-vacation or holiday occurrences?  Was the loss caused by human failure?  Was there any equipment failure?  Was the employee’s health a factor? Was the employee properly trained in proper performance at the highest safety standard?   Was the loss caused by an outside influence?

 

Since the list of reasons and questions concerning losses can be extensive, it is best that the loss review be conducted by a committee.  The committee should include a person knowledgeable in the industry safety standards, an employee working in the injury causing area, management, and a union representative if applicable.

 

Most insurance carriers have loss prevention services available.  They are generally free as the service is part of the overall insurance program.   If you have such service available, the insurance company loss engineer should be added as a member of the loss review committee.

 

Federal and State governments have a myriad of work safety programs.  However, while these agencies may profess to be of assistance in solving issues, they have a vested and sometimes mandated interest in looking for violations and non-compliance to law or regulation.  Should the agent find a problem, the employer is more likely to be penalized, fined or even imprisoned.  Any help they claim should be viewed with jaundice eye and used with extreme caution.

 

 

Uncover problems:

 

As issues are uncovered review the operating procedures.  Is the equipment state of art?  What are the ergonomic needs?  Is employee experience and training proper for safe operation?  Is the employee physically and mentally capable to do the job safely?  Should there be periodic breaks or rest periods?

 

Is the environment (heat, light, and air-conditioning) proper and conducive to safe productive operation?  Is safety equipment state of the art and in properly maintained?

 

When the operation is out doors does the employee have proper dress and equipment for elements?

 

When the employee is working at various locations have they been schooled to watch for animals, suspicious activities, hazards of sun, wind, rain, snow, ice, and defective properties?   Are their vehicles proper for the job and well equipped and maintained?

 

 

Set the policy:

 

Once the initial studies are complete, and remedies are made, the next step is to set the policy in writing.  Have each employee and manager trained in any new procedures and sign off on the policy.

 

After that constant vigilance and monitoring is a must.   Use trade journals, and other industry sources to keep abreast of new changes and ideas.

 

A focus will be necessary to engage the employees for cooperation and compliance, and reward or discipline must be part of the program.  Consider compliance a part of job performance and evaluation.

 

 

Limit severity:

 

When a loss does occur it is necessary to have protocols in writing that address first aid, assignment and transportation to medical facilities.  Medical triage should be immediate to determine necessary treatment, disability, alternate employment and any assistance needed by the employee to speed recovery.

 

 

Conclusion:

 

Prevention and reduction of losses are subjects filled with many challenges.  It takes a committee and team approach to discover the problems and determine methods to reduce and eliminate injuries.  It is strongly recommended that the employer enlist professional engineers in safety, mechanics, environment, and other areas necessary to assist in addressing pertinent issues.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Humanize Work Comp To Realize Medical Savings

Medical costs continue to account for a significant portion of every workers’ compensation claims.  In order to address this matter, innovative teams are seeking improvements in the way they direct medical care and treatment in their claims.

 

 

Barriers in Directing Medical Care

 

All workers’ compensation programs are subject to a rigid statutory and regulatory framework that impacts the medical portion of every claim.  Notwithstanding the use of treatment parameters and fee schedules, the medical component in every jurisdiction can create challenges.  Some common barriers faced by the claim management team include:

 

  • Choice of medical providers and the ability of the employee to switch providers during the course of medical treatment;
  • Failure to use correctly an independent medical examination (IME) to mitigate exposure on a claim. This can often include selecting a doctor who lacks the correct credentials or familiarity with the injury in the claim; and
  • Problems dealing with medical care that enables the injured worker to malinger.

 

 

Dealing with Common Pitfalls in Medical Care

 

The claim handler in charge of the claim is on the front lines when it comes to dealing with injured workers and making sure they receive the benefits, care and treatment they are entitled to post-injury.  This requires that member of the claim management team to take a proactive approach to dealing with these issues and reducing future exposures.

 

Here are some important things to consider:

 

  • Educate the employer/clients regarding injury prevention;
  • Be proactive when it comes to reporting claims. Time is of the essence.  A promote injury response can also buy good will from the employee and their attorney;
  • Have good lines of communication with the medical representatives of the employer. This should include having a coordinated response immediately post-injury and continue throughout the course of care; and
  • Gain the trust of all medical providers outside the scope of the preferred employer medical team’s network. This includes conducting yourself in a professional manner at all times.  By gaining their trust, you will more likely than not gain their cooperation.

 

 

The Human Element of Workers’ Compensation

 

To the injured workers, members of the claim management team are often faceless individuals that are guardians of the insurance carrier’s financial interests.  This perception leads to the false conclusion by injured parties and their family members that the claim handler does not consider the interests of the injured employee.  Personalizing the services you provide can pay dividends during the course of managing the claim.

 

Various steps can be taken to gain the trust and cooperation and “humanize” the workers’ compensation process:

 

  • Provide accurate information whenever dealing with the injured party or their legal representatives;
  • Be responsive to their communications. Set realistic and reasonable expectations from the outset of the claim.  Develop the relationship as you would any other professional interaction.  Personalizing the response is helpful; and
  • Empathize with the position of the injured party. Although workers’ compensation wage loss benefits are tax free, they are being paid at a reduced rate.  When the injured person is off work, it is important to remember their bills do not have a similar reduction.

 

 

Conclusions

 

Reducing the medical costs in workers’ compensation claims requires an active role by all members of the claim management team.  Part of this requires individual claim handlers to make the extra effort in their file load.  It is also necessary for the claim handlers to bring a sense of humanity to their claims when dealing with injured employees.

 

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Carpal Tunnel Is Not Always A Compensable Injury

Heavy use of personal, laptop, iPod, and Tablet Computers in today’s working world has caused a significant rise in carpal tunnel injury compensation claims.  Repetitive Motion, Vibration, or Poor environmental conditions are usually cited as the reasons to make carpal tunnel injuries compensable.

 

These conditions are causes for compensability, however, they should be accepted when verified, buy factual investigation and medical confirmation of a work relationship.   Underlying health problems may also contribute to carpal tunnel flare up by these cited conditions.

 

Since many claims have been linked to computer usage, there may be tendency to accept claims without fully exploring true causal relationship.

 

Some Occupations Most Likely to see Carpal Tunnel Injuries:

 

  1. Typists
  2. Assembly line functions requiring a lot of hand motion
  3. Professional Vehicle Drivers
  4. Craftsman
  5. Musicians
  6. Restaurant Chefs
  7. Professional Sports
  8. Jack Hammer Operators

 

 

What is Carpal Tunnel Syndrome?

 

It is the compression of the median nerve and tendons that flex the fingers as it passes through the carpal tunnel.  The carpal tunnel is located at the base of the hand centered in the wrist.  It is narrow so even a small amount of nerve swelling can produce symptoms.   Conversely it can be a progressive condition occurring over weeks, months and even years.

 

Symptoms are:

 

  1. Numbness, tingling, and pain in the thumb and first three fingers of the hand.
  2. Pain or burning sensation that travels up the arm.
  3. Nightly wrist pain that interferes with normal sleep.
  4. Weakness in hand muscles.
  5. Tendency for the hand to want to go into a claw position.
  6. Swelling or redness in the wrist-hand joint area.

 

Diagnosis Tools:

 

  1. Nerve conduction studies
  2. Physical examination
  3. Reviewing all the patients daily physical activities
  4. Prior medical history
  5. Review of current physical pathologies

 

Treatments:

 

  1. Splinting
  2. Structured Exercise
  3. Steroid Injection
  4. Avoidance of activities that place strain on wrist
  5. Medication to reduce inflammation
  6. Surgery that cuts the bad of tissue crossing the median nerve

 

Disability may range from a few weeks to months, and permanent loss of function is possible.  Reoccurrence can occur if the person returns to the activity or life style that generated the symptoms originally.

 

Some Other causes for Carpal Tunnel Injury:

 

  1. Diabetes
  2. Lupus
  3. Pregnancy
  4. Obesity
  5. Hyperthyroidism
  6. Fractured bones in hand or wrist
  7. Excessive bone growth from healing fractures
  8. Illnesses that cause joint swellings, pain, stiffness, and bone deterioration
  9. Illness that reduces blood flow to the arms and hands
  10. Bone spurs
  11. Rheumatoid Arthritis
  12. Gout
  13. Claimant having a second source of exposure such as a second job, sports, or doing some activity in unusual positions that have vibration or repetitive motion.

 

 

Prepare To Defend At The Time Of Hire:

 

Preparing to properly defend a carpal tunnel claim starts by hiring the proper person for the job which includes exploring the potential employee’s social background, experience, and health.

 

  • Learning facts is challenging. Many records are public and available for research. Criminal, Court, Credit, Driver, Property Tax, Fire Losses, and Civil litigation records have some information that can be used as investigative leads

 

  • The internet has information on how to obtain background information. Much is free, while other sources charge fees.  These sources are discreet and mindful of exposures and reputations.

 

After the applicant meets the employment need socially and by experience, obtain a pre-employment medical examination.  Provide the examining medical physician with a complete job description, including a video of the job being done on actual location.

 

 

Perform a Thorough Investigation

 

Once a claim is presented, the claim technician must do a thorough investigation.

 

  • Full statements from the employee, the supervisor, and possibly fellow employees are necessary.
  • Statements must cover detail on job function, length of time on the job, and how symptoms manifested.
  • Secure a history of health conditions, and off duty activities.
  • Research personnel records for health claims, and performance information for potential impact.
  • Provide the Independent Medical Examination physician with all the investigative fact, medical background and a detailed job description including a video of the job.
  • Have defense counsel review the case. Legal counsel should be well versed in Carpal Tunnel injuries and have a high defense success ratio.

 

 

Summary:

 

Carpal Tunnel Syndrome may have other causes than job function.  Strong investigation and medical background is needed to successfully defend non-work related losses.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

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