7 Ways to Reduce Your Workers’ Comp Prescription Drug Spend

Focusing on generics instead of brand name drugs, and in-network pharmacies instead of third-party billers are among the ways payers can help reduce their workers’ compensation costs while still ensuring quality care. Taking a deeper look into where and how the industry spends money on pharmaceuticals reveals many additional things organizations can do to eliminate unnecessary expenses for medications.

 

A recent report on drug trends within the workers’ compensation system shows, for example, that brand name abuse-deterrent formulations for opioids cost on average $520.85 more per prescription than non-brand abuse deterrent formulations (ADFs). Even though these medications are not typically included in workers’ compensation formularies (unless by client request), they are having an impact, according to the Drug Trends Report from Express Scripts.

 

Steps to eliminate wasteful Rx spending include:

 

  1. Educate providers and patients about the risks and benefits of opioids, and consider alternatives for chronic pain by using evidence-based guidelines.
  2. If an ADF is requested, consider whether the patient is at risk of abuse when considering whether to approve the medication and if they can use a more traditional opioid. Likewise, if  an overdose antidote is requested because of overdose risk, consider less expensive alternatives to Evzio where possible, such as narcan, naltrexone or naloxone.
  3. Look closely at dermatologicals that are prescribed; consider lidocaine rather than the more expensive Lidoderm.
  4. Closely review prescriptions for compound medications to see if they are truly needed for the patient. Likewise, for physician-dispensed drugs.
  5. Educate and encourage providers to use of generics rather than brand name drugs, where possible.
  6. Avoid third-party billers if possible.
  7. Closely review and watch prescriptions of specialty medications.

 

Below is a look at several categories of medications prevalent in the workers’ compensation system and where payers can reduce their costs.

 

 

Opioids

 

These remain the most expensive and most utilized class of drugs in workers’ compensation, despite industry and governmental efforts to stem their abuse. Express Scripts said they accounted for 26.6 percent of per-user-per-year (PUPY) spend and 24.3 percent of PUPY utilization among its clients. The good news is that spending on opioids decreased last year.

 

Still, more than half of injured workers — 50.9 percent had an opioid prescription last year, and 25 percent of injured workers used them for at least 30 days.

 

Patient and provider education is key to reducing utilization and prescribing of these drugs so that they are used according to evidence-based guidelines in the more acute phases of pain, rather than injured workers with chronic pain.

 

The use of ADFs among injured workers increased by 50 percent from 2015 to 2016. Typically, a payer must approve the medication prior to dispensing due to the cost of the drug and the need to assure that it’s appropriate for the injured worker.

 

If you receive a request for an   opioid overdose antidote, look at the specific drug noted. Several versions are on the market, including naloxone; Narcan®, (naloxone); naltrexone; and Evzio, as self-injectable form of naloxone. It is important to note however, “the average cost per prescription for Evzio was $3,380.69 higher than for Narcan, naltrexone and naloxone combined,” according to the Express Scripts report.

 

 

Dermatologicals

 

Of the top 10 drug therapy classes, the total spend per class decreased on 7 of the 10 classes between 2015 and 2016. Among those with an increase were dermatologicals, which had a spending increase of 1.3 percent. The 10 percent increase in the average cost per prescription was moderated by a 9.5 percent decrease in utilization, according to the 2016 Drug Trend Report.

 

Generic versions of Voltaren® gel helped decrease utilization of the brand name drug, and should be considered by payers.

 

Prescriptions of lidocaine decreased, and the average cost per prescription is almost half that of Lidoderm — a lidocaine patch. Even though Lidoderm only had 4.2 percent of market share in 2016, the cost increased nearly 28 percent from the previous year.

 

 

Compounded Medications

 

Spending on these has decreased considerably in recent years, mainly due to a decrease in utilization. However, these are still seen as a significant cost driver in the workers’ compensation system. Medical treatment guidelines generally do not consider these a first line therapy for conditions typical of injured workers. They are excluded from most formularies and require prior authorization.

 

The cost of compounded drugs “averaged $1,966.92 per prescription in 2016 compared to $1,558.14 in 2015,” according to Express Scripts.

 

 

Physician Dispensing

 

These cost “$109.19 more than drugs dispensed by pharmacies,” the Drug Trend Report said. More than 38 percent of physician dispensed drugs are for pain or pain/inflammation.

 

The top physician dispensed drugs in 2016 according to Express Scripts were meloxicam, cyclobenzaprine, gabapentin, tramadol and Mapap® (acetaminophen).

 

 

Generics

 

Generics are identical in effectiveness to brand name drugs. Nevertheless, prescribers may turn to brand name drugs due to “habit, lack of awareness of available alternatives or patient request,” according to Express Scripts. “Injured workers create waste by requesting brand-name drugs instead of generics. Workers’ compensation payers can create unintentional waste when, to limit potential disruption, they fail to adopt programs that encourage the use of equally effective, lower cost options.”

 

 

Network Pharmacies

 

Prescriptions that are filled through third-party billers or out of network pharmacies “incur additional costs, with no additional value,” according to Express Scripts. The company noted that payers using its network pharmacy system spent 15 percent less than through third-party billers.

 

 

Specialty Drugs

 

These account for less than 1 percent of drugs used by injured workers, however the costs for them can add up. Spending on them increased 3.2 percent in 2016 and represented 5.9 percent of total spending, among Express Scripts’ clients.

 

There was a 46.9 percent increase in spending for the HIV drug Truvada® prescribed for pre-exposure prophylaxis; spending on Xyrem® (sodium oxybate) in the therapy class of psychotherapeutic and neurological agents (anticataplectic agents) increased 68.6 percent; and Xolair® (omalizumab), an asthma medication saw a 64.3 percent increase in spending. Client spend on specialty medications varies, largely dependent on the injured worker population covered by the client.

 

Conclusion

 

Ensuring injured workers get the best medical care for optimal outcomes should not be contingent on spending on unnecessary medications. Payers can control their costs for medications and still provide quality care.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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.

4 Risks from Hurricanes and How to Mitigate Them

The devastation caused by hurricanes Harvey, Irma and Maria underscores the seriousness of these storms. The loss of life and severe damage to structures can easily occur.

 

Employers should never take the threat of a storm lightly. Workers should be provided with the right equipment and training before, during and after a storm. With the Atlantic hurricane season continuing through the end of November, it’s important to take all steps necessary to protect workers.

 

 

Evacuation Plan

 

Protecting workers starts by making sure they stay out of harm’s way. An evacuation plan should be implemented that outlines when, how and what actions will be taken.

 

It might include:

 

  • Conditions that will activate the plan.
  • Chain of command.
  • Emergency functions and who will perform them.
  • Specific evacuation procedures, including routes and exits.
  • Communication plan, and procedures for accounting for personnel, customers and visitors.

 

It’s also important to with work local emergency and other officials to get the very latest information, and be ready to heed instructions from local authorities.

 

 

Understand The Terminology

 

A hurricane or tropical storm ‘watch’ means such a storm is possible; a ‘warning’ means it is expected to strike the area, usually within 24 hours. At the first signs of a storm — the ‘watch’ — initial preparations should be undertaken.

 

It’s also important to understand the extent of damage that an impending storm could do. Widespread flooding and wind damage can occur. Hurricanes are categorized into 5 groups:

 

  • Category 1. Winds of 74 – 95 mph are expected, which snap large branches and topple shallowly-rooted trees. Buildings that are well constructed could have damage to roofs, siding and gutters. Power lines can be damaged or downed, creating a potentially disastrous situation. Power outages lasting from hours to weeks are possible and must be taken into account.

 

  • Category 2. These 96 – 110 winds are extremely dangerous and cause extensive damage. In addition to downed trees and damaged buildings. Near total power loss is expected.

 

  • Category 3. Winds of 111 – 129 mph can cause devastating damage. In addition, both electricity and water may become unavailable for days or weeks.

 

  • Category 4. 130 – 156 mph winds are catastrophic, with severe damage to roof structures and some exterior walls. Power outages can last from weeks to months and areas hit may be uninhabitable for weeks or months.

 

  • Category 5.  With winds of over 157 mph buildings are destroyed, trees and power lines are downed, and most areas affected are uninhabitable for weeks or months.

 

 

Post Storm Strategy

 

Hard hats, safety glasses, work gloves, fall protection and steel toed and waterproof boots may be necessary for cleanup efforts and should be purchased before a storm.  There are many potential dangers facing workers after a hurricane. Here are several of the most common and how employers can mitigate their risks.

 

  1. Contaminated water. Bacteria, toxic substances and mold or fungi could be present in flooded areas. Workers should be trained to assume flood waters are contaminated and only those with the proper protective apparatus should be allowed to clean up these areas. The use of approved disposable respirators should be included. Materials that have obvious water damage and contamination should be discarded. Clean water should be available for workers to drink and use for hand washing.

 

  1. Damaged/downed power lines. Workers who are expected to cut and remove tree limbs can easily come in contact with power lines, causing them burns or electrocutions. They can also be injured from falling branches or trees, or from removal equipment, unless properly trained. Workers should be trained to assume all power lines are live or energized and these areas should be clearly marked as danger zones where debris may fall on workers. Employees should also be instructed to remain at least 10 feet away from downed lines. The utility company should be contacted to deenergize power lines. Workers should be provided with PPE and trained to protect themselves from injuries caused by using equipment with which they are unfamiliar.

 

  1. Portable generators. Electrical shocks and electrocution from gas and diesel power generators can occur, especially to the inadequately trained worker. Carbon monoxide exhaust can harm a worker, along with fires caused by improperly refueling. Workers expected to handle generators should be trained to avoid using one inside an enclosed space. There should be proper ventilation in the area where they will be used. Employees should inspect all electrical cords for defects, and use a ground-fault circuit interrupter. And they should shut down the generator before refueling.

 

  1. Construction activities. Demolition of structures, such as sheds or other facilities may expose workers to asbestos contaminated materials. Confined spaces with limited access present suffocation hazards. Cave-in are a risk in unsecured buildings. And there is the risk of musculoskeletal injuries from lifting and handling building materials and debris. Appropriate PPE should be provided and may include respirators. Confined spaces with permits required for entering should be off limits to any worker who is not properly trained and/or does not have a permit. Cave-ins can be prevented by benching, sloping, shoring or shielding the soil. Proper lifting techniques should be employed. Bulky and heavy items should be moved by two-person teams.

 

 

Conclusion

 

The debate over climate change and its potential effects on recent storms notwithstanding, the 2017 hurricane season has been one of the worst on record. With several weeks left, employers with facilities in potentially affected areas need to make sure they do everything possible to protect the safety of their workers.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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.

Work Comp 101 – What Are Indemnity Benefits?

Note: The following article is for people new to the workers’ compensation field or as a refresher for those in the field.

 

Indemnity benefits paid to employees for work related disabilities are generally divided into two types—temporary benefits and permanent benefits. Each of the two types, temporary and permanent, are then divided into two additional categories, total and partial. This gives us four categories—temporary total disability (TTD), temporary partial disability (TPD), permanent total disability (PTD) and permanent partial disability (PPD). A fifth category of indemnity benefits is death benefits which some jurisdictions combine with PTD.

 

 

Temporary Total Disability (TTD)

 

The most common indemnity benefit is TTD. In most jurisdictions the amount paid for TTD is based on the formula of two-thirds multiplied by the average weekly wage (AWW) of the employee. A few jurisdictions will use seventy-five percent or eighty percent of the employee’s net pay after income taxes to compute the AWW.

 

A waiting period for indemnity benefits exist in all jurisdictions. Most jurisdictions have a four to seven-day waiting period before indemnity benefits will start, but a few states have a three-day waiting period. If the employee is able to return to work without any limitations within the waiting period, no indemnity benefits are paid. If the disability continues beyond the waiting period for a set number of days or weeks, almost all jurisdictions will require the insurer to pay indemnity benefits retroactively to the first lost day (or partial lost day) the injured employee was not paid his normal wage.

 

A lost day due to a work comp injury can be either a full day lost from work or it can be a partial day missed from work. Most employers find it much easier for payroll purposes to pay the employee for the remainder of the day of the accident. For example—the employee works 8 hours per day and normally gets off work at 4:00 p.m., but gets injured at 2:00 p.m. the employer will go ahead and pay the employee through 4:00 p.m. Therefore, the first lost day from work is the day after the accident.   However, if the employer elects to pay the employee only through 2:00 p.m., the work comp adjuster calculates the indemnity benefits due from 2:00 p.m. The employee will have a partial lost day on the day of the accident and a full lost day the following day.

 

 

Example of Waiting Period & Lost Days

 

Examples of the waiting period and lost days are: The injured employee is off work two days due to the work comp injury and returns to work without limitations on the third day—no TTD is paid. The injured employee is off work nine days and returns to work without limitations, with a seven day waiting period, two days of TTD would be paid.   The employee is off work 20 days with TTD retroactive to the first day after two weeks off work, the employee is paid 20 days of TTD.

 

 

Average Weekly Wage (AWW)

 

The AWW is determined by the employee’s prior pay history. The jurisdictions vary in the time frame used to calculate the AWW. Most jurisdictions use the previous 52 weeks as a time frame, but some states use the prior 13 weeks or the prior 26 weeks as the time frame. An example using the AWW to calculate the TTD: The employee made $52,000 in the 52 weeks prior to the injury causing the disability. The AWW would be $1,000 with the TTD rate being $666.67 (two-thirds X $1,000).

 

An employee’s AWW in most jurisdictions includes all compensation, not just the wage or salary. The adjuster should include overtime pay, bonuses, commissions or any other form compensation in determining the AWW.   Also, some jurisdictions will include the value of benefits if the employer suspends paying for those benefits during the time the employee is off work.

 

The amount of TTD has an upper limit cap and a minimum amount. The jurisdictions vary in the dollar amount for the upper limit and the lower limit. A jurisdiction might by statute state the maximum amount of TTD is $800.00 per week and the minimum amount of TTD is    $100. 00 per week. An executive making $2,000.00 per week would not receive two thirds of his AWW of $2,000.00, or $1,333.34. The executive’s TTD would be capped at $800.00 per week. A part-time fast food worker making $120.00 would not be limited two-thirds of his AWW, or $80.00. His TTD rate would be the state minimum rate of $100.00.

 

 

Temporary Partial Disability (TPD)

 

During the course of the medical treatment of the injury, the treating physician may determine the employee can return to work but only for a limited amount of time per day.   This is when the TPD benefit would come into play on a work comp claim. For example, the injured employee is allowed to return to work for four hours per day and before the injury was working 8 hours per day.   The TPD amount would then be calculated by multiplying the AWW by the amount allowed within the jurisdiction by the fraction of the day the employee is unable to work (4 hours divided by 8 hours = one-half). Let’s say the AWW was $900.00 per week prior to the injury. The state statute allows the employee to collect two-thirds of his AWW. The TPD rate would then be $900 X 2/3 X 1/2 = $300. This injured employee on TPD would be collecting half his normal wage or $450 plus his TPD of $300 for a total of $750 per week.

 

Temporary partial disability is paid until the employee reaches maximum medical improvement (MMI) or is able to return to work full time, whichever occurs first.   Some jurisdictions place limits on the number of weeks (or years) an employee can draw TPD.

 

 

Permanent Partial Disability (PPD)

 

When the treating physician determines the employee has reached MMI, the physician will determine the amount of permanent disability, if any, the employee may have suffered due to the injury. The amount of PPD indemnity benefit maybe either a set scheduled amount or it may be percentage of a body part or it can be a percentage of the whole body.

 

A schedule of injury values is used for the complete lost of a body part in about 40 jurisdictions. Examples of scheduled injuries would be the complete loss of eyesight in one eye or the amputation of one hand. In some jurisdictions the PPD benefit is paid to the employee as a set dollar amount for the complete loss of the body part. For example—the complete loss of the eye is worth $85,000. In other jurisdictions the body part is worth a set number of weeks, for instances, an arm is worth 200 weeks of the TTD rate of $600 per week or $120,000 (200 X $600).

 

Some jurisdictions will use the schedule for the partial loss of a body part or a partial lost to the body as a whole. The treating physician determines the amount of disability. In many jurisdictions the physician rates the loss of body function using the American Medical Association Guide to the Evaluation of Permanent Impairment. For example—the physician following the AMA Guidelines determines the employee lost 20% of the use of his arm. The employee would receive 20% of the scheduled amount for the value of the total arm. Using the $600 TTD rate, the employee would be paid PPD of $24,000 (200 weeks X 20% = 40 weeks; 40 weeks X $600 = $24,000).

 

 

Permanent Total Disability (PTD)

 

When the treating physician (often in consultation with specialists) determines the employee will never be able to return to work, the employee becomes eligible for PTD benefits. In cases where the employee is rated as 100% disabled to the whole body, PTD is almost automatic.

 

Determining PTD is less clear cut when it comes to an employee who has suffered severe injuries and is unable to return to work for your company, but who is not classified as 100% disabled. A number of issues will then come into play in determining PTD. The nature and degrees of physical impairment, the educational level of the employee, the age of the employee, and the ability of the employee to be retrained for other suitable work, plus the availability of the other suitable work, are all factors in the determination of PTD.

 

The amount of PTD varies among the jurisdictions.   In some jurisdictions the PTD rate is the same as the TTD rate. In other jurisdictions the PTD rate is lower than the TTD rate and is a percentage of the TTD rate.

 

PTD benefits are paid until the employee is able to assume work in another field, or until the jurisdiction’s maximum number of benefit weeks is met (in most jurisdictions), or until death (in a few jurisdictions), or until the employee reaches his full social security age (in a few jurisdictions).

 

 

Death Benefits

 

Fortunately, the least common type of indemnity benefit is the death benefit. All jurisdictions provide for the cost of burial, up to a maximum amount. The burial amount varies tremendously among jurisdictions.

 

A death benefit will be paid to the spouse or to the spouse and dependent children. If there are no dependents, a death benefit in some jurisdictions will be paid to siblings or parents. The maximum amount per week and the minimum amount per week are set by statute in each of the jurisdictions. Most jurisdictions will pay the death benefits to the spouse until she remarries or for a set period of time, with 400 weeks of benefits or 500 weeks of benefits, being the most common time frames.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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.

Price Out Future Prescription Cost In Real-Time to Settle More Workers’ Comp Claims

One of the biggest barriers to settling a long-term claim is the fear of running out of money. Injured workers are often reluctant to finalize a claim because they don’t think they’ll have enough money for all their needs — especially for their future medical treatments.

 

But a growing trend in the workers’ compensation system addresses that concern. It happens when a professional administrator becomes involved and can accurately demonstrate real-time savings for prescription drug costs, rather than suggesting a vague range of prices. In fact, plaintiff’s attorneys are even warming up to the idea.

 

 

Transparent Drug Prices

 

Pricing out prescription savings is becoming a key tactic to settling workers’ compensation claims.  Here’s how it works:

 

  • A Medicare Set-Aside or medical cost projection is offered as part of an overall settlement for the injured worker.
  • A professional administrator determines the discounted price of each prescription the injured worker is taking. While the costs are based on today’s current rates, they can sometimes be locked in for a period of time.
  • The injured worker sees the actual discounted pricing of his medications during the settlement process.

 

The professional can determine its discounted prices of prescriptions with the National Drug Code, a list of medications the injured worker is taking, and any recent MSAs and care plans within the past year. Some professional administrators are able to offer drug prices that are 40 percent below the price the injured worker would otherwise pay.

 

Consider this example:

 

  • An injured worker’s MSA projected lifetime prescription cost is $100,000.
  • During the settlement process the professional administrator is able to show the injured worker that, through its platform, the injured worker’s drug prices would actually be $40,000, providing the injured worker with the extra $60,000 for any needed surgeries, or to leave to his heirs.
  • Working with a credible professional administrator ensures the injured worker remains compliant with Medicare guidelines. In the rare event that the worker exhausts his funds, Medicare would become the primary payer going forward.

 

Settlement Tactic

 

Getting long-term workers’ compensation claims off the books is often an elusive goal, due to the fears and concerns of injured workers. Providing real-time, transparent prices for current medications is a strategy that is increasingly leading more injured workers to settlement agreements.

 

Attorneys for injured workers are also becoming savvy to the idea. They say it is much easier to approach their clients about settlements when they can see substantial savings.

 

What makes the idea compelling is that it shows the injured worker exactly what he would be paying for his medications if he was working with the professional administrator. Many injured workers are frustrated, overwhelmed and confused about how much money they will need going forward. While they may not like dealing with the workers’ compensation system, they find some comfort knowing that at least most of their medical needs will be met and someone is there to help them navigate the system.

 

An appropriately developed settlement with a professional administrator involved can address both needs. The worker gets the money he needs — spelled out in a clear, concise manner, and the professional administrator guides him through the process going forward. In addition to medication costs, some professional administrators also have discounts for home healthcare, skilled facilities, and durable medical equipment services.

 

 

Conclusion

 

Using a professional administrator as part of the settlement process provides a level of comfort for all participants, and helps ensure the injured worker will have enough money for the rest of his life.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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.

Workers’ Comp File Review Checklist for Initial and Subsequent Adjuster Action Plans

When you go on-line to review the adjuster’s file notes on your company’s lost time work comp claims, do you know what you should see in the adjuster’s Action Plan? If you have not been a work comp claims adjuster, it would be easy for you to miss items overlooked or missed by the adjuster. The adjuster’s file notes should state what was accomplished and what needs to be accomplished to move the file forward.

 

 

Each of the items that need to be accomplished should be given a due date and placed on the adjuster’s diary (calendar) for completion. You should see at minimum the date due and the date completed for each of the items in the adjuster’s Action Plan.

 

 

 

Initial Claim Handling Completed Day Claim Received

 

 

If your adjuster is following the Best Practices set by most insurers and third party administrators, the initial claim handling was completed the day the claim was received in the claims office. You should see file notes reflecting coverage was verified for the claim, that the employer contact, employee contact and physician contact was completed and the initial reserves were placed on the file.

 

 

All of these items should have been completed before the adjuster does the initial Action Plan. If for any reason coverage has not been verified, contacts not completed or the reserving cannot be done, the adjuster’s Action Plan should reflect the item(s) that are outstanding from the initial handling and provide the due date for the follow up on those items to be completed.

 

 

Initial Action Plan Checklist

 

Assuming the first day’s claim handling was completed, the initial Action Plan for the work comp claim should contain:

  1.  A follow up date for further contact with the employee (ability to return to work).
  2.  A follow up date for further contact with the employer (availability of a modified duty position if the employee is unable to return to full duty).
  3.  A follow up date to verify the receipt of the initial medical report.
  4.  A follow up date to verify the receipt of the documentation of the average weekly wage (should be within 14 days or less depending on the jurisdiction—in order for the adjuster to issue the first TTD payment or issue a denial of claim).
  5.  A follow up date to complete any further investigation of the claim (should be within 14 days of the date the claim was received).
  6.  If subrogation is appropriate based on the investigation, a date to put the responsible party on notice of the subrogation claim.
  7.  A date to verify the claim is accepted for compensability or the date the claim will be denied.
  8.  A date for the TTD benefit payments to be calculated and the first TTD check issued, if applicable.
  9.  A date for the completion of the ISO filing (within 14 days of the receipt of the claim).
  10.  A follow up date to verify all state required forms have been filed with the state work comp board.
  11.  If the file is reportable to an insurer, excess carrier or any other party, the date the reporting will be completed.
  12. A date for the next Action Plan to be completed (usually 30 days after the first Action Plan but the time frame can be shorter or longer depending on the severity of the claim).

 

 

Second Action Plan Checklist

 

By the time the second Action Plan is due, most or all of the items outlined in the first Action Plan were completed. Any items not completed are carried over to the second Action Plan with a new due date for each carried over item. Activities you can expect to see on the second Action Plan include:

 

  1. A date for reevaluation of the file reserves (usually 60 days from the date the claim was received in the claims office).
  2. A date for evaluation of the need for a Nurse Case Manager on the claim, if the employee has not returned to work, and assignment of the Nurse Case Manager, if needed.
  3. A date for coordination of the return to work full duty or modified duty, if needed.
  4. A date for the obtainment and evaluation of the disability rating.
  5. If the file is reportable to an insurer, excess carrier or any other party, the date the second report will be completed.
  6. A date for the next Action Plan to be completed (usually 30 days after the second Action Plan but the time frame can be shorter or longer depending on the severity of the claim).

 

 

 

Third & Subsequent Action Plan(s) Checklist

 

The third and subsequent adjuster’s Action Plans will vary more in the items that will be included in the Action Plan. Some things to look for in the subsequent Action Plans including their due dates, are:

 

  1. Medical records being obtained and evaluated for all on-going treatment.
  2. Regular scheduled follow-ups with the employee, the employer and the medical providers.
  3. Regular scheduled contact with the Nurse Case Manager when there is one.
  4. The completion and filing of all state forms.
  5. The scheduling and obtaining of independent medical evaluation or a peer review.
  6. Offsets and deductions being calculated and applied.
  7. Second Injury Fund (in the jurisdictions that still have one) being placed on notice
  8. A settlement evaluation that is explained and properly justified, including both the strengths and weaknesses of the claim.
  9. A Litigation Plan and a Litigation Budget, if the claim is in suit or in a contested board review.
  10. All required waivers and/or releases obtaines.
  11. CMS notification if a MSA is considered or needed.
  12. A re-evaluation of the reserving accuracy.
  13. Subsequent filing of the claim with the ISO/Index Bureau.
  14. If the file is reportable to an insurer, excess carrier or any other party, the date the next report will be completed.
  15. A date for the next Action Plan to be completed (usually 60 or 90 days after the third Action Plan but the time frame can be shorter or longer depending on the severity of the claim).

 

 

As long as the work comp claim remains open, the adjuster continues to have an Action Plan outlining the steps to take to bring the claim to a conclusion. The final entry on the adjuster’s last Action Plan for the claim is actually the activity the adjuster looks forward to doing. The final Action Plan activity should read: “Close file.’’

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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.

President Trump: How NOT To Deal with Unions in Workers’ Comp

If you’d like to learn how to be more successful in working with your union and your workers’ compensation program, all you simply need to do is follow the actions of President Trump and the do the exact opposite. Hello. My name is Michael Stack. I’m the CEO of AMAXX, and this past weekend was a very interesting and public display of working with a group in a union type environment and something that we can learn from.

 

 

President Trump Condemned NFL & Caused Dramatic Response

 

Let’s talk about what happened. On Friday, President Trump gives a speech and he says that the NFL players that have been kneeling or sitting down during the anthem, during the National Anthem, before the games should be fired. He condemned those actions and said those owners should fire them immediately and fans should walk out of the stadium. On the other side of this equation is the players’ rights to free speech, their right to peaceful protest.

 

Now, whether you’re a huge supporter of Trump, or whether you completely oppose everything that he says and does, on this particular issue, I happen to agree with President Trump. I think that we should honor our flag. I think that we should be standing during the National Anthem, respecting those that paid the ultimate price to give us that freedom, which we so often take for granted. But, while I don’t agree with their actions in doing that, I respect their ability to do it. When you look at what happened, the condemning of the NFL and the players, the response by the owners and the coaches and the players was that all 32 teams participated in a protest this past weekend. All 32 teams participated in a protest this past weekend in response to those comments, because what happened is, those comments changed the conversation, changed the reasoning behind those actions. Because my bet is, many of those players, many of those coaches, many of those owners, are probably somewhat on this side, and they may even agree with President Trump’s statements to some degree, or they were undecided prior to making those statements.

 

 

Adopt Us & Them Attitude

 

But, the statements that he made changed the conversation between honoring the flag versus free speech. He changed it to us versus them, and it forced those players, owners, and coaches to respond and band together in opposition to those comments. So, I challenge you in your organization to look at your union relationship. Is your attitude, is your communication fostering this us versus them dichotomy? Or, is it more an, us and them? Once you can change the conversation to: How can we work together to create a better outcome for both parties? You will never be as successful as you could be. Again, I’m Michael Stack, CEO of AMAXX, and remember your work today in workers’ compensation can not only have a dramatic impact on your company’s bottom line, but it will have a dramatic impact on someone’s life, so be great.

 

Learn more: How to Execute Successful Return to Work with Unions

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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.

7 Ways Structured Settlements Are Advantageous — Regardless of Interest Rates

Interest rates continue to be at historically low levels. Even with recent hikes by the Federal Reserve, other factors playing into the equation are holding down rates. While that’s great for those buying property, it raises questions for injured workers setting up or dependent on a pre-established income stream — such as a structured settlement. The good news is, it really doesn’t matter.

 

Structured settlements are not investments like other products and, therefore, are not subject to the whims of Wall Street. They are guaranteed due to their underlying financial instrument – typically an annuity from a life insurance company. The structured annuity is guaranteed regardless of what happens in the market. As long as a highly rated insurance company is involved, there are strict regulations to ensure sufficient reserves are set aside for every annuity the company issues.

 

A deeper understanding of structured settlements sheds more light on how they work and why the interest rate environment is really not a factor.

 

 

What is a Structured Settlement

 

First created in Canada, structured settlements came into this country in the 1970s exclusively for injured workers. Initially they were used on large, catastrophic injury cases; although now as many as half of structured settlements are often less than $50,000. Federal and state governments have passed myriad laws and changes to the tax codes over the years to make structured settlements more attractive.

 

Instead of taking the money received from a workers’ compensation settlement or personal injury lawsuit in one lump sum, some or all the money is put into a structured settlement for future needs and goals. A set amount of the money is distributed at preset intervals — monthly, quarterly, annually or whatever is agreed upon by all parties. It can be doled out over a finite period of time or for the person’s entire lifetime. The settlement may even include a portion for beneficiaries upon the injured worker’s death.

 

A typical structured settlement includes upfront cash for immediate needs, such as attorney fees or medical expenses. The remainder is then put into one or more annuities issued by a life insurance company, which makes the periodic payments to the injured worker.

 

 

Advantages

 

Structured settlements include many inherent features that make them more appealing than lump sum settlements. Research continually shows that a majority of people who receive a single sum of money end up spending most or all of it too soon.

 

Among the additional benefits of structured settlements are:

 

  1. Guarantees.  The payments to the injured worker from interest-earning annuities are backed by insurance companies, which are highly regulated.
  2. Tax Free.  The injured worker receives a 100 percent lifetime exclusion from income, dividend and capital gains taxes.
  3. No Fees.  Structured settlements do not include management fees.
  4. No risk. Because of their structures and guarantees, the injured worker receives the money as scheduled — regardless of current interest rates. Also, they are not managed as other investment products are, so are not in danger of ending due to poor investment results.
  5. Eligibility. Benefits from federal and private health care plans are protected.
  6. Customization. Working with an experienced, reputable company with appropriate knowledge and financial tools means the settlement can be designed to fit the specific needs and desires of the injured worker involved.
  7. Higher returns. One of the biggest advantages of structured settlements stems from their status as tax free. That translates to returns that are higher than those seen in low- to moderate-risk investments. To match or get a better return than what an underlying annuity provides would require taking on higher risk and more uncertainty.

 

For example, in order for an injured party to earn the 6 percent return rate of the structured settlement, he would have to earn an additional 3.23 percent on the cash investment at the 35 percent tax bracket (9.23 percent less 6.0 percent), an additional 2.33 percent at the 28 percent bracket and 2.0 percent more in the 25 percent income tax bracket. In addition to the added interest, the self-investor would have to subtract any local and state taxes, as well as the related brokerage or investment fees.

 

 

Conclusion

 

Getting long term workers’ compensation claims off the books and ensuring the injured worker’s needs are taken care of can be done relatively easily through a structured settlement. Those with the appropriate expertise in developing them create a win-win for all parties involved in the settlement.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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.

Case Study: $774,583 in Work Comp Savings through MSA Triage

Medicare Secondary Payer compliance has created several challenges for interested stakeholders in workers’ compensation programs that seek to reduce cost and improve efficiencies.  One of the common failures of many workers’ compensation programs when it comes to building an effective compliance program is the inability to assess the situation, prioritize troublesome files and position those files for settlement.  Now is the time to change the direction of your program and reduce costs by considering a triage process that is similar to how emergency rooms treat patients when they come through the door.

 

 

Emphasis on Case Triage and Care Prioritization

 

Applying the concept of triage to files involving Medicare Secondary Payer compliance matters is important when it comes to prescription drugs, which has been a main cost driver since the addition of the Medicare prescription drug benefit in 2006.  This allows a workers’ compensation program to understand the exposure and take effective steps to mitigate the future risks.

 

 

Implementing an Effective Triage Program to Reduce Program Costs

 

Like an injured person entering the emergency room, an MSP compliance case requires triage to assess the condition and effectively guide care.  Recommendations can also be made to reduce future exposures through the implementation of an effective plan.

 

  • Use a clinical team to review and understand the employee’s complex medical issues;

 

  • Understand state specific rules for prescription drug use, in conjunction with evidence based medicine to ensure best practices are included in the treatment/drug weaning plan; and

 

  • Evaluate the need for the recommended future medical care and treatment and take the necessary next steps to reduce program costs.

 

By taking the above steps, a proactive workers’ compensation program can coordinate care with the employee’s treating doctor.  This can include the removal of certain future care recommendations, implement steps to reduce prescription drug usage or change certain drugs from name-brand medications to generics, which are often less expensive.  The result of early case evaluation and triage can ensure quicker employee recoveries, promote settlement and add savings to a workers’ compensation program.

 

 

CASE STUDY (Provided by Tower MSA Partners): $774,583 in Savings from Pre-MSA Triage

 

Challenge:

 

Case submitted to Tower for Pre-MSA Triage to assess Medicare exposure.  In 2010, worker was doing electrical line work when he was struck by lightning.  Injuries included electric shock with pain, insomnia, depression and seizure activity.  Treatment included prescription drugs as follows:  Hydrocodone/APAP (7.5 / 325 mg at 4 / day), Baclofen (muscle relaxant), Topamax (anti-seizure), Cymbalta (anti-depressant), Keppra (anti-convulsant), Naproxen (pain), Clonazepam (anti-anxiety).  Cost drivers included Keppra and Topamax, both with generic available, but being prescribed, filled and paid by carrier as brand.

 

Total MSA Exposure – $1,416,513. 

 

 

Solution

 

As part of the standard Pre-MSA Triage process, Tower’s clinical team identified the key cost drivers, made recommendations within the context of the state of jurisdiction to optimize the drug regimen, documented recommendations to achieve the desired result, and calculated the optimized MSA value at $641,930.

 

In this case, recommended next steps included Tower’s Physician Follow Up service to contact the injured worker and treating physician to request a change from ‘Brand’ to ‘Generic’ formulation for Topamax and Keppra. Tower’s legal team worked with defense to facilitate the switch by obtaining attestation of acceptance of the generic formulation by the injured worker (he had previously requested brand), then communicating with the prescribing physician to obtain written confirmation of the substitution of generic formulations of both drugs for the previously prescribed brand drugs.

 

 

Results:

 

With client approval, Tower used the information prepared with the Pre-MSA Triage, added the attestations obtained from both injured worker and physician noting that substitution was allowed for both Topamax and Keppra and finalized the MSA for submission to CMS.

 

In its review, CMS accepted the attestations as confirmation of the change in drug therapy and approved Tower’s submitted MSA at $641,930.

 

Total savings = $774,583.

 

 

Conclusions

 

Changing the mindset of a workers’ compensation claims program needs to include the willingness to explore options when it comes to Medicare Secondary Payer compliance.  Using a triage program on all files where future medicals are part of the equation adds value to a claims management program and promotes savings.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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.

Follow Evidence Based Medicine on Every Work Comp Claim With This Simple System

Hey there, Michael Stack here CEO of Amaxx. So I’m not a doctor, right, I have no medical training. I’ve never even particularly liked science very much; biology, chemistry, those classes in high school, just not my thing. I was much better at math, I was always good at math and I was always very interested in business.

 

 

Medical Component Significant in Workers’ Compensation

 

So, fast forward over 20 years later and now I’m in an industry where the medical component of it is a huge piece to what we do in creating these best outcomes. The costs are only continuing to rise and the complexity of the health care system is following right along with it.

 

So, while I’m not a doctor and you might not be either, I do know how to read. I also know how to use a phone and I even know how to use email and if you have these three skills as well, there is no reason that you should not be following the best practices of evidence based medicine on every single one of your medical injuries, which are your worker compensation claims.

 

 

Simple System to Follow Evidence Based Medicine

 

Now let me lay out a very simple system for you to ensure that that happens. You start with reading the evidence based guidelines for that injury. John Smith’s injury, which has a rotator cuff injury, these are published in MD guidelines, also published in ODG guidelines, both of those are paid subscriptions. You can also use a free resource at guidelines.gov.

 

So either you yourself or someone else on your claims handling team, read the guideline on what it says for rotator cuff injuries for that particular ICD9 or ICD10 code. You then have a weekly meeting with your claims handling team, your risk manager, your adjuster, maybe your account representative, case manager, possibly, possibly an attorney if it made sense on that particular day.

 

 

Compare Injury to Evidence Based Guidelines

 

You talk about John’s injury, where is he now, where is he going, what has happened, how does it compare to those evidence based guidelines and you’re holding this meeting on the phone. If it starts to look like he’s going off the track or there’s some elements that when you compare them to the guidelines, it’s outside of what’s recommended or outside of what’s typical.

 

Now, that might be relevant, that might be right, based on John’s scenario but you don’t know that because you’re not medically trained and your adjuster isn’t either. So the next thing you do is, you send an email to your medical advisor and you say doctor medical advisor, can you take a look at this case based on John’s history, based on John’s circumstances, based on the comparison to those evidence based best practice guidelines for what should be expected in this case. Is that right or is there something else we should be doing, some different interventions, maybe it’s an IME, maybe it’s a UR, maybe it’s further case management, maybe it’s something else that your medical advisor would recommend.

 

Following this simple system, in a systematic way will ensure that every one of your medical injuries, which are your worker compensation’s claims do follow the best practices of evidence based guidelines.

 

Again, I’m Michael Stack with Amaxx and remember your work today cannot only have a dramatic impact on your company’s bottom line but it will have a dramatic impact on someone’s life. So, be great.

 

Learn more: HOW TO USE EVIDENCE BASED MEDICINE TO CREATE BETTER WORKERS’ COMP CLAIM OUTCOMES

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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.

 

 

Hiring Unqualified People Is Big Worker’s Comp Mistake

Hiring Unqualified People Is Big Worker’s Comp MistakeHiring unqualified people to fill positions within the workforce is by far one of the biggest mistakes made in maintaining low workers’ comp costs.

 

The trucking industry and bus drivers for school buses, over the road or municipal buses is a perfect example of how applying ability standards as conditions of employment help maintain work comp costs, while maintaining productivity and high safety standards.

 

The Department of Transportation (DOT) requires medical exams to ensure a driver is physically capable and qualified to operate a big rig truck. Using a variation of these standards in hiring can help companies protect their workers’ comp budgets by making sure they hire an employee who can do the job!

 

 

Adapt DOT Approach to Meet Your Company Needs

 

DOT’s approach can easily be adapted to meet the needs of all companies. Place the emphasis not only in performing background checks and drug screening, but also make sure potential employees are qualified to perform the job they are hired for. If the position calls for someone with above average hand-eye coordination, would it be wise to hire the next candidate who walked through the door without qualifying him/her for the job?

 

When a company suffers from too many employee accidents, the nature of the accident needs to be examined. Policies need to be put into place to prevent reoccurrences. Accidents do happen and with proactive policies dictating how these events are handled, management personnel has tools to help them fine tune employee training and accident avoidance policies.

 

Many companies have strict procedures requiring the immediate reporting of all accidents, whether there was injury or not, followed up by detailed documentation of the event. Where there is an injury, these policies ensure the injured employee receives prompt medical treatment, timely filing of required workers’ comp paperwork and claims forms, and the employee’s recovery is monitored to ensure a prompt return to work, even if into modified duty.

 

Additionally being on top of all work related accidents and injures affords greater control of these situations and provide the means to monitor and evaluate employee qualifications and adherence to workflow procedures.

 

 

Cost Savings Are Easy to Calculate

 

Cost Savings is easy to calculate. Enter the total incurred losses and your profit margin, and when you calculate, it will show the sales to pay for accidents. For example, it will take 11 Million dollars to replace $500,000 in incurred losses if your companies profit margin is 4.5%. So, it’s cost effective to put a program in place to screen new hires and make sure they are physically and psychologically suited to the job.

 

The focus of administration is on fostering safety within the workflow and encouraging employees to follow procedures and help newer employees do the same. By making employee safety as important as meeting production quotas and timelines, you, the employer, show your employees you care about them. The employer’s sincere concern is then perceived by the employees as their company caring about their welfare.

 

By establishing qualification testing and standards in the workforce, a company can ensure safety and work procedures are not compromised, keep the workforce safe while maintaining workers’ comp costs and workforce productivity. There are numerous companies that help set up employment screening programs. Interview several, and ask them to come to your facility to meet them and let them see the jobs your company performs.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 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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