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.

 

 

©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.

 

Cal-OSHA Cites ExxonMobil for Workplace Safety Matters

Cal/OSHA recently issued citations to ExxonMobil Refining & Supply Company after it discovered the company did not repair faulty equipment at its Torrance refinery for four years, exposing workers to possible serious injury or death.

 
Cal/OSHA opened an investigation following a hydrofluoric acid leak at the refinery’s alkylation unit on Sept. 6, 2015. Investigators found that the leak was related to a temporary clamp that was installed on a three-inch nozzle flange following an earlier leak in 2011. The nozzle was not replaced until January, 2016.

 

“This is a case, a minor repair could have prevented workers at this refinery from exposure to a life-threatening acid,” said Cal/OSHA Chief Juliann Sum.

 

“These citations and penalties are a wake-up call that refineries must follow strict safety protocols to protect their employees.”

 

The three citations issued include one willful-serious, indicating the employer was aware of the hazardous condition and did not take reasonable steps to address it, and two general citations for ExxonMobil’s failure to conduct a hazard analysis and identify and address the 2011 leak. Proposed penalties total $72,120.

 

ExxonMobil mitigated the leak caused by the faulty clamp within 48 hours of the release. The company also removed tank 5C-31 from service, where the faulty nozzle was attached, to make repairs. Before ExxonMobil was allowed to restart operations in January, a complete inspection of the alkylation unit was conducted to ensure there were no additional leaking flanges or nozzles.

 

Cal/OSHA previously issued 19 citations with proposed penalties of $566,600 to ExxonMobil following an explosion on Feb. 18, 2015 that injured four workers. The recent citations are unrelated to that incident.

 

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

WORK COMP CALCULATOR:   http://www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

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New Comp Coverage in Ohio for Some Employers

Good news for some businesses doing work in the Buckeye State.

 
A new workers compensation coverage insurance option is now available to eligible Ohio businesses for their employees who work in other states. The new offering will simplify workers comp for these employers, ensuring their employees are protected without the need to manage policies in multiple states with varying laws.

 

Effective as of March 1, employers can apply for this coverage through policies issued by the Ohio Bureau of Workers Compensation (BWC) through a program with United States Insurance Services (USIS) and Zurich Insurance.

 

“By contracting with insurers licensed in other states, BWC is able to ensure employers have proper coverage wherever they’re operating,” said BWC Administrator/CEO Steve Buehrer. “Addressing this longstanding concern of many Ohio employers is one of many steps we’ve taken at BWC over the last five years to ensure workers comp is not a barrier to business expansion, inside and outside of the state.”

 

BWC does generally provide coverage for employees working temporarily outside of Ohio; however, complications can arise when the injured worker files a claim in another state. Treatment can be delayed and businesses can be subject to penalties by the other state.

 

A law enacted last year granted BWC the authority to contract with an insurer to provide this coverage. USIS and Zurich submitted a program proposal and were selected through a request for proposal process. USIS first installed another state’s coverage option in Maryland in 1996, and first began its agency relationship with Zurich in 2010.

 

Employers must have the majority of their business in Ohio to be eligible for the coverage option.

 

Interested employers will apply directly to BWC, which will determine eligibility and the premium cost for the optional coverage. BWC will issue a Zurich policy to cover out-of-state exposures and Zurich will respond to any claims filed out of state.

 

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

WORK COMP CALCULATOR:   http://www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR:   http://www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE: Workers Comp Resource Center Newsletter

Ohio Worker Suffers Multiple Broken Bones, Company Fined

A 39-year-old Ohio worker suffered multiple broken bones after he fell more than 40 feet while conducting maintenance on a crane at TimkenSteel’s Faircrest Plant.

 
The U.S. Department of Labor’s Occupational Safety and Health Administration found the company failed to provide the worker adequate fall protection. The Aug. 7, 2015, injury was the second life-threatening injury at a TimkenSteel plant since May 2015.

 

OSHA cited the steel manufacturer on Jan. 29 for two repeated and three serious safety violations. TimkenSteel faces $129,500 in fines as a result of OSHA’s investigation. Investigators found crane maintenance workers were exposed to falls due to lack of guardrails, and protective equipment. They also found workers were not protected from operating parts of cranes during service and maintenance because locking devices, guards and other safety procedures were not used and equipment was not powered down properly.

 

“TimkenSteel needs to fix their safety program immediately,” said Howard Eberts, OSHA’s area director in Cleveland. “OSHA will monitor these plants until the company makes protecting workers a priority. No worker should die or suffer life-altering workplace injuries because their employer fails in its responsibility to protect their employees.”

 

In May 2015, another TimkenSteel worker was severely injured when a crane’s safety latch failed and 1,000 pounds of equipment fell on him at its Gambrinus plant.

 

In October 2015, OSHA placed TimkenSteel in the agency’s Severe Violator Enforcement Program, after investigations at the Harrison and Gambrinus plants found several violations resulting in proposed fines of $393,500. The company has contested those violations.

 

TimkenSteel was spun off from The Timken Company in 2014. Prior to this inspection, the three plants and corporate offices now operated by TimkenSteel had been inspected by OSHA 29 times since 2005, resulting in the issuance of 76 violations.

 

The manufacturer of large steel bars and seamless mechanical tubing was mostly recently cited by OSHA in November 2014. Its Harrison steel plant melts, rolls, produces and finishes steel, and its Gambrinus plant performs cold steel finishing.

 

The company was given 15 business days from receipt of its citations and penalties to comply, request an informal conference with OSHA’s area director in Cleveland, or contest the findings before the independent Occupational Safety and Health Review Commission.

 

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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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.

 

Trio of Midwestern States Looking Harder at Workplace Safety

The increased likelihood that workers in high-hazard manufacturing industries – such as food, furniture, fabricated metal, nonmetallic mineral, machinery and computer products – will be injured on the job is leading federal safety and health inspectors in three Midwestern states to increase its focus on industry outreach and inspections to reduce injury and illness rates.

 
More than 340 workers died in fatal manufacturing incidents nationwide in 2014, the Bureau of Labor Statistics reports.

 

On Jan. 25, the U.S. Department of Labor’s Occupational Safety and Health Administration launched a new Regional Emphasis Program in Kansas, Nebraska and Missouri.

 

Regional and local emphasis programs are enforcement strategies designed to address high-risk industries; OSHA’s regional and/or area offices implement the programs.

 

Programs Start with Three-Month Education, Outreach Activities

 

Each begins with a three-month period of education and prevention outreach activities to share safety and health information with employers, associations and workers. OSHA encourages employers to use this period to bring their facilities into compliance with federal safety and health standards, if they are not already.

 

“Workplace injuries, illnesses and deaths are preventable when employers train workers and provide a safe and healthy work environment. This region-wide emphasis program provides 90 days of outreach and education to assist employers in high-hazard industries to eliminate hazards that can cause worker injuries and illnesses,” said Marcia Drumm, regional administrator for OSHA. “The program will also re-direct OSHA’s resources and increase the probability of inspections at establishments in high-hazard industries with more than 10 employees and those that have not had a comprehensive inspection since 2011.”
OSHA prioritizes general industry inspections using the most recent BLS “Days Away, Restricted or Transferred” rates and its “Days Away From Work Injury and Illness” rates. Hazards related to lifting and other ergonomic stressors will also be evaluated.

 

The emphasis program focuses on manufacturing industries where injury and illness rates exceed the average for the private sector. Included are manufacturers of the following products: food, furniture, fabricated metal, nonmetallic mineral, machinery, and computer products as well as printing and related support activities.

 

This three-state emphasis program ends Sept. 30, 2016, unless extended. OSHA area offices will continue to open inspections in response to complaints, hospitalizations and fatalities.

 

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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WCRI Study Zeroes-in on Illinois Medical Services

A new study from the Workers Compensation Research Institute (WCRI) compares the workers comp fee schedule rates and Medicare rates for a variety of medical services in Illinois as of 2015.

 

The medical services covered in the report, Evaluation of the 2015 Fee Schedule Rates in Illinois, are professional medical services, hospital outpatient and ambulatory surgery center (ASC) facility services related to surgical procedures, and hospital inpatient services. The analysis focused on the common services delivered to injured workers within each category.

 

Additionally, to provide some context on where Illinois stands with respect to other states, the study compared the fee schedules in Illinois relative to Medicare (as of 2015) with fee schedule rates relative to Medicare in other states (as of 2011) for professional medical services. The study computed the workers’ compensation fee schedule rate as a percentage above or below the Medicare rate.

 

The following are among the study’s findings:

 

  • In 2015, the workers comp fee schedule rates for professional services in Illinois were on average 69 percent above the 2015 Medicare rates for the same set of services in the state.

 

  • As compared with July 2011, Illinois moved down in the interstate ranking for overall professional prices in 2015 but remained among the states with relatively higher workers comp fee schedule rates relative to Medicare.

 

  • The difference between workers comp fee schedule rates and Medicare rates varied tremendously across seven groups of professional services in Illinois, ranging from near Medicare for evaluation and management services to 339 percent above Medicare rates for major surgery.

 

  • In 2015, the Illinois fee schedule rates for the hospital outpatient facility services associated with common knee and shoulder surgeries were on average 157 percent and 110 percent higher than Medicare rates for similar knee and shoulder surgeries, respectively.

 

  • At the procedure level, the difference in workers comp fee schedule rates over Medicare rates for common surgeries performed at ASC settings varied substantially, from $2,368 to as much as $5,282.

 

In 2015, for hospital inpatient stays associated with common inpatient procedures, Illinois set fee schedule rates 54 percent to 119 percent above Medicare.

 

For more information about this study, or to purchase it, visit http://www.wcrinet.org/result/eval_2015_IL_FS_result.html.

 

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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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.

 

Ohio BWC Reminds Workers That Comp Fraud Doesn’t Pay

Ohio Bureau of Workers Compensation (BWC) Administrator/CEO Steve Buehrer recently reported that four individuals were convicted of, or pleaded guilty to, charges related to defrauding Ohio’s workers compensation system in January 2016. These court actions are the result of investigations conducted by BWC’s Special Investigations Department (SID).

 
The following are cases that resulted in guilty pleas or convictions during January:

 

Consuelo “Connie” Griffin and David Lusk (Cincinnati, Hamilton County) both pleaded guilty Jan. 14 in the Hamilton County Court of Common Pleas to counts of theft after they were discovered cashing BWC benefit checks for an injured worker who had died. SID opened an investigation after receiving an allegation from BWC’s claims department, which was unable to contact an injured worker receiving permanent total disability for a workplace injury. The claims department reported that worker’s phone was disconnected. The investigation found that while the injured worker passed away in June 2014, the BWC checks that were mailed to his home continued to be cashed. Griffin and Lusk lived in the same apartment complex as the deceased and when he was hospitalized, Griffin signed a power of attorney document giving her control over his finances. Griffin also had the injured worker’s mail forwarded to her address and the pair moved into his apartment when he was hospitalized. Griffin confessed to signing Harrell’s name on the checks and cashing them. Griffin also took money out of his bank account while he was ill and wrote checks from his account to herself for cash. His account was soon closed because Griffin and Lusk spent all the money and failed to pay any of his nursing home expenses. Lusk pleaded guilty to count of theft and one count of theft from the elderly, both fifth-degree felonies. Griffin also pleaded guilty to two counts of theft, both fifth-degree felonies. The court sentenced them to 10 months in jail, suspended, and ordered them to repay restitution of $5,072.62. They also received three years of probation.

 

Michelle Green (Columbus, Franklin County) pleaded guilty Jan. 13 in the Franklin County Court of Common Pleas to attempted workers compensation fraud, a first degree misdemeanor, for working while receiving benefits. SID’s Intelligence Unit received data from the Ohio Department of Job and Family Services (ODJFS) that indicated Green had received wages while receiving BWC benefits. The investigation confirmed Green was employed with Good Hands Home Health Care Service in Columbus. Evidence obtained during the course of the investigation also showed that she intentionally misrepresented and withheld her employment in order to continue collecting benefits. She was ordered to pay restitution in the amount of $1,899.99 and $100 in court costs.

 

Randy Gates, dba Gator’s Auto Repair and Towing (Caledonia, Marion County) pleaded no contest on Jan. 21 in the Marion Municipal Court to a second-degree misdemeanor count of failure to comply for operating his business without workers compensation insurance coverage. BWC’s Employer Fraud Team (EFT) identified that Gates continued to operate his business, Gator’s Auto Repair and Towing, without valid BWC coverage after two previous investigations for the same issue. He had been previously referred for prosecution in 2005 for failure to comply for operating a business without the required BWC coverage. The EFT attempted to work with this employer to become compliant with state law but Gates refused to submit completed outstanding payroll reports in an effort to calculate accurate premiums owed. The employer also failed to attempt to pay his balance with the BWC. On Jan. 21, 2016, Gates entered a plea of no contest to failure to comply, a second-degree misdemeanor. Gates received a 180-day jail sentence which was suspended, and was ordered to pay fines and court costs. Gates currently has an estimated balance due of approximately $36,000 and is working with the BWC to submit outstanding payroll reports for calculation of exact premium due.

 

To report suspected workers comp fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

 

 

 

 

Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com.  Contact: kstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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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.

 

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