Top Industry Exec Offers Workers Compensation Year-In-Review

Two-thousand-eleven has been an interesting year in the workers compensation industry. New software has helped many administrators take better control of their costs, studies on safety have led to an increase in preventative measures and legal changes have led to unusual and sometimes controversial administration in some states.
Here at Roundup we asked one of our favorite experts, Curtis Smith, executive vice president of Medcor, Inc., a national on-site health services company, what he thought the top WC issues were for 2011. What follows are his conclusions:
Conflicts of Interest Inherent in the Industry
The very organizations employers depend on to help manage and reduce costs depend on claims for their core revenue – and this can lead to potential conflicts of interest, according to Smith. He offers these examples: contingent commissions for brokers and consultants, TPAs (third-party administrators) and MCOs (managed care organizations) who select network providers and share revenue from provider discounts. Smith also cautions against pharmacy chains that put pharmacies on-site in large worksites for convenience also employ the practitioners who write the prescriptions.
Prescription Drug Abuse
Thousands of people incur illness and injury each year from abuse of prescription medications, especially pain medications. Addictions and overdoses are increasing, as are deaths, Smith wrote. Addictions often arise from treatment after a work-related injuries but the medical community is not policing or restricting doctors who write these prescriptions. What’s more, TPAs are not excluding these unrestricted doctors from networks of approved providers for fear of litigation.
Prescription Drug Costs
The same medication can cost 10 times as much in workers compensation cases as it does in general health applications. Medications’ fee schedules have been negotiated down and controlled in group healthcare far more than in workers comp situations. Consequently, drug companies and others are moving into the comp space to take advantage of increased profitability, Smith said.
Increased Litigation in the Industry
The fundamental premise behind the workers compensation system is falling apart in many states (e.g. California and New York) where an increasing percentage of claims are contested and litigated. Huge settlements out of proportion to true economic need are forcing employers to be defensive and deny claims; denying and resisting legitimate claims forces employees to seek counsel and litigate. The comp system is turning into a battleground of plaintiff and defense attorneys working the system.
Injury Triage
Smith said he would be remiss if he did not mention injury triage. “This truly is an effective way to reduce unnecessary claims and costs, to identify serious cases, and to provide early intervention for all cases,” he wrote. Financial and health outcomes are improved with the use of triage. “It’s also innovative – wining several U.S. patents — are there any other WC methods that have been patented in the last 10 years? Or ever?” he asks. Thousands of companies are using triage and many competitors have joined the market, providing a variety of service and pricing models. Yet, many employers (even most) still don’t use it and the claims-driven industry still resists it.
Even those who offer injury triage often do so begrudgingly to satisfy their employer-clients, to block another triage provider from taking claims away, or to acquire business – but they are slow to introduce triage to an existing book of businesses, or, once introduced, often let implementation and utilization languish so claims can continue to flow.
In conclusion, look to hear more about these important topics in 2012. Though they may not be resolved in short order, they are certainly going to be on the minds of those of us in the industry in years to come.
Curtis Smith is Executive Vice President of Medcor and can be reached at or 815-363-9500 Ext 5558. Visit Medcor at
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at:

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