7 Ways to Avoid Mega Workers’ Comp Claims

7 Ways to Avoid Mega Workers’ Comp Claims“There was an uptick in the number of mega workers’ comp claims in Accident Year (AY) 2016,” according to NCCI. “Ten claims of at least $10M have been observed for AY 2016 evaluated at 24 months. This is more than for any of the previous 15 AYs at a comparable maturity.”

 

The organization’s latest research brief drills down further and outlines additional revelations:

 

  • These multimillion-dollar mega workers’ comp claims are frequently the result of motor vehicle accidents or falls from elevated levels.
  • It is the Contracting industry group that has by far the greatest share of mega claims
  • The carpentry classification has had more mega claims than any other class over the past 15 years.
  • The trucking classification — representing short-haul and long-haul — ranks 2nd in both mega claims and all lost-time claims.
  • Central nervous system injuries (neck/spine or head/brain) and injuries to multiple body parts account for nearly 95 percent of mega claims. For lost-time claims, these categories make up only 16 percent of the claim total.
  • Hospital inpatient and home health care account for more than half of the mega claim medical costs. This is in stark contrast to all lost-time claims where physician expenses and hospital outpatient represent most of the medical costs.
  • Approximately two out of three mega claimants spend at least three months as a hospital inpatient, and approximately one in five are in the hospital for more than a year.

 

Armed with this knowledge, workers’ compensation stakeholders should focus their efforts on preventing these injuries — especially in the industries affected most.

 

 

Auto Accidents

 

Even though strains and slips/trips are the leading causes of loss for all lost-time claims, motor vehicle accidents accounted for more than 30 percent of $10 million+ claims. These are also the #1 cause of work-related deaths, accounting for more than 40,000 fatalities in 2016. The 14 percent increase from 2014 represents the largest jump in more than 50 years.

 

The federal government says fatalities from distracted driving grew nearly 9 percent in 2015, outpacing the overall increase in traffic accidents.

 

The three types of distractions for drivers are:

 

  • Visual — eyes on the road.
  • Manual — hands on the wheel.
  • Cognitive/mental — mind on driving.

 

Cell phones, one of the main causes of motor crashes lately, involve all three forms of distraction. One big problem is that drivers talking on cell phones may not realize they are mentally distracted. Also, this type of distraction usually lasts much longer than either visual or manual distractions.

 

Despite common thinking, hands-free talking on cell phone while driving does not reduce the risk — due to the mental distraction. The argument that it is similar to talking with passengers flies in the face of research. Actually, adult passengers share awareness of the driving environment and having them in the vehicle lowers the crash risk.

 

Unfortunately, educating employees will not lead to voluntary compliance. Employers need to implement and enforce specific policies about driving. These should state that employees who are driving:

 

  1. Are not allowed to use electronic devices, either handheld or hands-free.
  2. May not answer calls. Incoming calls must be directed to voicemail.
  3. Are prohibited from reading or responding to text messages and emails.
  4. May make an emergency 911 call can only after parking the vehicle in a safe location first.

 

The driving policy should include:

 

  • Clear language.
  • Documented training and communication.
  • A requirement for all employees to sign the policy.
  • Disciplinary action for violating the policy. This could consist of warning for the first two violations and termination for the third incident.

 

The effort to encourage safe driving should involve senior leadership, as well as managers throughout the organization. A person high up in the organization can send a letter to employees explaining that the policy is going into effect for any employee using a motor vehicle associated with company business and/or electronic devices owned or used for company business.

 

 

Falls

 

While half the fatal falls in 2014 occurred from a height of about 20 feet, 12 percent of them were from less than 6 feet high. Construction workers are at most risk, although falls can happen to anyone, anywhere.

 

Falls are 100 percent preventable. OSHA has a three-fold plan to avoid falls:

 

  • PLAN ahead to get the job done safely
  • PROVIDE the right equipment
  • TRAIN everyone to use the equipment safely

 

Whether work is being done from a ladder, scaffolding or on a roof, all three of these mandates apply.

 

  1. Employers must look ahead to ensure a job is done safely. That means identifying how the job will be done, the tasks involved, and the safety equipment that will be needed. Safety equipment should be included in a job’s cost estimate.

 

The area where the work will be conducted should be scanned for potential hazards ahead of time. For example, there should be level ground if ladders are to be used.

 

  1. Workers exposed to potential fall risks must be given the proper tools and equipment to ensure they get the job done safely. Depending on the job, that might include

 

  • Fall protection such as personal fall arrest systems and safety gear that is fitted properly to each worker.
  • A ladder or scaffold that is appropriate for the job.
  • Slip-resistant shoes
  • Harnesses
  • Safety nets.
  • Stair railings and/or handrails

 

Holes in which employees could fall should be guarded with a railing and toe-board or flor hole cover.

 

  1. Every employee who works at a site with fall risks must be trained on how to set up the area and proper use of any equipment to be used. All fall-protection equipment to be used should first be inspected.

 

 

Summary

 

Employers and payers are spending millions of dollars and watching their employees suffer for years over claims that are completely avoidable. Implementing and enforcing some simple steps can protect the entire organization.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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.

6 Steps to Keep Liability Settlements Out of Medicare’s Crosshairs

Keep Liability Settlements Out of Medicare’s CrosshairsNo one likes to pay for items that are not their responsibility. This statement is true of the federal government in the workers’ compensation industry as the feds have exerted control over settlements involving injured workers who are or will soon be covered by Medicare.  An entire cottage industry has sprung up comprised of experts who develop Medicare Set-Asides (MSAs) and ensure Medicare’s interests are considered before a workers’ compensation settlement is finalized.

 

As the Medicare Set-Aside industry has grown and matured in workers’ compensation, a similar approach is now being considered with liability settlements. The law on the books for decades clearly says that Medicare is supposed to be a secondary payer in such settlements. Lately, there have been clear indications the Centers for Medicare and Medicaid Services (CMS) plans to take action on this soon. How it will ultimately shake out is up for debate. In the meantime, payers should at least be aware of what is happening and take steps to prepare.

 

 

The Issue

 

“The extent to which settling parties must consider Medicare’s interests in medicals in a liability settlement continues to be unclear.” Thus begins a new white paper discussing the issue and what can be done. Written and published by Tower MSA Partners, Navigating Through the Fog: Medicare, Future Medicals & Liability Settlements reviews the workers’ compensation experience with CMS, outlines likely scenarios for liability settlements, and provides tips for payers.

 

Liability insurance coverage protects the policyholder or self-insured entity against claims based on negligence, inappropriate action, or inaction that results in bodily injury or property damage.

 

Examples include

 

  • Homeowners’ liability insurance
  • Automobile liability insurance
  • Product liability insurance
  • Malpractice liability insurance
  • Uninsured motorist liability insurance
  • Underinsured motorist liability insurance

 

Medicare beneficiaries must notify Medicare when a liability claim is made against a party with liability insurance and the liability carrier must report to Medicare when it settles a claim with a Medicare beneficiary. When there is a settlement, Medicare expects reimbursement for any payments it covered that should have been paid out of the settlement.

 

The settlement becomes more complicated when there are future medical costs for the specific injury. If Medicare is billed, it may seek reimbursement. In those situations, Medicare’s interests should be taken into account, and a liability MSA may be advisable.

 

 

Medicare Has Not Yet Established Framework for Liability MSAs

 

Unlike the process for workers’ compensation MSAs, Medicare has not established a framework for reviewing LMSAs or provided any guidance on the issue. Instead, any CMS reviews for proposed LMSAs that do occur are done on a case-by-case basis and only by some regional offices.

 

The good news is that, so far at least, there are no known incidents of CMS denying payment or seeking reimbursement for injury-related medical care after a liability settlement. Tower MSA Partners anticipates action from CMS within the next two years. When that happens, according to the white paper, CMS will need to address issues including:

 

  • Review thresholds
  • Allocation of the MSA based upon a compromise formula
  • Documentation required to submit to CMS with an LMSA proposal
  • Whether the LMSA review will occur pre- or post-settlement
  • Timeline for LMSA policy implementation
  • Multiple defendants and mass tort settlements
  • Pricing of medical in an LMSA (usual and customary vs. Medicare rates)

 

Other factors that come into play with liability settlements include policy limits, statutory tort caps, negligence rules, pre-existing conditions, case law and other issues that may result in a settlement for less than the full value of the claim.

 

 

What to Do

 

With things up in the air regarding liability settlements, one question is whether a claim for reimbursement could extend to the claimant and the primary plan, as well as the claimant’s attorney. Right now, it is uncertain.

 

Despite the vagueness of the issue, Towers suggests payers take the following actions to protect themselves and claimants.

 

  1. Identify whether the claimant is a Medicare beneficiary or has a reasonable expectation of Medicare eligibility within 30 months.
  2. If Medicare eligibility is or soon will come into play, evaluate the necessity of future injury-related medical care. Is future medical care claimed in the settlement demand or alleged in the pleadings?
  3. If there is a necessity of future injury-related medical care, will this burden likely be shifted to Medicare? For example, does the claimant have a source other than Medicare to pay future injury-related medical care; e., group health plan, which will likely cover future injury-related medical?
  4. If Medicare is the likely source of future injury-related medical care, consider whether there are sufficient settlement funds to allocate a portion to fully fund future medicals. If so, then consider an LMSA as part of the settlement. If there are insufficient funds to fully fund future medicals, then consider an apportionment of the future medical allocation in relation to other damages allocated in the settlement.
  5. Document the file and settlement/release in regard to steps taken to consider Medicare’s interest:

 

– If an LMSA or other type of allocation for future medical has been included in the settlement, ensure the plaintiff is aware of his or her responsibilities in utilizing those funds for future medical expenses.

– If the LMSA has been apportioned, document the reasons why such a reduction was taken.

– If no LMSA or allocation for future medical has been included in the settlement, then ensure the plaintiff is aware of the potential implications for future payments by Medicare for injury-related medical care.

– Document why no such allocation has been included in the settlement/release.

 

  1. Besides the future medical considerations, remember as well to investigate and resolve Medicare conditional payments, including payments made through Part C Medicare Advantage Plans.

 

 

Conclusion

 

Medicare may begin denying payment for claims if it determines that payment should have been made through a liability insurance policy or another primary payer. Such a change would likely delay liability settlements. Therefore, it is imperative to work with an experienced settlement planning professional, as failure to comply with MSP provisions can result in severe penalties.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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.

5 Questions to Investigate the Mechanism of Injury

Investigate Mechanism of InjuryMembers of the claims management team are required to conduct diligent investigations into workers’ compensation matters, investigate the mechanism of injury, and address issues of compensability.  This is a task that requires them to determine if the information they receive fits the type of injury claimed.  This includes not only injuries involving a specific incident, but also claims that culminated over a period of time.  Failure to properly accomplish this task can result in protracted management of a claim and added costs to any workers’ compensation program.

 

 

The Anatomy of a Work Comp Injury

 

There are essentially two types of injuries employees sustain in the workplace.  Each type of injury is unique in how they occur and the evidence one examines when deciding matters of primary liability.

 

  • Specific Incident/Sudden Onset: This type of injury is often easy to identify as it encompasses a specific injury that is easy to identify and occurs at a specific moment in time.  These injuries include slip/falls, striking an object, an immediate onset of pain, or a fracture of a bone/joint dislocation.

 

  • Workplace Exposure/Repetitive Trauma: This is often more difficult to identify as to when the “injury” occurs as it primarily happens over a period of time.  Common examples include the inhalation of dust, irritants or other substances that result in an injury/respiratory condition.  In other instances, problems occur over a period of time that results in the degeneration of joints and discs.  Questions as to the “date of injury” are often subject to contentious litigation as each jurisdiction defines when these injuries culminate.  Examples include when the employee started missing time from work, when the employee first received medical treatment, or when the employee reasonably believes they have sustained a work injury.

 

Regardless of the type of injury, a complete investigation is required.  Only deny claims in good faith.

 

 

Investigating the Mechanism of Injury

 

It is important for members of the claims management team to investigate and determine if the mechanism of injury (how it occurred) matches the claimed injury.  It is also essential to analyze where the work activity is attributed to the work injury, or if the work condition was aggregated and/or accelerated due to work activity.  Additional issues to consider include:

 

  • Did an injury occur as a result of the work activities?

 

  • Was the employee performing work activity consistent with the claimed injury?

 

  • If there was, in fact, a work injury, what body parts are actually involved? Defining an injury by ICD-10 codes may also be important given the reporting requirements for Medicare and Medicaid coordination of benefit

 

  • How long did the employee engage in the work activity for it to result in a work injury? Was it a substantial contributing factor in the disability and/or need for medical care and treatment/disability?

 

  • If not a specific incident-type injury, when did the injury culminate?

 

Questions regarding these issues may involve a medical director, nurse case manager, or someone with an advanced understanding of medicine.

 

 

Making Informed Decisions Regarding Primary Liability

 

It may be difficult for a member of the claims management team to make a legally defensible position when it comes to primary liability.  This can be due to a number of factors beyond their control.  If that is the case, utilize the service of a peer review physician or medical advisor to obtain further insight on an action plan for the claim.

 

 

Conclusion

 

Members of the claims management team are charged with a variety of tasks.  Chief among them includes collecting applicable evidence and making reasoned decisions based upon the facts of the case and the law.  This also involves seeking information on the mechanism of injury and determining if the claimed injury fits.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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 Data-Based Tips for Workers’ Comp Injury Prevention

Data-Based Workers’ Comp Injury Prevention 10:00 in the morning is an expensive time of day for many organizations. There is a spike in injury frequency in the service/hospitality, construction/natural resources and healthcare industries, according to Pinnacol Assurance. The Colorado workers’ compensation insurer released trends based on five years of its claims data in four industries. The results can help employers in the industries take positive steps toward improved workers’ comp injury prevention.

 

 

Trends

 

Injury Frequency. While many injuries occur to newly hired workers, some industries were noteworthy for other spikes in injury frequency

 

  • Healthcare – 3 – 4 years after the hire date
  • Clerical/professional – more than 10 years after the hiring date

 

Also, in healthcare, 38% of injuries happen during the first year on the job, whether the worker is new to the organization OR new to the industry.

 

Danger Zone Times. A drop in blood sugar levels is speculated as a reason for the increase in injuries at 10 a.m. in several industries. Additional times of frequency spikes include:

 

  • Service Hospitality: 9 p.m. saw a spike in the most expensive injuries
  • Construction/natural resources: 9 – 11 a.m. and 1 – 3 p.m.
  • Clerical/professional: 8 – 11 a.m., with a significant spike at 2:00

 

Vulnerable Body Parts. The lower back is the most commonly injured body part in both the professional/clerical and construction/natural resources fields.  It’s also the most expensive location for injuries in construction/natural resources.  Other commonly injured and/or expensive body parts injured include

 

  • Service/hospitality: fingers, hands and lower back are most commonly injured. Lacerations, contusions, strains, sprains, and burns are the most expensive injuries.
  • Construction/natural resources: lower back, knee, foot, lower leg, and fingers are the most expensive body parts injured.
  • Healthcare: lower back, shoulder, knee, wrist, and ankle are the most expensive. Strains, strikes (needlesticks) and strains (lifting/carrying) are the most frequent causes of injuries, while animals are number 8 on the list of causes, due to home health care incidents.
  • Clerical/professional: lower back, knee, fingers, shoulder and wrist are the most commonly injured body parts. The most expensive injury types are contusions, strains, sprains, fractures and The most frequent causes of injures are strains from lifting, falls from ice/snow, falls on the same level, repetitive motion, and motor vehicle incidents.

 

Lessons and Strategies

 

While the reasons for the trends are not all known, employers/payers can use the data to focus their injury prevention efforts.

 

  1. Train/retrain. All four industries reported a higher frequency of injuries among newer workers. But in at least two, there were frequency spikes years after the hiring date. Employers should provide thorough training for all new hires, including temporary workers. For example, 30% of injuries occur during the first year of employment in the clerical/professional industry. The top cause of injuries are strains from lifting. Proper lifting techniques should be a mainstay of the training. Knowing there is a spike in injury frequency more than 10 years after hiring, the training should be repeated on an ongoing basis, such as annually.

 

  1. Encourage movement. In three of the 4 industries, there is a spike in injuries at 10 a.m. In clerical/professional organizations, most injuries occur between 8 and 11 a.m., with a significant spike at 2:00. Knowing this, employers should schedule activities that will get workers moving.

 

  1. Walking meetings, for example, are a great way to get the body and brain going.
  2. Getting fresh air is another good remedy, so scheduling short breaks and encouraging workers to step outside can be effective.
  3. Stretching properly for even a couple of minutes can have a positive impact.
  4. Group activities require social interaction, which revs up the body and mind.

 

  1. Provide protection. Lower back injuries are rampant among all four industries. Provide protection for employee with the following:

 

  1. Employers in the healthcare industry should seriously consider devices to help lift and move patients.
  2. Construction companies can take simple steps, such as locating cement and other heavy materials close to where workers will use them, to prevent unnecessary handling. Padding for workers’ shoulders should be provided when they will be carrying heavy lumber.
  • Clerical/professional workers might have less risk of sustaining a low back injury with ergonomically appropriate chairs and workstations. This need not be expensive. Having an ergonomist show employees a proper workstation set-up and providing instructions on new chairs can go a long way.
  1. Lacerations caused by non-powered tools and broken glass account for the most frequent and expensive injuries in the service/hospitality industry. Employers should be especially vigilant about training workers to use tools and ensuring broken glass is cleaned up quickly and thoroughly.

 

  1. Modify schedules/tasks. Knowing that more injuries are prone to occur during certain times can help employers determine when to require certain tasks be undertaken. The riskiest work should be avoided during times of high injury frequency, such as 10 a.m. for many industries, as well as early afternoon in construction/natural resources and clerical/professional, and 9 p.m. for service/hospitality.

 

 

Conclusion

 

Insight into when and how more workplace injuries occur can help employers/payers tailor their prevention strategies. Data from Pinnacol and other sources can be invaluable in protecting workers and reducing workers’ compensation costs.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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.

 

Writing the Perfect Independent Medical Exam (IME) Letter

Independent Medical Exam (IME) LetterOn many occasions, members of the claim management team need to write a cover letter to the independent medical examiner.  This is an important part of defending a workers’ compensation claim for mean reasons.  It includes preparation, planning and having accurate information.  When drafting this letter, it is important to consider a number of factors and include the right questions.

 

 

Expert Foundation for Medical Opinions

 

It is important that your expert has the proper foundation to provide their findings and opinions within a reasonable degree of medical certainty.  As part of your cover letter, consider asking for the following information:

 

  • Please set forth the amount of time that you spend with «Name of Employee» in your evaluation.

 

  • Please set forth the medical records which you reviewed as part of your evaluation.

 

 

Information on the Injury and Its Nature and Extent

 

It is important to demand precision for your medical expert.  Help ensure you receive the information you need by asking for the following:

 

  • What is your diagnosis and prognosis of «Name of Employee»’s «Body Part/Condition»?

 

  • What is the substantial contributing cause of any diagnosis you make? Further, what is the etiology of any diagnosis you make?

 

If there is a question as to whether the work activity contributed to the condition, you might want to consider asking:

 

  • In your opinion, did the claimed events of «Date Here,» aggravate, accelerate or otherwise substantially contribute to the onset and progression of «Name of Employee»’s diagnosed condition?

 

Otherwise, it is important to verify the condition is work related, along with its nature and extent.

 

  • In your opinion, did «Name of Employee» sustain a work injury on «Date Here»? If you find that «Name of Employee» sustained a work injury on «Date Here,» was that injury permanent or temporary in nature?  If temporary, how long did it last?

 

  • If there is more than one substantial contributing cause to «Name of Employee»’s condition, please apportion responsibility for any medical care and treatment, surgery, disability and permanency for these injuries.

 

 

Other Matters to Consider

 

The IME can be used to determine a number of other legal issues.  Maximum medical improvement or the “end of healing period” is one of these important matters for the expert to address.  The payment of ongoing benefits can depend on this status.  Be sure to consider asking the following:

 

  • In your opinion, has «Name of Employee» reached Maximum Medical Improvement for all diagnosed conditions? If so, when did the Employee reach Maximum Medical Improvement?  If not, when would you expect the Employee to reach Maximum Medical Improvement for all diagnosed conditions?

 

Issues concerning permanent partial disability are also important to consider asking about:

 

  • Did «Name of Employee» sustain any ratable permanent partial disability, pursuant to the workers’ compensation permanency guidelines as a result of the work injury of «Date Here»? If so, please state what you would attribute any permanent partial disability, citing the specific section in the workers’ compensation permanency guidelines?

 

The need for future medical care and treatment is also important.  Be sure to ask about the following matters:

 

  • Has «Name of Employee»’s medical care and treatment been causally related to the (claimed events) events of «Date Here» to his/her «Body Part/Condition»? Why or why not?

 

  • Has «Name of Employee»’s medical care and treatment been appropriate under the workers’ compensation treatment parameters (if applicable)? Why or why not?

 

  • What medical care and treatment do you propose «Name of Employee» undergo, if any? Also, could you please state what its frequency and duration would be for any recommendations that you have.

 

  • Is «Name of Employee» in need of any restrictions on his/her ability to perform activity, if any? If so, please state what restrictions you would place on «Employee»’s activity.  Also, please state what you would attribute the need for any such restrictions?

 

  • In your opinion, is «Name of Employee,» capable of sustained gainful employment with regard to his «Injury Here,» and if so, what restrictions, if any, would you place on his work activities?

 

  • Is the Employee undergoing functional overlay for secondary gain?

 

  • Please provide any additional relevant comments.

 

 

Final Considerations

 

A well-written independent medical examination letter is clear, concise and free from bias.  Remember that any letter sent to a medical expert is discoverable and can be submitted as evidence.  By following these guidelines, members of the claim management team can ensure their expert’s opinion receives full consideration from a compensation judge.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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.

The Workers’ Comp Lesson To Learn From The Kavanaugh Process

Hey, there. Michael Stack here, CEO of AMAX. So very big national news over the past weekend with the confirmation of Brett Kavanaugh as the latest Supreme Court justice of the United States.

 

Now, this was obviously a very politically charged and bitter process. And whether you are in complete support of Mr. Kavanaugh or complete opposition, it’s not for me to tell you whether you were right or wrong, that’s up for you to decide. But there was one thing out of this process that struck me that I think we can all learn and apply to our work comp program and it’s the importance of this line here right in the middle.

 

 

Kavanaugh Process Had Hard Line of Separation

 

In the Kavanaugh process, this line was very clearly defined. You were either in support or you were in opposition. Now, there are some lessons in politics that we can use as examples to follow and there are some lessons that we can use as warnings, so let’s talk about this process now.

 

Don’t take this left and right now as having anything to do with politics because it doesn’t. Now in worker’s compensation, there’s really somewhat two schools of thought. There’s the advocacy model, a claims advocacy model, and more of a litigation type of model. Now on this advocacy side, you’re looking out for the employee’s best interest. You’re working together as a team. You’re looking to give them the best medical support. You’re establishing trust, you’re communicating, you’re sending a get well card. You’re going to visit them at the hospital and you’re trying to get them back to work in a timely fashion, working together as a team to lower your costs and improve those outcomes.

 

Now, some in opposition to that will say, “Well, that’s kind of maybe a little bit soft,” that you’re just skipping through the flower fields, hoping that everything is right and you’re just kind of la, la, la going around and everyone’s great and we’re just going to look out for everyone’s best interest and it’s all gonna work out.

 

So that opposition model will hold the mindset often of this litigation mindset and say, “Well, no one’s going to pull one over on me. If my employees are committing fraud, I’m going to crush them and I’m going to deny their claim,” etc. etc. etc. And on that goes.

 

 

Politics Has Positive Examples and Warnings

 

Here’s the lesson that we need to learn from this process and we’re looking at this hard line of both of the positive examples and the warnings is that in worker’s compensation, these are actually the same thing and should be the same thing and they should all be working together all at the same time. So here’s what I mean by that.

 

Is that yes, there’s a very hard line in the middle and this needs to be very clearly defined in your program just like it was in the Kavanaugh process, but at the same time, this litigation mindset also needs to be over here and here’s what I mean by that, is you start with the advocacy model. You start by looking out for your employees’ best interest. You start by setting expectations. You start by establishing trust. You start by giving them the best medical, getting them back to work, providing a transitional duty job that’s going to create a better outcome and lower your costs, but at the same time you’re also doing a thorough investigation.

 

 

Claims Advocacy & Litigation Work Together in Tandem

 

You’re establishing what actually happened in that claim. You’re establishing good information in order to make a good decision on what is actually happening and you’re setting an expectation for your employees as well that they need to come to the table. We’re going to give you all the support we can, but we also have an expectation for you to participate in the process and when you do have this line very clearly defined in the middle and when your employee is trying to pull one over you with a fraudulent claim, they’re malingering. They’re trying to get extra medical treatments included when they shouldn’t be.

 

You have that very clearly hard line defined and you’ve already done the work at the beginning of the claim to establish your position and so then you can deny that claim appropriately with a very strong and very powerful litigation aspect of your claim as well. Both of those philosophies need to be working together in tandem and only when your employee passes that hard line in the middle is when you deploy that litigation mindset.

 

Again, I’m Michael Stack, CEO of AMAX, and remember your work today in workers’ compensation can have a dramatic impact on your company’s bottom line, but it will have a dramatic impact on someone’s life. So, be great.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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.

 

Understand the Legal Basics of Workers’ Comp Claim Denials

Understand the Legal Basics of Workers’ Comp Claim DenialsOne of the most important and often difficult roles of a claim handler is to issue a workers’ comp claim denial.  It is important that the claim handler conduct a diligent claims investigation and issue denials that are supported by the facts of the claim and the law.  Failure to do so is not only unethical but contrary to the letter and spirt of the law.

 

 

Back to the Basics – “Arising Out Of” and “In the Course and Scope”

 

Issuing a workers’ comp claim denial requires understanding a basic premise of all workers’ compensation laws – both “arise out of” and “in the course and scope of” the employee’s employment.  This is a legal standard that is complex to understand and depends on the facts of each case.  When analyzing these threshold standards, it is important to understand the following:

 

  • Arising Out Of: This generally refers to a factual determination of whether the injury occurred within the parameters of one’s direct work  In other words, there must be evidence of a causal connection between the injury and the employment.  Courts often struggle with issues concerning whether there was an “increased risk” presented by the work environment that is tied to the injury.  Factors that are subject to litigation and interpretation include slips/falls on various surfaces (flat hallways, stairwells, ice on sidewalks, etc.), assaults/actions by third persons and idiopathic injuries; and

 

  • Course Of: Determinations regarding this element are more clearly defined, but also create concern and litigation.  Generally, this question involves one of the time, place, and circumstances under which the accident/injury occurs.  Notwithstanding its appearance, questions of compensability also include litigation when it concerns the hours of employment (breaks, meals and errands), ingress/egress issues and traveling employees.

 

When considering these issues, it is important for the investigation to involve questions as to specific activities involved and whom else may have been involved in the injury.

 

 

Pre-existing Conditions and Questions of Compensability

 

The presence of a pre-existing condition does not necessarily preclude the compensability of a work-related injury.  Given the rather liberal standard of what constitutes a “personal injury,” the better question that needs to be asked is whether the work injury or activity “aggravated or accelerated the underlying condition.”  If this is the case, more often than not the claim will ultimately be found to be compensable.

 

When investigating these matters, obtaining the proper medical evidence is key to any investigation.  Areas of concern should include the following:

 

  • Chiropractic care and treatment;

 

  • The existence of prior imaging, including MRIs, CT scans and EMGs; and

 

  • History of athletic or MVA related accidents/injuries.

 

 

Notice and Statute of Limitation Defenses

 

Most workers’ compensation statutes require an employee report their injury promptly.  There are also limits as to when an employee can obtain a report from their work injury.  This is where it is important to understand how notice and statute of limitation provisions can prevent recovery and serve as a valid legal defense to a claim.

 

  • Notice Defense: An injured worker is under the legal obligation to report their work-related injury in a timely manner.  The rationale behind this concept is this allows the defense interests a reasonable amount of time to investigate a claim and prevent the spoliation of evidence.  Notice defenses are often not successful given the fact “constructive notice” is often imputed on the employer.  It also comes down to a question of credibility of the employee.  Notwithstanding these limitations, it is something to consider when defending a claim.

 

  • Statute of Limitation Defense: Once a workers’ compensation injury is reported, there is a time limit place on the employee for them to make a claim for  In many instances, the statute of limitation defense is limited to a period of six years.  What this means is if the employee reports and injury, but does not incur wage loss or medical benefits within the prescribed time period, they are forever barred from seeking benefits related to the matter.  This defense is used to deny claims made on trivial injuries and provides certainty.

 

 

Conclusions

 

Members of the claims management teams are on the front lines when it comes to claims investigations and determinations of primary liability.  Issuing a proper workers’ comp claim denial includes determining if the incident falls within the parameters of the workers’ compensation act and other issues of liability.  This requires a claims handler understands the law and is able to investigate a claim to make good faith determinations regarding compensability.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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.

Orchestrate A Culture of Quickly Reporting Workplace Injuries

reporting workplace injuryAn important role of the claims management team is to coordinate with employers and defense interests to make sure quickly reporting workplace injuries is a top priority of your organization.  It is easier for claims to be evaluated and decisions regarding primary liability to be made in an effective and efficient manner when injuries are quickly reported.  There are many steps claims management teams can make to develop important work injury compliance steps, which includes the use of evolving technology.

 

 

Emphasis the Importance of Reporting Workplace Injuries

 

There are several steps that employers can make to ensure workers’ compensation claims are reported in a timely manner.  This starts with developing a culture of understanding on the part of the employees.  This goes beyond making sure the proper posters are displayed in the workplace:

 

 

  • Provide documentation on how work injuries should be reported and the information needed to make a report of injury; and

 

  • Ensure that the employer has a contact person to make sure the First Report of Injury is filed timely with the workers’ compensation insurer. In some instances, employers and their staff are unsure how the process generally works.  Making sure these persons understand the process is important.

 

All workers’ compensation insurance carriers and third-party administrators can provide information to their insured on these processes.

 

 

Ensure of Culture of Compliance from the Top

 

The best workers’ compensation programs at the employer level have a culture of compliance and consistency.  This means that senior-level leaders within an employer need to emphasize safety and ensure that reports are being dealt with ethically and honestly.  All employees need to be treated with respect and dignity.  Other steps can include:

 

  • Preparation, issuance, and posting of quarterly safety reports. State industrial commissions typically require the posting of job site injury information.  This should be viewed as the baseline requirements – do not be afraid to go beyond those requirements; and

 

  • Highlight improvements to safety within the workplace. This ensures that all employees understand the important role they play in the process.

 

 

Eliminate ‘Accident-Free’ Incentives

 

Employers often attempt to drive a culture of safety through creative programs that provide cash incentives for ‘accident-free’ days. These types of programs are a mistake because studies demonstrate they have an adverse effect where employees feel they cannot report a workplace injury.  In reconsidering these original programs, employers should focus more on a metric that encourages the timely report of work injuries.

 

 

Provide Effect Reporting Tools

 

Technology has created many opportunities for employers to ensure all workers’ compensation claims are reported by employees in a timely manner.  It also allows employees to provide greater detail, including documentary evidence that allows for quicker and more accurate decisions concerning primary liability.

 

One example of matching technology with efficient and effective work injury reporting is app-based technology.  The development of this technology is cheap, and it is easy to implement.  With a vast majority of employees having smartphones, it is something nearly anyone can upload and use.  Features that can be used on these apps include:

 

 

  • Easy communication with the injured worker and the claims management staff. Communications include information regarding primary liability determinations, request for documents and prior authorization requests; and

 

  • Payment status and direct deposit of indemnity benefits. This allows for injured workers to receive payments immediately, and avoids the uncertainties of mailing a check.

 

 

Conclusions

 

The workers’ compensation process starts with the reporting of workplace injuries. This is a process that causes confusion, delay, and frustration in the process.  Proactive members of the claims management team can work with their insured to improve the reporting process through reforms to internal processes.  It can also include the development and implementation of app-based technology to make the process efficient and user-friendly for all employees.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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.

Compounded Medications — 6 Solutions to Address a Nagging Issue for WC

Compounded Medications — 6 Solutions to Address a Nagging Issue for WC“There is no such thing as an FDA-approved compound medication.” That statement from myMatrixx Chief Clinical Officer Phil Walls underscores one of the main criticisms of these medications; while the drugs within the mixtures may all be FDA-approved, the specific combinations have not been tested and verified.

 

Safety is just one concern, however. The other is cost; they generally are priced significantly higher than similar, FDA-approved drugs or the sum of their underlying medications.

 

Both the utilization and the average cost of compounded medications in the workers’ compensation system has decreased in recent years. However, there are still pockets of excessive use. Stakeholders need to maintain a steady and continued focus on efforts to curb the unnecessary use of these pharmaceuticals.

 

 

Problems Cited

 

Compounds are a mixture of drugs intended for a specific patient’s use. According to an FDA report, they are beneficial only in limited circumstances; such as when other medications have failed, a patient is allergic to some of the inactive ingredients or has difficulty swallowing.

 

The federal agency inspected compounding facilities and noted the following “troubling conditions” that could lead to widespread harm of patients:

 

  1. Toaster ovens used for sterilization.
  2. Pet beds near sterile compounding areas.
  3. Operators are handling sterile drug products with exposed skin, which sheds particles and bacteria, among many others.

 

 

Latest Stats

 

Compounded medications are not considered first-line therapy for pain or other common conditions of injured workers according to industry guidelines, such as evidence-based medicine guidelines from Work Loss Data Institute, American College of Occupational and Environmental Medicine, and many other state-specific guidelines.

 

Compounds are available in many applications but are used in workers’ compensation most often as topical products for pain management. Usually, compounded medications are excluded from workers’ compensation formularies, and require prior authorization before they are dispensed to an injured worker.

 

State legislatures and organizations within the workers’ compensation system have taken steps in recent years to reduce the overuse of compounds, and they have been largely effective, according to the most recent Drug Trend Report in the workers’ compensation system from myMatrixx:

 

  • Spending on compounded medications declined 37.1 percent in 2017
  • It was the third year in a row that payer spending on compounded drugs has decreased
  • Compounds fell from the top 10 therapy classes
  • Utilization decreased 21.2 percent
  • The average cost of compounded medications decreased 15.9 percent

 

Along with the good news, however, are some disturbing reports.

 

Recent Problems

 

  • Pennsylvania. A recent report found that legislative reforms in the state resulted in cost savings on physician-dispensed drugs; however, they were offset by an increase in pharmacy dispensing of expensive compound drugs.

 

The legislation that took effect in December 2014 capped prices paid for physician-dispensed drugs and restricted physician’s ability to dispense opioids and other drugs to limited timeframes. The Workers Compensation Research Institute found there was an associated decrease in the number of injured workers who received physician-dispensed drugs. But they also found there was a “dramatic” increase in the prescription payments for compound drugs in the same years, which it attributed to the emergence of new pharmacies dispensing expensive drug products, especially compound drug prescriptions.

 

  • Texas. A loophole in the state’s drug formulary allowed compound prescriptions to be filled without obtaining preauthorization to confirm medical necessity. Regulators said the workers’ compensation system saw a 46.4 percent increase in compound prescriptions from 2010 to 2014, with the total cost of an average prescription more than doubling from $356 to $829.

 

 

Solutions

 

A new rule amended the Texas formulary to exclude any prescription drug created through compounding and required preauthorization for all compounded medications. That rule took effect July 1. Several additional states have adopted similar measures, including Arkansas, Oklahoma, Florida, Nevada and Tennessee, and the idea is being considered in other jurisdictions.

 

The National Conference of Insurance Legislators is considering model legislation with clearly established guidelines for the reimbursement of pharmaceutical products in the workers’ compensation system. It includes language that would limit compound medications and require a critical evaluation with a physician documented statement of medical necessity or a utilization review of the compounded pharmaceutical products.

 

Stakeholders can work closely with state regulators and legislators. Additional ways to address the issue of excessive use of compound medications include:

 

  1. Working closely with a pharmacy benefit manager to ensure compounds are used judiciously and only when preauthorized
  2. Payment limits. Placing reimbursement limits per each script or per each ingredient in a compound medication
  3. Limiting the number of ingredients or the total cost per script
  4. Retrospective review. Allowing employers the option to deny coverage for a compound medication that has not been preauthorized
  5. Network pharmacies. Allowing employers to direct injured workers to specific pharmacies
  6. Including compound medications in the list of medications allowed only with preauthorization

 

 

Conclusion

 

The overuse of compound medications has been a troubling area for workers’ compensation stakeholders for several years. Strategies to address the issue are effective but must be continually employed and updated to ensure the problem is appropriately managed.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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.

Prepare To Effectively Manage Death Claims – And Hope You Never Have To

Prepare To Effectively Manage Workplace Death Claims – And Hope You Never Have ToIt is a horrible tragedy when an employee is killed at work.  While we hope this never happens, over 6,000 people are killed every year in workplace accidents.  This averages out to about 14 workplace death claims per day and nearly 100 per week.

 

The impact of an employee death is heart wrenching and impactful for an organization.  It is essential for members of the claims management team to understand how to effectively deal with workplace deaths.

 

 

Conducting an Effective Death Claim Investigation

 

It is important to conduct an effective and prompt investigation once someone is killed due to a workplace incident.  In addition to the steps normally taken, it is important to obtain the following information:

 

  • Reports regarding the incident. This includes police and ambulance reports.  Other important documents include OSHA generated forms and safety logs, along with information concerning any tools or equipment involved.  Make sure no evidence is destroyed.

 

  • Determine whom may be entitled to benefits. This includes the marital status of the deceased employee, information concerning their dependents and the location of where these people were living.  Questions often arise when the employee and their spouse are separated or are in the process of getting a divorce.  Domestic partnership status is also important to know and understand.

 

  • Validate important documents concerning family relationships. This is important in cases where marriage or parentage is not clear-cut.

 

Most workers’ compensation laws require a workplace death is reported to the state industrial commission within 24 to 48 hours of the incident.  Ensure the proper report is made in a timely manner.

 

 

Dealing With Other Special Issues

 

Determining issues of a spousal relationship or parentage can become complex issues.  This is the result of the chaining definition of what constitutes a family, dependents and the legalization of same-sex marriages.  When investigating these issues, members of the claims management teams should closely scrutinize the following issues:

 

  • Establishment of residence: In many jurisdictions, marriage to another person does not automatically qualify the spouse for dependency benefits.  If the couple is separated (even not in a legal sense), the survivor may be excluded from additional compensation;

 

  • Recognition of marriage: This issue can arise in several different instances.  The most common is couples who were married under “common law” in a jurisdiction that recognizes such practices but later moves to a location that does not recognize that form of marriage.

 

  • Parentage: The increased use of genetic testing has helped resolve some of these issues over the years.  However, questions may still remain if there was not legal recognition of the relationship prior to death.  Legal battles may ensue of the deceased employee is cremated prior to testing being performed.

 

 

Most Important: Demonstrate Care in Difficult Situation

 

Demonstrating care and empathy is critically important in the face of a tragic death claim. Steps to prepare your organization include:

 

  • Create a dedicated team to handle all workplace death claims. This will allow for others on the team to better allocate their time on other cumbersome files and allow for a more effective response.

 

  • Educate employers and other interested parties on workplace safety issues. This is especially true when working with employers who fall into high-risk categories.  This includes construction jobs that involve employees working at heights, the operation of dangerous equipment and machinery and those who work in the lumber and logging industries.

 

  • Go beyond what is required by the law. This can include random acts of kindness such as sending flowers to the next-of-kin.  Members of the claims management team should also avoid blaming the deceased employee – it was someone’s son or daughter who died.

 

  • Promote efforts that go beyond safety training. Encourage interested stakeholders to look beyond the incident and understand the events leading up to the fatal incident.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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/

 

©2018 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.

 

Conclusions

 

A workplace death is an event all employers hope they never experience.  However, it is important for members of the claims management team to be properly prepared.

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