What Is Likely The Problem With Your Work Comp Program


It was late one March evening and a taxicab going over 115 miles per hour smashes into the back of a police car. Instantly setting that car on fire, and the officer was trapped inside. Hello, my name is Michael Stack, I’m the CEO of AMAXX.

 

 

Burning Shield – Jason Schechterle

 

This past week I spent several days at the annual meeting of the settlement planning organization Ringler, he’s one of the partners on my website here at Reduce Your Worker’s Comp. Now it was a great couple of days spent networking and learning and sharing ideas, but one of the highlights of that conference or of that meeting was the keynote presentation given by Jason Schechterle, who was the officer who was inside of that car hit by the taxicab. Now Jason experienced severe burns on his face, his neck, his head, and over 40% of his body. He underwent over 50 surgeries to recover from that event. His message was powerful in his keynote presentation, and the book that he wrote called the Burning Shield. I recommend checking it out.

 

 

Accountability In This Life

 

Jason’s message had a lot to do with taking an honest look at our circumstances, and taking accountability for where we stood and what happened. There were so many powerful lessons and inspiring keynotes that he gave throughout the course of that presentation. The one that struck me the most went like this, he said good or bad, we have an accountability in this life. Why me is not a question is not a question we can ask. He said good or bad, we have an accountability in this life. Why me is not a question we can ask. Good or bad, we have an accountability in this life. Why me is not a question we can ask. That lesson and that sentiment is so applicable to so many areas of our life. Today we’re gonna talk about how that applies to your work comp program.

 

 

You Are Likely Looking At the Problem

 

What I see so often, particularly from employers, is that we want to blame everyone else. It’s the adjuster, they have too high of caseload. It’s that stinking doctor, he’ll never release my employee to work or that case manager’s not getting it together. Or my attorney, he’s a real pain in the butt or she’s a pain in the butt. Or that investigator, if that investigator would just have done their job we wouldn’t be in this mess that we’re in right now. It’s such a common sentiment that we feel in our work comp programs, and generally within our own lives. Per Jason’s lesson, we need to think about how that applies to our lives, and how that applies to our work comp programs as well. Because when you wake up in the morning and you’re looking in the mirror, you need to realize that you’re likely looking at the problem.

 

Again my name is Michael Stack, I’m the CEO of AMAXX. Remember your work today in worker’s 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: https://blog.reduceyourworkerscomp.com/

 

©2019 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.

 

Evaluating Medical Evidence to Make Better Workers’ Comp Decisions

medical evidenceMembers of the claim management team are called upon to evaluate the medical evidence and determine issues of reasonableness and necessity of medical care and treatment, along with determinations of causation and primary liability.  These decisions have a significant impact on an individual claim and the effectiveness of a workers’ compensation program.

 

 

 

Evaluating the Medical Evidence from a Physiological Standpoint

 

Imagine the next claim that lands on your desk involves a meat production worker.  The employee is a 62-year-old man who’s work activities requires him to process meat on a bench that is no higher than their waist.  During this process, the employee will turn in one direction to place the finished product for further processing and sale, and turn in the other direction to place the undesirable portions of the product for disposal.  None of their work activities require the employee to lift objects above chest level or over his head.  The employee is now claiming a progression of symptoms that involve stiffness, which has now culminated in “frozen shoulder” syndrome.  Should the alleged injury be accepted?

 

While the cutting of meat and its processing are repetitive, not all claims of repetitive trauma are compensable.

 

 

Making the Right Assessment

 

Claim handlers deal with many barriers when reviewing matters and determining questions that have real consequences.  This includes rigid timelines that can result in sanction or penalty if not done right or within a timely manner.  Questions that must be considered include:

 

  • Did a work injury actually occur – even if it only aggravated or accelerated an underlying condition?

 

  • What role if any, did the work activity contribute to the injury, disability and/or need for medical care and treatment?

 

  • Even taking into consideration the employee’s age and possible prior injuries, did the work activity advance the underlying condition to the point of compensable injury?

 

  • Does the overall medical evidence as presented fit the alleged injury?

 

In terms of the above scenario, the claim handler worked with a medical expert to review the claimed mechanism of injury, prior medical records and other information to allow for a primary denial.  It was noted that the contemporaneous medical records and work history did not support a work injury and the claimed mechanism was inconsistent with the subsequent medical diagnosis.  In sum, because the physiological body mechanics in question did not fit injury, the proactive claim handler was effective and proactive in denying the claim.

 

 

Application in Claims Handling Practice

 

It is important for members of the claim management team to review their files and determine if the medical evidence fits in not only workplace exposure/repetitive injury claims, but also specific incident injuries.  Examples of how this can be used in specific injuries include:

 

  • How the employee fell or what they were doing when they fell;

 

  • Angles of fracture and the type of fracture following a slip/fall; and

 

  • The nature and extent of an injury based on pre-existing conditions such as degenerative disc disease for back and neck claims, and claims involving joints such as knees, shoulders, and

 

The list of possibilities is really endless.

 

 

Conclusions

 

Members of the claim management team face many challenges in their position on a daily basis.  It is of utmost importance that claims handlers make proper decisions after having investigated a claim in a timely manner and making evidence-based decisions.  This includes taking the time to obtain information on how the injury took place, they can save time and money for their program and clients.

 

 

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: https://blog.reduceyourworkerscomp.com/

 

©2019 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.

Quick Claim Reporting – The Workers’ Comp Silver Bullet

quick claim reporting in workers' compensationNearly every claims management team is looking for the silver bullet to cure all their workers’ comp issues.  Many vendor services will claim to be this solution, but there is only one that doesn’t cost any money – quick claim reporting.

 

The origins of the term “silver bullet” is derived from Philip of Macedonia (the father of Alexander the Great), and the belief the element contains magical properties that can kill just about anything, including supernatural beings.  It later gained fame in American folklore in the 1930s with the tales of the Lone Ranger – who used silver bullets to dispense justice in the Wild West.

 

Like the Lone Ranger, members of the claim management team are charged with the responsibility of pursuing justice as they manage claims.  This includes educating clients on best practices to improve program efficiency and reduce costs.

 

 

Remove Quick Claim Reporting Barriers

 

The failure to report a work injury remains a barrier in many programs.  This is driven by the concern employers have when filing claims – they fear negative changes to their “experience rating modification.”  The result will be increased premiums or losing coverage, and being forced into a state’s assigned risk plan pool.

 

When educating employers on the claims process, it is important to reiterate the following points and encourage prompt reporting of all work injuries:

 

  • Statutory requirements an employer purchase insurance. Do not be afraid to use it.  Insurance is a necessary cost of doing business;

 

  • Highlight your program’s claim management toolbox. This includes post-injury response, return-to-work/transitional job placement, medical cost containment and medical care coordination.  Prompt investigation and reporting of fraud, waste, and abuse are also important; and

 

  • Education on reporting requirements. This should include information on how prompt reporting of work injuries can reduce penalties by a state industrial commission, which in turn impacts your workers’ compensation insurance premiums.

 

 

Impact of Late Claim Reporting

 

There are many significant problems caused by late reporting in the workers’ compensation process.  Effective members of the claim management team can serve as a resource when it comes to this process.  This starts with encouraging employers to report their known claims in a timely manner.

 

  • Penalties: Industrial commissions generally monitor all required filings and the compliance department will issue penalties according to statute or rule.  Most jurisdictions place an emphasis on the timely reporting of claims and prompt payment.  This includes a graduated penalty system will impose sanctions on the insured and insurer when reporting is not done.  The fines increase based upon the frequency of late reports, including the First Report of Injury, and late payment of workers’ compensation benefits to the employee; and

 

  • Increased claim costs: Studies from the National Council on Compensation Insurance (NCCI) demonstrate delayed reporting increases costs to a program in other ways.  According to this report, the median cost of a workers’ compensation claim increased dramatically if it was not reported within two weeks from the date of the injury – generally an increase of up to 51%.   These claims were also found to be subject to more litigation, which included the use of an attorney.  The report also determined quicker reporting allows for a better and more complete investigation.

 

 

Improved Claims Investigation Techniques

 

An effective investigation of any work injury must start with the employer.  This includes preserving the accident scene, making sure the injury is documented correctly and evidence is not destroyed.  From a claims management perspective, this can be frustrating as claim handlers are not included until after the fact.  They can be proactive in promoting efficiency by helping their client’s in order to do a more complete job.

 

 

  • Preparation of work injury investigation kits. Items in these kits should include forms to document the injury, checklists to make sure all relevant information is is logged correctly and reminders to preserve evidence.  Taking photographs is often a must; and

 

  • Preservation of evidence. This can include defective equipment or documentation of floors, stairs or work  This can matter when it comes to subrogation efforts down the road.

 

 

Conclusions

 

Members of the claims management team should use the “silver bullet” of quick claim reporting to drive down program costs and provide outstanding service.  Part of the process must including educating all interested stakeholders in the workers’ compensation system to identify areas of improvement.  By taking these steps, a program can be cost-effective and efficient.

 

 

 

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: https://blog.reduceyourworkerscomp.com/

 

©2019 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.

Dealing with Chronic Pain in Workers’ Compensation

chronic-pain in workers compensationIssues concerning chronic pain continue to dominate workers’ compensation claims across the United States.  These issues include recognizing it, efficiently dealing with it and finding creative solutions to drive an effective program.

Understanding Chronic Pain

There are different types of chronic pain.  When investigating a workers’ compensation claim, it is important for claim handlers to determine a potential diagnosis early on in the process, which includes a recognition of symptomology and familiarity of potential treatment protocols.

 

  • Chronic Pain Syndrome: This is pain that continues for more than a month following an injury.  It is characterized by persistent symptomology that interferes with daily life activities and the quality of life of an employee.  Associated conditions can include numbness and tingling in the lower and upper extremities, psychological disorders (anxiety, insomnia, and other dysfunctions), and the inability to perform even light duty work activities;

 

  • Fibromyalgia and other Myofascial Pain Syndromes: Persons suffering from this condition have complaints of hypersensitive reactions to touch on various areas of one’s body. Other symptoms include muscle spasms and weakness in the upper and lower extremities.  Studies indicate a person’s suffering from these conditions may have underlying psychological and/or psychiatric conditions.

 

  • Pain Syndromes: These conditions are often referred to as Complex Regional Pain Syndrome (CPRS) or Reflex Sympathetic Dystrophy (RSD).  Symptoms of these conditions include: burning or throbbing pain in the extremities (including hands and feet); hot/cold sensitivities; swelling and stiffness in joints; and changes in skin color, which include a reddish or bluish discoloration.  It remains a mystery as to how these conditions develop and the effectiveness of various care plans.

 

State law or administrative rules are often used as a guide to help compensation judges or industrial commissions approve claims for these conditions.  Careful research that includes case law should always be conducted by a claim handler to know the correct standard.

 

 

Reasonableness and Necessity of Care in Chronic Pain

 

All compensable medical care and treatment in workers’ compensation must be “reasonable and necessary.”  Given a lowered burden of proof, courts will generally approve medical care if it is demonstrated to provide a benefit to the injured employee and aid in their recovery.  When reviewing medical care, members of the claims management team should evaluate the following factors, especially when it involves chronic pain issues:

 

  • Evidence of a treatment plan: All recommended medical care and treatment should have a defined plan to cure and relieve the effects of a work injury.  Concerns should be raised when proposed care is open-ended.

 

  • Documentation of treatment details: Questions should be raised (especially with physical therapy or chiropractic care) when it appears the provider is merely using a word processor to copy/paste the symptoms of an employee, the care provided and results of the treatment.

 

  • Degree and duration of relief: While the standard of compensability in workers’ compensation is low, threshold matters of lasting and long-term relief should be present in medical records.  If care appears to be palliative in nature, it should be aggressively defended.

 

  • Frequency of medical care: Medical treatment parameters generally require long-term care to be on an “as needed basis,” and not based on a set schedule.  Proactive claim handlers should scrutinize medical records to determine if patterns develop in medical care.

 

  • Relationship between treatment goal and returning the employee to suitable gainful employment: In all but a few limited instances, the goal of any treatment modality should focus on returning the employee back to work following an injury.  Dangers occur when the employee becomes deconditioned and does not improve the strength and endurance of an employee.

 

  • The cost of medical treatment in light of relief: Finders of fact in workers’ compensation are generally more willing to approve a form of medical care and treatment if it has either a stated goal of returning an employee to work, diagnosing the underlying problem, or is rather inexpensive and/or non-invasive.  Care can also become duplicative, which should be a concern. Examples of this include recommendations of chiropractic care in conjunction with physical therapy.

 

 

Conclusions

 

Dealing with chronic pain issues require members of the claim management team to be proactive.  This includes understanding the dynamics of these claims and various effective treatment modalities.  It also requires and deeper dive into medical records and investigating the claim to only pay for medical care that is reasonable and directed at returning the injured employee back to work.

 

 

 

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: https://blog.reduceyourworkerscomp.com/

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Steps to Optimize Medicare Set Asides Before — and After — Settlement

Optimize MSAs Most workers’ compensation practitioners agree: Medicare Set-Asides can be a pain in the neck.  It takes time, resources and skill to create an MSA.  In addition, any snag could result in a loss of money — for the injured worker as well as other parties involved.

 

The myriad of moving parts and high chance for error, along with getting approval from the Centers for Medicare and Medicaid Services are the reasons a specialized industry has arisen around MSAs as well as other components to Medicare Secondary Payer compliance.  By understanding such things as when, how, and where to get an appropriate MSA and ensuring post-settlement assistance is available for reporting and follow-through, stakeholders can settle more claims and feel confident they are doing the right thing for injured workers and other parties involved.

 

 

MSA Realities

 

Here are a few sobering, post-settlement, realities from a professional administrator that demonstrate why MSAs cause angst to so many:

 

  1. There were 51% more phone calls from Medicare on MSA administration in 2018, compared to 2017
  2. Medicare inquired on virtually 100 percent of lump sum MSA exhaustions
  3. Medicare checked in on 1-out-of-every-3 structured settlement exhaustions
  4. CMS is adding more technology and getting smarter about compliance every year, especially with the post-settlement administration of the MSA.

 

In other words, don’t expect the government to ease up on ensuring Medicare’s status as the secondary payer in workers’ compensation cases anytime soon. Quite the opposite is happening as Medicare becomes more intent on not only ensuring the MSA was accurately put together but that the funds are spent appropriately.

 

 

MSA Q&As

 

Here are appropriate questions you need to ask and what to look for.

 

 

When is the right time to obtain an MSA?

 

When an injured worker has reached maximum medical improvement. Someone who is about to have or just had surgery, or is changing medical providers is not an appropriate candidate because his medical situation is likely to change. The injured worker should have his medications and treatment stabilized.

 

 

How can MSA amounts be deemed sufficient for the injured worker but not excessive?

 

You want to make sure the injured worker has the funds he needs to live out a fulfilling life, but don’t want to spend unnecessary dollars. This requires working with an MSA partner willing to take a deep look into the injured worker’s situation, now and in the future. There may be some projected treatments and/or medications that are inappropriate and unnecessary. Things to consider are:

 

  • Generic alternatives to medications
  • Potential overuse of opioids
  • Inconsistencies between medical records and prescription drug history
  • Whether authorized medications are still being prescribed or used
  • Medications that are unrelated to the occupational injury
  • Planned surgery that the injured worker does not want or need
  • Estimated costs for surgeries and other treatments that may be unrealistic
  • Frequency of physician visits
  • Rated age/life expectancy
  • Evidence-based medicine; to ensure it is being followed

 

 

What is clinical intervention and why is it important?

 

Identifying and clarifying these and other issues takes leg work. The MSA vendor must be willing and able to work with treating physicians and others to get the correct answers, as these are key to both saving money and protecting the injured worker.

 

This may include

 

  1. Physician follow-up
  2. Clinical oversight
  3. Peer-to-peer review, where another physician is brought in to work with the treating physician
  4. Addressing inappropriate care — another area where peer review is advantageous

 

There are situations, for example, when a particular medication is listed as being current but is no longer being prescribed. The solution is to have both the injured worker and the treating physician write statements specifying the date the medication ceased to be prescribed or used.

 

Another typical example is when a treating physician had discussed a specific treatment — such as a spinal cord stimulator, but later determined it was not necessary. The cost of a spinal cord stimulator can be in excess of $150,000. In that case, the MSA partner should seek a statement from the treating physician confirming the treatment is no longer necessary or reasonable.

 

 

What are indications of an effective MSA partner?

 

When considering organizations for partnerships, facts and figures tell the story. Some to look for include:

 

  • CMS MSA approval rate
  • Percentage of MSAs with prescription medications, especially opioids
  • Percentage of cases settled
  • Savings from clinical interventions
  • Rate of development letters
  • Average MSA approval amount

 

“These metrics determine the success or failure of an MSA program in limiting allocation amounts and facilitating settlement,” says Dan Anders, Chief Compliance Office of Tower MSA Partners.  “Your MSA partner should be using these key performance indicators to drive the outcomes you want to see.”

 

 

Post-Settlement MSA Support

 

Just because the MSA has been developed and approved by CMS and the claim settled, does not mean things cannot still go wrong. Complying with CMS requirements — including reporting duties — is crucial. That’s why it’s just as important to have a post-settlement strategy set up before the claim is settled. If the injured worker unintentionally fails to adhere to CMS guidelines and the money runs out —

 

  • They jeopardize their future Medicare benefits
  • They may be forced to reimburse all the money that was misspent, up to the full settlement amount
  • Their attorney(s) and/or others (including the adjuster/payer) may also be pulled back into the case, which can cause unnecessary burdens and work on everyone involved

 

Those in the best position to ensure things go smoothly after the settlement are professional administrators. These are neutral, third-party experts who handle all compliance and annual reporting for MSAs. Additionally, professional administrators establish a bank account for the injured worker’s future medical care and act as custodian — receiving the medical bills and paying them on behalf of the injured worker.

 

“There are a lot of things that happen in the settlement process that could confuse an injured worker,” said Marques Torbert, CEO of the leading professional administration company, Ametros. “Injured workers are worried about getting better. A professional administrator makes sure the injured worker has a support system and access to savings and support post-settlement while helping to keep them in compliance.”

 

A professional administrator should have extensive physician and pharmaceutical networks, which results in cost savings for the injured worker and extends the life of the MSA. Top-notch professional administrators demonstrate significant cost savings for injured workers while also protecting Medicare’s interests by maintaining the viability of the MSAs account over those workers’ lifetimes

 

Average Savings From Top Professional Administrator

 

  1. 63% on provider bills
  2. 28% on other medical expenses
  3. 50% with bill review adjustments

 

Many advocates for injured workers are finding that bringing in professional administrators during the settlement process can be extremely valuable. Because they are neutral third parties, they can serve as mediators for competing interests; such as carriers, and plaintiff and defense attorneys.

 

“Bridging the gap to settlement can sometimes be difficult,” says Torbert. “At the end of the day you have several stakeholders at the table, the only party that stays with the injured worker well after the settlement is the professional administrator. Being able to show the injured worker that they will be taken care of can help all parties come to a resolution.”

 

The benefits of professional administrators are such that CMS itself last year “highly recommended” injured workers consider using them for MSA administration.

 

 

Conclusion

 

Injured workers who have been in the workers’ compensation system for long periods are often hesitant to settle their claims due to fears of running out of money. An improperly developed or utilized MSA is one of the main reasons that fear can come to fruition. Having the right partners involved brings peace of mind to injured workers, as well as all parties involved in settlement.

 

 

 

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: https://blog.reduceyourworkerscomp.com/

 

©2019 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 Reasons to Include Experts Early in Workers’ Comp Settlements

settlement consultantSettling workers’ compensation claims is — or should be — a major goal for payers and employers. Ideally, you want the injured worker to return to function and, if possible, work. At the very least, both you and the injured worker want out of the workers’ compensation system — the worker so he can move on with his life, and the payer/employer to get the claim off the books.

 

 

The Key to Successful Settlement is Starting Early

 

The key to successful settlement is starting early in the claim history.  However, all too often there are claims that sit on the books for years, adding up to devastation for the injured worker and significant costs for the payer/employer. Settling claims can be fraught with uncertainty and peril — unless you work with the right experts. While it’s impossible to find one person or even one company with expertise in all facets of settlements, there are experienced organizations that specialize in one area of settlements and have wide-reaching connections with authorities in other relevant areas.

 

 

What is a Settlement Consultant?

 

A settlement consultant is a settlement expert with knowledge and access to various settlement tools to address the most challenging workers’ compensation claim issues. These experts can be brought into the process early on, so the settlement is set up appropriately.

 

Rather than just running quotes, the settlement consultant should act as the general contractor in identifying, bringing and managing the best experts to the table to address the issues preventing a positive outcome for all parties in the case.

 

 

Whole Person Approach

 

Industry stakeholders are increasingly seeing better outcomes when they treat the injured worker holistically, rather than focusing only on the specific injury/illness. Ignoring issues such as comorbidities and psychosocial factors only prolong claims and end up costing more.

 

In the same way, injured workers who are settling their claims must be viewed in their entirety, since each person is unique. That means in addition to taking care of the person’s ongoing and future medical needs, other aspects of his wellbeing and life must be taken into account in order to have a successful settlement. A whole case approach is ultimately a win-win for everyone.

 

The amount of the settlement and how it will be distributed must be based on a variety of factors — not just the person’s injury. For example, some issues that may need attention are:

 

  • Retirement
  • Children with current or future educational needs
  • Legal concerns
  • Government benefits
  • Tax consequences
  • Insurance
  • Lien resolution

 

Uncovering the injured worker’s needs and desires should form the basis of the type of settlement and how the money will be distributed and overseen. The distribution of settlements can be done either by:

 

  • Lump sum, in which the entire amount is given to the injured worker; OR
  • Structured settlement, where the person gets money doled out in a variety of ways over a period of time.

 

The majority of injured workers, as well as others presented with the choice of collecting a significant amount of money, opt for the lump sum. Unfortunately, many of them end up running out of money way too early. In the case of an injured worker, that can present a slew of problems.

 

  1. Many injured workers who settle their claims have at least some of the money included in a Medicare Set-aside to ensure Medicare does not pay for medical care that should instead be paid through workers’ compensation. Determining whether and how an MSA should be created is highly complex and can be a nightmare for those without specific expertise in the area.

 

The Centers for Medicare and Medicaid Services (CMS) has specific reporting requirements for MSAs. Among them are:

 

  1. The money must be deposited into an interest-bearing account
  2. The funds must only be used for treatments related to the specific injury — not other medical issues
  3. The money can only be used for Medicare-covered expenses
  4. Payment must be made according to the appropriate fee schedule
  5. Each year, the injured worker must prepare and submit an annual accounting report to CMS
  6. A line item detail must be maintained for the duration of eligibility

 

Since failure to comply puts the injured worker at risk of being denied Medicare benefits, it’s crucial that an expert in managing MSA funds is involved.

 

  1. Other Benefits. Medicare is not the only government benefit program that could be impacted by a settlement. Medicaid and Supplemental Security Income (SSI) benefits can also be affected since settlements give the person additional assets. Injured workers who are receiving these benefits must be made aware of how a settlement could make them ineligible for these and other public benefits.

 

Special Needs Trusts were created by Congress for this very purpose. Some of the proceeds from the settlement can be placed in these vehicles to preserve and even extend the purchasing power of the settlement. Again, these are very complex and must be developed in conjunction with someone who has the expertise in state and federal statutes, public benefits and tax law.

 

  1. Durable Medical Equipment. In addition to the injured worker’s medical needs, he may need special equipment or even alterations to his home and vehicle. An expert on durable medical equipment (DME) should be involved in the settlement process to provide expertise on when, where and how much money will be needed.

 

  1. Family needs. In addition to the injured worker’s ongoing medical needs are those of his family. Children may eventually need money for a car and/or higher education. Parties to the settlement should understand this ahead of time to ensure it is structured in a way that will make these funds available when needed.

 

 

Engaging a Settlement Consultant

 

The best and more efficient time to engage a settlement consultant is before a claim has occurred.  The consultant should be a part of your team and ready to assist as needed.  When a claim comes across your desk and you say “ugh,” reach out to your settlement consultant and ask “what do you think?”

 

For legacy claims, find a block of with high reserves that seem to be going nowhere. Providing the name of the case, the adjuster, the claims liaison, attorneys, employer, TPA and a brief synopsis to the settlement consultant starts the ball rolling. With permission, the consultant can reach out to the various parties, gather information and report back as to which claims make sense for settling, as well as which cases do not and why.

 

 

Conclusion

 

Settling workers’ compensation claims should not be just about doling out a sum of money to an injured worker. An appropriate settlement starts with a settlement consultant early in the claim who builds a relationship with the injured worker and uncovers his needs, then brings in experts he knows who will be valuable contributors to the entire process. Working as a team with the injured worker creates a win-win for all parties.

 

 

 

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: https://blog.reduceyourworkerscomp.com/

 

©2019 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.

Why and How Good Job Descriptions Help Reduce Workers’ Compensation Costs

digital job descriptionA good job description is like money in the pocket for workers’ compensation payers. The more specific the information is available, the better the chances of returning an injured employee to work that much sooner. A well written, appropriately available job description is invaluable for any organization that ever has an injured worker.

 

 

Job Descriptions

 

Surprisingly, many organizations have either poorly written or no job descriptions at all. The vast majority are vague and don’t provide nearly enough information on which to make decisions about whether an injured worker can physically handle a particular job. It is not uncommon to see a company with multiple locations have different job descriptions for the same jobs at each location.

 

Medical directors for third-party administrators cite the lack of adequate — or any — job descriptions as one of their major hurdles in getting injured workers back on the job.

 

Some job descriptions include the 5 strength categories outlined by the Department of Labor:

 

  1. Sedentary
  2. Light
  3. Medium
  4. Heavy
  5. Very heavy

 

This, at least, gives the treating physician an idea of how much weight and effort is needed to do the job. But it fails to take in many other factors that can be crucial to fitting an injured worker in the right position.

 

For example:

 

  • Does the job require the worker to bend, kneel, reach – and how high?
  • Are long periods of standing necessary?
  • Is driving a requirement?
  • Would climbing be important, such as climbing onto equipment?
  • Is pushing and/or pulling involved?
  • Are specific body parts more taxed than others, and to what degree?
  • What cognitive skills are needed?

 

The more detailed, accurate information provided in the job description, the easier it is for physicians to determine if an injured worker can handle the job and what, if any accommodations could enable him to return to work.

 

In addition, a good job description (profile) reduces the number of injuries at an employer by identifying injury risks and preventive ergonomic modifications.

 

 

Disability Duration

 

Getting injured workers back on the job in some capacity saves costs for the employer/payer, who no longer has to pay workers’ compensation benefits. But it also saves the employer/payer additional, though overlooked costs; that is, preventing an injury from becoming one of the small percentages of claims that consume the majority of costs.

 

Estimates are that somewhere between 5 – 10% of claims comprise 80% of workers’ compensation costs. While some of these involve catastrophic injuries, many are seemingly small claims that stay on the books for months or years, often involving multiple medical treatments and medications. That is the impact of disability duration on utilization.

 

Additionally, the longer a person is out of work and the more treatments/medications he receives, the more likely he is to continue in that vicious cycle. He develops a disability mindset and believes he truly needs whatever medical services are suggested.

 

Physicians cannot take all the blame for these claims. If employers/payers cannot provide accurate job descriptions that include specific job demands, and if they are unwilling to make accommodations, the doctor can only do what he is trained to do; help the injured worker resolve his injuries and pain.

 

In addition to providing accurate job descriptions, it is also incumbent on employers/payers to work with treating physicians to help them understand the benefits of returning an injured worker to some sort of work — for the injured worker as well as the employer/payer.

 

 

Get Help Creating Accurate and Comprehensive Job Descriptions

 

The creation of accurate and comprehensive job descriptions is often outside of an employer’s capability.  Technology is advancing in a way that makes the creation of this important information easy.

 

 

 

ODG, one the leading providers of evidence based medicine guidelines has recently incorporated a unique new product option, the ODG Job Profiler.

 

The ODG Job Profiler is an innovative software platform powered by MyAbilities™ which adds job demand data across every industry and occupation by providing a comprehensive database of physical, cognitive, and environmental demands specific to over 30,000 jobs spanning nearly every industry. This solution helps insurers, third-party administrators (TPAs), and employers identify and mitigate the risk of injury by creating a customized Physical Demands Analysis (PDA) for each job function, adjusting disability duration guidelines according to job demands.

 

This information is then packaged as an online digital job profile and becomes shareable to all stakeholders in a claim, streamlining the RTW process and allowing for automated job matching between the individual’s capabilities and available jobs.

 

 

Suggested Actions

 

Shortening up disability durations is key to reducing workers’ compensation costs. Organizations can achieve this by:

 

  1. Getting accurate, detailed job descriptions. Get help directly from an outside service provider, or work with a with a TPA or insurer that can provide access to better physical demands descriptions for various occupations, especially if the provider is using a national database.

 

  1. Taking videos of employees doing their jobs. This can become part of a job description. It can also be used to show the treating physician exactly what a job entails, which will help make more informed decisions about getting the worker back to the right work and seeing if accommodations would help.

 

  1. Partnering with the treating physician. The doctor treating the injured worker should be part of the caregiving team. The physician is a vital part of the RTW process since she has the authority to release the employee to work and the type of position he can do.

 

  1. Providing training to avoid reinjury. Based on the job demands and the worker’s condition, some training may help ensure the employee is doing tasks properly.

 

 

Conclusion

 

Helping injured workers recover and return to productivity should not be left to chance. By having a strategic plan of partnering with physicians, TPAs, insurers and others involved in a claim, and providing as much detailed information as possible — especially job descriptions — organizations can prevent routine claims from becoming expensive, long-lasting ventures.

 

 

 

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: https://blog.reduceyourworkerscomp.com/

 

©2019 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.

Contractor Liability In Workers’ Compensation

contractor liability in workers compensationThe issue of contractor liability in workers’ compensation is something members of the claim management team need to be aware of when dealing with claims.  This is especially true when handling claims in the construction industry or other job classifications that rely heavily on contractors to perform work.

 

 

Contractor Liability in Workers’ Compensation: Back to the Basics

 

As a general rule, employers (with some limited exceptions) are required to purchase workers’ compensation insurance for their employees.  In the setting of a general contractor, they typically do not have employees as people who work for them are generally classified as “independent contractors,” or subcontracted labor through another person or entity.

 

Notwithstanding this exception to the general rule, contractors may want to consider obtaining the benefits of workers’ compensation coverage should a judge or industrial commission determine an injured person is an “employee.”  Situations to consider include the following:

 

  • Uninsured contractor: General contractors can be found liable in workers’ compensation matters if a subcontractor does not have required coverages for their employees.  Although there is no employer-employee relationship, courts generally will look to the main contractor, as well as other intermediate contractors, for coverage.

 

  • Employee misclassification: This can occur in serval different circumstances, which include times when the misclassification is intentional (fraud), the nature of the relationship changes during the course of business or in instances of good faith dealings a finder of fact determines an employer-employee relationship exists.  The mistake of fact, even if it is unintentional, is not a defense.

 

  • Self-coverage: In many instances, a contractor will purchase coverage for themselves, and others working under them.  This can include independent contractors working directly for the contractor, and subcontractors and their employees and the independent contractors of a subcontractor.  This can sometimes come in the form of “ghost” or “shadow” policy, which covers medical and indemnity benefits under a workers’ compensation act, and also cover expenses related to legal representation in legal proceedings.

 

 

Avoiding Contractor Liability in Workers’ Compensation

 

The policy behind contractor liability in workers’ compensation is two-fold.

 

  • Avoids situations where a contractor is avoiding liability and the payment of workers’ compensation insurance at the expense of unskilled labor; and

 

  • Provides a certainty in benefit payment and reduction in tort litigation (eg – the Grand Bargain).

 

When a person working in a subcontractor situation is injured, that party should either have workers’ compensation insurance, if self-employed or for their employees.  If the subcontractor does not have workers’ compensation insurance, a cause of action may arise against the contractor immediately above that entity.  Liability will often also extend to the next immediate contractor if there is not the presence of insurance, etc.

 

Based on this complex statutory framework, members of the claim management team need to be diligent in their investigation.  Practice pointers should include the following:

 

  • Educate all insureds about the basics of contractor liability in workers’ compensation matters. This includes making them aware of the fact they may be responsible for persons unrelated to their business when involved in projects involving contracted labor.  This is especially prevalent in the construction industry;

 

  • Determine if any contractors and/or subcontractors are present at the injury site. Things can get complicated, so drawing a diagram may assist in determining liability for a work injury; and

 

  • Careful payroll audits when determining workers’ compensation insurance premiums. While most contractors and employers are honest when reporting the number of employees, wages and injury rates, there is a temptation to “game the system.”

 

When speaking with an insured about workers’ compensation insurance in a contractor/sub-contractor setting, it is also important to provide precise and correct answers.  Failure to do so can give parties with a false sense of security.

 

 

Conclusions

 

Workers’ compensation systems become complex when dealing with contractors.  It is important to educate insureds and provide them with accurate information.  This includes resources on how to avoid unnecessary risks and do so in an ethical manner.  It can also help avoid the unnecessary payment on claims when insuring a contractor who works with other entities.

 

 

 

 

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: https://blog.reduceyourworkerscomp.com/

 

©2019 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.

 

Don’t Make Two Mistakes In A Row in Workers’ Comp Return to Work

 

 

workers compensation return to work

An object in motion will stay in motion unless acted upon by an unbalanced force. That’s Newton’s first law of motion. “Don’t make two mistakes in a row,” a quote by Beverly Buffini, from one of the podcasts I listen to called The Brian Buffini Show.

 

Hello, my name is Michael Stack. I’m the CEO of Amaxx and those two exact opposite statements and concepts are both vitally important for you to understand personally as the leader of your work comp program or as the educator of your clients, as well as for your injured employees themselves in the success of your program.

 

 

Newton’s Law of Motion in Workers’ Compensation

 

What I want to do today is break down those two concepts, what they are and how they work together to drive your program and yourself to greater success. Let’s first talk about this law of motion and kind of what it means. We all kind of know that, right? You’re kind of going in a certain direction and you just kind of keep going in that certain direction unless you don’t, unless you stop, unless there’s some reason for you to change course.

 

Same is very much true in work comp. Let’s take a look at these return to work rates and this comes from a Washington State L & I study published in the IAIABC return to work paper that they published several years ago. This is a probability that your injured worker is going to return to work ever, probability that they ever return to work at all. Here’s the numbers and you can see how dramatically they start to drop off, 92.8% probability they return to work in some capacity in their lifetime if they’re back to work in less than 12 weeks. Pretty high likelihood that they’re going to be back to work if they get back to work pretty quickly.

 

After 12 weeks, this drops off a cliff, 55.4% of people ever return to work if they haven’t been back to work in 12 weeks. Critical concepts to now start to understand. This ball is in motion, this ball is in motion, this ball is in motion, this ball is in motion, and then after 104 weeks, less than 5% chance they ever return to work at all if they’ve been out of work for that entire time. The ball is in motion. It’s an important thing to critically understand that if you don’t change it for some reason, intervene before here, get those numbers up here, your employee is going to be likely out of work forever, causing permanent and lasting damage to their entire life, as well as making that claim very expensive.

 

 

Don’t Make Two Mistakes In A Row

 

This other concept I heard on this podcast, The Brian Buffini Show. I’ve been following Brian Buffini for 15 plus years. Great lessons, great information as far as business success, personal success, living a balanced life. Check it out if you are interested in that type of thing. But listening to this concept when they’re talking about teaching volleyball. His wife Beverly was a Olympic volleyball player and they’re teaching their daughters about how to be successful in volleyball. This concept which resonated with me, resonated with my wife, is just don’t make two mistakes in a row. Everyone’s going to make mistakes, you’re going to miss the ball, you’re going to drop the ball in some capacity in our lifetimes, but if you don’t make two in a row, you now start to avoid this ball going downhill in all phases of your life, personally as well as your work comp program.

 

If you can understand those two concepts, that the ball is going to stay in motion and if you make a mistake, if something goes wrong, if things are starting to go off the tracks, they’re going to continue to go off the tracks unless you do something about it, unless you’re intentional about it, unless you’re aware that if you’re making that mistake, oh okay, let’s not make two in a row. Or you have a bad part of your day, let’s not have that continue and ruin my entire day or my entire week or my entire month or my entire year in this capacity.

 

Two important concepts to understand, that things are going to stay in motion and if they’re going positively you want that to continue. If you make that mistake, you need to intervene and get things going on the right track.

 

Again, my name is Michael Stack. I’m the CEO of Amaxx and remember your work today in workers’ compensation can make a dramatic impact on your company’s bottom line, but it will make a dramatic impact on someone’s life. 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: https://blog.reduceyourworkerscomp.com/

 

©2019 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.

Mental Health Workers’ Comp Claims

Mental Health Workers’ Comp ClaimsReducing costs is challenging when it comes to mental health workers’ comp claims. This is based on a number of different factors that separate these claims from common physical ailments and injuries.  In order to be successful in reducing workers’ compensation program costs, members of the claim management team need to take extra steps in determining liability and making sure the claim is properly defended if there is a dispute regarding causation, and reasonableness and necessity.

 

 

Understanding Mental Health Workers’ Comp Claims

 

Workers’ compensation laws originally covered only physical injuries.  As social norms changed, so did the concept of what constitutes a “personal injury.”  As laws developed, mental health workers’ comp claims gained acceptance and allowed employees to receive wage loss and medical benefits for claims that did not involve traditional physical injuries.

 

The laws in jurisdictions vary, so it is important to understand how the law applies, the required standards and medical support necessary for a mental health workers’ comp claim to be found compensable.  There are two general categories of mental injuries claims:

 

  • Physical/Mental Injuries: This injury originates with a physical injury (specific incident or workplace exposure), and morphs into a psychological and/or psychiatric claim.  Common examples include an aggravation and/or acceleration of an underlying condition that is worsened as the result of the physical trauma.

 

  • Mental/Mental Injuries: This is an injury that results from work-related mental stress or stimulus that produces in many cases symptomology or ailments deemed to be compensable.  An early example of this type of claim comes from Wisconsin where students at a high school demanded a guidance counselor be removed from her position.  The counselor developed a severe neurosis tension state that was eventually determined to be compensable.  School District No. 1, ILRC, 62 Wis. 2d 370, 375, 215 N.W.2d 373, 376 (1974).  Compensability in other instances has included cases where the employee merely observed someone else being injured at work.  International Harvester v. LIRC, 116 Wis.2d 298, 341 N.W.2d 721 (Wis. Ct. App. 1983).

 

 

Determining Issues of Compensability

 

It is important to note the legal standard for these types of injuries varies.  There are common themes that run through statutes supporting these types of claims that a member of the claim management team must keep in mind when making determinations of compensability and whether denying the matter is appropriate:

 

  • Whether the mental condition arose from a situation greater than the “day-to-day” emotional stress one would otherwise experience;

 

  • Whether the alleged mental condition really exists based on objective medical evidence; and

 

  • Whether the workplace exposure or conditions as compared to everyday life is a substantial contributing factor in the mental health condition and/or disorder.

 

Some jurisdictions require additional medical evidence to support a claim for a mental health injury.  Examples of this include a requirement the mental diagnosis must be given by a licensed psychiatrist or psychologist, and/or meet the described criteria found in the Diagnostic and Statistical Manual of Mental Disorders (DSM).  Limitations can also be placed on these claims if the underlying condition is the result of disciplinary action, work evaluation, job transfer, layoff, demotion, promotion, termination, retirement or other good faith actions of an employer.

 

 

Special Considerations When Investigating Mental Health Workers’ Comp Claims

 

Like physical injuries, psychological and/or psychiatric claims require members of the claims management team to investigate the “mechanism of injury” when determining issues of initial compensability and reasonableness/necessity of claims.  This includes:

 

  • Obtain a complete set of medical records for the employee and make additional inquiries regarding medical care and treatment related to the employee’s mental health and any history of family/personal counseling;

 

  • Investigate treatment for chemical dependency issues. This should not be limited to the employee, but members of their immediate family; and

 

  • Reviewing issues concerning other factors that may impact the alleged injury and time off work. Factors to consider include periods of unemployment, bankruptcy, gambling problems, and other financial losses.

 

 

Conclusions

 

Issues concerning mental health will continue to dominate workers’ compensation claims as we learn more about it and its impact on one’s well-being.  The result is members of the claim management team will need to better understand how it can impact a claim and seek to run a better program to control 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: https://blog.reduceyourworkerscomp.com/

 

©2019 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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