Content for this article was derived from a webinar presented through Risk & Insurance by

• Marcos Iglesias, Chief Medical Officer, Senior Vice President, Broadspire;
• Monica Manske Sr. Manager of Workers’ Compensation and Employee Safety, Rochester Regional Health.

Access the On-Demand Webinar here

Over the past few years we have heard it claimed that wellness programs can generate a 3 – 1 return on investment for employers. But many organizations that implement them become frustrated by the lack of significant – if any – benefits and may feel their money has been wasted.

Wellness programs are not a panacea. Some elements of typical wellness programs are questionable or even harmful, from a medical standpoint. Faced with high healthcare and workers’ compensation costs, organizations are seeking ways to help their employees and improve their bottom lines. Experts say with proper design, effort, time, and realistic expectations, employers can see positive impacts from wellness programs.

The Facts

The overall health of the average America is not ideal; “deplorable,” is how some would describe it. Chronic health conditions, which comprise 7 of the top 10 causes of death, are common, deadly and disabling – yet preventable. The Centers for Disease Control and Prevention says if we eliminated poor nutrition, sedentary lifestyles, and use of tobacco products, we could eliminate 80 percent of heart disease, stroke and diabetes, and 40 percent of all cancers. Improving the health and wellbeing of the employee population is far beyond the abilities of any single employer and will require massive changes in society.

But employers can take steps to help their employees make incremental improvements in their overall health and wellbeing. More than half of small employers and the vast majority of large employers are trying.

The problem comes when companies that undertake these efforts see no gain. One year into the program, it’s not unusual for companies to see no improvement in health outcomes or productivity and no difference in the number of sick days employees take.

One recent study showed the only difference after 12 months was that employees who were included in the program were overall happier than others. There were no measurable health changes, however. Another recent well-publicized study of employees at BJ’s Wholesale Warehouse found no reductions in healthcare costs and no difference in clinical measures after 18 months.

Dr. Marcos Iglesias, the chief medical officer for Broadspire, said some wellness programs include recommendations that don’t follow evidence-based medical guidelines. One he cited from the Midwest encouraged all employees to undergo a colonoscopy, which is not medically recommended for everyone, is expensive and unpleasant. Another suggested self-breast exams and testicular exams, which he said are also not advised or recommended for everyone. Iglesias said the frequency of preventive screenings in most wellness programs on the market do not follow medical evidence, and in some cases may do more harm than good.

Weight management programs, while well-intentioned, frequently advocate crash-dieting principles. Also, they may cause emotional harm by constantly reinforcing the message that the employee needs to lose weight or stop smoking.

The penalties for non-participation in the program or failing to meet certain clinical measures may be seen as coercive or punitive, especially for workers who cannot participate – the disabled and single parents, for example. According to Iglesias, employees who do not participate in wellness programs forfeit an average $670 per year.

How to Impact Employee Health

All this begs the question, what can employers do to impact the health and wellbeing of their employees?

The first step is to understand what a wellness program is and what elements to include, based on the organization. There are myriad definitions of what actually constitutes a ‘wellness program.’ Generally, it is a benefit to employees that focuses on lifestyle and prevention to help employees improve their health and/or stay healthy. It may include a variety of elements such as fitness activities, smoking cessation and weight loss programs, health assessments, disease management, nutritional guidance, and lunch and learn educational sessions, for example.

No two wellness programs are necessarily alike and the most effective ones evolve with changes in the organization. The webinar outlined a series of ‘musts’ in designing or improving wellness programs that can make a difference for organizations.

1. Seek input from inside and outside the organization.
   1. Unless an organization is comprised of wellness experts, it can benefit from consultants who are brought in to provide input.
   2. A wellness program should be a benefit to all employees – not just those who are already-fit and healthy. Their needs and desires may be different. Creating a cross-functional team comprised of various employees can serve as a guide to the elements that should be included. Surveys can also be used to identify their needs and satisfaction levels, once the program has been implemented.
2. Clearly define the goals of the program.
3. Explore and determine the amount needed to be budgeted and human resource commitment.
4. Find the right space.
   1. If onsite fitness will be included, an area needs to be designated.
   2. Additionally, there should be an area for educational services and preventive programs. It should be welcoming and attractive to employees and their families.
5. Show compassion, care, and foresight for employees in the design and approach of the program. Consider the specific needs of all employees, including those with outside obligations that may prevent them from participating in after-hours programs.
6. Continuously evaluate the program. Again, seek engagement of a cross-section of employees to determine how effective the program is.
7. Make it a carrot, not a stick. Center the program on employees. Offer a variety of activities that meet their needs. That may involve expanded hours for certain programs, or allowing workers to use work hours to participate.
8. Have realistic expectations. Acknowledge that it may not be able to move the needle toward optimal health and wellbeing for all employees, but that some improvement is a benefit to workers and the organization and that it will take time.

For existing programs that appear to be ineffective,

9. Conduct a SWOT analysis. Collaborate with a cross-sectional team of employees to determine what is and is not working, and if any new needs have evolved; what, if any external forces are impacting the program.
10. Identify what to measure. Looking to workers’ compensation costs to determine the program’s effectiveness may not make sense because of its long tail.
11. Determine if there is the appropriate amount of HR support for the program, since these are often add-ons and, therefore, not administered by a designated person.

Conclusion

The idea of a wellness program should not be to create wellness superstars but to impact workers’ overall health. Organizations that carefully consider the needs and desires of their workforces spend time properly developing the program, and continuously evaluate and tweak it may see some benefits to their workers and bottom lines.

Author:

Author 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/

Contributor:

Dr. Marcos Iglesias is senior vice president and chief medical officer of Crawford & Company’s global TPA, Broadspire. He has more than 25 years of experience in workers compensation, disability evaluation and treatment, and insurance leadership. In addition to being a physician, executive, national speaker and author, Iglesias is known for his compassion for patients, progressive and inspirational leadership, and integrated approach to injured worker care. Iglesias has a special interest in the prevention and mitigation of delayed recovery and disability. He is driven to help ill and injured workers live active, productive and fulfilling lives, which has led him to develop innovative, comprehensive disability management solutions that focus on returning workers to pre-injury function.

Monica Manske, Sr. Manager of Workers’ Compensation & Employee Safety; Rochester Regional Health. Rochester Regional Health is the leading provider of comprehensive care for Western New York and the Finger Lakes region. From harnessing research and technology, to helping patients redefine the odds—we are leading the evolution of healthcare. It’s a commitment to health that exceeds expectations, reaching beyond the present into what’s next. Formed in 2014 with the joining of Rochester General and Unity Health systems, now, as one organization, Rochester Regional Health brings to its mission a broad spectrum of resources, an ability to advocate for better care, a commitment to innovation and an abiding dedication to caring for the community.

©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.

Picking the right third-party administrator (TPA) takes time.  Failure to pick the correct one can result in increased costs to a workers’ compensation program.  There are many important factors to consider beyond a TPA having the right price.   In the first part of this series, we looked at selecting a TPA on how they make initial contact with the injured employee and other parties following a work injury, and the methodology of their initial claim examination.  Additional factors that need to be considered also include a deeper dive into how losses are reported, claims are assigned, and coverage is verified.

Nothing Succeeds Like Success…

Leading TPA’s success comes from the division of labor into four areas:

1. Loss Reporting: Prompt loss reporting is a key aspect when it comes to timely loss notification. Prompt reporting has three advantages:

• Immediate contact with all parties involved in a workers’ compensation claim results in reduction of claimant representation, and litigation. Contact with all parties includes the employee, employer, witnesses, other interested stakeholders;

• Prompt investigation: This includes several different items to consider immediately after a work injury.  This includes making sure the employee receives medical care and treatment, identifying witnesses, preserving physical evidence, and getting information about the injury from the employee; and

• Reduction of overall cost per claim: This promotes efficiency in any program.

2. Claim Assignment: An effective assignment process helps to ensure proper handling of claims at the appropriate technical level. The claim assignment process may include gathering additional information beyond what is available in the First Report of Injury.  It includes other aspects such as making sure the proper forms are filled with the state industrial commission and asking the right questions.  TPAs can practice a team approach by:

• Distributing the work to the most appropriate level of technical expertise; and

• Obtain the highest possible efficiency possible by effective internal communication, use of regular file reviews, and communication with the insured.

3. The Assignment Procedure: Upon receipt of a First Report of Injury, a four-step process must be initiated to promote best in class services:

• Supervisory evaluation of the First Report of Injury to ensure it is properly classified. Examples include “medical only claims,” claims involving lost time; and catastrophic injury claims;

• Supervisory review and direction to the appropriate claim handler. Claim management teams should have specialized units for various claims and situations.  The examination of fraud can also take place in these units;

• Creation of a Central Index Bureau referral for lost time claims and medical-only as required. It is important to know the claims history early in the process; and

• Case management services should be utilized as appropriate. (It should also be noted the claim classification and technician assignment can change throughout the life of the claim if a significant change in complexity level occurs.

4. Coverage Verification: This starts with confirmation of the client’s self-insured  It also must include verification of a client’s policy of insurance, limits of coverage, and effective dates.  Coverage issues are recognized, investigated, and addressed with the carrier before it becomes an issue after a work injury.

Conclusions

Best in class service starts with paying attention to details and ensuring all of the “i’s are dotted, and t’s are crossed.”  It also includes making sure that claim handlers work as a team and have the resources to success.  This results in claims that are handled in an effective manner.

Author 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/

©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.

Third-party administrators (TPA) perform many important functions in workers’ compensation claims.  It is important to make a reasoned decision when selecting the right TPA.  Failure to do so can result in a chaotic program that does not serve the best interests of the client, nor does it ensure the injured employee receives best in class service.

Keys to Effective Contact

A three-point contact system results in establishing and maintaining effective communication with all key parties to the claim to facilitate the investigation, claim control, and explanation of benefits.  This includes the following:

• The claim handler will verbally contact the injured employee or attorney, if represented, the employer and the treating physician by the end of the next business day following receipt of the loss to the TPA;

• When unable to reach an injured employee within one business day, a letter will be sent asking the injured employee to call;

• The claim handler should make at least two attempts to contact the applicable parties within 3 days following receipt of the loss. A letter will be sent if unable to reach the parties; and

• If contact cannot be achieved due to circumstances beyond the control of the claim handler, the claim file should be appropriately documented.

The contact process should continue throughout the life of a claim.  The following steps should be taken during a claim until it reaches its conclusion:

1. Ongoing contacts with the employer, the injured employee and the medical provider;

2. All contact efforts should be detailed in the claim notes. It is not written down contemporaneously, it did not happen;

3. The claim handler should vary calling times to increase the chance of a successful contact;

4. Significant changes in the injured employee’s condition should be documented in the claim notes; and

5. If the injured employee is off work or on transitional duty, contact should be maintained, at maximum, every 30 days by the claim handler and/or medical case manager.

Medical-Only Claims

Medical only claims require contact just like any other claim.  Important steps that need to occur to be effective include:

1. The medical claim analyst verbally contacts the employer by the end of the next business day following receipt of the loss report;

2. The medical claim analyst sends letters to the employee and medical provider by the end of the next business day following receipt of the loss report; and

3. On transitional duty claims with lost wages or a reduction in hours worked, three-point contact is verbal for all three contacts areas.

Effective Claims Investigation

Prompt and thorough investigation provides the framework for timely analysis of coverage, compensability decision, effective claim management, pursuit of cost containment opportunities, and the timely issuance of claim benefits.

1. The scope of the investigation considers the type of accident, complexity of injury, and compensability issues. Investigation applies to all claims other than those designated as medical-only claims through the assignment process;

2. Initial investigation is completed within 14-calendar days of receipt of the loss report. This TPA utilizes a proprietary claim advantage system, an evidence-based decision tree software tool, to support investigation and prioritize claims. The claim-handling process continues to re-evaluate the exposure as the case progresses and allows for the development of a goal-centered strategic plan of action; and

3. Identification and investigation of potential subrogation or second-injury fund maximize recovery potential and reduces client/carrier loss cost. All claims with potential subrogation are handled by a claim handler who teams with licensed subrogation partner to evaluate and pursue recovery opportunities.

The TPA, as a matter of sound business practice, and in recognition of its public policy obligations, has a duty to identify and resist all fraudulent claims. When the evidence supports withholding benefits, such claims are promptly rejected, and aggressively defended.  When the evidence is inconclusive, the claim is promptly adjusted.

Conclusions

TPAs play an important role in the claim management process.  It is important to understand how a TPA communicates with parties following a work injury and investigates claims.  Examining these factors allows the insured to run an effective workers’ compensation program and provide better services to the injured employee, and all interested stakeholders.

Author 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/

©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.

Members of the claim management team face many challenges when it comes to dealing with injured employees seeking entitlement to permanent total disability (PTD) benefits.  Exposure for these types of claims is high.  It is important to be proactive on these claims in order to reduce costs in a workers’ compensation program.

The Aging Workforce and Workers’ Compensation

Notwithstanding the recent economic upturn and increasing wages, Americans continue to suffer from the effects of the Great Recession.  Proof of this can be found labor market statistics from the U.S. Department of Labor.  According to a recent survey, the “greying” of the workforce continues:

• In 1994, 11.9% of the U.S. labor marker was 55 years old and older.

• In 2014, this age group comprised 21.7%.

• By 2024, people 55 years old and older will make up 24.8% of the labor market.

Older people miss work for longer periods of time compared to their younger counterparts.  On average, someone over the age of 55 will miss up to two weeks following an injury.  Those between the ages 20-24 will only miss four days.

Permanently and Totally Disabled Defined

According to Prof. Arthur Larson, someone is totally disabled when the “claimant has been able to earn occasional wages or perform certain kinds of gainful work does not necessarily rule out a finding of total disability or require that it be reduced to partial. The task is to phrase a rule delimitating the amount and character of work a man can be able to do without forfeiting his total disability status.”

Reduced into a general rule, courts in many jurisdictions will review the following factors when determining if someone qualifies for permanent total disability benefits:

• Job Search: Employee’s in most jurisdictions are required to conduct a reasonable and diligent job search.  Examples of what is “reasonable and diligent” includes time spent looking for work, the location where one seeks employment, and the overall effort spent.

• Cooperation with Vocational Rehabilitation Assistance: In many states, employees have access to a Qualified Rehabilitation Consultant (QRC) to assist in job search efforts.  A QRC performs a variety of roles when it comes to assisting an injured employee re-enter the workforce.

• Earning Capacity: This factor takes into consideration the employee’s ability to work and earn a wage comparable to what they were making prior to the injury.  It is important to note an employee working in a limited capacity can be successful in their efforts to obtain permanent total disability benefits.

• Refusal of Suitable Job Offer: The employee’s willingness to accept a job offer often comes down to concerns of whether they are able to perform a job offered by the employer.  When reviewing this factor, it is important to evaluate medical and vocational evidence to determine if the work offered by the employer is similar to what they were performing at the time of injury, and uses their training and experience in a manner that would advance the interests of all parties.

Other Defenses to Consider in Defending PTD Claims

There are other issues to consider when defending PTD claims.

• Withdrawal from Labor Market: Employees seeking workers’ compensation benefits are required to stay active in the labor market until they demonstrate an inability to secure suitable gainful employment.  A withdrawal from the labor market can include a move to another geographic location that has fewer job opportunities, or an area where jobs pay lower wages.  It may be necessary to secure a vocational expert to successfully employ this defense.

• Retirement Defense: Most states allow for the termination of PTD benefits when an employee retires.  This is often not a clear-cut distinction, and requires investigation.  This can include statements made by the employee as to how long they intended to work prior to their injury and application for Social Security retirement benefits, and receiving payments from a pension.

Conclusions

The aging workforce is driving members of the claim management team to be proactive when it comes to claims for permanent total disability (PTD) benefits.  This requires a complete investigation and determination as to the employee’s job search efforts, cooperation with their QRC, earning capacity, and refusal of a job offer.  Failure to take the necessary steps can add costs to a claim and reduce a program’s effectiveness.

Author 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 the 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.

Self-insured employers and insurers understand that workers’ comp leakage costs money.  The overpayment of medical cost, indemnity benefits and claim expenses is a waste of money and weakens the overall financial stability of the employer or the insurer.  What to do about workers’ comp leakage is a frequent topic of discussion.

When there is no doubt that a payment should not have been made (example:  a non-recovered duplicate payment), it is referred to as hard leakage.  When a payment is made that is questionable and is subjective (example: a higher than normal settlement), it is referred to as soft leakage.

Employers and insurers frequently attempt to mitigate both hard and soft workers’ comp leakage by providing additional training to the claims staff. Additional training definitely has benefits and will reduce leakage, but additional training normally addresses only the issues the work comp supervisor or claims manager has identified.  This approach will often continue to overlook different types of leakage that is not on the company’s radar.

Independent Claims Auditors Bring Perspective

To identify leakage that is being overlooked, companies have been turning to independent claims auditors who bring in an outside perspective when reviewing claim files.  Senior management often recognizes adjusters, supervisors and even claims managers have a built-in conflict of interest in identifying every source of leakage – the more leakage they identify, the lower their level of competency appears to be.

The independent claims auditor can be completely objective, as the independent claims auditor does not have to worry about the impression the results of a workers’ comp leakage audit will create. The outside auditor is looking for the financial mistakes (leakage) in an effort to assist the insurer or self-insured employer to lower its overall claims costs without the worry that senior management may be critical of the adjuster’s/ supervisor’s/claims manager’s performance.

Hard Workers’ Comp Leakage

The independent claims auditor will identify types of hard workers’ comp leakage including:

• Payment of non-compensable claims
• Payment of claims occurring outside of the insurance policy period
• Failure to utilize the medical bill fee schedule for all medical bills covered by the schedule
• Payment of the same medical bill, including overlapping medical bills, more than once
• Incorrect calculation of the employee’s average weekly wage
• Incorrect calculation of the employee’s indemnity benefit
• Incorrect calculation of the number of days or weeks of indemnity benefits owed
• Incorrect handling of the waiting period and the retroactive period
• Erroneous payment of indemnity benefits after the employee has return to work
• Failure to properly calculate the impairment rating value
• Failure to utilize the pharmacy benefit management program
• Failure to apply offsets including unemployment benefits, social security benefits, over governmental programs
• Failure to identify and pursue subrogation
• Failure to obtain Second Injury Fund recoveries
• Failure to obtain reinsurance company recoveries
• Failure to arrange for modified duty work when approved by the medical provider
• Payment of temporary total disability benefits when temporary partial disability benefits are owed
• Overpayment of medical mileage
• Over reserving of the long-term claim resulting in a higher than appropriate experience modification factor with Underwriting

Soft Workers’ Comp Leakage:

The independent claims auditor will identify possible soft workers’ comp leakage including:

• Failure to thoroughly investigate the claim prior to acceptance of compensability
• Failure to complete the Insurance Services Office inquiry
• Failure to properly evaluate future medical benefits when settling a claim
• Poor settlement negotiations
• Failure to properly manage defense counsel
• Failure to properly utilize medical case management, either overutilization or underutilization
• Failure to utilize medical triage
• Failure to settle dispute claims at the optimum cost point

Controlling Workers’ Comp Leakage Can Mean Large Savings

Controlling leakage is frequently the difference between an insurer or self-insured employer making or losing money.  While no claims operation will eliminate all leakage, a five percent (5%) leakage factor on a small self-insured program with $20 million in paid claims each year is an extra $1 million dollars spent, and 3% leakage on a $100 million a year paid out by an insurer is an extra $3 million dollars spent.

The above lists of how leakage occurs in workers’ compensation are not complete.  There are various other ways leakage can occur.  For a workers’ comp leakage audit to provide the maximum benefit to the insurer or self-insured employer, an auditor with a high level of expertise in workers’ compensation is needed.

Author 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.