Detecting Workers’ Compensation Fraud

Detecting Workers’ Compensation FraudWorkers’ compensation fraud continues to be a problem.  Members of the claim management team need to be aware of this problem and develop a plan for its prevention.  They also need to create a plan to remedy the situation.  By taking steps to stamp out workers’ compensation fraud, programs will become more efficient and ultimately reduce costs program-wide.

 

 

Defining the Issue – What is Workers’ Compensation Fraud?

 

Malingering or showing signs of pain magnification is not workers’ compensation fraud.  Instead, it is defined by state law, and investigated and prosecuted by a state agency.  Other civil ramifications can also apply.

 

According to Webster’s Dictionary, “fraud,” occurs “when a person knowingly or intentionally conceals, misrepresents, or makes a false statement to obtain” workers’ compensation benefits or coverage, “or otherwise profit from the deceit.”

 

Workers’ Compensation fraud is not limited to injured employees.  Employers can commit acts of fraud by:

 

  • Misrepresenting company payroll on underwriting forms;

 

  • Paying an employee cash or not accurately reporting wages;

 

  • Not accurately reporting their payroll staff; and

 

 

In sum, an employer commits fraud anytime it intentionally undertakes an action to reduce the cost of its workers’ compensation insurance premium.

 

 

Common Examples of Workers’ Compensation Fraud by Injured Employee’s

 

There are numerous examples of workers’ compensation fraud committed by an employee in the context of a claim.  Some of the more common examples include:

 

  • Filing a claim for an injury that never occurred, or occurred outside the workplace;

 

 

  • Reporting an injury that occurred during another activity, such and an employee intentionally inflicting an injury and making a claim for benefits;

 

  • Misrepresenting the nature/extent of a work injury to a medical provider; and

 

  • Making a claim related to an injury that occurred following a job termination, layoff, or end of seasonal work.

 

 

Danger Ahead – Common Red Flags of Workers’ Compensation Fraud

 

There are numerous red flags members of the claim management team should look out for when investigating a claim.  It is important to work as a team and share information to help less experienced claim handlers detect it and avoid paying unnecessarily on a claim.

 

  • Employment changes and terminations: Be mindful of claims that arise at the same time an employee changes positions within an employer or is terminated/seasonally laid off.  A complete review of whether the injury/incident was reported prior to termination or whether the employee was near the end of their unemployment benefits prior to reporting a claim is key.

 

  • Beginning of week injuries:  It is often not a coincidence an employee is injured first thing Monday morning after arriving at the workplace.  This should make anyone scrutinize a claim to determine if it in fact occurred over the weekend.

 

  • Unwitnessed incidents: This should be an area of concern when the claim is made by someone who would typically not be working in a particular area or performing a certain activity.  A review of security video should be a part of any investigation to monitor the activities of the employee immediately prior to the incident.

 

  • Experienced claimants: These are individuals with a long and well-documented history of work injuries and other insurance claims.  A review of an insurance bureau index can track claims histories of a person and be a part of an investigation.

 

Other red flags include employee’s who give differing stories, work other side jobs (often as independent contractors), or may be experiencing financial difficulties.  It is also important to understand what hobbies or recreational activities an injured employee partakes in away from the workplace.  This can include someone playing in a sports league or enjoys “extreme sports.”  Proactive claim teams should have a plan in place to identify potential fraud issues and undertake a more exacting investigation.

 

 

Conclusions

 

Members of the claim management team need to be mindful of workers’ compensation fraud in all claims.  In addressing this issue, there are many red flags a claim handler must be aware of before accepting a claim and paying benefits.  By doing this, one can ensure that all valid claims are paid in a timely and correct manner.  It can also improve program performance and efficiency.

 

 

 

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.

5 Critical Pieces of Information to Confirm Following a Work-Related Injury

 

How to Execute A Bulletproof Workers' Comp claim

 

There is no time in a worker’s compensation injury claim more important than that time immediately following the injury to find out actually what the heck happened. Hello, my name is Michael Stack. I’m a CEO of Amaxx and today I want to walk you through the five critical pieces of information that you need to confirm immediately following an injury.

 

 

Employer Injury Report / Adjuster Recorded Statement

 

Now, this is either done by the employer when they’re filling out those forms. You’re going to get a certain piece of this information. But also then by the adjuster when the adjuster is taking their recorded statement. Let me run you through those five critical pieces of information that you need to confirm and lock down so that there’s no gray area later and you’re trying to put the puzzle pieces together and figure out what the heck happened when you could have just confirmed this right away when the information was still clear in everyone’s mind.

 

 

5 Critical Pieces of Information to Confirm Following a Work-Related Injury

 

Let’s talk about what these things are.

 

  • You need to confirm the mechanism of injury
  • If there are any witnesses there at the scene that saw exactly what happened,
  • What body parts were involved
  • If that individual injured worker has previous injuries or not,
  • And then finally who the healthcare providers are, who their primary doctor is, etc.

 

Let me run you through those again. The mechanism of injury. What and how did the injury occur. The witnesses. The body parts. What exact body parts were involved. Was it the elbow only? Was it the knee as well? Was it the hip? They landed on their back. What was involved and what was not involved. If there were any previous injuries and then if there were healthcare providers, what healthcare providers have they seen in the past, so that you can locate those medical records and get a lot more information on what exactly has occurred with this individual and injured worker, so you can make the right decision, which is what we’re trying to do here in worker’s compensation.

 

 

How to Execute A Bulletproof Workers’ Comp Claim Investigation

 

For more information on this, for more in-depth training on this, I have a fantastic new course. It’s called how to execute a bulletproof work comp claim investigation. I walk through these five things with our special guest Stewart Colborn, who’s a defense attorney out of Texas. It’s great in-depth training in how to do this and how to do it right out of the gate. You could check that out on a link below. 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.

Record and Document Even Minor Work Injuries

The majority of workers at some point in a career sustain a minor injury at work. Sometimes it does not need to be treated and the worker prefers to deal with it privately at home. Or maybe the employee takes a few sick days to rest and then returns with no other issues.

 

 

Why Document Minor Injuries

 

No matter how minor the injury, it should always be documented. Adjusters receive countless workers comp claims, where a new claim is received in one month but the injury date is 6 to 8 months earlier. Why was this claim not reported back when the injury occurred? The answer from the employer is usually “Since the employee said it was not a major injury, and did not want to go to the clinic, I did not call a claim in at that time. No time was lost from work, so we did not think it was important .”

 

True, it may not have been important at the time. But if the injury details are not documented, then the adjuster has too little information. The employee may report telling the supervisor after the injury happened. And maybe the supervisor failed to make the necessary injury report, so no supporting documents exists. In addition, the supervisor does not remember any details of the injury. However minor the incident, it is important to have floor supervisors and managers document every incident. And the decision to call or not call in the “incident-only” claim to the carrier can be left up to whoever is responsible for calling in claims.

 

 

Put A Copy in Personnel File

 

The important thing is to document everything and put a copy in the worker’s personnel file. Then when a worker comes back about this injury a year later, there is documentation to support that an incident did actually occur and someone in management was informed. This helps the adjuster legitimize the claim and continue on with an investigation. If an employer chooses not to document an injury, then no supporting documentation is available for defense of a potential law suit.

 

A workers comp claim may seem “bad” to some, but it’s not as bad as a liability suit against the owner. A minor injury can morph into a bigger issue at any time. It is better to be on the safe side by documenting every seemingly insignificant little thing, as there is no way of knowing when  a little injury or issue may turn into a nightmare.

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

 

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.

Effective Handling of Medical Only Workers’ Comp Claims

medical-only workers comp claimsMedical only workers’ compensation claims are sometimes viewed as being unimportant and routine.  This mindset can cause issues and lead to larger problems within a claim management team.  If left unchecked, it can significantly impact the ability of a claims team to handle a large number of claims and not settle workers’ compensation claims in a timely manner.

 

 

Medical Only Workers’ Comp Claims – Defining the Issue

 

Medical only workers’ comp claims are those that involve an injury where the employee only receives medical care and treatment, or the wage loss is confined to the “waiting period” under a workers’ compensation act.  In these claims, the employee’s medical care and treatment may be as short as one office visit, or as long as several years.  The important thing to remember is money is being spent and the claims need to be properly managed.

 

 

 

Avoiding Pitfalls in Medical Only Workers’ Comp Claims

 

Members of the claim management team that work on these claims are generally newer claim handlers with less experience.  The work may be monotonous, but it is still important.  Members that are working these claims should pay close attention to detail, which includes the following issues:

 

  • Ensure the injured employee receives prior authorization when necessary to receive medical care and treatment;

 

  • Understand requirements as it released to applicable medical treatment parameters and fee schedule payments; and

 

  • Review applicable claims to ensure managed care protocols are followed, if applicable.

 

This process also requires the claim handler sets the proper reserves on a claim.  In order to accomplish this goal, the claim handler needs a complete understanding of workers’ compensation protocols.  It is also important to ensure the employee remains gainfully employed to avoid exposure for indemnity and wage loss benefits.

 

 

 

Move Cases Forward – Not Letting Dust Settle

 

All members of the claim management team need to act in an honest and ethical manner. This includes treating the injured employee with respect and dignity.  All payments should be made when legally required. The importance of properly handling medical-only claims is echoed by a National Council on Compensation Insurance (NCCI) report that found the following:

 

  • About 80% make the transition within 12 months of the date of injury;

 

  • Medical-only claims that become lost-time claims cost an average of 40 times more than those that remain medical-only;

 

  • Carpal tunnel claims are the most likely claims to transition from medical-only to lost-time, with the probability of such a transition being approximately 34%;

 

  • The larger the incurred value (paid plus case reserves), the greater the probability of the claim becoming a lost-time claim; and

 

  • The probability of a claim transitioning increases with claimant age until age 65, and then it declines.

 

 

It Takes a Team to Manage (Medical Only) Claims

 

All members of the claim management team need to take a proactive approach to medical only claims.  Even claims that are reserved at lower amounts – $500 to $1,000 – can reduce a program’s efficiency and effectiveness.  Small dollar amounts allocated across countless files add up.

 

  • Claim Managers: Be a leader and work hard to make sure all members of the team are moving claims toward settlement.  A file that collects dust impacts everyone;

 

  • Claim Handlers (more experienced and indemnity handlers): Provide guidance and assistance to newer members of the team.  Make sure they know how to be efficient and effective.  Mentorship can pay dividends across the team by building morale.  It also demonstrates you are capable of handling more complex matters; and

 

  • Medical-only Claim Handlers: Pay attention to what is going on.  Understand there is a learning curve so do not shy away from constructive feedback.  Never be afraid to ask questions.

 

 

Conclusions

 

At the end of the day, the only good file is a closed file! This starts with a program-wide review of medical only claims.  Make sure these files are properly reserved and files that can be settled are moved toward closure.  It is also important for everyone on the claims management team to be involved and work together for the good of a program.

 

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.

 

Evaluating Medical Evidence to Make Better Decisions

Evaluating 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 effectiveness of a workers’ compensation program.

 

 

Evaluating the 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 require him to process meat on a bench that is no higher than his 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?

 

 

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.

Durable Medical Equipment Often Overlooked for Cost Containment

Durable Medical Equipment Often Overlooked for Cost ContainmentSelf-insured employers who are trying to control the cost of medical care within their workers’ compensation program will often use medical triage, nurse case managers and pharmacy benefit managers, but overlook durable medical equipment (DME).  Durable medical equipment is reusable medical gear or reusable medical products necessary for the injured employee to function at home or away from a medical facility.  Durable medical equipment must be prescribed by a doctor and most DME will have no benefit to a person who does not have an injury or occupational illness.  The need for durable medical equipment is closely related to the severity level of an injury — the higher the level of severity of an injury, the greater the probability that an injured employee will need DME.

 

 

Can Be Expensive, However Cheaper Than Hospital

 

Depending on the nature of the DME, it can be very expensive adding considerable medical cost to the workers’ compensation claim.  Examples of DME that can add substantially to the claim cost include:

 

  • Oxygen tents

 

  • Hospital beds

 

  • Motorized wheelchairs

 

  • Power operated vehicles

 

  • Lift chairs

 

  • Continuous positive airway pressure (CPAP) machine

 

  • Iron Lungs

 

  • Traction equipment

 

  • Prosthetic limbs

 

  • Transcutaneous electronic nerve stimulators (TENS units)

 

  • Air beds or fluid beds

 

 

While some DME can be expensive, it is always much cheaper for the injured employee to be at home using DME than it is for the injured employee to be in a hospital room, nursing home or other type of convalescent facility.  The cost of medical care supplied away from the home can range from 100% to 1000% higher than the cost of medical care at the injured employee’s home with DME.

 

In some liberal jurisdictions, the range of DME has been expanded to include such items as:

 

  • In-home spas

 

  • Whirlpools

 

  • Hot tubs

 

  • Orthopedic/specialty mattresses

 

  • Air conditioners

 

  • Dehumidifiers

 

  • Hearing aids

 

 

Prescription Written by Doctors Should be Verified

 

Prescriptions for these types of items are normally only written by doctors chosen by the employee’s attorney.  If the employer is confronted with a prescription for specialized DME of this type, an independent medical examination of the injured employee can be completed to verify the need for the specialized DME.  An alternative is to have a utilization review or a peer review of the prescription to verify the medical necessity. A different approach is to have the request for specialized DME reviewed by the workers’ compensation board or industrial commission for their concurrence or denial.

 

 

Claims Adjuster Should Arrange for Purchases

 

If it is determined the specialized DME is necessary, the claims adjuster or the nurse case manager should arrange the purchase of the specialize DME.  This will allow the adjuster or nurse case manager to obtain the necessary equipment, but restrict the purchase to what meets the doctor’s prescription, but does not exceed it.  For example – the doctor writes a prescription for a Tempurpedic mattress and the industrial commission rules it must be provided.  If the claimant is left to select and order the mattress, the claimant will select the $6,000 version, while if the adjuster is responsible for obtaining the mattress, the adjuster will select the $3,000 version that meets the requirements of the doctor’s prescription.

 

Some DME is not expensive and is commonly provided to injured employees.  Examples of less expensive DME includes:

 

  • Commode chairs

 

  • Walkers

 

  • Canes

 

  • Crutches

 

  • Nebulizers

 

  • Non-motorized wheelchairs

 

 

Hold Durable Medical Equipment Costs Accountable

 

If the state medical fee schedule includes DME (some state fee schedules do include DME while others do not), and if there is no question in regards to the medical necessity of the DME, it should be submitted to the medical fee bill review service for control of the cost of the DME.

 

In the states where the state fee schedule does not address DME, the self-insured employer should make arrangements with a company that specializes in DME to provide all necessary DME.  A pre-arranged pricing agreement for the DME items listed above will reduce the cost of DME.

 

 

 

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/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Writing an Effective Independent Vocational Evaluation Letter

Independent vocational evaluations (IVE) are used to assist members of the claims management team in determining a variety of issues related to vocational rehabilitation and disability matters. Similar to an independent medical examination, an Independent Vocational Evaluation is costly and often only performed once during the course of a disputed workers’ compensation claim. When spending the money on an IVE, it is important to do your homework first in order to save time and money. Part of this includes preparing a proper letter and asking the right questions of the evaluator.

 

 

Preparing the Independent Vocational Evaluation Letter

 

The Independent Vocational Evaluation will typically not take place until just prior to a settlement conference, mediation or hearing on the merits. Part of the preparation includes obtaining the necessary background information on the employee and understanding their medical condition(s). Information to consider obtaining and sending the expert include the following:

 

  • Medical records: This included medical records regarding co-morbid conditions, surgeries, treatment immediately after the work injury and subsequent medical care and treatment;
  • Education and Work History: This is information that will be obtained during the course of discovery. It is important for the examiner to have a complete picture of the employee’s background and possible transferable job skills; and
  • Deposition Testimony: Having sworn testimony under oath is keep to giving your expert proper foundation.

 

 

Questions to Ask Your Vocational Expert – Writing the Independent Vocational Evaluation Letter

 

The letter to your vocational expert may likely end up in evidence at the hearing. This is why your letter should be completely factual and without bias. Commonly asked questions may include the following:

 

  • Given the employee’s age, education, employment experience, transferable skills, relevant labor market, and employee’s disability and restrictions, what jobs exist in the relevant labor market in substantial numbers that the employee is capable of performing?

 

An Independent Vocational Evaluation is often used to determine if the employee is capable of working in any capacity, and if there are jobs located near them. This is often information defense interests will want to know when defending claims involving exposure for permanent total disability (PTD) benefits or retraining claims.

  • Given the employee’s age, education, employment experience, transferable skills, relevant labor market, and employee’s disability and restrictions, what is the employee’s current earning capacity? Please give a range for any capabilities and give a median or average earning capacity opinion.

 

The issue of an employee’s earning capacity is often in dispute when an employee needs ongoing vocational rehabilitation benefits. It can also be an issue in high-exposure cases where the employee suffers a significant injury requiring disabling restrictions assigned by the employee’s treating doctor.

 

  • Perform a labor market survey to determine if there are actual jobs that do exist in the relevant labor market that the employee would be capable of performing. Please discuss actual jobs that are available within the restrictions provided by the treating doctor.

 

Labor market surveys are commonly used in retraining claims. One criterion that is often in dispute is whether the employee has conducted a good faith job search, or if there are jobs available for the employee once they are retrained in a new field.

 

  • In your opinion, is the employee performing a diligent job search?

 

The quality and sincerity of a job search are often in dispute when a claim is in litigation. This is a legal issue and results in a “battle of the experts.” The vocational expert will examine the number of applications submitted by the employee, the methods the employee is using when searching for a job and how much time the employee spends looking for a new position. Having accurate and complete information is key.

 

 

Other Matters to Consider

 

It is also important to make clear with your vocational expert that they provide a discussion regarding their answer. This will be useful if live courtroom testimony or admitted deposition testimony is not given at the hearing. Any expert worth the money you are paying should not object to such a request.

 

 

Conclusions

 

A well-written letter to a vocational expert can pay dividends in workers’ compensation cases. Timing, preparation, and knowledge of the issues are key. Failure to do so can be harmful when defending a claim, as well as hurting one’s chances of success.

 

 

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/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Surveillance is Often Used Incorrectly

Surveillance is Often Used Incorrectly

Members of the claim management team need to be creative when investigating workers’ compensation claims and to determine issues of compensability.  This includes using claim investigation techniques that go beyond interviewing the employee, witnesses, experts, and reviewing medical records.  To be effective, proactive claim handlers and investigators need to do a deeper dive to reduce program costs.


Surveillance is Often Used Incorrectly

Over the years, defense interests in the workers’ compensation industry have become dependent on using private investigators to conduct surveillance on an injured worker.  Surveillance is a recommended and effective technique. However, it is often :

 

  • Limiting surveillance to one day: The problem is this provides only a Not obtaining of what the employee is doing and allows for them to argue you watched them on “a good day;”
  • Not obtaining complete background information on the employee: This includes not knowing the habits of an employee and what activities they might be doing when under the watchful eye of an investigator. In worst case scenarios, the employee will do nothing at all – not even coming outside their home; and

 

  • Following the rules: Many jurisdictions have specific timelines as to when and how documentary evidence from surveillance needs to be disclosed to the employee and/or their attorney.  Failure to follow these rules can have significant consequences.



Using Other Resources to Uncover Favorable Claim Information

Claim handlers need to be creative and ethical when uncovering information on a claim and developing their theory of the case.  This requires patience, persistence, and creativity.


Job Site Videos

Job site videos are useful in a number of ways when done.  For example, if an employee is claiming that a certain activity (especially those that require repetitive movements) is includes using of an injury, it allows for a medical expert to evaluate whether be effective of injury is consistent with the objective medical evidence.  It also reduces or eliminates the ability ofan employee to exaggerate movements, including the frequency at which it is performed.

When creating such videos, it is important to remember key items.  This includes having a workplace station or machine set up exactly how it was at the time of the injury. When possible, have the employee to perform the motions or movements.  If this is not possible, itis essential to have someone of a similar size perform the activity.  Failure to exactly recreate these motions in question can result in the job site video not being admitted into evidence at the hearing.


Timing and Work Schedules

Records documenting the coming and going of an employee, an employee and the number of shifts they worked can be relevant in a number of circumstances. Instances when this can be useful include the following circumstances:

  • Claims made by the employee as to their physical presence at a location at a specific time, or when other identified witnesses claim to have been present;

 

  • The number of hours or shifts worked by an employee.  This is important information to have in workplace exposure cases; and

 

  • Tracking movements of traveling employees. This can be important when trying to determine the applicability of “portal-to-portal” coverage where an employee may have made a personal deviation, which took them outside the “course and scope of” their employment

 



Social Media Investigation


While fewer Americans are using social media platforms on a consistent basis, it is still relevant to any claim investigation.  Key points to remember include checking common programs such as Facebook, Twitter, and Instagram.  Ethical considerations apply.  Do not obtain access to an employee’s account under false pretenses or by using a strawman.  Attorneys representing defense interests should also take note of case law that warned, “It should now be a matter of professional competence for attorneys to take the time to investigate social networking sites.” Griffin v. Maryland, 192 Md.App. 518, 535 (2010).


Conclusions

Running an effective workers’ compensation claim program requires hard work and creativity.  In order to be cost-effective, one needs to think outside the box and go beyond the “cookie cutter” approach to investigating and defending workers’ compensation claims.  By looking for alternative methods, members of the claim management team can make better decisions and move cases toward settlement.




Michael Stack - Amaxx

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/

©2018 Amaxx LLC. All rights reserved under InternationalCopyright 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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