Work Comp Roundup

Six Tips to Get the Most From Your Insurer

December 19, 2018 by Michael B. Stack

Many insurers are great providers, however, it is naïve to think every insurer has your best interests in mind. Sometimes you need to remind them, and be very specific about your needs.

Here are six tips to get the most from your insurer:

Get Regular Reports

It is essential for companies to request brief, narrative reports from their insurers for all open claims at regular intervals of 30, 60 or 90 days. The frequency of reporting requirements is, of course, dependent on claims volume and availability of internal company staff.

A company with 1,000 lost-time claims annually may want less frequent or less-detailed reports every 90 days, for example, but, a company with only 100 lost-time claims annually may want full narrative reports every 30 days.

The adjuster should provide sufficient detail in describing “action items” planned for each 30-day period that indicates steps to be taken to resolve the claim.

Many companies requested information solely about reserve practices in the past, however, the focus of reporting requirements should be on claims resolution strategies.

Ask About Recovery Potential – Get it in Writing

Additional items often incorporated in your Account Servicing Instructions (ASI) include requirements that “all claims should be evaluated for state second injury fund and subrogation potential.” The company should receive a report identifying recovery potential within 90 days after the claim is received by the carrier. The carrier files liens in all actions brought by its employees against third parties and these liens should not be waived or compromised without the company’s prior written consent.

Benefit Checks Should Come to You First

In those states where permissible, benefits checks should be delivered to the company to distribute to employees. In lieu of this, copies of all checks should be forwarded to the company. Direct deposit can be a convenient way to distribute checks, but you will lose the ability to interact with your injured workers come payday.

All claims should be paid “without prejudice” in those states where possible, and the carrier should file for extensions of this status whenever possible.

Ask Your Carrier to Reference the CIB

Companies should also request their carriers reference the Central Index Bureau, an insurance industry-maintained database, on all claims to determine if a prior claim was filed.

Be Sure your Carrier and Insured Are On the Same Page with Denials

When the company requests a claim be discontinued, the carrier should be flexible enough to agree to take necessary steps to terminate benefits in a timely manner so long as the company’s position is legally supportable. The carrier should take an aggressive posture in denying insupportable claims. Conversely, the insured should be consulted before any claim is denied to avoid human resource and morale problems.

Your Insurer Should Notify You In Advance Regarding Hearings

Furthermore, the company should be notified sufficiently in advance of all hearings and conciliations so its representative may attend the hearings. Also, the litigation manager should be consulted before appeals are filed and should retain the right to determine whether an appeal is warranted.

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/

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

Filed Under: Insurance Issues, Rates, Premiums

Establishing and Changing Primary Care Doctors in Workers’ Comp

December 18, 2018 by Michael B. Stack

A common method to control costs in workers’ compensation claims is the designation of a primary treating medical provider. This is important for a number of reasons and is something claim handlers need to understand. Failure to recognize its significance can result in excessive costs in the claim management process.

Threshold Issues to Consider for Primary Care Doctors in Work Comp

Determinations regarding the establishment of a primary care doctor are usually defined by statute or administrative rule under a jurisdiction’s workers’ compensation law. In many instances and employee establishes their primary doctor based upon the number of times or frequency an injured employee receives medical care and treatment following an injury.

Time to Consider a Change in Healthcare Providers?

A health care provider is typically considered the “primary doctor” once they direct and coordinates the course of medical care provided to the employee. Employees are usually allowed to only have one primary health care provider at a time. Once an employee establishes a primary treating physician, their ability to change that provider are limited. Circumstances that permit change without initiating a legal process include the following:

Death or retirement of a physician, doctor or other health care provider;

Termination or suspension of a provider’s health care practice; or

Referral from the primary provider to another provider.

Failure of an employee to receive advance approval of a change in health care provider can have a significant impact on a workers’ compensation claim. One common consequence of this action is the ability of the workers’ compensation insurer to avoid legal liability for medical care and treatment received by the employee even if the medical care is reasonable, necessary and causally related to the work injury.

Other Factors to Consider When a Request for Change Occurs

If a change is not approved by a workers’ compensation insurer, employee’s generally have the ability to initiate a legal process to change their primary health care provider. While factors to consider in this process vary, they generally include the following issues:

Whether the requested change is an attempt to block reasonable treatment or avoid acting on the provider’s opinion concerning the employee’s ability to return to work: A change is sometimes requested when an injured employee is hesitant about proposed medical care and treatment. Failure to follow the proposed treatment plan can also delay recovery.

Development of a litigation strategy rather than to pursue appropriate diagnosis and treatment: This can occur in instances where an employee is malingering or exhibits unsafe habits such as seeking opioid-based prescription medications.

The provider lacks expertise to treat the employee for the injury: Medicine is complex. Sometimes a medical provider may lack the necessary training or experience to properly care for an injured employee. There are also health care providers known to enable an employee by seeking excessive care or unnecessary procedures.

Other factors to consider: It is important to evaluate a request for change in a health care provider in terms of travel costs to see a particular health care provider and other unnecessary expenses. Members of the claim management team should be skeptical of a request for change when it is certain the employee does not require additional care.

Members of the claim management team also need to consider the best interests of all parties. What these means is often vague and uncertain. This requires the application of the “smell test” to determine if such change is really necessary.

Conclusions

Claim handlers need to be vigilant of excessive medical costs as long as it continues to drive workers’ compensation program costs. One area of focus should be a determination on the employee’s primary medical provider following a work injury and what circumstances truly necessitate a change.

Contact: mstack@reduceyourworkerscomp.com.

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

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

Filed Under: Medical Cost Containment

6 Ways Nurse Case Managers Add Value to Workers’ Compensation Claims

December 17, 2018 by Michael B. Stack

Nurse case managers can be invaluable to an injury management program. They can have a tremendous impact by helping organizations attain better outcomes for their injured workers and saving significant dollars.

But far too often industry stakeholders misunderstand how and when to use them. Like many aspects of claims management, Nurse Case Managers are a tool that should be employed judiciously and with forethought to garner the most value.

Expectations

NCMs are not miracle workers. However, when incorporated into the right types of claims they can be instrumental in getting the injured worker healed and back to work in a timely fashion, resulting in the types of savings reported above.

Here are the many ways NCMs help with a claim:

Patient advocacy. This is where NCMs shine. Injured workers are often confused and scared, especially if the injury is severe. Unlike being injured at home and going to see whatever physician they choose, the rules for injured workers are different. They are often told what doctor to see and when. They may also be concerned about how they will get money if they are out of work for any length of time. And they may fear losing their job. A NCM can guide the injured worker through the process, allaying his fears and answering his questions. They can

Explain the process and restrictions
Discuss likely recommendations from doctors
Provide options for various specialists, regardless of the rules for physician choice in a jurisdiction. Where the injured worker has the option to visit any physician, the NCM can recommend physical therapists, orthopedists, or others. In employer-directed care states, the NCM can discuss various in-network providers known to her.
Review meds. The NCM can explain the medications that are prescribed and look at possible interactions with other pharmaceuticals the injured worker may be taking.

Reduce litigation rates. One of the benefits of NCMs is the trusting relationship they develop with the injured worker. Research shows injured workers who work closely with a NCM are much less likely to sue their employers.

Increase engagement and ensure compliance. Injured workers can be notoriously unfaithful to the treatment plans — forget to take their medications, miss PT or other provider appointments, failing to do assigned exercises that aid recovery. Again, having a trusting relationship with a NCM who is clearly advocating for the injured worker is likely to result in better adherence to a treatment regimen.

Communicate. Because he is closely involved with the injured worker, the NCM is the best person to act as the liaison to all stakeholders.

With the employer. The NCM can keep the employer updated on the injured worker’s progress. He can discuss restrictions and ways the employer can accommodate the worker. He can also discuss the capabilities the injured worker has during the recovery process to help identify light-duty work.
With the treating physician. Especially in states where workers have a choice of providers, the NCM can explain the workers’ compensation system and the emphasis on return to work.
With the claims adjuster. The person handling the claim may be unaware that the injured worker has been released to return to work, for example, requiring a change in the benefits.

ID then need for peer review. Sometimes claims go off the rails because the treating physician is not following evidence-based medicine guidelines, or doesn’t understand the goal of return to work. A medical provider who is not an occupational physician may continually say the injured worker should not go back to work in any capacity. The NCM can detect such incidents and get a medical provider from the insurer or third-party administrator to review the case and possibly talk with the treating provider.

Coordinate interventions. Psychosocial issues may be present that could derail the claim unless they are addressed. The NCM may be the first person able to detect these and seek cognitive behavioral therapy or other intervention. A pain management program may be warranted, which the NCM can coordinate.

Conclusion

NCMs are one of the most effective ways to achieve best win-wins for injured workers and employers. But it’s important for stakeholders to know how and where they can add value. For example, they should not be used on every claim.

Contact: mstack@reduceyourworkerscomp.com.

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

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

Filed Under: Medical Cost Containment

Writing an Effective Independent Vocational Evaluation Letter

December 13, 2018 by Michael B. Stack

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.

Contact: mstack@reduceyourworkerscomp.com.

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

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

Filed Under: Claim Management

Medcor Launches New Telemedicine Service for Workers’ Comp Nationwide 24/7

December 12, 2018 by Senior Editor

Medcor, Inc., the nation’s leading health navigation firm, announces a new telemedicine service developed specifically for work-related injuries. Medcor Telemed™ will be available 24/7 in all 50 states, beginning January 14, 2019. This new service enhances Medcor’s existing injury triage service, already in use by more than 309,000 worksites, and will augment Medcor’s 240+ onsite and mobile clinics.

Medcor navigates patients to optimal care by using evidence-based medicine, proprietary clinical algorithms, and patented processes. Medcor serves employers across a wide range of industries, including many Fortune 100 and 500 companies, as well as government agencies, TPAs and insurance carriers.

Medcor’s President and CEO Philip Seeger said, “We designed our new service to address the challenges telemedicine faces in occupational health. This service will improve outcomes, reduce costs and provide a positive user experience for patients, their employers and for the treating doctors.” Mr. Seeger added, “Avoiding the conflicts of interest so common in medicine is a tough challenge to address, and it is a cornerstone of all Medcor’s health navigation services.”

Sophisticated algorithms programmed into Medcor’s system identify cases that are appropriate for telemedicine; high-acuity conditions that require in-person care and diagnostics are directed to the appropriate offsite facilities. Identifying the needed level of care saves time and expense. Vice President and General Manager Matt Engels oversees the new service. He said, “Medcor Telemed is an early intervention opportunity to guide low- and moderate-acuity injuries onto the right path to recovery and to jumpstart the claims management process. Our system connects patients to physicians seamlessly with wait times measured in minutes and without advance scheduling. Medcor Telemed is staffed by a team of hundreds of physicians to ensure coverage across all states day and night. Our physicians are trained and experienced in telemedicine and oriented to Medcor’s best practices in occupational health.”

Patients and physicians benefit from Medcor care navigators who stay with the injured worker through the entire telemed process, from registration to resolution. The navigators handle technical and administrative aspects of the session. They document and clarify key workers’ compensation information, such as return-to-work status and restrictions for modified duty. At the end of each session, the navigator facilitates carrying out treatment orders from the physician. The system automatically processes reports for all the stakeholders.

Medcor’s new service operates with a combination of Medcor’s technology and licensed systems. It works on desktop computers, tablets and smart phone apps, which can be downloaded at the time of service. Medcor has already provided more than 2.5 million injury triage and other telehealth visits, which represent a solid foundation of experience for its new telemed service.

For more information, watch the short video at this link https://youtu.be/CTUT5QeoQIg/, contact media@medcor.com or call 815-759-5442.

Filed Under: Workers Comp News

Surveillance is Often Used Incorrectly

December 11, 2018 by Michael B. Stack

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.

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/

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

Filed Under: Fight Workers Comp Fraud & Abuse

ACOEM 3-Part Return to Work Framework

December 10, 2018 by Michael B. Stack

ACOEM Whitepaper: Preventing Needless Work Disability by Helping People Stay Employed

Hey, there. Michael Stack here, CEO of Amaxx. One of the most fundamental goals in workers’ compensation is to return our injured employees to work and back to function. I want to draw your attention to a white paper written by ACOEM several years ago entitled Preventing Needless Work Disability. You could find a link to that white paper below. Within that paper, they talk about a three-part framework or a three-step framework to consider return to work on nearly every single workers’ comp claim. I want to walk you through what that framework is when you’re considering return to work for your injured employees.

ACOEM 3-Part Return to Work Framework

The first part is to assess where that current employee is. The next piece is compare. Then, the final piece is to create. So assess, compare, and create. Assess where they currently are. What are their current job restrictions? What restrictions do they get from the physician that say they could only lift 20 pounds or 50 pounds and they can bend this way or stretch this way X amount of times standing, whatever that happens to be? Where do they currently stand? Compare that what the job descriptions are, the physical demands of their actual jobs. You should have a very comprehensive library of what this means at your organization so you can compare one with two. It’s very, very simple when you actually break it down.

Simplicity of High-Level Understanding

Then, the final piece is to create that job. What are those action steps, then, to now put this into practice? Obviously, there’s a lot more depths to each one of these steps. But if you can understand the high level of what it is that we’re actually trying to accomplish, it can ultimately be fairly simple in your mind to now put this all together. So assess, compare, and create. Three steps in the return to work framework in ACOEM’s Preventing Needless Work Disability white paper, which I highly recommend downloading and checking out. It’s a great resource. Again, my name is Michael Stack, CEO of Amaxx. Remember, your work today on workers’ compensation can have a dramatic impact on your company bottom line. But it will have a dramatic impact on someone’s life. So be great.

Contact: mstack@reduceyourworkerscomp.com.

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

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

Filed Under: Return to Work and Transitional Duty

The Power of A Personal Note – Legacy of George HW Bush

December 6, 2018 by Michael B. Stack

Hey, there. Michael Stack here, CEO of AMAXX. Our former president, George H.W. Bush, passed away recently at the age of 94. Mr. Bush was a tremendous leader who left a lasting impact and legacy on our nation. And more close to home for me, in my hometown where I live with my family in Kennebunkport, Maine, Mr. Bush and Barbara Bush’s impact on our small town here has certainly been felt.

Honor Life & Legacy of a Great Leader

When we look at the life of a great leader, we look at their legacy. We need to look at what are those lessons that we can learn from them and apply to our lives to improve our outcome, to improve our situation, and more specifically, for our purposes today, improve our work comp programs.

Power of Personal Notes

I want to draw your attention to one of Mr. Bush’s best practices, which was writing personal notes. It’s looked at an old-fashioned practice, but he would write notes to foreign leaders. He would write notes to celebrities if he sat by them at a dinner. He even wrote a note to his granddaughter when his granddaughter was born, and passing around the internet, the letter that he wrote to the incoming president, Bill Clinton, you can see and read the spirit of how he lived.

Send Get Well Card to Injured Workers

When we look at our work comp programs, when one of your employees gets injured, can you take the time to write them a get well card? Say, “Hey, John. I’m sorry you got injured. We look forward to having your spirit back as part of the team as soon as possible.” Something along those lines. Taking the time to put pen to paper, there is no better way through written communication to make that personal connection.

It’s not sending a text. It’s not sending an email. There’s something magical about putting that pen to paper and dropping that card in the mail. Take that lesson from Mr. Bush’s life and legacy. Apply it to our programs, and you will see dramatic results.

Again, I’m Michael Stack, CEO of AMAXX, and 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.

Contact: mstack@reduceyourworkerscomp.com.

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

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

Filed Under: Communication with Employees

Avoid Workers’ Comp Penalties and Other Pit Falls

December 5, 2018 by Michael B. Stack

Members of the workers’ compensation claims management team are on the front line when it comes to investigating a claim and making timely payments of benefits. Failure to do so can result in penalties to a workers’ comp program and cause interested clients to lose confidence in the process. Transparency and consistency are key. Now is the time for all claim handlers and their managers to better understand the various rules and requirements in jurisdictions they handle, apply these procedures correctly and make good faith determinations to avoid common pitfalls in the claims process.

Common Errors that Result in Workers’ Comp Penalties

Many rules govern workers’ compensation insurers and third-party administrators. It is important the claims management team understands these rules and make proper determinations.

Frivolous Denial of Liability: Denials of primary must state why a claim is being denied. This includes stating a factual and legal basis for not paying on a claim or deny specified treatment. This can also include a failure to fully investigate a workers’ compensation claim in a good faith manner or make inaccurate statements following the investigation.

Nonspecific Denial of Liability: Denials of primary liability must also be specific. The requirements to avoid this type of penalty vary, but generally, denials must be sufficiently specific to convey clearly, without further inquiry, the basis for the denial. Denials based on the premise that the injury did not “arise out of and in the course and scope of employment” must also include additional information supporting this position, so the injured employee knows why a matter is not being paid by the insurance carrier. Avoid excessive “legalese” when denying a matter.

Late Denial of Liability: Applicable laws generally require a determination to be made promptly. In many instances this is between 10-14 days. When a member of the claim management team receives a reported injury, it is important for them to determine the first day of disability and when the employer received notice of disability. Knowing this information can ensure the claims professional issues the denial promptly.

Late Filing of First Report of Injury (FROI): The employer plays an important role in completing the FROI. This is important as most state workers’ compensation laws require this form be completed and filed with the industrial commission in a timely manner. Claim handlers must ascertain when the employer receives notice of the injury or disability to determine when the FROI must be filed in a timely manner. An effective claim management team should help train employers on these issues to avoid delay and penalty.

Late First Payment of Benefits: There are also time requirements for the insurance carrier or administrator must make payment on admitted claims. Important information for the claim handler to know to avoid a penalty for late payments includes: the first day of disability, when the employer received notice of the injury or disability, if the employer is paying the ongoing employee wages, and requirements regarding the payment of wage loss benefits. Coordination and cooperation are

Other Prohibited Claims Practices

Workers’ compensation insurance carriers are also required to operate honestly and ethically. This includes not acting in bad faith.

Insurance carriers that operate fraudulently may be subject to discipline by a state commerce department. When underwriting workers’ compensation insurance policies, it is important carriers, and administrators follow through on contractual promises and provide what is covered under the policy. Failure to do so can result in a carrier not being able to sell insurance in a state or subject to other sanction.

In the same regard, an insurance carrier should avoid bad faith tactics. This includes not dealing fair with parties subject to an insurance contract. This duty is known as the “implied covenant of good faith and fair dealing.”

Conclusions

Members of claim management teams and their insurance carriers have a contractual and ethical obligation to serve their insureds. This is accomplished by following the rules established under a workers’ compensation statute that require good faith claims practices. Failure to do so adds to the costs of a workers’ compensation programs and can jeopardize a carrier’s ability to underwrite workers’ compensation policies.

Contact: mstack@reduceyourworkerscomp.com.

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

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

Filed Under: Claim Management

12 Questions and Metrics to Assess Work Comp MSA Cost Drivers

December 4, 2018 by Michael B. Stack

A thoughtful and critical review of your Medicare Secondary Payer (MSP) compliance program is a great exercise to perform annually. Consider these questions and metrics:

Questions & Metrics to Assess Work Comp MSA Cost Drivers:

What percentage of your Medicare Set-Aside (MSA) submissions are accepted?
Can you identify the biggest cost drivers in your MSAs?
What percentage of your CMS approved MSAs include opioids?
What percentage of your approved MSAs include any pharmaceuticals?
What is the average cost of prescription drugs on MSAs?
Do you understand why CMS approves/denies MSA proposals?
Are you overfunding/underfunding MSAs? How do you know?
Do you know what documentation you need for approval of changes in medical treatment or pharmaceuticals?

If you were not able to confidently answer the questions above it might be time to make some changes to your MSP compliance program. Some claims and risk managers put together a program, let it run and hope for the best. Instead, using data analytics and continuously tracking outcomes and other performance indicators can significantly improve the process of preparing and submitting MSAs to the Centers for Medicare and Medicaid Services (CMS) — especially, where pharmaceuticals are concerned.

MSP Through the Years

It’s been approximately 15 years since the government ramped up its efforts to ensure Medicare doesn’t pay for medical services that should be funded by some other entity, including the workers’ compensation system. At the time, organizations scrambled for ways to develop MSAs that would be approved by CMS.

The process for CMS approvals has evolved over the years. What was a fairly complicated system, to begin with, has turned into an extremely intricate series of steps that can befuddle even the most competent people in the industry – unless they have the benefit of highly advanced technological solutions combined with strong expertise.

For example, in addition to new regulations from CMS, state statutes and fee schedules are also constantly changing. Failing to keep tabs on them can make the process time consuming, costly and fraught with peril.

In the past 18 months, CMS has taken steps to intensify its efforts further. The agency has put millions of dollars into a new contractor and greatly updated its technology, making the process of identifying mistakes that much quicker and easier. It means anyone trying to stay in compliance with Medicare also needs to improve and upgrade their systems.

What the Metrics Can Tell Us

Most workers’ compensation payers would agree that pharmacy is the biggest cost driver for their MSAs. However, few know the answers to these key metrics:

What is your current pharmacy spend on MSAs?
What percentage of your CMS-approved MSAs include opioids?
What percentage of MSAs are approved with or without drugs?
What is the average cost of prescription drugs on your MSAs?

With medications comprising such a tremendous portion of MSA costs, it’s vital to have a clear understanding of the issue. This can only be accomplished by focusing on the metrics. By analyzing the data on opioids as well as other pharmaceuticals in terms of your MSAs that are approved, you can then begin to fully manage these costs.

Optimizing MSA Outcomes

Whether working with an MSA vendor or doing Medicare compliance on your own, several strategies are a must for success.

Identify metrics that drive the results you want to see, particularly where medications are concerned.
Measure your performance and modify processes, workflow, and technology to improve it. For example, look at the percentage of your MSAs with ongoing medical to see how much you have allocated for opioids. If the answer is anything more than zero, go back to the drawing board.
Examine current CMS performance and the most recent state statutes and fee schedules against CMS’s review methodology as defined in the most recent Workers’ Compensation MSA Reference Guide. If/when there are changes, update your system immediately. Once developed, this should be a simple verification, audit and sign-off process.
Analyze every CMS response against your internal best practices in MSA allocation, with a focus on pharmaceuticals and opioids. You want to know how you are performing against CMS in such areas as pricing, frequency and life expectancy.
Leverage Section 111 data to improve the CMS approval rate of MSAs.

To truly effect change in your Medicare compliance program requires examining certain metrics and taking steps to manage them best. For example:

What is the number of Medicare conditional payment searches and investigations initiated and the success rates for disputes and appeals, including dollars saved?
What type of clinical interventions have been initiated, what is their success rate and the average dollar amount saved because of them? This strategy can save many thousands of dollars per claim. Investigating each claim with an eye toward medical procedures anticipated and/or pharmaceuticals can yield surprising results. You may find, for example, a doctor is prescribing a medication the injured worker no longer takes or has never taken; so removing that drug from the future medical amount is an easy change.
What is the percentage of submissions to which CMS has countered with a higher dollar amount? A lower dollar amount? If there is a high percentage of either, you need to understand why there is a trend and how to counteract it.

You want the injured worker to have adequate funds for his lifetime needs related to the injury, but you don’t want to pay unnecessarily high costs. Often the projected expenses are way too high, or the therapy is not within evidence-based medical guidelines.

The best MSA developers can fully assess exposure before the proposal is submitted. They can spot inappropriate or unnecessary treatment and pharmaceuticals AND take steps to curb them such as physician peer-to-peer discussions, for example.

Conclusion

Paying too much for anything does not make sense. But, that’s exactly what happens far too often because many workers’ compensation payers don’t take advantage of advanced technologies in developing MSAs. Using metrics and data analytics and working with an MSA expert can help ensure injured workers get what they need and deserve without payers going overboard.

Contact: mstack@reduceyourworkerscomp.com.

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

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

Filed Under: Medicare Set Asides (MSAs)

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