Important studies – Top three practices for closing a claim

While workers’ comp is a data-rich industry, it is only beginning to use the data to make better and smarter decisions. Rising Medical Solutions recently released a white paper that condenses the study’s multi-year benchmarking data into the top three practices ‘high performing’ claims organizations use to excel. Performance ratings were based on claims closure ratio, a comparison of opened claims versus closed claims. A claims ratio of 100% means the organization is closing as many claims as they are opening.

Here are the top three practices:

  • Focus on and measure medical management, disability / return-to-work (RTW) management, and compensability investigations While other competencies such as claims reserving and litigation management are important, these three are most critical to claims outcome. An employee’s return to the same or better pre-injury functional capabilities was the number one classification of a “good claims outcome.”

    However, just focusing on these factors is not enough. Higher performing claims organizations are five times more likely to measure their performance in core competencies, six times more likely to measure claim outcomes based on evidence-based treatment guidelines, and 10 times more likely to measure claim outcomes based on evidence-based disability duration guidelines.

  • Invest more in people and claims advocacyAs expected, the high performers cultivate talent by providing more training and career-long learning opportunities, raising performance expectations, fostering communication and critical thinking skills, and making available decision support tools known to improve claims outcome. “At a claim’s outset, the adjuster is uniquely appointed to visualize and predict how the claim will resolve, and then adapt her or his strategy as new information emerges.”

    Particularly important is embracing the historic shift from reactive, compliance-focused models of injured worker interaction to an employee-centric approach, known as claims advocacy. The importance of understanding and engaging the injured worker in the recovery process is a clear competitive advantage.

  • Invest more in advanced tools and technology, including predictive analytics High performers focus on outcome management, rather than process management. They measure medical provider performance and use predictive analytics eight times more than others. While sometimes this has been a much-contested topic, predictive modeling warehouses data on injured workers, uses outcome-based data to improve treatment, and measures success.

    It can reduce claims costs by identifying potential complicating factors and creating a more proactive approach to the ongoing treatment plans. It identifies “routine” claims that have the potential to become complex. The same data and insights can be applied to a return-to-work plan to reduce the risk of re-injury.

 

On-the-job crashes up

Motor vehicle accidents are a troubling trend for the workers’ compensation sector, according to data released recently by the National Council on Compensation Insurance (NCCI). Frequency for on-the-clock car accidents increased 5 percent, in contrast to an overall decline of 17.6 percent for all claims in comp from 2011 to 2016. Alarmingly, over 40% of workers’ compensation fatalities involved a motor vehicle accident.

Other findings included:

  • Motor vehicle claims cost 80% to 100% more than the average claim because they involve severe injuries, such as head, neck and multiple body-part injuries.
  • The rapid expansion of smartphone ownership since 2011 may have been a factor in the rise in accidents.
  • Most accidents are the result of driving as opposed to being hit by a car. From 2000 to 2016, the split of “occupant vs. struck by” claims has remained “very consistent” at about 85% to 15%.
  • Of the top 30 motor-vehicle classes reviewed, including that of trucking, the largest increase in frequency occurred in the “taxicab company” class, with a dramatic rise in frequency more than doubling from 2011 to 2015.

 

Opioids deaths linked to occupations

The opioid-related death rate for those employed in construction and extraction occupations was six times the average rate for all Massachusetts workers, according to a report by the Massachusetts Department of Public Health. The report speculates that the higher rate of work injuries in these fields, as well as low job security, and a lack of paid sick leave could be contributing factors.

The study reviewed death certificates from 2011-2015. Other industries with higher than average rates of opioid-related deaths include farming, fishing, healthcare support occupations, food preparation, and the restaurant industry. The industries with the highest rates also varied by gender: for men, the highest rate was in construction. For women, serving-related jobs, food prep, and healthcare support had the highest rates.

The Department plans a larger study to see if there is a link between workers compensation and overdoses.

 

Opioids still present in polypharmacy claims

Even though efforts in the state to curb opioid prescriptions have had some success, opioids alone are the most prevalent type of drug found in polypharmacy claims that involve five or more concurrent prescriptions, according to a study by the California Workers’ Compensation Institute.

Polypharmacy is the use of multiple drugs at the same time to treat one or more medical conditions in a patient. Oftentimes, they are used to alleviate risks and side effects caused by other drugs, but they can interact poorly and increase the risk of overdosing.

While only 4% of the claims analyzed were considered polypharmacy claims, 91.5% of them involved indemnity payments, 21.5% were at least ten years old, and they more commonly involve older workers. The top diagnostic category for polypharmacy claims (21.3 percent of claims) was back conditions without spinal cord involvement, including back sprains and strains.

 

Employees believe they get fat on the job

A recent survey conducted by Harris Poll on behalf of CareerBuilder found that more than half of U.S. workers consider themselves overweight, and many believe their current job has played a role.

The survey included a representative sample of 1,117 full-time workers from multiple industries and different-sized companies. 45 percent said they gained weight while at their current job, with twenty-six percent gaining more than 10 pounds and 11 percent more than 20 pounds.

Among the reasons cited:

  • Sitting at a desk most of the day (53 percent).
  • Too tired after work to exercise (49 percent).
  • Stress eating (41 percent).
  • No time to exercise before or after work (34 percent).
  • Workplace celebrations (13 percent).
  • Skipping meals because of time constraints (12 percent)

The survey also found that 63 percent of workers eat lunch at their workstation, and 72 percent snack on the job.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Determining the risks of delayed recovery

One of the most perplexing problems in workers’ comp is delayed recovery, or relatively minor claims that become long-term, costly claims. Often the claims go unnoticed until significant dollars are spent on procedures, surgeries, and medications for an injury that should have healed long ago. While these claims may only represent 6 – 10% of all claims, they can consume 80 percent or more of medical and indemnity resources, according to Integrated Medical Case Solutions.

Yet, if identified early, proper intervention prevents the delayed recovery. Research suggests that psychosocial factors play a large role in these “creeping catastrophic claims.”

Pioneers of diagnosing and treating injured workers with psychosocial risk factors, Michael Coupland, the CEO and Network Medical Director of Integrated Medical Case Solutions, and Steven Litton developed a simple pain screening questionnaire (PSQ). Though widely used in Canada and several other countries, it is just starting to catch on with the U.S. workers’ compensation system, according to an article in Property Casualty 360°.

It includes ten questions or statements related to the injured worker’s pain attitudes, beliefs and perceptions, which the injured worker rates on a scale of 1 to 10. The article notes that one of Coupland’s favorite questions is ‘I should not do my normal work with this amount of pain,’ which gives insight into work attitudes, catastrophic thinking, and fear-avoidance behavior.

Physicians focus on the pain and physical diagnosis and prescribe MRIs, tests, surgeries, and even opioids. Costs escalate with little relief of pain. The underlying psychosocial factors go untreated and include:

  • Catastrophic thinking – or OMG! Thoughts. Despite the injury or illness, people believe they are beyond the ability to recover.
  • Fear avoidance. Workers are so concerned about further injuries, they avoid doing anything that might exacerbate the pain.
  • Anger and perceived injustice. Regardless of how long someone has worked at their company, they feel a disservice has been done to them.
  • External focus of control. Workers rely on their medical providers and others to fix them, rather than taking any responsibility for their own recovery.

Since 2013, Albertsons Safeway has used the test to determine the risk level of delayed recovery, giving it to all injured workers with indemnity claims two weeks post injury. According to a blog post by the IMCS Group, the average amount paid per claim rose exponentially with risk level. Looking at data from the 2013 – 2015:

Risk Level # of Injured Workers Average Amount Paid
Low 1,031 $2,059
Low-Moderate 307 $10,759
Moderate 145 $21,783
High 192 $26,212
Very High 148 $39,967

The injured workers who scored high or very high were given the opportunity to undergo cognitive behavioral therapy (CBT). About half agreed to do so. Unlike traditional psychotherapy, CBT is brief. The goal is for injured workers to cope with their pain, rather than be cured of it.

The blog post, Early CBT Intervention Changes Lives, Saves Money for WC Payers, explains the company created three groups of injured workers that had scored as high-risk on the PSQ to test the effectiveness of the CBT intervention. One group that participated in the CBT program; a second group that chose not to participate; and a third group of injured workers that had not been offered CBT.

Here are the results:

Group Average Total Paid
Participated in CBT $36,629
Did not participate $44,356
Were not referred to CBT $73,488

Those who engaged in CBT returned to work much sooner than those in either of the other two groups. According to an Albertsons Safeway representative, the program resulted in an estimated 30 percent reduction in total claims cost.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Things you should know

Workplace deaths rise and workplace violence is now the second-leading cause

According to Bureau of Labor Statistics data cited in the AFL-CIO’s 2018 edition of Death on the Job: The Toll of Neglect, 5,190 workers were killed on the job in 2016, an increase from the 4,836 deaths the previous year, while the job fatality rate rose to 3.6 from 3.4 per 100,000 workers. Workplace violence is now the second-leading cause of workplace death, rising to 866 worker deaths from 703, and was responsible for more than 27,000 lost-time injuries, according to data featured in the report.

35% of workers’ compensation bills audited contained billing errors

Out of hundreds of thousands of audited workers’ compensation bills, about 35% contained some type of billing error, according to a quarterly trends report from Mitchell International.

The top cause was inappropriate coding, which produced 24% of the mistakes and unbundling of multiple procedures that should have been covered by one comprehensive code accounted for 19% of billing mistakes.

Only 13 states adequately responding to opioid crisis – National Safety Council

The National Safety Council (NSC) released research that shows just 13 states and Washington, D.C., have programs and actions in place to adequately respond to the opioid crisis going on across the country. The states receiving the highest marks of “improving” from the Council are Arizona, Connecticut, Delaware, Washington, D.C., Georgia, Michigan, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Rhode Island, Virginia and West Virginia. Eight states received a “failing” assessment including Arkansas, Iowa, Kansas, Missouri, Montana, North Dakota, Oregon and Wyoming.

NIOSH answers FAQs on respirator user seal checks

Seal checks should be conducted every time respiratory protection is used on the job, and employers and workers should ensure the equipment is worn properly so an adequate seal is achieved, NIOSH states in a recently published list of frequently asked questions.

NIOSH publishes fact sheet on fatigued driving in oil and gas industry

According to a new NIOSH fact sheet, fatigue caused by a combination of long work hours and lengthy commutes contributes to motor vehicle crashes, the leading cause of death in the oil and gas industry.

New tool allows employers to calculate cost of motor vehicle crashes

Motor vehicle crashes cost U.S. employers up to $47.4 billion annually in direct expenses, according to the Network of Employers for Traffic Safety, which has developed a calculator to help organizations determine their own costs.

It has separate calculators for tabulating on- and off-the-job crashes, as well as one for determining return on investment for employee driving safety programs.

Watchdog group releases list of Dirty Dozen employers

The National Council for Occupational Safety and Health (National COSH) announced their list of the most dangerous employers, called “The Dirty Dozen.” Among those listed: Seattle-based Amazon.com Inc., Mooresville, North Carolina-based Lowes Cos. and Glendale, California-based Dine Brands Global Inc., which owns Applebee’s and International House of Pancakes locations.

CMS finalizes policy changes for Medicare Part D Drug Benefits in 2019 with focus on managing opioid abuse

The policy change addresses the Implementation of the Comprehensive Addiction and Recovery Act of 2016 (CARA), which requires CMS’ regulations to establish a framework that allows Part D Medicare prescription plans to implement drug management programs. Part D plans can limit access to coverage for frequently abused drugs, beginning with the 2019 plan year and CMS will designate opioids and benzodiazepines as frequently abused drugs.

Stakeholders hope that CMS will apply similar thinking to Workers’ Compensation Medicare Set-Aside (WCMSA) approvals in which the beneficiary is treating with high-dosage opioids.

Study: workers exposed to loud noise more likely to have high blood pressure and high cholesterol

A study from the Centers for Disease Control (CDC) was published in this month’s American Journal of Industrial Medicine that indicates workers who are exposed to loud noises at work are more likely to have high blood pressure and high cholesterol.

IRS FAQs on tax credit for paid leave under FMLA

The IRS has issued FAQs, which provide guidance on the new tax credit, available under section 45S of the Internal Revenue Code, for paid leave an employee takes pursuant to the FMLA.

US Supreme Court rules car dealership service advisers exempt from being paid overtime under the Fair Labor Standards Act

The FLSA exempts salesmen from its overtime-pay requirement and “A service adviser is obviously a ‘salesman,'” said the majority opinion in the 5-4 decision in Encino Motorcars L.L.C. v. Navarro et al. This reversed a ruling by the 9th U.S. Circuit Court of Appeals in San Francisco that held the advisers were not exempt from being paid overtime.

Legal experts note that this expands the FLSA’s interpretation more broadly and could have implications for other businesses.

State News

California

  • The Workers Compensation Insurance Rating Bureau (WCIRB) quarterly report for year-end 2017 projects an ultimate accident year combined loss and expense ratio of 92%, which is 5 points higher than that for 2016 as premium levels have lowered while average claim severities increased moderately. More findings.
  • Cal/OSHA reminds employers to protect outdoor workers from heat. The most frequent heat-related violation cited during enforcement inspections is failure to have an effective written heat illness prevention plan specific to the worksite. Additional information about heat illness prevention, including details on upcoming training sessions throughout the state are posted on Cal/OSHA’s Heat Illness Prevention page.
  • The Department of Justice certified that the state’s prescription drug monitoring program is ready for statewide use. Doctors will have to start consulting the program before prescribing controlled substances starting Oct. 2.
  • According to a recent report by the Workers’ Compensation Research Institute (WCRI), the state ranked fourth-highest in terms of average claim costs among 18 states examined and a major contributing factor is the relatively high percentage of claims with more than seven days of lost time.

Florida

  • A new law, HB 21, takes effect July 1 and puts a three-day limit on most prescriptions for acute pain and toughens the drug control monitoring program. The bill also provides for additional treatment opportunities, recovery support services, outreach programs and resources to help law enforcement and first responders to stay safe.

Georgia

  • The State Board of Workers’ Compensation’s latest fee schedule update, which became effective April 1, includes the first-ever dental fee schedule and reimbursement rates for air ambulance services as well as other amendments.

Illinois

  • According to a recent report by WCRI, the average claim cost of $16,625 was the highest among 18 states examined and the percentage of claims with more than seven days of lost time ranked third.

Massachusetts

  • Deaths on the job reached an 11-year high in 2017, an increase attributable to the state’s many construction projects, as well as an increased prevalence of opioid addiction, according to a newly released report.

Michigan

  • Work-related injuries requiring hospitalization increased for the third straight year recent data from Michigan State University shows.

Minnesota

  • The Department of Labor plans to adopt what it calls “cost neutral” changes to workers’ compensation vocational rehabilitation fees and other rules without a public hearing, unless one is requested by at least 25 people, in keeping with state law. Comments can be made until May 31.
  • Paid claims and premiums have dropped significantly in the last 20 years (54 percent relative to the number of full-time-equivalent (FTE) employees from 1996 to 2016), while benefits have risen slightly, according to the Minnesota Workers’ Compensation System Report for 2016.

North Carolina

  • The Supreme Court denied review of an appeal by medical providers who argued that the Industrial Commission violated the state’s Administrative Procedure Act when it adopted an ambulatory surgery fee schedule. The fee schedule that became effective on April 1, 2015, remains in effect.

Tennessee

  • According to a recent report by WCRI, the average total cost per workers’ compensation claim decreased by 6% in 2015, driven by a 24% reduction in permanent partial disability and lump-sum benefit payments.

Wisconsin

  • In an effort to combat the misclassification of workers, the state has netted $1.4 million in unpaid unemployment insurance taxes, interest and associated penalties, according to the state Department of Workforce Development.
  • According to a recent report by WCRI, medical costs in workers’ comp increased five percent per year rising in 2014 with experience through 2017.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Legal Corner

ADA
Multi-month leave not required in 7th Circuit states – Illinois, Indiana, and Wisconsin

The U.S. Supreme Court has declined to review a 7th Circuit decision that the ADA doesn’t require employers to allow workers with disabilities to be off the job for two months or more. In Raymond Severson v. Heartland Woodcraft Inc, the 7th Circuit ruling that a multi-month leave of absence is beyond the scope of a reasonable accommodation under the ADA does not comply with the U.S. Equal Employment Opportunity’s position and disagrees with other courts.

The Severson decision allows employers in the 7th Circuit to, without violating the ADA, terminate the employment of workers who make months-long leave requests, but employers should be cautious about denying leaves of less than two months and obtain written confirmation of the requested time off. Under Wisconsin law, there is a more lenient interpretation of reasonable accommodation than under the ADA, so it important to consider the state statute as well.

Telecommuting a reasonable accommodation

The 6th U.S. Circuit Court of Appeals affirmed a $92,000 verdict and $18,184.32 for back pay and lost benefits award for a city utility attorney who was denied her request to telecommute during her 10-week bed rest for pregnancy complications. The utility had reversed its policy on telecommuting in 2011, requiring all lawyers to work onsite, but she had been allowed to work from home when she recovered from neck surgery, shortly after the policy change.

In her 23rd week of pregnancy, her doctors placed her on modified bed rest for approximately 10 weeks. She made an official accommodation request with supporting documentation, which was denied based on the argument that physical presence was an essential function of the job, and telecommuting created concerns about maintaining confidentiality.

She filed a lawsuit for pregnancy discrimination, failure to accommodate and retaliation under the ADA and was awarded $92,000 in compensatory damages and $18,184.32 for back pay and lost benefits by a jury. Upon appeal, the attorney testified that in her eight years of employment, she had never tried cases in court or taken depositions of witnesses, even though those duties were listed in her position description. The court found that she was adequately performing her duties telecommuting, as her job duties were not tied to her presence in the office. Mosby-Meachem v. Memphis Light, Gas & Water Division, 6th Cir., No. 17-5483 (Feb. 21, 2018).

Workers’ Compensation
Worker entitled to attorney’s fees although benefits were less than he sought – Florida

In Portu v. City of Coral Gables, a fire fighter developed hypertension, but his impairment rating was based on those of a female patient and were adjusted from 35% to 4%. State statute provides that a worker will be entitled to a fee award if the claim is successfully prosecuted after being denied by his employer. Also, a fee award will not attach to a claim until 30 days after the date the claim petition was provided to the employer or carrier.

A judge denied the claim for attorney fees because the city paid benefits within 30 days of the revised impairment rating assessment, and it couldn’t have paid benefits earlier because it had no way of calculating the correct amount. An appellate court, however, found he was entitled to attorney’s fees because the carrier had denied the claim, the employee had successfully prosecuted the claim, and 30 days had elapsed from “the date the carrier … receives the petition.” It did not matter that the claim petition had sought benefits based on a higher impairment rating.

Police officer entitled to duty disability pension for injuries in training session – Illinois

In Gilliam v. Board of Trustees of the City of Pontiac Police Pension Fund, a police officer was injured during a voluntary bicycle patrol training session and was denied a line-of-duty pension because her disability had not been caused by an “act of duty.” An act of duty is defined as an act “inherently involving special risk, not ordinarily assumed by a citizen in the ordinary walks of life, imposed on a policeman.”

The decision went through a series of appeals and the courts determined that there are “special risks associated with bicycle patrol” and what mattered was whether she was injured while attempting a bicycle maneuver that involved a special risk.

No additional payment for provider who accepted partial payment from Medicaid – Minnesota

In Gist v. Atlas Staffing, a worker for a temporary employment agency was assigned to a position that involved working with silica-sand tanks. About two years later he stopped working and shortly after was diagnosed with end-stage renal disease. He received treatment in Minnesota and Michigan, which was partially paid for by Medicaid and Medicare.

He then filed a workers’ comp claim, asserting the exposure to silica had caused the kidney failure and the treating medical center intervened seeking payment for the portion that Medicaid and Medicare had not paid. A workers’ compensation judge found in favor of benefits but noted the medical center should be paid “in accordance with all other state and federal laws.”

The case made its way to the state Supreme Court, which noted that while a treatment provider is entitled to a payment for medical services provided to an employee, to the extent allowed under the workers’ compensation medical fee schedule, even if the provider has already received partial payment from a private, non-employer insurer, in this case payment was received from Medicaid. A federal regulation requires providers who participate in Medicaid programs to accept a Medicaid payment as “payment in full.”

Award of schedule benefits overturned because summary judgment is not a way to resolve factual disputes – Nebraska

In Wynne v. Menard, a retail worker injured her knee and in a later accident injured her shoulder. The court awarded her temporary total disability benefits and ordered that the benefits continue until she reached maximum medical improvement, at which time she underwent a functional assessment evaluation. While the evaluator imposed no restrictions on her ability to sit, her treating physician said she could not sit for more than 10 minutes at a time, and a court-appointed vocational expert questioned this finding.

The state Supreme Court said there was a triable issue of fact as to the extent of her disability and the Workers’ Compensation Court erred by weighing the relative merits of the evidence and awarding her schedule benefits for her knee and shoulder since summary judgment is not a way to resolve factual disputes. The case was reversed and remanded.

Board can reject medical decision but not misread records – New York

In Matter of Gullo v. Wireless Northeast, the Workers’ Compensation Board rejected the opinion of the worker’s doctor because he had testified that he could not offer an opinion on causation since he was not familiar with the employee’s work duties. However, when he was advised of her work duties, he confirmed his opinion. The appellate court found that the Board overlooked this fact when it held that the doctor could not offer an opinion on causation. Thus, the denial of benefits was reversed.

Employer’s lien against subrogation recovery determined when settlement is made – New York

In Matter of Adebiyi v. New York City Housing Authority, an employee was injured when an ultra-high-pressure washer malfunctioned. He filed tort suits against the manufacturer and lessor of the pressure washer and received settlements of $1.6 million and $800,000. When he received judicial approval of the settlement with the lessor, the Housing Authority was granted a lien of over $222,000. At the time, the Workers’ Compensation Board was deciding whether to reclassify him as permanently and totally disabled and the employee argued the lien should not be determined until the decision was made. While a trial judge ruled in his favor, the appellate court noted the lien was appropriately determined at the time of the settlement without consideration for reclassification.

Failure of employer to timely contest claim doesn’t guarantee benefits – New York

In Matter of Nock v. New York City Department of Education, a lunch helper alleged she suffered a work-related back injury. A judge found that the department did not file a timely contest and awarded benefits. The Workers’ Compensation Board reversed and Appellate Division’s 3rd Department agreed, explaining that an employer’s failure to file a timely notice will bar it from raising certain defenses, but it does not relieve a worker of the burden to prove that the medical condition was caused by work.

Medical claim for non-FDA approved compound cream upheld – North Carolina

In Davis v. Craven County ABC Bd, an employee injured his ankle and after four years of treatment was diagnosed with reflex sympathetic dystrophy and prescribed a compound cream. The carrier refused to pay for the cream, which was not approved by the FDA, or any further treatment from the prescribing physician. A new physician prescribed a similar, non-FDA-approved cream and the carrier again refused payment.

The North Carolina Industrial Commission affirmed a deputy’s order for the carrier to pay for the cream. The appellate court noted that the law did not limit the types of drugs that might reasonably be required solely to those that are FDA-approved. Reasonable treatment is a question that must be individually assessed in each case. “If requiring workers’ compensation providers to compensate injured workers for non-FDA-approved drugs is bad policy, it is for our General Assembly to change that law,” added the court.

No benefits for teacher’s stroke suffered while receiving unfavorable review – North Carolina

In Cohen v. Franklin County Schools, a high school principal received complaints about a math teacher and prepared a professional development plan. When he met with the teacher and the director of secondary education, he presented the plan, but she refused to sign it. After the meeting, which lasted about 15 minutes, the teacher experienced head pain and sought medical treatment three days later. It was determined she had had a stroke and she sought comp benefits.

The Industrial Commission denied the benefits and the Court of Appeals upheld the denial, noting that the meeting was neither unexpected nor inappropriate. “At most, Cohen received critical feedback that was unwelcome to her – an occurrence that is not unusual for an employee at any job.”

Uber limousine drivers are independent contractors – Pennsylvania

In what is believed to be the first ruling on the classification of Uber drivers under federal law, a U.S. District judge ruled that drivers for Uber’s limousine service, UberBlack, are independent contractors and not the company’s employees under federal law. The judge found that the drivers work when they want to and are free to nap, run personal errands or smoke cigarettes in between rides and, thus, the company does not exert enough control over the drivers for them to be considered employees. Razak v. Uber Technologies Inc.

Chiropractor cannot collect fee for office visits and same day treatments – Pennsylvania

In Sedgwick Claims Management Services v. Bureau of Workers’ Compensation Fee Review Hearing Office, an employer was obligated to pay reasonable and necessary medical expenses for an employee’s shoulder injury under a Compromise and Release Agreement. The employee saw a chiropractor as many as three times each week, who billed the TPA $78.00 per visit for office visits on dates on which he provided chiropractic treatment.

The TPA denied the office visit charges but paid for the other treatments. The state code permits payment for office visits “only when the office visit represents a significant and separately identifiable service performed in addition to the other procedure.” Thus, the Commonwealth Court overturned a hearing officer’s decision finding that a chiropractor was entitled to payment of the office visit fee, noting that payment for same day examinations was the exception, not the rule.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Trends in combatting abuse and fraud in Workers’ Compensation

Fraud or abuse that might not reach the legal requirements for criminal sanctions happens in all aspects of the Workers’ Comp system. There’s employee fraud, employer fraud, health provider fraud, attorney fraud, and even insurer and claims adjuster fraud. The good news is that technology is making it easier to detect and many states have strengthened their laws to prevent fraud. In this article, we’ll look at employee fraud and health provider fraud.

Employee fraud

It’s important to recognize that only 1 – 2% of employee injuries are considered fraudulent and that injured employees can be scared and overwhelmed by the system and need the support and guidance of the employer to navigate to a quick recovery. But when fraud or abuse occurs it can be hard to detect and lead to unnecessary costs.

The most common types of employee fraud are faking injury claims, exaggerating injury or illness, claims for injuries incurred outside of work, failing to report earned wages while receiving temporary disability benefits, and prescription fraud, especially related to opioids. Malingering can also complicate an already complex claim and postemployment claims such as those involving cumulative trauma (CT) can be difficult for the employer to control.

Two recent phenomenon driving employees to cheat the system are expensive health care and long-term unemployment. While the evidence is anecdotal, high deductible health insurance plans, the ever-increasing costs of co-pays, and the growing uncertainty of coverage can incentivize the use of workers’ comp. In most cases, workers will have all medical costs covered and receive indemnity payments. Despite continued job growth and low unemployment, long-term unemployment persists among certain workers, and those having a tough time finding jobs that match their skill set or pay well may look to postemployment comp claims for much needed income.

There are many “red flags” that can help employers identify questionable claims and these should immediately be shared with the claims adjuster. However, proving that an injured worker is engaged in personal physical activities inconsistent with the alleged disability can be difficult. Today, a combination of the traditional approaches to fraud detection and technology make it easier and more affordable.

Here are eight things that employers can do:

  1. Have the injured worker put in writing the facts of the injury.
  2. Do a thorough investigation of the incident, including interviewing witnesses, taking pictures, documenting PPE in use, and so on.
  3. Make your employees comfortable with reporting suspected fraud and train supervisors in monitoring “workplace chatter.” Often, co-workers may have information or a sense that a co-worker is abusing the system.
  4. Use surveillance cameras in offices, parking lots, warehouses, etc. According to an Employers Holdings, Inc. survey, 24% of small businesses have installed surveillance cameras on their property. There was a widely publicized YouTube video of a Florida woman hitting herself on the head with a sprinkler head that had fallen on her desk and then claiming a workplace injury.
  5. Have a relationship with a trusted, competent occupational physician who understands your business and can foster the confidence of employees. This partnership will help identify possible fraudulent cases and control prescription abuse. Prescription fraud is easily mitigated by a doctor’s ability to check a prescription-monitoring data base, which 49 states now have in place.
  6. Monitor social media. It’s positively amazing what people will post on social media. If fraud is suspected, investigators can use software to search upwards of 200 social media sites. Employers need to be cautious about how they employ social media tools to investigate their employees’ behaviors and be sure that the evidence is admissible in court. While social media has been allowed in some court cases, this area of law is still in its infancy. Even if the admissibility of social media is questionable, it provides an indication that video surveillance, which is more likely to be admissible because it includes a time stamp, is warranted.
  7. Consider smart device data. In recent cases, police obtained a search warrant for the data from the cardiac pacing device in an arson investigation, a fitness tracker was used to discredit an alleged assault, and an Amazon Echo was accessed (unsuccessfully) as a witness to a murder. This area of law is largely untested, but should not be overlooked.
  8. Check job applicants carefully. Criminal backgrounds and a history of suspicious injury claims can be good predictors of potential fraud.

Physician fraud

For the dishonest physician, workers’ comp is fertile ground. Common examples of fraud include: submitting claims for services not provided, duplicate billing, upcoding or submitting claims for services with higher rates, unbundling or submitting claims for several services that should have been one claim, ordering excessive treatment or supplies, dispensing drugs for personal gain, receiving kickbacks in exchange for directing patients to other service providers, and operating “medical mills” with others who lack required credentials.

Some states such as California have enacted laws to aggressively pursue fraud. Since A.B. 1244, which requires the division’s administrative director to suspend any medical provider, physician or practitioner from participating in the workers’ comp system in cases that involve criminal activity or inability to perform duties safely, among other requirements went into effect Jan. 1, 2017, over 170 providers have been suspended.

To combat physician fraud, employers can:

  1. Have a relationship with trusted, competent occupational physicians who understand your business and can develop confident relationships with your employees.
  2. Vet independent medical reviews for quality. Complex claims that involve comorbidities can be feeding ground for exaggeration and malingering and often involve legal representation. According to a recent white paper by the Risk & Insurance Management Society Inc. a quality independent medical examiner (IME) can help mitigate losses. It’s important to hold an IME to a high standard.
  3. Report the suspected fraud.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com