Workers Compensation. Best Practices (A-M)

Transcription

1 Workers Compensation Best Practices (A-M) All information provided in this report and any documents ancillary thereto ("Report") are provided for information purposes only. Although the information found in this Report is believed to be reliable, no warranty, expressed or implied, is made regarding the accuracy, adequacy, completeness, legality, reliability, or suitability of any information, either isolated or in the aggregate. All information is provided "as is." Changes may be periodically made to the information contained in this Report. No notice is required with respect to any changes. If you find any errors or omissions, we encourage you to report them by to: Under no circumstances will Dragon Services, Inc., or its directors, officers, agents, contractors, employees or assigns be liable for any direct, consequential, indirect, special or punitive damages whatsoever arising out of your access to or use of this Report. 1

2 INDEX ACCIDENT INVESTIGATION 4 AUDIT PAYROLL 5 BACK INJURIES (LOW BACK) 6 BACKGROUND CHECKS 7 BEHAVIOR BASED SAFETY 8 CLAIMS REPORTING 9 CLAIMANT GUIDE 10 CLAIM AUDITS 11 DISABILITY PAYMENTS 12 DRUG SCREENING 13 EMPLOYEE-SELECTED PHYSICIANS 14 ERGONOMICS AND CUMULATIVE TRAUMA INJURIES 14 GAINSHARING 15 2

3 HEALTH CARE ORGANIZATIONS 16 HIRING PRACTICES 16 INVESTIGATIONS (SURVEILLANCE) 18 LIFTING INJURIES 20 LOSS ANALYSIS 22 LOSS CONTROL 23 LOW BACK INJURIES 23 MEDICAL BILL REVIEW/ULTILIZATION REVIEW 24 MEDICAL CLINIC SELECTION 25 MEDICAL PROVIDER NETWORKS 27 3

4 ACCIDENT INVESTIGATION A simple accident investigation procedure should be followed after every incident, regardless of whether or not the incident becomes a workers compensation claim. A checklist of items to address should be presented to the immediate supervisor of the worker who suffered the incident. The supervisor should go through the checklist with the injured worker as soon as possible after the incident. The names of witnesses, if any, should be recorded. In addition, a brief interview should be conducted with the potential claimant about the circumstances of the claim. For any injury requiring medical treatment, a second person should interview the claimant as soon as possible after the claim. The benefits of this approach are numerous: Fraud Abatement: Many employees who would consider bringing a fraudulent claim change their minds once they are questioned by their immediate supervisor about the circumstances surrounding the claim. Fraud Abatement: Having another person interview the injured worker after medical treatment provides an opportunity to compare the original description of the circumstances surrounding the claim to the subsequent description. For fraudulent claims, there is often a change in the description of the claim, and when confronted, a potentially fraudulent claimant can be dissuaded from actually pursuing the claim. Supervisor Relationship: By having another person interview the claimant after medical treatment, one can often determine if the real cause of the injury is discord between the injured worker and the supervisor. Such discord can cause not only fraudulent claims, but also exaggerated claims. When the employee feels such discord with the supervisor, he/she will not want to return to work, even in a light duty or modified duty position. Subrogation: Immediate investigation of the claim can at times identify third parties that may be financially responsible for the claim payments. Loss Control: When the physical condition of the premises contributes to the injury, such conditions can be immediately identified and rectified. Also, patterns of injury causation can be identified over time and addressed. 4

5 The time required for an accident investigation can often be as brief as five minutes, so time constraints should not be used as excuses for not completing investigations. Disposable cameras should be provided to all supervisors. This allows the supervisors to photograph the area, which can help in identifying hazards. Photographs can also help in defending claims should the injured employee engage an attorney at some point. An investigation that follows every incident also emphasizes the importance of safety throughout the organization, a key aspect to an aggressive Safety Culture. AUDIT - PAYROLL When the premium is determined by multiplying payroll times a particular rate, there is frequently confusion between the insurance company and the client as to what items should be included in Payroll Often a payroll audit may determine that the client is owed a significant amount of return premium based on inclusion of certain items that should not be considered as Payroll for Workers Compensation purposes. Items that might be considered but which should not be included are: automobile allowances (above actual or specific reimbursement) group insurance payments (employee s contribution) housing or hotel reimbursements life insurance premiums paid by the employer overtime pay (which should be calculated for Workers Compensation purposes at regular time, not time and a half) profit sharing payments employer contributions to qualified retirement plans severance pay stock options expense reimbursements travel reimbursements reimbursements for uniforms. Often audited payroll for the current year will identify faulty payroll reporting by personnel in the client administrative office. Payroll audits can also be performed on prior years payroll reporting, which may entitle the client to return premiums on expired insurance policies in the event of inaccurate reporting. 5

6 BACK INJURIES (LOW BACK) Roughly 25% of all Workers Compensation cases are injuries to the back, specifically the lower back (based on California data). Once an individual has a back injury, there is a 90% chance of recurrence. Importantly, there is little difference between loading dock work and office work when it comes to the number of claimant hours represented by lower back injuries (perhaps due to the better physical condition loading dock workers can be expected to maintain). Very few back claims involve long treatment; 75% involve four or fewer treatments, with return to work within one week. However, 5% of low back claims involve 30 or more visits and extend for more than 300 days post injury. Furthermore, 90% of all claimants with lower back pain will recover spontaneously within four weeks without any further treatment. The conclusion, then, is that a very small number of low back claims generate enormous claim dollars. This is true for businesses with real physical hazards as well as for those with little apparent risk. Best Practices used by many large insureds include: Functional Screening Exams: These can be performed by a physician or by a specialty firm to ensure that employees hired into positions requiring the flexion and twisting of the back are physically capable of performing the work at the time of hire. Back x-rays are not effective, as many studies have shown. MRI s, however, have some effectiveness in identifying preexisting injuries in new hires. Intense Treatment: Low back injuries require intense, focused treatment at the outset of the injury to attempt to return the worker back to a light duty, modified duty, or original work position as soon as possible. Work Hardening: This term has become common in the industry to reflect the significant shift away from a focus on pain treatment towards helping the patient improve his/her activity tolerance. A patient who does not require surgery should be moved quickly back into the work force, to allow the employee to build up the trunk 6

7 strength (stomach and low back) thatwill be necessary for return to work. Prolonged bed rest (more than 4 days) has been found to have potential debilitating effects. Hiring: Many employers have found it effective to include a question in the Application for Employment to the effect of asking the prospective employee if they have ever suffered an injury, or have a condition that would prevent them from performing the duties of the position for which they are being considered. While a positive answer of this question is not a reason to prevent the hiring of that person, according to the ADA, it can identify those people whose lifting activities should be limited. Also, failure to answer this question truthfully, if discovered later, can be grounds for termination. Claimant Follow-up: Once an injured worker is back to work after a low back injury, it is important for the employer to follow up with that injured worker to encourage the worker to perform the trunk exercises recommended by the physician (stomach and low back). This is in recognition of the fact that 90% of all low back injuries recur in the future. Too often, once a claimant is back to work, the injury to that claimant is forgotten. BACKGROUND CHECKS Fraudulent claims are estimated to account for anywhere from 10% - 30% of total claims for Workers Compensation in the United States. Logically, many fraudulent or exaggerated claims are brought by employees with troubled work histories. This shows the need to perform background checks on employees prior to hire. How extensive the background check is will depend on the position for which the employee is being hired, the legality of the search, and whether or not the employee has signed a waiver authorizing a background check. A thorough background check could include some or all of the following: criminal records, civil records, driving records, Workers Compensation claim histories, credit reports, social security number verification, educational degree verification, professional license verification, Medicaid sanctions, employment verification and reference checks. At the very least, Best Practices require the employer to contact the prospective new hire s previous employer(s) for at least the previous 5 year period. 7

8 While the previous employer(s) may not be willing to divulge negative information, reluctance to discuss the prospective employee at the time of the conversation(s) often reveals a potential problem. Since the cost of fraudulent claims (absolute fraud and exaggeration combined) is estimated to total approximately 30% of all claim values (based on California data), the cost of background checks has usually been seen to be worthwhile. BEHAVIOR BASED SAFETY Behavior based safety is a process that has proven to be very effective for many Fortune 1000 companies. In brief, behavior-based safety involves the voluntary participation of employees in the design and execution of the safety program. With the assistance of experts, employees select those behavior- driven practices that will most likely result in the reduction or elimination of Workers Compensation claims. Once those behaviors are identified, employees volunteer to be observed infrequently, on an anonymous basis, by other voluntary participants in the program. At the end of an observation day, the observer sits with each of the employees that have volunteered to participate in the program, and in a positive manner, reviews their compliance with the agreed upon behaviors that represent proper safety procedures. The enormous buy-in of the employees has proven to be very effective for many companies, along with the positive approach to acknowledging safe behavior, as opposed to a punitive approach. This is in contrast to the typical safety program that only identifies behavior after a loss, which by definition identifies improper behavior. Also, the behavior-based safety approach acknowledges that over 90% of all Workers Compensation injuries are caused not by unsafe facilities or exposures, but by unsafe behavior. Finally, behavior-based safety is effective because it acknowledges that safety is driven by continuous safe behavior, on a voluntary basis by the employees, in an environment where proper safe practices are acknowledged and applauded. Copyright 2011, Dragon Services. This report may not be copied or reproduced in any medium without the express written consent of Dragon Services, Inc.

9 CLAIMS REPORTING Many studies have pointed out the importance of early reporting of claims in reducing overall claim value. Claims that are reported to the insurance company, and subsequently to the medical provider, more than 3 days after injury have a significantly higher claim value than those that are reported to the medical provider promptly. Best practices require that the employer takes steps necessary to ensure the reporting of any claim to the insurance company, and most importantly to the medical provider, within 24 hours. Also, the injured worker must be directed to the appropriate medical provider immediately, or the employer may be deemed to have waived the right to control the medical treatment of the claim. The importance of directing the claimant to the employer s medical provider is so important that many employers have chosen to transport injured workers as far as 30 or more miles to the medical provider of choice, rather than have the employee visit an unfamiliar occupational medicine physician, or worse, a non- occupational physician selected by the employee. The rapid reporting of claims, and the direction of the employee to the employer- selected physician, is critical because it is estimated that up to 40% of all claims are originally misdiagnosed. This misdiagnosis is the cause of much litigation, since the injured employee often feels that the employer s physician is not paying attention to their needs. Also, an accurate diagnosis at the outset is needed to promptly implement a light duty or modified duty option for the injured worker. A procedure should be in place for disciplining employees that fail to report injuries in a timely fashion. Supervisors must be trained on what to do when an employee reports injuries to them. This is the opportunity for the employer to gather evidence, in case the claim is not legitimate. Supervisors should clearly describe the employee s work environment, work exposures, movements, and actions at the time of the injury. Unless the employee is in need of immediate medical care, this is the time to have the employee complete a written statement of injury. 9

10 CLAIMANT GUIDE Many studies have indicated that claimants often pursue an attorney because of their confusion and fear after a Workers Compensation injury. This is then shown to be the driving force for litigation in many states. In response to this, many employers have put together a Claimant Guide to Workers Compensation. (Several states have done the same. One example is the state of Washington). This Claimant Guide may be critical in reassuring the employee that the Workers Compensation benefits available to the employee will take care of him/her during recovery. It can reassure the injured worker about the interest of the employer in returning the injured worker to both an active work life and an active personal life, something in the interest of both the employer and the employee. The guide can also explain in layman s terms how Workers Compensation operates, thus mitigating the confusion that is quite natural after a Workers Compensation injury. The injured employee can be provided with the name or position of the person he/she should contact should the employee have questions about care after the injury. This guide can be distributed not only at the time of the injury, but also during the employee s first orientation prior to starting work, and annually during regularly scheduled meetings. The guide might also address many of the following issues: The employer s interest in quality medical care so as to return the employee to work as quickly as possible. The fact that there will be prompt payment of medical bills and wage loss benefits. The opportunity for the employee to return to work as soon as possible, when physically able, in either a light duty role, a modified duty role, or to the employee s regular job. The fact that Workers Compensation will pay the employee if there is a permanent loss of earning capacity. The guide can also encourage employees and remind them of their obligation to: Immediately report injuries. Follow up with the treatment plan prescribed by the treating physician. Keep the employer advised of their medical status. 10

11 Return to an alternate duty job when available (to enable the employee to continue to receive temporary disability compensation). The guide can make clear that it is the employer that ultimately pays for the workers compensation benefits, and not some anonymous insurance company or the government. The guide can also point out to the employees that they do not need lawyers to obtain the full benefits described by the Labor Code. Finally, it can remind employees that any legal fees will be deducted from their award, if they do elect to hire an attorney. It can also point out that any settlement must be approved by a judge at the state Workers Compensation agency, whether or not there is an attorney involved. CLAIM AUDITS As part of the Best Practices program, many employers have contracted with an independent third party to perform an audit of the claims function, whether this claim function is performed by an insurance company or by a Third Party Administrator. These claims audits review file details, such as attorney correspondence and medical reports, and are not limited to a simple review of the claim diaries. The audits are performed to measure adjuster performance compared to: Best Practices Standards of the claims administrator or insurance company Agreed upon standards of the employer s choosing. Included in the claims audit will be an assessment on proper: Investigation: Did the adjuster order surveillance when needed and at the time needed? Medical Management: Is there ongoing evidence of medical management, including documented regular contact with the treating provider and a documented treating plan? 11

12 Reserve Changes: Was a preliminary reserve established within three days, and a definitive reserve within 30 days of file opening? How frequently have reserve changed? (If more than 3-4 times over the life of the file, it could indicate inadequate reserve estimates by the adjuster.) Reserve Documentation: Is the rationale for reserve changes documented in the file and logical? Action Plan: Is there evidence of a plan to manage the claim to conclusion from the beginning of the claim? Is the plan up to date? Subrogation: Has every potential for subrogation been investigated and pursued? Litigation: If the claim is in litigation, is there a litigation plan and budget? DISABILITY PAYMENTS (collateral to Workers Compensation payments) Best Practices for a Workers Compensation program requires consideration of supplemental disability payments. If not properly coordinated, a company s employee benefit and compensation programs may inadvertently extend Workers Compensation payments. Consideration needs to be made for the possible delay of the injured worker s prompt return to work, based on the availability of any of the following plans: Salary and wage continuation Supplemental payments, over and above Workers Compensation temporary disability payments Open ended job return policy (jobs should be held open for only a specific period of time, for just 6-9 months). This will encourage return to work. Long-Term Disability: Workers Compensation payments should be subtracted from any available long-term disability payments. 12

13 DRUG SCREENING The National Institute on Drug Abuse (NIDA) estimates that one in six working Americans has a drug problem, a situation that costs American business as much as sixty billion dollars per year. According to the US Chamber of Commerce, 42% of persons, when entering the full time work force for the first time, have used drugs illegally within the past year. The average drug user is five times more likely to file a Workers Compensation claim and is estimated to be approximately one third less productive than the average worker is. In this environment, employers who choose not to screen for drugs prior to hiring put themselves at a disadvantage in the work place, as many employers now are performing preemployment drug screenings. The pool of workers attracted to an employer who is not screening for drugs contains a higher percentage of the drug using population. While any employer that considers establishing a drug screening program should first review details of the program with an attorney, it has generally been held that a program that is determined to be non-discriminatory is allowed in the work place. There are three types of drug screening that can be implemented: 1. An incident related screening, where employees are tested after an accident or other incident. 2. Scheduled testing of high risk or safety-sensitive occupations. 3. Random, unannounced sampling for screening within a certain occupation. These three are in addition to drug testing prior to hiring. Drug testing can be fairly cost effective, and newer types of tests are less offensive to many individuals (e.g. the use of a cotton swab inside the cheek). 13

14 EMPLOYEE-SELECTED PHYSICIANS Claimants who are seeing their own physicians are more likely to generate very costly claims, and many employers have chosen to closely manage the legal requirements regarding employee-selected physicians actions in the treatment of workers compensation claims. These statutory requirements include requirements for notification to the employer at certain intervals. Best Practices require that the employee s physician receive a written description of the employee s original position and work duties. It also requires that the employee-selected physician receive a description of return-to-work opportunities with the employer and the work restrictions that would fit any of these light duty or modified duty positions. It is important that these items be presented to the employee-selected physician immediately after the claim is identified by the employer, so that the employee- selected physician can have an opportunity to prescribe work restrictions that will fit into a light duty or modified duty work position. It is also important for the employee-selected physician to know that the employer is monitoring the claim and that it has not become lost in the system. ERGONOMICS AND CUMULATIVE TRAUMA INJURIES Cumulative trauma injuries are some of the most difficult injuries in occupational medicine. Cumulative trauma usually means a soft tissue injury, which is dependent on the subjective response of the claimant necessary for diagnosis and treatment. Because of this, cumulative trauma injuries are prone to exaggeration and abuse of the Workers Compensation system. While ergonomics is a very complicated issue, certain conclusions are being drawn by a consensus of expert opinion on the issue. Cumulative trauma claims are often thought to be those resulting from typing or deskwork. However, cumulative trauma claims (or repetitive motion claims) can arise out of virtually all types of employment, including any employment with a repetitious motion. Examples would include work by automobile mechanics or people working in an assembly line packing materials. Ironically, cumulative trauma often also affects employees in many jobs considered light hazard or non-repetitious. 14

15 GAINSHARING Gainsharing is a concept that has been adopted by many large employers with regard to their claims administrator, whether claims administration is handled by an insurance company or by a third party administrator. There are several reasons for this: Worker s compensation experts believe that there is typically overpayment on worker s compensation claims of 25% or higher. These overpayment dollars are greater on mid-sized claims than on large claims, because larger claims tend to get the attention of more experienced claims adjusters. Brokers cannot adequately compare, in a credible fashion, the claim service capability of one claims adjusting entity versus another. The only way to determine if a claims administrative entity has performed well on any particular account is to perform a claims audit of the claims file. Then, one can determine if the claims adjusters have performed in a timely fashion, with proper communication, and according to the Best Practices of that third party administrator. One can also see if claim values in the aggregate exceed historical averages for the period and averages in the industry in general. Brokers at the more senior level do not deal with claims adjusters. This responsibility is often delegated to less senior people in the organization. The ideal Gainsharing agreement will be based on outcomes. Should the claims adjuster meet an average claims settlement value below a particular established target, perhaps with many targets based on type of claim, the claims adjusting company will receive a bonus. Alternately, failure to realize superior outcomes may put income at risk for that claims adjusting entity. Gainsharing agreements can also be based on meeting the particular Best Practices of the claims adjusting entity. Ultimately, outcomes can be measured against the historical performance of the claims adjusting entity. While there are certain legal impediments to the compensation of claims adjusters for superior performance, Gainsharing under the appropriate circumstances is possible and has been adopted by many large employers. 15

16 HEALTH CARE ORGANIZATIONS (HCO s) The idea of Health Care Organizations is a concept that first arrived in California in the early 1990 s. In brief, in return for an agreement to provide medical benefits that were satisfactory to unions in California, i.e. benefits of a superior nature with Superior Health Care Providers, employers were allowed to extend their control of medical treatment after an occupational injury. This control could extend from the current 30 days to as much as 180 days, depending on the nature of the HCO chosen for health benefits by that employer. However, in the 90 s extremely few medical providers chose to become qualified by the Department of the Corporations as a Health Care Organization. In order to qualify as an HCO, the restrictions on a medical provider were deemed to be far too restrictive, and in a soft workers compensation marketplace, there was little interest in the HCO option. With the California Workers Compensation reformat (AB749) effective January 1, 2003, the ability to become qualified as an HCO has become easier. HIRING PRACTICES There are many studies indicating that employees who are within the first six months of being hired into a new job are more likely to suffer a workers compensation injury. Some studies indicate that new hires account for as much as 40% of all claims dollars (based on California data). For this reason, many large employers have adopted several strategies to mitigate the exposure to workers compensation injury by new hires. Some strategies are: Employment Screening: Employee screening can be very elaborate and may involve extensive background checks (see separate section), drug testing (see separate section), psychological screening (see separate section), multiple interviews, pre-hire physicals (see separate section), etc. Safety Orientation: Ranging from one hour to several days, depending on the business exposures, safety orientations are believed to be a very effective means of reducing workers compensation injuries with regard to new hires. Assigning a Mentor: Many large firms do not allow a new hire to operate independently until the employee has been on board for several weeks. Instead, a mentor is assigned, one that has a particular desire and interest in ensuring safe practices for the company. 16

17 New Hire Interviews: Several companies have found that it is important to interview the new employee after two or three weeks to determine whether or not the employee has assimilated all of the safety practices and procedures to which the new employee has been exposed. Failing an oral or written test would require that the mentoring process and the training process continue into the future. Written Job Descriptions: Detailed job descriptions, including the physical requirements of the job, can, at times, rule out candidates who are not physically capable of performing the job. Employment Applications: Employment applications often include a question or two regarding the physical ability of the applicant to perform the job, often referring to the position description itself. These can be effective because employees may be candid with regard to their limitations in performing the job duties described. This would alert the employer to modify the job duties of the applicant, or assign the new hire to another position. (As mentioned before, it is not a reason to prevent the hiring of this employee.) Should the employee respond dishonestly about his/her ability to perform the job at hand and regarding any safety accidents that they have suffered in the past that would impair the employee s ability to perform the job at hand, such a response could result in the employee s termination if the dishonesty is discovered. Temp-To-Hire: A more common technique for avoiding injuries associated with new hires is the use of employee leasing companies. The employee leasing company is responsible for workers compensation injuries to leased employees until such time as the primary employer makes the leased employee a permanent employee. Since the employee leasing company is concerned about its workers compensation premiums, and thus its claims, and since it often has a history with the employees in question, shifting the workers compensation exposure to the leasing company has often proved to be very effective. In addition, employee leasing companies are reluctant to recommend to client employers persons who appear to be potentially likely worker s compensation claimants. 17

18 INVESTIGATIONS (SURVEILLANCE): Many large companies have adopted an aggressive approach to potentially fraudulent claims, including the use of video surveillance of supposedly disabled employees, in an effort to discredit those employees or even pursue prosecution for workers compensation fraud. Video surveillance has many problems, including: It is often difficult and expensive to videotape a supposedly disabled employee s activities that would discredit the medical diagnosis in a workers compensation claims file. Many employees bringing fraudulent claims are careful in performing activities that would be within their work restrictions as designated by the treating physician. Any surveillance must take place with an eye towards the work restrictions described in the claim file. Often, seriously injured claimants will have very limited work restrictions, relative to an original job position that required significant physical. In other words, the restrictions will allow the employee to perform a range of normal duties, but not the strenuous duties involved in the job that caused the injury. Claimants often argue, once caught on tape performing an activity that is in violation of the worker restrictions in the file, they were enjoying a good day. For surveillance to be effective, videotape must often be collected on multiple days to be successful. Rules vary by state, but for instance, in California, every insurance company and every third party administrator is required to maintain a special investigative unit (SIU). Where authorized and effectively managed, these special investigative units have proven to reduce costs. As part of the Workers Compensation insurance renewal, employers rarely negotiate details regarding future surveillance activity necessary to reduce costs. By not having the insurance company agree with the employer on surveillance in advance, frustration often occurs for employers that believe employees are committing fraudulent claims and the insurance companies or third party administrators are reluctant to incur the expense of surveillance. It is legally risky for an employer to engage in surveillance of a suspected fraudulent employee without insurance company or claims administrator involvement. Some employers use surveillance not only to expose claimants with fraudulent claims, but to also expose physicians who have imposed work restrictions that are far too restrictive. Such surveillance would be accomplished by showing a 18

19 videotape of the supposedly injured worker performing activities beyond the work restrictions originally prescribed by the physician. This has been effective for some companies in dealing with employee-selected physicians who are suspected of exaggerating injuries. Finally, despite the difficulty in effectively using surveillance as a tool to discredit fraudulent claimants or treating physicians for suspect and exaggerated injuries, some companies have elected to aggressively use surveillance to send a message to their company that any claim suspected as being fraudulent will be aggressively pursued. The effectiveness of any individual effort in surveillance is less important than the overall message sent to the entire company, and the anticipated reduction in fraudulent claims because of this message. These companies often take the approach of limiting the dollars that will be spent on any individual surveillance, in an effort to control the expense. Large Claim Indicators: In the past several years, frequency of claims has gone down while severity has gone up. At this time, the average claim value is approaching $40, in California. For this reason, Best Practices requires identification of potentially large claims as early as possible. Many companies have developed a list of indicators of potentially large claims. They have distributed these throughout the organization to people directly involved with workers compensation claims, as well as to frontline supervisors, so that all can be on alert for a claim that should be aggressively managed from day one. Some of the large claim indicators: A claimant s history of unemployment Extensive use of sick days by the claimant Suspected drug and alcohol use Marital difficulties Financial trouble An identified addictive personality A claimant s history of depression Anxiety High absenteeism as in general 19

20 Disciplinary actions in a claimant s personal file. Problems with coworkers Type of Claim Back & shoulder injuries. Knee sprains. Repetitive motion injuries. With regard to the type of claim, soft tissue injuries generally are capable of generating large claims because of the especially subjective nature of these injuries. The claimant s description of his/her experience of pain determines the nature and extent of treatment since there is often no specific evidence to the physician of the actual injuries. As such, there is the tendency for these types of such injuries to be misdiagnosed at the outset, and this combined with the subjective nature of the injuries can lead to significantly higher claim values as the claim develops differently than originally anticipated. Companies that use Large Claim Indicators encourage communication within the organization about claimants that may be subject to realizing an especially costly large claim. LIFTING INJURIES Lifting injuries are some of the most troublesome injuries in Workers Compensation. This is because of they are soft tissue injuries, often generating significant claim dollars not only for medical treatment but also for lost time payments. Because the injury is so subjective, diagnosis and treatment is based largely on the response of the claimant and to the pain that they are feeling. Lifting injuries are especially hard to prevent because of the complex dynamics surrounding lifting injuries: Lifting injuries are usually cumulative in nature, with a sudden traumatic incident that triggers the problem. Lifting can happen to employees exposed to daily lifting environments, as well as to those who have relatively sedentary jobs. Lifting injuries are hard to predict because they largely are based on the fitness of the particular employee at risk. 20

21 Lifting injuries are hard to prevent, because an employee who exhibits proper lifting technique routinely may suffer a lifting injury by failing to exercise proper lifting technique a single time. There is no way to put a maximum on weight that should be lifted. Even small amounts of weight can create and cause lifting injuries depending on other characteristics of the claimant and the work environment. The number of times per day that a particular weight is lifted is difficult to calculate in terms of predicting lifting injuries. Furthermore, lifting injuries are challenging because while there are many approaches an employer can attempt, there is very little data verifying the effectiveness of certain loss control techniques. It is commonly heard that one should bend at the knees. However, there is virtually no scientific evidence that this can help prevent lifting injuries. In addition, the use of back belt has proven controversial. Some companies have found the use of back belts to be helpful in reducing lifting injuries overall. Other companies have found that back belts create a sense of invincibility, causing employees to ignore lifting restrictions and thus often resulting in injuries. Perhaps the only rules that have been scientifically determined to make a difference in lifting exposures are the following: Avoidance should be pursued at all cost, whether that means the use of lifting tools in place of physical exertion or the solicitation of help from another person at all times. Keeping the item being lifted close to the body at all times during the lift can help prevent injuries. This is because an item held further away from the body creates more torque on the lower back. One should plant the feet squarely before lifting any item. One should also prepare to equally engage the muscles of the legs, hip, and back during the stress of the lift. Lifting injuries are often caused by twisting while lifting, flexion of the lower back. This movement prevents use of back muscles equally on both sides of the spine and puts undue pressure on particular areas of the lower back. This has often caused lifting injuries for sedentary people who are lifting items that are actually quite light. 21

22 LOSS ANALYSIS One of the difficulties of managing Workers Compensation claims is in gathering sufficient and appropriate data overtime. Part of this problem is due to a lack of industry wide standards for the data that should be gathered for each individual claim. Moving from one insurance company to another or one, third party administrator to another usually causes a change in the data that is being gathered. This is clearly a point that should be negotiated by every employer with an insurance company or third party administrator. Items to consider including as part of loss analysis would be the following: Date/time of injury Date/time reported Name of claimant Age of claimant Tenure of claimant (date of hire) Position description (e.g. mechanic) Department or Unit Unit/Unit Manager Supervisor at time of injury Whether the claim was witnessed Whether the claim was litigated Medical only injuries Indemnity costs Whether light duty was made available Whether light duty was accepted Description of the injury Injury codes Causation codes Obviously, at some point there is a balance in cost vs. benefit for the input of all of this data for each individual claim. 22

23 LOSS CONTROL Loss control is an extremely critical topic for any employer, but it is also specific to each person employer. Certain points, however, are common to all employers. First, it is commonly held that 80 percent or more of all accidents are due to unsafe behaviors or unsafe actions. Twenty percent or less of accidents happen because of unsafe conditions. In other words, loss control should focus on the behavior of employees and not strictly on the physical hazards of the premises. Secondly, virtually all experts agree that a loss control program requires more than anything else buy-in from management, from middle management and from the employees, in order for any loss control program to be effective. Often, loss control is delegated to specific people who are responsible for safety, with a little concern or emphasis from top management. This message does not go unnoticed by the employees of the company. There are four types of injuries that cause virtually 80 percent of all accidents. Slips, trips, and falls 35 percent of all injuries. Material handling 25 percent of all injuries. Employees struck by or against another object 10 percent of all injuries. Vehicle accidents 10 percent of all injuries. However, there are certain injury types that cause significantly more claim dollars than others do. In particular, low-back claims account for up to 30 percent of all claim dollars. Similarly soft tissue trauma, otherwise known as repetitive motion injury, is held to account for as much as 25 percent of loss dollars in the Workers Compensation system. LOW BACK INJURIES Low back injuries are the most common problems presented to occupational health and primary care providers. These complaints account from 20 to 50 percent of all occupational and non-occupational injuries, according to Workers Compensation insurance companies and the Bureau of Labor Statistics. Furthermore, low-back injuries are disproportionately expensive, accounting for over 30 percent of all Workers Compensation costs. Certain characteristics of low-back injuries stand out: 23

24 The nature of the injury is unique in that it is generally a gradual deterioration of muscular, skeletal, or nerve support in the body. Eight out of ten people are expected to have back pain in their lifetime. Ninety percent of all back injuries show a recurrence at some point. Fitness is a big key to prevention of injuries. 40 to 50-year-old employees are most likely to be injured due to a low- back problem. Training is the best prevention. Lifting should be avoided if at all possible. If necessary, the item lifted should be held close to the body, both feet firmly planted on the ground, and the employee should be conscious of using the musculature of the legs, hips, and back in lifting any item. At all costs, the body should not be turned or twisted or flexed while performing the lift. The item should be lifted straight up and set straight down. Ergonomics can help reduce the hazard. However, it must be recognized that ergonomics is designed in the job to fit each individual person. MEDICAL BILL REVIEW/UTILIZATION REVIEW Exports from managed care to Workers Compensation have been the implementation of Medical Bill Review and Utilization Review. Medical Bill Review is the review of bills from a physician, a clinic, or a hospital. Items reviewed include the following: Duplicate billings. Billings in excess of the state s Fee Schedule. Billings in excess of the contractual agreement between the medical provider and the Preferred Provider Organization (PPO) for which the medical bill review vendor is working at that time. In reality, the real value of the PPO is the discount negotiated by contract with the physician, clinic, or hospital. Any medical bill review vendor should catch duplicate billings and billings in excess of the fee schedule systematically. Utilization review is an effort to identify treatments that are not required according to the diagnosis in the medical file. A claims adjuster or a nurse case manager often performs utilization review. 24

25 In contrast, medical bill review is often automated with respect to identification of duplicate billings or billings in excess of the fee schedule. In comparing bids for medical bill review vendors, it is important to distinguish between contract reductions (reductions negotiated as part of the Preferred Provider Organization agreement with the medical provider), and reductions due simply to duplicate bill identification or reductions of bills to standard, statutory fee schedules. Identification of duplicate billings and reductions to fee schedule should not be credited to the PPO; only contract reductions in amounts billed should be credited to the PPO. Some insureds choose to test the efficiency and effectiveness of the medical bill review vendor. This is done by performing a test audit. First a representative sampling of medical bills is gathered, and then this sample is shared with three or four competitive medical bill review vendors. Each vendor then submits its analysis of the bills. The amount of the reductions achieved by each test participant will vary depending on a variety of circumstances, including auditor expertise, reductions according to PPO agreements, computer software capabilities, etc. MEDICAL CLINIC SELECTION Medical bill review, utilization review, and other managed care efforts are all attempts to simulate the results that have been achieved by employers who have developed a close relationship with a particular physician or a particular medical clinic. The ideal scenario for best managing Workers Compensation claims is to identify individual physicians or a group of physicians that: Have a thorough understanding of occupational medicine. Have an understanding of the importance of aggressive treatment as opposed to what many believe is the HMO model of delayed or deferred treatment. Have an understanding of return to work concepts and the consequences of careful wording when describing work restrictions. Will look out for the employer and the employees best interests by attempting to reduce the duration of disabilities and the overall cost of the claims (not simply the medical costs but the indemnity costs as well). 25

26 One of the failures of preferred provider organizations is the frequent inability to identify the best physicians, and not simply those that will accept a reduced rate for a greater volume of patients or a promise of prompt payment. Unfortunately, identification of physicians who have superior results in the treatment of occupational injuries is not readily available when consideration is given to the total cost of claims. Instead, employers are left to perform interviews and analyze the capabilities of an individual physician or a group of physicians within a clinic that will be responsible for treating the employees of that company. While many employers have developed checklists and questionnaires to try to assess the quality of a physician or clinic they are contemplating including in their occupational medicine programs, some of the more important questions to be answered are: Is the physician board certified in occupational medicine? Will the physician or clinic disclose historical success with regard to return to work opportunities involving occupational injury patients? (if the results are good, the clinic will generally be glad to publish return to work rates) Will the physician and/or clinic agree to perform services relative to getting injured workers back to the work force promptly? What is the percentage of the physician s or clinics patients that have ccupational injuries? Does the physician or others at the clinic have bilingual capabilities? What are the specialties of the physicians and the others on staff at the clinic? (These should align with the exposures for the particular client, meaning that, for instance, if the client primarily has a repetitive motion exposure, the clinic should have expertise in ergonomics) Will the treating physician/s be available by telephone for insurance questions from a claims adjuster or the employer? Is the physician willing to tour the employer s workplace to become familiar with return-to-work options, actual work duties of the employees, and the needs of the employer with regard to occupational medicine? Is a list of references readily available of other employers that have used this physician/clinic? 26

27 Will the physicians or clinic sign a release allowing current or previous occupational injury patients to talk freely about their experience with that particular physician and/or clinic? Will the physicians/group provide transportation for injured persons to and from the place of employment and/or the patient s residence? Many employers have found it especially useful to ask the occupational medicine physician/s to address company employees on an annual basis in an informal fashion, perhaps even at a company picnic or other social function. In this way, the physician can become known to the employees, and if an employee suffers an occupational injury, the physician will not be a stranger. MEDICAL PROVIDER NETWORKS (MPNs) Medical Provider Networks are relatively new concept with regard to California Workers Compensation. In layman s terms, MPNs are networks established by each insurance carrier to handle workers compensation injuries for that insurance company. Many MPNs are large medical providers such as PacifiCare and Kaiser, although many smaller clinics also qualify with certain insurance companies. California SB899 holds that when a Medical Provider Network treats occupational injuries, the claimant does not have the option after 30 days to select just any physician. Instead, the claimant is restricted to choosing another physician who is already part of the MPN. Prior to the implementation of MPN s, claimants could select virtually any treating physician to replace the employer- selected physician 30 days after the injury. Prior to the change, with regard to claims that were fraudulent or exaggerated, claimants often selected new treating physicians that would expand treatment and define the injuries so as to make the claims appear far more serious than originally defined, thus dramatically increasing the value of the claims. This often happened at the direction of an attorney that represented the claimant. This possibility still exists for employers that have not selected an occupational clinic that is part of their insurance company s Medical Provider Network. However, for those employers that have selected medical providers that are within their insurance company s MPN, it is said that these employers now have lifetime control of the claim, not just 30 days. (Note that there are important exceptions to the claim of lifetime.) The inability of a claimant or a claimant s attorney to select a physician outside of the network prevents that attorney and claimant from altering the original medical diagnosis, a significant new advantage for the employer. 27