AORMA Worker s Compensation Claims Review and Loss Control Strategies January 19, 2013 Cindy Parker Vice President of Operations Sedgwick Claims Management Services Brent Escoubas, CSP Vice President Alliant Risk Control Consulting
Agenda SB 863 AORMA WC Loss Summary Loss Control Strategies
SB 863 IN FOCUS Presented by: Cindy Parker, Vice President Sedgwick 2012 Confidential Do not disclose or distribute.
Background According to a recent Workers Compensation Insurance Rating Bureau (WCIRB) study Costs are up 41% since 2005 - when costs were at their lowest level - and 14 % above the highest level prior to the reforms The bill streamlines processes and clarifies procedures to reduce fraud Sedgwick 2012 Confidential Do not disclose or distribute. 4
Background 9/18/2012 - California Governor Edmund Brown signed into law SB 863, a comprehensive workers compensation reform package designed to bring balance to the workers compensation system. The Governor challenged the legislature to pass a reform bill that would decrease loss adjustment costs and eliminate areas of abuse while increasing benefits to injured employees Representatives from labor and management negotiated a reform package, which was presented to and passed by the legislature on 8/31 Sedgwick 2012 Confidential Do not disclose or distribute. 5
Sedgwick 2012 Confidential Do not disclose or distribute. Permanent Disability
Permanent Disability Increases aggregate permanent disability (PD) benefits phased in over a 2-year period Adjusts the formula for calculating the benefit amount so that: Compensation amounts more accurately reflect loss of future earnings Ensures that no class of injured workers receive a lower award than under the present system Weekly PD rates for injuries occurring on/after 1/1/2013 will vary from $230 to $290 per week depending on the percentage of disability For injuries on/after 1/1/ 2014 the rate will increase to $290 a week regardless of the percentage of disability Rates currently vary between $230 to $270 per week Sedgwick 2012 Confidential Do not disclose or distribute. 7
ELIMINATES Permanent Disability diminished future earning capacity (DFEC) from the determination of permanent disability; all PD will be multiplied by 1.4 the requirement to increase or decrease permanent impairment benefits by 15% due to an offer of return to work for dates of injury on or after 1/1/2013 psychological, sleep disorder, and sexual dysfunction add-ons to primary injuries that do not originally include these injuries when calculating the level of PD; requires all appropriate medical treatment for these injuries This will apply to all dates of injury on/after 1/1/2013 Sedgwick 2012 Confidential Do not disclose or distribute. 8
Independent Medical Review (IMR) Sedgwick 2012 Confidential Do not disclose or distribute.
Independent Medical Review (IMR) Allows the employee to appeal a utilization review decision or MPN dispute by requesting an Independent Medical Review (IMR) Eliminates the WCAB s authority to adjudicate medical treatment disputes that are directed to the IMR process Establishes a hierarchy of standards that are to be applied by the IMR, with the Medical Treatment Utilization Schedule as the highest source for evaluating the appropriateness of medical treatment Makes the results of the IMR process binding on all parties, absent clear and convincing evidence of fraud or conflict of interest Note: Effective for all dates of injury as of 7/1/2013 Sedgwick 2012 Confidential Do not disclose or distribute. 10
Independent Medical Review (IMR) The California Division of Workers Compensation is currently in contract negotiations with Maximus Maximus, based out of Reston VA, reported revenues of $929.6 million in 2011 and is anticipated to surpass the billion mark for 2012 Maximus is currently utilized by the CA Department of Managed Care Health to provide IMR services relating to group health disputes Maximus reported in 2010 that it had 500 reviewers capable of completing 7,500 reviews per month Sedgwick 2012 Confidential Do not disclose or distribute. 11
Independent Bill Review (IBR) Sedgwick 2012 Confidential Do not disclose or distribute.
Independent Bill Review (IBR) Provider who disagrees with the amount paid by the employer must request that the employer reconsider its findings within 90 days of receipt of the explanation of benefits If the only dispute is the amount of the payment and the provider does not request a second review within 90 days the bill shall be deemed satisfied and neither the employer nor the employee shall be liable for any further payment. The employer must respond with a final written determination on each of the items or amounts in dispute with 14 days of a request for second review. Any additional payment owed must be paid within 21 days of receipt of the request for second opinion Sedgwick 2012 Confidential Do not disclose or distribute. 13
Independent Bill Review (IBR) Establishes an independent bill review process to make medical billing disagreements process similar to the IMR process, limiting the need for lien filing. If the only dispute is the amount of payment and the provider has received a second review that does not resolve the dispute the provider can request an independent bill review within 30 days of receipt of the second review. If the provider fails to request an independent medical review within 30 days of receipt of the second review the bill shall be deemed satisfied. Sedgwick 2012 Confidential Do not disclose or distribute. 14
Independent Bill Review (IBR) Duplicate submissions of medical service itemizations, for which an explanation of review was previously provided, shall require no further or additional notification or objection by the employer to the medical provider and shall not subject the employer to any additional penalties or interest for failing to response to a duplicate submission Sedgwick 2012 Confidential Do not disclose or distribute. 15
Liens, Fee Schedules, Medical Care, etc. Sedgwick 2012 Confidential Do not disclose or distribute.
Liens Prohibits the filing of a lien for matters that are subject to the IMR and IBR dispute resolution process Prohibits the ability of medical providers to recover for unauthorized treatment for a known industrial condition Establishes a $150 filing fee in order to file a lien and a $100 activation fee for legacy liens, recoverable if the lien claimant prevails Adopts statutes of limitation within which liens must be filed 3 years for dates of service prior to 1/1/2013 18 months for dates of service after 1/1/2013 Sedgwick 2012 Confidential Do not disclose or distribute. 17
Fee Schedules Adopts a fee schedule for ambulatory surgery centers (ASCs), home care services, and photocopy services. Requires the Administrative Director to adopt a medical fee schedule methodology based on the Medicare Resource Based Relative Value Scale (RBRVS) system, with specified modifications for California s workers compensation system, including geographic adjustments Clarifies the rules that govern the fee schedule applicable to vocational expert compensation Sedgwick 2012 Confidential Do not disclose or distribute. 18
Medical Care Closes a loophole that allowed third parties and hospitals to charge twice for implantable surgical hardware Repeals the requirement that a second opinion be obtained in cases of spinal surgery, and instead would resolve questions of appropriateness of spinal surgery in the IMR process Provides that a chiropractor who has reached the 24 visit cap cannot serve as the injured worker s primary treating physician Sedgwick 2012 Confidential Do not disclose or distribute. 19
Interpreters Requires that the injured worker request interpreting services from the employer when needed. This will allow the employer to channel services. Provides that the employer must pay for needed interpreter services when requested by the injured worker. Requires that interpreters be certified, and authorizes the Administrative Director to establish, operate, or contract for an interpreter certification program. Sedgwick 2012 Confidential Do not disclose or distribute. 20
Return to Work Modifies the Supplemental Job Displacement Benefit rules to solidify the reimbursement amount for all injuries to $6,000 Prohibits cashing out the retraining voucher in a settlement Specifies that an injury that occurs during retraining does not constitute a compensable injury Creates an annual $120 million return-to-work program derived from the Workers Compensation Administrative Revolving Fund for compensating workers whose permanent disability benefits are low in comparison to their earnings loss Sedgwick 2012 Confidential Do not disclose or distribute. 21
Self Insurance Professional employer organizations and temporary service agencies will not be able to apply for self insurance in the state on or after 1/1/2013 A certificate of consent to self-insure shall not be issued after 1/1/2013, to any professional employer organization or temporary services employer All self insurance certificates for these employers will be cancelled as of 1/1/2015 The minimum self-insured annual security deposit will no longer be based on a percentage of the estimated future liability Deposits will be based on an actuarial report that each self insured entity will calculate and produce as of 12/31 of each year The Office of Self Insurance Plans will start a higher level of monitoring for public entities: the Office Director will establish a schedule to evaluate costs of administration, workers compensation benefits expenditures, and solvency and performance of public self-insured employer workers compensation programs Sedgwick 2012 Confidential Do not disclose or distribute. 22
Sedgwick 2012 Confidential Do not disclose or distribute. THANK YOU
Top Five Body Part Groups System-wide Body Part Claim Count Total Incurred Upper Extremity (including shoulders) 443 $1,190,587.41 Lower Extremities 239 $ 717,929.62 Spine (including hips/pelvis) 136 $ 426,797.22 Head, Face & Mouth 115 $ 66,834.28 Trunk & Internal Organs 27 $ 44,097.61 Body Part Claim Count Total Incurred Upper Extremity (including shoulders) 443 $1,190,587.41 Lower Extremities 239 $ 717,929.62 Spine (including hips/pelvis) 136 $ 426,797.22 Psyche 12 $ 102,330.10 Head, Face & Mouth 115 $ 66,834.28 $102,330.10 $66,834.28 27 115 Upper Extremity (including shoulders) Upper Extremity (including shoulders) 136 443 Lower Extremities Spine (including hips/pelvis) $426,797.22 $1,190,587.41 Lower Extremities Spine (including hips/pelvis) Head, Face & Mouth Psyche Trunk & Internal Organs $717,929.62 Head, Face & Mouth 239
Top Five Incident Types System-wide Incident Type Claim Count Total Incurred Cut / Puncture / Scrape 218 $117,208.87 Slip / Trip / Fall 173 $473,795.02 Lifting /Carrying 135 $545,061.65 Struck by / Against 116 $494,683.17 Burn 63 $ 18,597.81 Incident Type Claim Count Total Incurred Lifting /Carrying 135 $545,061.65 Struck by / Against 116 $494,683.17 Slip / Trip / Fall 173 $473,795.02 Repetitive Action / Motion 48 $393,390.27 Exposure / Other 40 $349,457.49 63 $349,457.49 116 218 Cut / Puncture / Scrape Slip / Trip / Fall $545,061.65 Lifting /Carrying Struck by / Against Lifting /Carrying Struck by / Against Burn $393,390.27 $494,683.17 Slip / Trip / Fall Repetitive Action / Motion Exposure / Other 135 $473,795.02 173
Top Five Body Part Groups Location Comparison by Claim Count Auxiliary A Body Part Claim Count Total Incurred Upper Extremity (including shoulders) 22 $ 21,985.54 Lower Extremities 18 $ 26,373.95 Head, Face & Mouth 8 $ 5,775.14 Spine (including hips/pelvis) 6 $ 16,408.99 Trunk & Internal Organs 3 $ 480.61 Auxiliary B Body Part Claim Count Total Incurred Upper Extremity (including shoulders) 25 $ 6,593.62 Lower Extremities 15 $ 13,316.30 Spine (including hips/pelvis) 11 $ 16,339.23 Trunk & Internal Organs 4 $ 993.44 Head, Face & Mouth 3 $ 1,301.27 Auxiliary C Total Body Part Claim Count Incurred Upper Extremity (including shoulders) 58 $ 38,461.01 Head, Face & Mouth 20 $ 15,714.25 Lower Extremities 19 $ 9,899.92 Spine (including hips/pelvis) 14 $ 17,623.12 Trunk & Internal Organs 3 $ 633.74 6 3 Upper Extremity (including shoulders) Lower Extremities 4 3 Upper Extremity (including shoulders) Lower Extremities 14 3 Upper Extremity (including shoulders) Head, Face & Mouth 8 18 22 Head, Face & Mouth Spine (including hips/pelvis) Trunk & Internal Organs 11 15 25 Spine (including hips/pelvis) Trunk & Internal Organs Head, Face & Mouth 19 20 58 Lower Extremities Spine (including hips/pelvis) Trunk & Internal Organs
Top Five Body Part Groups Location Comparison by Total Incurred Auxiliary A Body Part Claim Count Total Incurred Lower Extremities 18 $ 26,373.95 Upper Extremity (including shoulders) 22 $ 21,985.54 Spine (including hips/pelvis) 6 $ 16,408.99 Head, Face & Mouth 8 $ 5,775.14 Trunk & Internal Organs 3 $ 480.61 Auxiliary B Body Part Claim Count Total Incurred Spine (including hips/pelvis) 11 $ 16,339.23 Lower Extremities 15 $ 13,316.30 Upper Extremity (including shoulders) 25 $ 6,593.62 Head, Face & Mouth 3 $ 1,301.27 Trunk & Internal Organs 4 $ 993.44 Auxiliary C Body Part Claim Count Total Incurred Upper Extremity (including shoulders) 58 $ 38,461.01 Spine (including hips/pelvis) 14 $ 17,623.12 Head, Face & Mouth 20 $ 15,714.25 Lower Extremities 19 $ 9,899.92 Trunk & Internal Organs 3 $ 633.74 $5,775.14 $480.61 Lower Extremities $1,301.27 $993.44 Spine (including hips/pelvis) $9,899.92 $633.74 Upper Extremity (including shoulders) $16,408.99 $21,985.54 $26,373.95 Upper Extremity (including shoulders) Spine (including hips/pelvis) Head, Face & Mouth $6,593.62 $13,316.30 $16,339.23 Lower Extremities Upper Extremity (including shoulders) Head, Face & Mouth $15,714.25 $17,623.12 $38,461.01 Spine (including hips/pelvis) Head, Face & Mouth Lower Extremities Trunk & Internal Organs Trunk & Internal Organs Trunk & Internal Organs
Top Five Incident Types Location Comparison by Claim Count Auxiliary A Body Part Claim Count Total Incurred Slip / Trip / Fall 15 $ 7,149.34 Cut / Puncture / Scrape 13 $ 1,980.01 Lifting /Carrying 9 $116,513.18 Burn 6 $ 541.97 Strain 4 $ 79,182.74 Auxiliary B Body Part Claim Count Total Incurred Cut / Puncture / Scrape 16 $ 2,918.68 Lifting /Carrying 11 $ 7,559.51 Slip / Trip / Fall 8 $ 14,715.52 Burn 7 $ 2,076.39 Struck by / Against 5 $ 2,323.32 Auxiliary C Body Part Claim Count Total Incurred Cut / Puncture / Scrape 30 $ 11,912.60 Slip / Trip / Fall 17 $ 47,961.86 Struck by / Against 13 $ 8,593.05 Lifting /Carrying 12 $ 11,941.98 Burn 9 $ 3,838.25 6 4 15 Slip / Trip / Fall Cut / Puncture / Scrape 7 5 16 Cut / Puncture / Scrape Lifting /Carrying 12 9 30 Cut / Puncture / Scrape Slip / Trip / Fall Lifting /Carrying Slip / Trip / Fall Struck by / Against 9 Burn 8 Burn 13 Lifting /Carrying 13 Strain 11 Struck by / Against 17 Burn
Top Five Incident Types Location Comparison by Total Incurred Auxiliary A Body Part Claim Count Total Incurred Lifting /Carrying 9 $116,513.18 Strain 4 $ 79,182.74 Repetitive Action / Motion 4 $ 19,834.48 Twist 2 $ 15,484.91 Slip / Trip / Fall 15 $ 7,149.34 Auxiliary B Body Part Claim Count Total Incurred Fall from Elevation 1 $ 15,242.04 Slip / Trip / Fall 8 $ 14,715.52 Lifting /Carrying 11 $ 7,559.51 Bending,Stooping,Squatting, Climbing 4 $ 6,130.16 Cut / Puncture / Scrape 16 $ 2,918.68 Auxiliary C Body Part Claim Count Total Incurred Slip / Trip / Fall 17 $ 47,961.86 Stress: Emotional / Psychological 2 $ 26,920.01 Lifting /Carrying 12 $ 11,941.98 Cut / Puncture / Scrape 30 $ 11,912.60 Running / Walking 4 $ 10,002.04 $15,484.91 $19,834.48 $7,149.34 Lifting /Carrying $2,918.68 Fall from Elevation $11,912.60 $10,002.04 Slip / Trip / Fall $79,182.74 $116,513.18 Strain Repetitive Action / Motion Twist Slip / Trip / Fall $6,130.16 $15,242.04 $7,559.51 $14,715.52 Slip / Trip / Fall Lifting /Carrying Bending,Stooping,Squatting, Climbing Cut / Puncture / Scrape $11,941.98 $26,920.01 $47,961.86 Stress: Emotional / Psychological Lifting /Carrying Cut / Puncture / Scrape Running / Walking
Did you know Alliant Risk Control provides safety consulting services for all AORMA members at no additional charge? 30
Safety Self-Assessment 1. Does your Auxiliary have a current Safety Program and IIPP? 2. Do all new employees receive safety related training prior to beginning work? 3. Are accident investigation reports conducted? And are they conducted in within 24 hours? 4. How does your Auxiliary record/report a near miss? 5. Are supervisors informed of work related injuries and losses? Of other like departments? 31
Safety Self-Assessment 6. Is safety training fully documented and kept on file? 7. Are safety assessments shared with employees? How often? 8. Are emergency evacuation procedures up to date? 9. Does the Auxiliary have a Cal/OSHA inspection policy? 10. Are key employees trained in CPR, AED and First Aid? 32
IIPP Introduction Title 8 California Code of Regulations Section 3203(T8 CCR 3203) Injury/Illness Prevention Program(IIPP) Each Auxiliary is required to have a written program. A copy must be maintained at each site. Employees must be informed of the IIPP. 42
Injury Illness Prevention Program The components of this Program are: 1. Responsibilities under the IIPP 2. Compliance 3. Communication of Workplace Hazards 4. Hazard Assessment 5. Accident/Exposure Investigations 6. Hazard Correction 7. Training and Instruction 8. Recordkeeping 43
Risk Control Services Hazard Assessment and Regulatory Compliance (Cal/OSHA) Slip/Fall Assessments Kitchen Safety Workers Compensation and Liability Claims Audits Premises Liability Loss Control Audits Fire and Property Protection Accident Investigation Custom Specific Self-Inspection Programs and Checklists Ergonomic Evaluations and Program Development 44
Custom Programs Golf Cart Training Special Event Risk Management Customer Service Fraud Prevention Ergonomics Aquatics Risk Management Passenger Van Safety 45
Loss Control Solution Center Hotline Live telephone advice, research, problem solving by loss control experts. Toll Free (888) 737-4752 or 949-260-5042 46
Sedgwick Participants
Brent Escoubas, C.S.P. Vice President Alliant Risk Control Consulting 1301 Dove Street, Suite 200 Newport Beach, CA 92656 949-260-5013 bescoubas@alliant.com