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NEWSLETTERS
NEWSLETTERS
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561-683-8383
February 2008 |
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In this issue
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Case Study: Real Estate Developer Builds on $100,000 Savings and Lower Experience Mod
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Five Costly Mistakes Employers Make with Workers' Compensation Managed Care Organizations
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Roles and responsibilities in Workers' Compensation
Employers - Injured Employees - Medical Providers and Insurance Carriers
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Case Study: Real Estate Developer Builds on $100,000 Savings and Lower Experience Mod
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Insured
A large multi-state owner/developer of residential and commercial property.
Situation
The company was using a large insurance agency/broker who was having difficulty managing the company's claims in a multi-state environment. This complexity requires expertise as well as the time and resources to provide an adequate service level. Unable to get a handle on the Mod credits, the Experience Mod was beginning to climb.
Assessment
Certified WorkComp Advisors (CWCAs) conducted an analysis and discovered numerous errors in the reporting of the data to the various state ratings boards that were not being closely monitored. The company signed a BOR agreement and the CWCAs went to work.
Solution
The CWCAs immediately set up a program to favorably adjust the Mod by regularly checking and coordinating the loss-run ratios. They also put in place a monthly telephone review of all claims and open cases, set up a quarterly meeting and action plan aimed at minimizing the reserve, instituted early involvement with a nurse-care manager, and launched an aggressive Return-to-Work campaign, all working towards the goal of lowering the Mod and reducing premiums.
Result
Because of the work by the CWCAs, the client's Experience Mod came down and the client received a total return of $100,000 in premiums.
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Five Costly Mistakes Employers Make with Workers' Compensation Managed Care Organizations
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While Workers' Compensation Managed Care is widely viewed as a means of controlling expenses, the results are sometimes quite different from what is expected. In fact, in many cases the consequences are not only unintended but also undesirable and costly to employers. How is it that a system developed to manage the utilization of care and costs associated with Workers' Compensation actually ends up costing employers more than is necessary? Here are five common mistakes that are often made when working with WCMCOs:
1. Employers assume that the goals of the Workers' Compensation Managed Care Organization (WCMCO) are aligned with their goal of safely returning the employee to work as quickly as possible
When employers select a WCMCO, they believe they are engaging experts who share their objectives, in the same way they choose an attorney or accountant. On the surface this makes sense. When employees are injured, the goal of the employer is to provide the right treatment at the right time by the right physician so that the employees can safely return to work as quickly as possible.
On the other hand, the aims of the WCMCO are more complex and require an understanding of how they work. While they may share the employer's return-to-work goal, they also have to make a profit. As a result, when the WCMCO recruits physicians, they negotiate fees lower than those mandated by the state, bill at the mandated price and pay the discounted fees to the physician. The WCMCO is paid a percentage of the savings and the balance is reported as a savings to the employer.
This arrangement has two unintended and undesirable outcomes. First, top doctors are not attracted to the network. Second, it encourages increased utilization - more visits, more tests, etc. to make up for the loss of income. The more treatments, the more that is billed, and the more the WCMCO earns. It is well documented that utilization is a prime driver of medical costs in Worker's Compensation that are higher than in non-occupational employee health insurance. Ironically, the "savings" to the employer increases as more bills are processed.
2. Employers engage a WCMCO that does not have physicians who are properly trained in occupational medicine
The treatment of job-related injuries requires an expertise that transcends the medical model followed by physicians who are trained to treat pathology, disease and impairments. In Workers' Compensation cases, there needs to be an understanding of the functional requirements of the job, care coordination and communication with the employee and employer, a knowledge of the how the employer can accommodate an injured worker, and a grasp of the important psychosocial factors involved in returning to work.
Overworked physicians have little time or incentive to visit patients' workplaces or explore alternatives with the employer to maximize functional and vocational recovery. This responsibility falls to the nurse case manager whose role is to consult with physicians, assist in reviewing treatment plans and help facilitate the optimal and efficient recovery of the injured worker.
Again, the system sets the stage for undesirable outcomes. First, case management is in effect, a rework because the right work is not being done, adding another layer and more expense. Second, doctors do not perceive nurses as peer review. Lastly, many case managers are not properly trained, nor do they have the skills to coordinate and guide this complex process. In the white paper, The "Management" in Case Management, Byran Chong, IBM Global Social Segment, notes, "Between 10% and 50% of case managers in Workers' Compensation organizations are considered not fully effective at what they do. These employees lack knowledge and skills, and many are not motivated to improve."
The result is episodic care management with a focus on cases flagged for intervention by the payer, rather than a holistic approach of managing all those involved in the process to optimize outcomes.
In contrast, a study of Louisiana workers' compensation claims, showed how a specialized care network of occupational medicine physicians and other specialists with experience in treating Workers' Compensation patients and expert knowledge of the physical demands of work, resulted in significantly fewer lost days and 40% lower costs of care.
3. Employers don't realize the importance of Evidence-Based Guidelines
When concerns were raised with WCMCOs regarding over-utilization and higher than expected costs, the companies developed "Utilization Reviews" designed to monitor the care injured employees receive to ensure that it is appropriate, necessary and efficient.
It makes sense to have proven medical protocols for injuries so that the right treatments can be applied with the right schedule to get the injured worker back to work. While these protocols exist, many WCMCOs do not use them. Since the present system financially rewards the networks when a claim goes bad, there is an understandable reluctance to adopt these important measures.
The American College of Occupational and Environmental Medicine (ACOEM) Practice Guidelines Committee publishes scientific, evidenced-based Occupational Medicine Practice guidelines, commonly referred to as "ACOEM Guidelines." The ACOEM guidelines consider the frequency, duration, intensity and appropriateness of all modalities and procedures that are most commonly used in the treatment of injured workers and establish benchmarks for the return to work.
A study in the Society of Occupational Medicine, Evidence-based care for low back pain in workers eligible for compensation, concludes that those workers who had evidence-based care, had less time off work, spent less time on modified duty, and had fewer reoccurrences compared with those who had usual care.
While there is a body of research supporting the results of evidence-based guidelines, there remains a significant gap between the scientifically supported approaches to care and the day-to-day practice.
4. Employers don't engage in relationships with medical providers
So much of managing the cost of disability claims is working with the right doctor who can diagnose the injury correctly, knows the protocols for Workers' Compensation injuries, and is able to put in place proper guidelines for medical care and return to work. Rather than relying on discounts, employers should provide incentives by extending the scope of services to include post offer employment screening, drug testing and maintaining work wellness. An appropriate fee schedule combined with evidenced-based guidelines will ensure quality health care for injured workers, while reducing costs to employers.
5. Employers don't require quantitative measures of results
A crucial part of assessing the quality and effectiveness of any medical program is the development of appropriate performance measures. There is a surprising paucity of information on the results of care from WCMCOs. A project by the Robert Wood Johnson Foundation Workers' Compensation Health Initiative found that a number of barriers exist to introducing standard performance measures in WCMCOs, including the inadequacy of patient data maintained by WCMCOs and the low demand from purchasers for the standard performance measurers.
Employers need to be proactive and insist that they receive:
a. Qualifications of the physicians and nurse case managers: are they properly trained experts in the care of occupational injuries?
b. Timely and appropriate care: are evidence-based guidelines used?
c. Outcomes: duration of disability, reduction in medical and indemnity costs, return to work, employee satisfaction.
d. Disability prevention: is there a program to match fitness to job requirements, post offer employment screening, etc.
WCMCOs were implemented to provide high-quality, cost-efficient service to the injured employee and their employers. All too often the present system, as structured, produces unintended bad results. Employers need to proactively turn their attention to the way Workers' Compensation Organizations think about, implement and measure their performance. |
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Roles and responsibilities in Workers' Compensation
Employers - Injured Employees - Medical Providers and Insurance Carriers
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In determining why employers have losses, one of the most common problems we find is that responsibilities are blurred and are not articulated. As a result, the process gets off track, time is wasted and costs escalate.
While roles and responsibilities will vary depending upon company policy, here are some general guidelines:
Employer responsibilities
* Provide a safe work environment
* Develop written Return-to-Work policies and procedures
* Educate all employees about the program
* Train employees on proper reporting of incidents and incident investigation
* Promptly report job related injuries to the insurance carrier
* Provide information to employees about the Workers' Compensation system and benefits
* Develop a Return-to-Work information package for medical providers
* Regularly communicate with the injured worker during the time away from work and monitor progress upon the injured worker's return to the job
* Make every effort to develop and provide meaningful return to work opportunities
* Proactively communicate with the treating doctor and insurance carrier to encourage recovery and return to work
* Develop functional job descriptions and identify physical requirements that clearly identify physical activities required to do the work
* Hold medical providers and insurance carriers accountable for providing data to effectively measure results of disability duration and treatment
* Evaluate the program
Employee responsibilities
* Know and follow safety policies and procedures
* Report any injury immediately
* If medical attention is necessary, inform your treating doctor that return to work opportunities are available to accommodate your physical abilities
* Provide your doctor with a Return-to-Work Information Packet as provided by your supervisor
* Notify your supervisor immediately if your work status changes
* When your doctor releases you to return to work, report on the next regular shift and
* Follow your doctor's orders and restrictions at home and at work.
Insurance Carrier responsibilities
* Ensure proper administration of all Workers' Compensation claims
* Maintain communication with the injured employee, health care providers, and the employer;
* Encourage and actively assist injured workers in the successful return to work.
Health Care Provider responsibilities
* Provide appropriate, effective medical treatment that facilitates recovery and expedites return to productive work (evidence-based guidelines)
* Learn about the employer's Return-to-Work program
* Set reasonable return to work and recovery goals from the beginning of treatment
* Work with employer to encourage appropriate return to work opportunities
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Return-to-Work programs: getting started
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An early Return-to-Work program should be simple, realistic, and suitable to the employer's business needs. Putting the policy and procedures in writing is the first important step.
A written policy statement reinforces the company's commitment to the program and helps make the expectation of early return to work an integrated part of the company culture. It helps to show that the company values its employees. Written documents provide readily available information helpful in communicating with employees, health care providers and insurance carriers. Having the information in writing ensures that everyone has the same information and helps ensure consistent application of the program.
Policy Statement
Write, adopt, and post a policy statement that is brief and broadly written so that it does not require frequent revision. Post the policy statement in an easily accessible place as a constant reminder and encouragement of early return to work following a work related illness or injury. Include statements that do the following:
* Confirm the company's commitment to the early Return-to-Work program;
* Explain the company's Return-to-Work philosophy; and
* Stress the importance of safe operations and prevention of injury.
Procedures and Responsibilities
Write procedures that explain step by step what will happen from the time of an injury until after the injured worker returns to work. Include clearly stated and detailed instructions that identify specific roles and responsibilities. Identify the primary contact person and provide contact information.
Roles, responsibilities, and procedures may vary depending on the program and on other company policies and specific expectations. Provide information such as:
* Who an injured worker should notify in the event of an injury
* What are the procedures for the injured worker to follow
* Who is responsible for completing the Employer's First Report
* Who is responsible for maintaining contact with the injured worker
* What an injured worker can expect from the insurance carrier, treating doctor, and others
* How and who determines the availability of medically appropriate work assignment
* How the incident is investigated
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