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A Message From Our Captain
by Ed Taylor
I recently saw a comic strip in which a New Year’s resolution was defined as something people do for a week before going back to their old bad habits. When it comes to workers’ comp, it’s a matter of legislative reform that sparks a short term change followed by a gradual return to the patterns of yore. With the new reforms for 2013, don’t you think we all should try something a little different? We here at RiskSolutions have always seen claims in a different light. Our approach is entirely focused on cutting the fat out of claims as early on as possible. With Nurse On Call, we help employers triage incidents up front which helps trim unnecessary trips to the clinic. Those claims that make it through would then be eligible for our next product, DREI, which we will be rolling out in the next few weeks. DREI stands for Delayed Recovery Early Intervention and is a patent pending process we use up front with any carrier or administrator’s predictive modeling. It is an algorithm that helps detect cases where employers and insurance carriers typically spend excessive amounts of resources on cases that began as seemingly benign injuries. This will, in turn, route the injured workers to appropriate providers to address the red flags we see during our interview process (effectively the three point contact). The research we have shows this sort of intervention does effect a significant cost savings early on in the claim.
Helping to Navigate the Troubled Waters of Workers Compensation Winter 2013
Table of Contents
What Is Early Intervention? ……….pg. 2 Comp Wars: The Return of the Injured Worker . …………………….pg. 2 The Winds of Change ………………pg. 4 The Trials of Sisyphus: Creating New Boundaries for Medical Providers and Lien Claimants in the Shadow of SB863 ……………………………….pg. 6
other products, you will see a decrease in frequency from Nurse on Call and a decrease in severity from DREI. Claims Oversight will also work to reduce overall severity and duration. All of these factors go toward lowering one’s XMod. Of course, we’re not content to rest on our laurels. There is still much debate about how and where new legislation will generate a cost savings. If you’ve recently seen another premium increase from your carrier, know that this is industry wide. The numbers keep showing us a hardening market and State Fund’s change in position on its broker relationships will tell you that there’s still more to be done. Stay tuned, because we have many new products, ideas and services that we’ll be working to develop in the months to come.
Ed Taylor, CEO and one of the founders of RiskSolutions Inc. has more than 35 years of experience in the risk management field. He brings a passion for safety and employer service to RiskSolutions. His goal is to provide a safe workplace for Our final component is Claims Oversight, with which workers and to educate employers and brokers. The we’re certain you’re all very familiar. Our expert team company name expresses Ed’s commitment to the industry of of analysts work with adjusters, defense attorneys, which he is a part. As the captain, Ed directs an outstanding employers and brokers to enact creative and effective crew who will gladly plot the safest course through the solutions to each individual claim. When used with our treacherous waters of the workers’ compensation system.
What Is Early Intervention?
by Linda Taylor
If you had asked me this question 10 years ago I would have given you several components that I believed were necessary to early intervention: Ÿ Timely and appropriate medical treatment Ÿ Maintaining contact between the employer and the injured worker Ÿ Assigning a nurse case manager to the file if lost time is involved Ÿ Keeping the injured worker well informed on how the workers' compensation system works (a duty of the adjuster). While all of these things are essential, they do not help prevent a claim from “going south", resulting in higher costs for the employers and insurance carriers. Over the years I have found that there are often several indicators that can help us flag these problem claims early on. There has been a great deal of research that shows that psychosocial issues are prevalent in claims that become our most costly and difficult to handle. It becomes clear that we must have a way to distinguish any potential risk factors when investigating a claim. Over the last year, RiskSolutions has developed an algorithm that can be utilized during the three-point contact to identify psychosocial issues and several other red flags. We are excited to announce the rollout of this product during the first quarter of 2013. We are dedicated to providing medical cost containment services that really work. This issue of our newsletter is dedicated to bringing our clients up to speed with breaking legislation and education on our new product. I wish you all a safe, happy, and successful 2013.
Linda Taylor, CSIA, WCCP, RN, CE, COO and co-owner of RiskSolutions, has more than 30 years in the workers’ compensation and risk management fields. She combines claim knowledge with medical knowledge to complete the picture for total claims management. Her goal is to provide the best outcome possible for the employer, injured worker and other stakeholders that struggle with a very complex system. Her experience, vision and insight drives a holistic approach to claims management that empowers employers to create their own safe harbor during these stormy times in workers’ compensation.
Comp Wars: Return of the Injured Worker
by Lisa Sanchez
In what seems like an endless sci-fi space opera, legislation and case law continuously change the landscape of California workers’ compensation. There is never a clear winner or loser except to say that many attorneys will be seeing an increase in their billable hours. Though there is no single solution that will fix the system, we hope this article will give you a few Jedi mind tricks to help navigate the upcoming year. Some significant changes implemented by SB 863 will affect the return-to-work benefits and incentives currently in place. There is now a $120 million Returnto-Work Program designed to make supplemental payments to workers whose permanent disability benefits are disproportionately low in comparison to their earnings loss, though how it will be applied continues to evolve. According to some experts, this additional investment may end up saving employers money by averting litigation and keeping some cases from going to life pension. Permanent Disability Previously, an incentive for employers to re-employ injured workers was the 15% decrease in permanent disability (PD) benefits owed to an injured worker when an offer of a permanent modified position was
Also, an injured worker can purchase computer equipment up Additionally, the maximum PD to $1,000. Keep in mind that rate is increasing starting with iPads and other tablet PCs might rating above 55% from $270 be classified as a computer. Part per week to $290. In 2014, this of the voucher may be used to will increase across the board. reimburse up to $500 in Furthermore, actual ratings will miscellaneous expenses and does automatically increase with the Diminished Future Earnings Capacity (DFEC) ratio not require a receipt, itemization, or any verification whatsoever when it is presented to the carrier for being removed from the PD rating equation. reimbursement. Up to 10 percent ($600) may be used to pay for the services of a licensed placement agency or Finally, add-ons for psyche (stress), sleep disorder and vocational counselor. sexual dysfunction will be going by the wayside – this is equivalent to blowing up the Death Star. Sure, the In the past, we have successfully negotiated the applicant’s bar is going to figure out a way around it, removal of SJDB reserves by virtue of the fact that the but for now we can celebrate knowing that there will be SJDB voucher was rarely used by the injured worker, fewer med-legal exams to contend with (a.k.a. lower but there is now a significant probability that up to medical reserves) and a lower PD rating at the end of $1500 of the voucher will be used routinely by injured the day. But do bear in mind that Almaraz/Guzman is workers. We will continue to bring you return to work still very much in play. strategies. Supplemental Job Displacement Benefit (SJDB) Up until last year, the Supplemental Job Displacement Benefit (SJDB), ranged from $4,000 to $10,000, depending on the Permanent Disability rating of the injured worker. This benefit applies when an injured worker has reached MMI and no permanent modified position is available. The significant change that will occur with this benefit is that there is now a $6,000 voucher across the board, regardless of the Permanent Disability rating. Additionally, where the SJDB is issued after 1/1/13, an expiration date will be in place of two years from the date it was furnished to the injured worker or five years from date of injury – whichever comes later. On dates of injury prior to 1/1/13, the SJDB will continue to have no expiration date. According to the Department of Industrial Relations, the voucher can be used for training at a California public school or any other provider listed on the state’s eligible training Case Law Pertaining to eligibility of Temporary Disability benefits An important decision made by the California Workers’ Compensation Appeals Board that limits Temporary Total Disability benefits to illegal workers still stands. In the Esparza v. Barrett Business Services case law, an employer would not be liable for TTD or SJDB to an undocumented injured worker if that individual’s immigration status is the sole reason he cannot return to work. In Esparza, the applicant sustained an admitted industrial injury to his head, neck and right shoulder on 12/21/10. His physician then medically cleared him to return to modified duty. The employer was able to accommodate these work restrictions but then discovered the applicant’s invalid Social Security number after the injury and would not allow the applicant to return to modified duties without proper work documentation. The case went to trial and the judge initially awarded benefits. Upon reconsideration,
made within 60 days of being informed the injured worker reached Maximum Medical Improvement (MMI). SB 863 eliminated this incentive for injuries on or after 1/1/13.
provider list. It can also be used to pay licensing or certification and testing fees or to purchase tools required by a training course.
the Board rescinded the prior Findings & Award. They found the applicant was not entitled to the temporary disability as he was unable to legally accept the employer’s offer of modified or alternate work.
and sexual dysfunction add-ons are gone, overall permanent disability ratings will go up. The permanent disability rate will be increasing, as well. Thankfully, the changes to the rating schedule are only mathematical in nature and will not be as radical as In short, all of these developments paint a brand new going from the work restrictions of the ’97 PDRS to the picture for the upcoming years and we’re here to help activities of daily living from the AMA Guides and ’05 develop strategies that will fully maximize the benefits PDRS. or mitigate the consequences of new legislation and case law to bring “a new hope” to employers There are many positive changes to the fee schedules everywhere. and how liens are handled. There are new fee schedules coming out to cover many of the services which were Lisa Sanchez, CSIA, WCCP is a graduate of the previously unregulated. Also, the Independent Medical University of California, Riverside and has a Bachelors Review (IMR) and Independent Bill Review (IBR) degree in Business Administration. She is a seasoned processes promise to reduce treatment disputes and bilingual claims adjuster with more than eight years bring some certainty to the adjudication of medical experience, having handled claims at a self-insured, payments while lifting the burden of these functions self-administered employer before being drafted to the RiskSolutions team. She brings a unique, employer-driven from the overburdened WCAB. However, this also perspective with her and hands on experience working means that defendants will need to be more judicious one-on-one with management and injured workers alike with Utilization Review.
helps employers to fathom the endless depths of California’s Every round of legislation carries its fair share of workers’ compensation system.
The Winds of Change
by James Carey
The Mayans had it all wrong. January 1, 2013 is our date with destiny. Defense attorneys and hearing representatives continue to do battle with undying liens at the WCAB. Adjusters are scrambling to learn the new regulations and get the indemnity rates straight. Meanwhile, the fog of uncertainty still lingers, as evidenced by the showdown between the WCIRB and Department of Insurance, ending with an overall increase in pure premium rates. The regulations are being drafted and we have many years of case law ahead of us. In spite of the promises the new laws bring us, this round of legislation is truly a double-edged sword. Though psyche, sleep disorder
double-edged swords and the foregoing are but a few examples of the battles we anticipate in the coming years. While cost savings are there, it will take time to develop effective strategies. One of the most important things to remember is often the most overlooked in workers’ compensation – that seemingly minor claims can develop catastrophic-level reserves. There are many factors that can contribute this phenomenon, known as delayed recovery, and more than thirty years worth of research has been done to mete out the reasons why. The latest buzzword is taking a “biopsychosocial” approach to treatment and relies on a model of care that effectively treats the whole body. It starts with identifying the injured workers who will benefit from medical care that extends beyond the typical treatment guidelines. However, how does one determine which cases are going to develop exponentially over cases that may experience only small delays? Some red flags may signal a delayed recovery whereas others may simply be a transient frustration experience by the injured worker. Either way, the best way to approach the specter of delayed recovery is with a screening protocol
that helps sift out minor medical only or limited lost time claims from those that will ferment and fester into the unholy nightmares that we all dread to talk about at claims reviews. Some approaches include predictive modeling where demographic data, input from the first notice of loss and other regional data are employed to identify possible high risk triggers at the initial triage. Others involve a more passive approach like having a claims adjuster or nurse case manager fill out a questionnaire. This is where our latest product, DREI comes into play. It is a unique algorithm that we employ up front as the initial claims contact, utilizing psychosocial screening techniques to identify red flags and triggers for potential delayed recovery claims. It is designed to work independently or in tandem with existing predictive modeling techniques and ensures that suspect claims are triaged to appropriate claims and medical personnel. Taking inputs from the initial contact with injured workers, employers and medical providers, our process specifically targets the psychological processes and sociological constructs that would foster an ideal environment for a delayed recovery claim, similar to cleaning an open wound and bandaging it before infection has a chance to set in. Secondarily, the insights gleaned from our process make it such that these statements can be utilized in litigation and become a part of the official record. Finally, we have developed a protocol for referring claimants to appropriate medical providers and monitoring the treatment going forward. The research we have gathered points to a variety of Predictors for a delayed recovery and techniques for resolution and avoidance. These factors include: perceived injustice (e.g. pay inequity, perceived discrimination), motive for secondary gain (financial stressors vs. opportunism), fear of pain (a precursor to opioid dependency), pre-existing psychological sequelae, childhood trauma, histrionic tendencies, etc. When identified, our team of providers and case managers will work swiftly to address these specific triggers. A point worth noting here is that the provision of psychological counseling does not equate to admitting a stress claim on an industrial basis, but
addressing an aspect of care that is commonly neglected in managing workers’ compensation cases. In short, the aim is to circumvent exponential cost development on injuries that are initially perceived to be relatively minor. Much like catastrophic claims are triaged immediately, DREI employs a similar approach to identify these risks right away so additional resources are deployed up front. As we all know, workers’ compensation claims don’t age like a fine wine- they age like a most acrid vinegar, ready to befoul one’s XMod for three years. Don’t wait for the legislature and appellate courts to get it “right.” Take matters into your own hands and see the new revolution in disability management and cost containment.
James Carey, CSIA, WCCP is a graduate of the University of California, Irvine and a veteran claims adjuster with more than a decade of experience. He has handled claims at insurance companies, third party administrators and government entities with strong experience handling highly complicated cases across multiple states and jurisdictions. He brings an aggressive, employer-oriented style to the table along with practical knowledge to help employers navigate the treacherous waters of the workers’ compensation system.
The Trials of Sisyphus:
Creating New Boundaries for Medical Providers and Lien Claimants in the Shadow of SB863
by Melissa Rehm
Remember the myth of Sisyphus? He was doomed every day to roll a giant rock to the summit of a hill only to have it roll down before reaching the top and thereby engaging in the continuum that would be his eternity. If only we could be so lucky. SB 863 requires the creation of fee schedules for copy services, home health care, vocational expert fees and interpreters. Additionally, the Official Medical Fee Schedule (OMFS), which governs fees paid to medical providers, will also be updated, to incorporate Medicare’s Resource-Based Relative Value Scale. This creates new cost containment measures that will ensure some level of consistency, predictability and accountability. When it came time to wrap up the numerous liens at the end of a denied, litigated case, this often proved to be an exercise in cat wrangling. Try as one may to get them all resolved, there was often another hiding out, waiting to pounce when the adjuster’s back was turned. The new year brings changes regarding liens filed against an injured workers’ claim, for medical treatment and other services provided in connection with the claim, but not paid for by the employer or insurance carrier. A filing fee of $150 will now be
required for all liens filed after 1/1/13. A $100 activation fee will be required for liens filed before then, but activated for a conference or trial after 1/1/13. There are certain ways the lien claimant can recover this fee, but ultimately, it is a means of ensuring that the lien claimant is actively engaged in informal resolution as opposed to filing a Declaration of Readiness. Additionally, the new laws prevent the assignment of liens unless the original claimant went out of business. There are also provisions for the dismissal of liens by operation of law after 1/1/14 if no filing or activation fee has been submitted, as well as an eighteen month statute of limitations for filing liens for services rendered after 7/1/13 and a three year statute of limitations for services provided before then. Together, these aspects of the new legislation come together to help achieve an easing of the lien logjam that is currently miring the WCAB offices around the state. Overall, we anticipate the consistency and predictability will bring some stability to the final costs on claims that have been settled as well as reducing the lag time from settlement to closure. Sometimes, it’s not so bad to undertake a Sisyphean task – at least with the liens, it's not an eternal struggle.
Melissa Rehm, CSIA, WCCP is the manager and backbone of RiskSolutions’ Claims Oversight department. With a flair for customer service and experience in the forestry, hospitality, healthcare, manufacturing and automotive industries, she brings practical knowledge and uses it to develop innovative solutions for the clientele of RiskSolutions. With her experience and tenacity, she helps employers anchor their costs and keep their XMods afloat amidst the murky depths of the California workers’ compensation system.
reducing the costs of doing business
P.O. Box 180 17602 17th St. Tustin, CA 92780
(951) 943-6775 ext 151 Fax: (951) 943-5221 etaylor@risksolutions-Inc.com
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