Congress Quickly Changes Course on TRIA
In one of its first official acts of 2015, the U.S. Senate voted 93-4 to approve a six-year extension to the federal Terrorism Risk Insurance Program — just one day after the House passed the reauthorization bill with a 416-5 vote.
President Obama signed the bill into law on Jan. 12.
Thanks to Congress’s swift actions upon reconvening, there were no major negative repercussions to the program expiring in Dec. 31, 2014 after Senate failed to vote on it before breaking for the holiday.
The insurance industry, however, had been preparing hastily for the prospect of the program not being renewed.
Many insurers had sent notifications of policy changes or cancellations, and companies were left scrambling to place new policies or add endorsements to maintain their coverage.
The bill also provides for the formation of the National Association of Registered Agents and Brokers … that would allow insurance agents and brokers to obtain certification to operate on a multistate basis.
In New York City, the New York State Insurance Fund was preparing to provide workers’ comp coverage to employers if the private marketplace did not respond.
Bob Hartwig, president of the Insurance Information Institute, said in comments to the New York Times that failing to reauthorize the federal backstop would be “the equivalent of everyone deciding they’re not going to be inoculated against measles.”
The passage of TRIPRA therefore won sighs of relief and high praise from many industry leaders.
Mike Russo, a senior financial analyst at A.M. Best, called the bill’s passage “a positive for the industry as it will get rid of some of the uncertainty that occurred last December when TRIA was allowed to lapse.
According to Russo, A.M. Best will continue to “keep an eye on insurance companies to make sure that with the increased deductible and co-participation that these risks don’t go out of bounds within their existing risk management foundations.”
David Sampson, president and CEO of the Property Casualty Insurers Association of America, said in a statement that the bill would “minimize market disruptions, maintain the availability and affordability of terrorism insurance for consumers, and protect taxpayers.
“I am grateful that Members of both chambers were able to quickly come together on a bipartisan basis to achieve a hard won compromise to maintain America’s economic resiliency plan to recover from terrorist attacks,” he said.
“This vote is a significant win for consumers, taxpayers, and our members. … We also are grateful that NARAB II was included in the legislation. We urge President Obama to sign this legislation as soon as possible.”
Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), said in a statement, “Congress’ timely reauthorization of TRIA will preserve a well-functioning private terrorism insurance marketplace.
“TRIA provides policyholders and businesses the certainty they need to operate and grow our nation’s economy. We thank the Congress for its steadfast support and hard work to reauthorize TRIA and urge President Obama to quickly sign the legislation into law.”
The legislation will extend TRIA by six years, until Dec. 31, 2020, and slowly transfer some coverage responsibility back to the private marketplace.
It will reduce the level of federal compensation and insurer co-pay by one percent per year, from the current 85 percent/15 percent to 80 percent/20 percent, beginning next year.
It will also increase the trigger amount from $100 million to $200 million, by $20 million per year over the next five years, also beginning next year.
The bill also raises the aggregate insurer retention by $2 million per year, from the current $27.5 million to $37.5 million, and creates a capital reserve fund requiring insurers to establish dedicated reserve funds for terrorism losses.
The bill also provides for the formation of the National Association of Registered Agents and Brokers, known as NARAB II, creating a nonprofit board that would allow insurance agents and brokers to obtain certification to operate on a multistate basis.
The creation of NARAB II will benefit policyholders by allowing for greater competition among agents and brokers and promote greater consistency in agent and agency licensing.
Quicker Care With Telemedicine
According to the Association of American Medical Colleges, the U.S. will face a shortage of more than 130,600 physicians by 2025, including both primary care practitioners and specialists.
Part of the shortage is created by the millions of additional patients entering the healthcare system as a result of the Affordable Care Act. But doctors are also aging and retiring faster than new physicians enter the field. Lower reimbursement rates are driving others out of the profession, while fewer residency programs make it harder for potential candidates to become practicing physicians.
“From a workers’ comp standpoint, at that initial time of injury, there’s potential to triage normal severity, less complex claims,” Robert Hall, MD, medical director at Helios.
That poses a particular problem for workers’ compensation insurers and employers, who will have a hard time keeping claims durations short and costs down if there aren’t enough docs to go around.
Telemedicine, while not yet widely used, could be a way to connect patients and physicians faster and trim the cost of care.
“Telemedicine has been around for 20 years,” said Anne Kirby, chief compliance officer and vice president of medical review services at Rising Medical Solutions. “Now there’s been a real resurgence of interest in this area.”
Telephonic and video conferencing between doctors and patients has been used in rural areas where the nearest doctor can be too far away to receive care quickly enough. Now it can be used to reduce the time it takes to see a doctor and cut down on ER and office visits, shortening claim duration and lowering costs.
“From a workers’ comp standpoint, at that initial time of injury, there’s potential to triage normal severity, less complex claims,” said Robert Hall, MD, medical director at Helios. “In situations where someone has a superficial burn or skin wound, a provider who’s distant can look at that remotely and say if they need to be seen more aggressively, if they need certain medications, or if it will heal on its own.”
“Telemedicine would also be good for maintenance of care,” Hall said. “It can help determine if functional capacities are improving, monitor side effects and determine if care is needed from other providers.”
“Telemedicine can also provide access to a high-level physician who (an injured worker) might not normally be able to get an appointment with,” Kirby said.
However, Hall said, telemedicine could potentially increase costs if it leads to doctors calling for more diagnostic tests in lieu of a hands-on physical examination.
“If I’m remotely trying to evaluate a patient and all I’m going on is patient history and what little physical examination I can do over a call, I might be more prone to order an X-ray or CAT scan or MRI,” Hall said. “When we start ordering more tests, we find more abnormalities we need to address.”
And while telemedicine can allow doctors to see more patients in a shorter period of time, there are concerns that lack of in-person interactions could damage quality of care. Patients may feel less comfortable discussing sensitive topics over a phone call, and may not perceive the same level of empathy and compassion from their doctor that they would in person.
Face-to-face care would also be better for more complex, musculoskeletal injuries, which constitute a large portion of workers’ comp claims, according to Hall.
Some workers’ comp organizations are already experimenting with telemedicine.
“We’re actually piloting a program at Rising for our early intervention program,” Kirby said. A treating physician can pull up the company’s software on his computer or device, which offers high definition video services and built-in scheduling function.
WorkCare Inc., a physician-owned and managed occupational health services company, also employs video conferencing between first responders and physicians at the site of an injury, using tools as simple as FaceTime on an iPad.
“The goal is to maintain self-care and avoid unnecessary transport,” said Peter Greaney, MD, WorkCare’s medical director, president and CEO.
CorVel is working on incorporating telemedicine into their programs as well, including a claimant smartphone app, according to CEO Gordon Clemons.
Medicaid and Medicare also have telemedicine initiatives, according to Kirby, which shows that legislative support is generally strong.
“You just have to convince the treating physician that this is a good option for them,” she said. “In workers’ comp, you often have docs who don’t really want to talk with case managers. The good thing [about telemedicine] is that it helps the physician not lose control of the case.”
Some obstacles do remain, however. Jurisdiction and physician licensing largely determine where doctors can serve patients through telemedicine. Doctors may find it too time-consuming and expensive to maintain licenses in multiple states, if that’s what a telemedicine network requires.
Patients may also feel uneasy about not receiving a traditional physical examination. “The biggest drawback is people’s comfort level with it,” Clemons said. “We’re working on things we can control. We’re making it friendlier and integrating it with other forms of interfacing with the patient.”
Developing technology and evolving internet speeds also matter, he said. “We have to look out three years from now and ask what the capabilities and availability of smartphones will be. Will smartphones be good enough to be used as a telemedicine device?”
The best way to advance the use of telemedicine is to diversify it and adapt it to the needs of the provider.
Both video and telephonic conferencing can work in different situations. Some payers may opt for doctors to communicate remotely with paramedics and other first responders, rather than patients. Telemedicine should also be seen as a supplement to – not a replacement for – in-person care.
Medical professionals debate how serious the physician shortage will be, but telemedicine could nevertheless expedite care and ease costs for healthcare providers, workers comp carriers and employers alike.
Is Health Care Integration the Answer to Compliance?
Addressing worker health has many parts – health care, wellness, disability management and workers’ comp.
Managing them as a whole instead of discrete components can help reduce costs while improving outcomes, which is why more and more employers are moving toward an integrated approach to employee health and safety.
But streamlining administration of these programs and making decisions that go across the board can also have the added benefit of tightening up regulatory compliance.
The Americans with Disabilities Act (ADA) – and amendments made in 2008 – present employers with a thorny trail to blaze.
Especially after the implementation of the Affordable Care Act, employers are shouldering a greater responsibility for employees’ health and wellness, and rules imposed by the ADA can complicate matters as companies and organizations strive to improve worker health without overstepping boundaries.
The intersection of the ADA with other regulations like the Family and Medical Leave Act (FMLA) and the Pregnancy Discrimination Act (PDA) also creates gray areas for employers when it comes to deciding what benefits an injured or disabled employee is entitled to, if any.
In a National Law Review article, labor and employment attorney Melvin Muskovitz called the intersection of ADA, FMLA and workers’ comp issues the “‘Bermuda Triangle’ of employee health-related statutes.”
Leave and benefits provided by workers’ compensation can overlap with what employees may be entitled to under the ADA and FMLA; carriers can benefit from more open communication with administrators of health plans and wellness and safety programs to ensure the right program responds to a request for accommodation or benefits.
One issue they all have in common is “the potential for claims of discrimination or retaliation,” Muskovitz wrote. “An employer must be sure the employee does not suffer any adverse employment action as a result of the leave of absence or condition necessitating the leave.”
“Integration is the only way to go with all these regulations coming at employers,” said Tamara Blow, principal consultant at TYB Global Business Consultants, LLC. “You need all the key players involved.”
That includes human resources, safety managers, risk managers, and legal counsel, as well as the payroll department or others in charge of tracking attendance.
With multiple perspectives weighing in on decisions, it should be easier to identify where clashes with different statutes could occur.
Take for example the case of Peggy Young, a female UPS delivery worker who sued the company in 2007.
When Young became pregnant in 2006, her doctor ordered her not to lift more than 20 pounds; UPS delivery workers sometimes have to lift packages of up to 70 pounds.
Young brought the doctor’s note to her supervisor and requested a temporary reassignment, which was denied because pregnancy is not covered under the ADA.
She was placed on unpaid leave for the duration of her pregnancy.
Young, whose case is currently being heard by the Supreme Court, argued that UPS violated the PDA, which states that pregnant women must be treated the same, in terms of receipt of benefits, as “others not so affected but similar in their ability or inability to work.”
In other words, if UPS provides accommodations for an injured worker with the same physical limitations as Young, she should also receive benefits even though she is not technically disabled.
Could an integrated approach have helped UPS avoid this regulatory tangle?
“Absolutely,” Blow said. “Any HR professional who’s worth their salt knows that the Pregnancy Discrimination Act would be the first to come into play with a pregnant employee.” A cross-functional team that included the legal department might have been able to anticipate potential violations.
“If their system was integrated, they would see that impairments that arise out of being pregnant would qualify as temporary disability covered under the ADA and FMLA,” she said.
For larger employers, though, there are structural hurdles blocking integration. Health care, disability management and workers’ comp tend be viewed as separate programs, so decision-making around them also remains separate.
“Workers’ comp is handled by risk management, which report up to either treasury or general counsel,” said Russell Johnston, casualty president for the Americas at AIG.
“Disability benefits and medical tend to be human resources or the administration side. So within larger employers, in terms of their governance model, there are structural disconnects.”
Bringing everyone together from different departments is a time-consuming effort that can also be constrained by office politics, Blow said. “Some departments want to be in charge. They may bash heads over who wants to take this initiative, especially with senior management’s eyes on it.”
Another structural hurdle Johnston pointed to was the way in which companies access these products on the market.
“Larger employers access the workers’ comp market through agents and brokers,” he said. “On the benefits and medical side, agents and brokers tend to be very different from the P/C side. They tend to operate completely separately. And in some cases it’s provided directly by the medical providers to employers.”
For these reasons, smaller employers have an easier time implementing an integrated approach to employee health. “They don’t have the luxury of having large infrastructure, so decisions are made across the totality of their business,” Johnston said.
Despite the obstacles, larger companies can still benefit in the long run from a unified employee health front because of cost savings. However, Johnston believes it won’t necessarily ease compliance issues.
“I struggle to see where it will make a material impact on the compliance side,” he said. “But is there a compelling reason for employers to look at this and try to implement it? Absolutely.”