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Nancy Grover

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at

Pot and Policy

Practitioners Consider Practical Applications of Medical Marijuana

Some evidence indicates medical marijuana may be useful to treat pain, but the workers’ comp system is not yet equipped to handle the issue on a large-scale basis.
By: | August 1, 2014 • 4 min read
med marijuana3

While attorneys weigh the reasons for the recent New Mexico ruling on medical marijuana, others are looking at the possible practical implications. One, for example, is whether the decision will spur more recommendations for medical marijuana.


“There is a growing body of medical evidence that marijuana can be useful for pain treatment,” said Jim Andrews, executive vice president of pharmacy services for Healthcare Solutions. “However, additional studies are needed that include larger patient populations and longer utilization periods prior to inclusion in any medical treatment guidelines.”

In the near term, Andrews does not believe there will be a significant increase in the use of marijuana to treat pain among injured workers.

“The medical community still doesn’t feel there is enough evidence to support widespread use of medical marijuana,” Andrews said. “Even in states like Colorado, physician groups still have reservations.”

As one of two states that allow marijuana beyond medicinal purposes, Colorado has become a focal point for the issue, especially among workers’ comp plaintiffs’ attorneys.

“Although medical and recreational use of marijuana is allowed in Colorado, I have not personally seen any of our authorized treating physicians recommending its medical use,” said Colorado attorney Ronda K. Cordova of Ritsema & Lyon PC. “In fact the physicians seem to be questioning the effectiveness to address the chronic pain complaints of our injured workers.”

Workers’ comp bloggers commenting on the issue likewise are unconvinced we’ll see a major uptick of medical marijuana in the workers’ comp system. They say the science just isn’t there yet.

“Yes, there is some evidence that in relatively small populations medical marijuana has been beneficial,” wrote Joseph Paduda, principal of Health Strategy Associates and author of the ManagedCareMatters blog. “However, they aren’t large enough, nor objective enough, to provide convincing proof.”

Even if some evidence indicates medical marijuana may be useful to treat pain, the workers’ comp system is not yet equipped to handle the issue on a large-scale basis. “Most states are moving toward medical evidence based guidelines, and most out there today have no mention of the use and appropriate use and role of medical marijuana in treating injured workers,” Andrews said. “So you’re at an impasse doing utilization review. Where you are looking for something as a body of reference, there is none.”

Cost Considerations

While the use of medical marijuana may not become widespread in the near term, some workers’ comp practitioners are nevertheless concerned about paying for those injured workers who do qualify. In the New Mexico case, the ruling specifically said the employer/insurer was required to reimburse for the drug rather than paying for it outright.


But determining the cost is a tricky business. The claimant’s attorney in the New Mexico case is trying to figure the amount owed to the injured worker.

“He still has not been reimbursed,” said attorney Peter D. White. “We are putting together his bills and getting affidavits from two providers/dispensaries so he can get reimbursed. Since [the marijuana] was ordered prior to the appeal, that’s what we are seeking.”

As White explained, marijuana is not included among the medications and services on the maximum allowable payment schedule in New Mexico. Typically, those are reimbursed at the rate paid by the worker unless something has been negotiated. “It isdefinitely time to consider negotiating rates with the dispensaries in New Mexico.”

As an executive of a pharmacy benefit manager, Andrews does not believe PBMs are equipped today to do such negotiations. “Pharmacy reimbursement is based on average wholesale prices as reported by nationally recognized compendia and not negotiations,” he explained.

There is also the issue of pricing the amount of marijuana. Some marijuana cigarettes are larger and contain more of the drug than others.

“Manufacturing standards need to be put in place consistent with drugs that are approved by the FDA today,” said Andrews.

If use of medical marijuana becomes more widely accepted by the medical community, Andrews and other workers’ comp practitioners hope that proper controls are put in place to effectively manage the distribution system. He compares the lack of regulation for medical marijuana to the situation the industry experienced with compound drugs several years ago.

“When utilization of compound drugs became more prevalent, there were not sufficient controls governing the manufacturing of these drugs. Then a manufacturing company in Massachusetts was found to be sending out contaminated materials,” Andrews said. “Do we really need a crisis before you take a step back and put a process in place? I don’t think everybody has thought this all through.”


In order to protect the safety of injured workers, Andrews says he will advocate for oversight of medical marijuana dispensaries by the Food and Drug Administration.

“We want to avoid having a crisis due to lack of process,” he said. “An infrastructure needs to be built if adoption of medical marijuana grows.”

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at
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NWCDC Preview

Medical Management Track Addresses Costs, Reforms, and Outcomes

The NWCDC Medical Management track will offer sessions to help attendees with strategies fro improving outcomes while reining in costs.
By: | August 1, 2014 • 4 min read

The 23rd annual National Workers’ Compensation and Disability Conference® & Expo takes place Nov. 19-21 at the Mandalay Bay Resort and Casino in Las Vegas. The confer­ence is produced by LRP Publications, which also publishes Risk & Insurance®.

ConferenceWith medical overtaking indemnity as the main cost of workers’ comp claims in most jurisdictions, managing the medical component has become vitally important to the workers’ comp system. The Medical Management track addresses a variety of relevant issues. Sessions will include:

Improving Claim Outcomes Using Outcomes Based Networks


  • David Deitz, M.D., vice president, national medical director, CI claims, Liberty Mutual Insurance
  • Stephanie Perilli, senior director, medical health management, The Home Depot

Many workers’ comp practitioners are starting to believe that certain medical providers can make a difference in achieving the best outcomes. Effective partnerships among employers and payors can help engage providers who deliver the best care for injured workers.


Provider measurement strategies to assemble physician panels in multiple jurisdictions is another influencing factor, according to the speakers. They will share how to develop top quality medical networks and will explain how reviewing provider performance metrics has led to reduced workers’ comp and disability costs at The Home Depot. They will also demonstrate how employer engagement in the selection of provider panels may result in better outcomes and analyze various techniques and tools to measure physician quality.

Managing the Costs of Medical Containment and Cost Control Services


  • Charles F. Martin, managing director, casualty operations consulting leader, Marsh USA Inc.
  • Joe Picone, claim consulting practice leader, risk control and claim advocacy practice, Willis

Services to manage ever-increasing medical expenses are essential to help eliminate unnecessary care and inflated billing. But the very cost-control measures and services themselves can become part of the problem and generate unwarranted expenses, if not effectively overseen.

Martin and Picone will discuss analytics and options they believe can help improve return on investment from medical management services. They will demonstrate where unwarranted costs can creep into a workers’ comp program, how to apply strategies for eliminating such expenses, and evaluate medical management spend for optimal outcomes.

Medical Case Management: How to Position Your Program for Best Outcomes


  • Kim Weaver, regional manager, MHayes
  • Anita Weir, director, medical and disability management, corporate risk department, Safeway Inc.

Effective case management does not happen in a vacuum, say Weaver and Weir. Companywide planning that focuses on all aspects of the claim cycle is the best way to ensure the best outcomes.

The speakers, highly successful industry veterans, will share case management program strategies they say will help drive clinical quality, improve return to work, and reduce claim costs.


They will explain the elements included in a successful case management program, identify strategies to prevent or limit costly tail claims, and critique what they say are best practices in case management.

Modeling Managed Care for Program Impact


  • Barry Bloom, principal, The bdb Group
  • John Riggs, manager, workers’ compensation, Disneyland Resort
  • John Smolk, principal manager, workers’ compensation, Southern California Edison

Many practitioners find the wide range of managed care services expensive, complex, and difficult to measure. The speakers believe it is important to understand what to look for to determine which ones will deliver the best outcomes for the injured worker and greatest cost savings for a company. The speakers, representing two large self-insured employers and a national workers’ comp consultant, specifically will define the available managed care services; distinguish the most appropriate services, depending on program needs; illustrate how to get better clinical results for injured workers; and assess ways to construct managed care services that are most appropriate for a particular organization.

Health Care Reform: Strategies You Can Apply Now


  • Denise Zoe Gillen-Algire, director, managed care and disability corporate risk, Safeway Inc.
  • William Wilt, president, Assured Research

The speakers say the workers’ comp industry needs to stop theorizing on the potential impact of the Affordable Care Act and start acting in order to be prepared. Wilt, an industry leading actuary, and Gillen-Algire, an occupational health executive, will share data reflecting some of the ACA’s current impact on the industry as well as strategies to help organizations be better positioned for the future.

The two will define the ACA and discuss how it is impacting the workers’ comp system, interpret data showing the direct effects of health care reform, appraise a variety of future changes to the system resulting from the ACA, and discuss design strategies to prepare for health care changes.

How to Reduce Costs With a Wellness Program


  • Karen Curran, director, health risk management, Pinnacol Assurance

Wellness programs can do much more than many employers and payers think, says Curran. She says overwhelming evidence shows that a well-orchestrated program targeting employee health risks can have a significant impact on workers’ comp claims and costs. Curran, an expert on the subject, will outline the undocumented findings of an ongoing study and discuss ways companies can help improve employees’ health and reduce claims frequency, leading to better health and financial outcomes.


She will discuss the preliminary results of a groundbreaking program; show how workers’ comp fits into the overall spectrum of health promotion relative to the more traditional players such as health plans and wellness vendors; analyze documented data showing how health behavior and risk factors impact claims; and compare engagement strategies for small versus larger companies.

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at
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Claim Trends

Indemnity Claims Up for Calif. Private Self-Insured Employers

While medical-only claims are declining for private self-insured companies in California, indemnity claim frequency has seen the biggest jump in 10 years.
By: | July 25, 2014 • 2 min read
chart with opposing arrows

In 2013, private self-insured companies registered the biggest increase in indemnity claim frequency in the past 10 years, according to a new report. At the same time, the incidence of medical-only claims declined.

Otherwise, the latest reports show “virtually no change in claim frequency in 2013.” Also flat was the average paid and incurred amounts per claim noted in the first reports for 2013 compared to the previous year.

The summary by the California Workers’ Compensation Institute is based on data compiled by the Office of Self-Insurance Plans. It reflects the experience of private self-insured employers who covered nearly 2.09 million California employees last year — down from 2.12 million employees in the 2012 initial report.

“The number of workers’ compensation claims reported by California’s private self-insured employers was down about 2 percent in 2013,” the summary says, “but for the fifth year in a row, private self-insured claim frequency was flat, as a marginal decline in the medical-only claims rate was offset by a slight uptick in the indemnity claims rate.”


There were 76,015 private self-insured claims last year — 1,542 fewer claims than in the 2012 initial report. However, “with the number of covered employees down, the private self-insured claim frequency rate held steady,” the report explains, “coming in at 3.64 claims (2.22 medical only and 1.42 indemnity) per 100 employees — almost identical to the 2012 rate of 3.65 claims (2.33 medical only plus 1.32 indemnity) per 100 employees.”

Looking at aggregate claim frequency rates from 2004-13 shows most of the decline in frequency occurred after the 2002-04 legislative reforms. For the last nine years the frequency rate has remained below 4 claims per 100 covered employees, the report says. Most of the fluctuation reflects changes in medical-only claim frequency even though “in 2013, indemnity claim frequency registered the biggest increase in the past 10 years while the incidence of medical-only claims declined.”

The OSIP data shows the number of indemnity cases reported in 2013 was 29,573 — up from the 28,065 cases in 2012 and higher than the 29,026 cases reported in 2011.

In terms of loss payments, the total as of the end of last year for private self-insureds was $180.9 million, or 2.8 percent less than in 2012. The total incurred — paid losses plus reserves for future payments — was 580.5 million for 2013, about 14.1 million or 2.4 percent lower than the initial incurred amount reported for 2012 claims.

CWCI’s analysis of more developed data confirms that reductions in average loss per claim combined with lower claim volume to push losses to a post-reform low in 2005. “By 2006, however, both average paid and average incurred losses began to trend up sharply, driving up private self-insured’s total losses even as claim volume continued to fall,” the report explains.

Nancy Grover is co-Chair of the National Workers’ Compensation and Disability Conference and Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at
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