Comp Experts Serve Another Term on Advisory Board
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® and Workers’ Compensation Report.
A veritable who’s who of workers’ comp and disability experts comprise this year’s conference Advisory Board. In addition to the six new faces joining the board, several other thought leaders have agreed to return for the 2014 conference.
Senior director, research information, LexisNexis
Following a 17-year career as a human resources professional with LexisNexis, Chevron Corporation, and other mid- to large-sized corporations, Caverly is now tasked with developing content and solutions in the workers’ comp, labor and employment, pension and benefits, Social Security, veterans, military, government contracting, and Native American areas of law.
Several issues stand out among those often discussed by the LexisNexis Larson’s Executive Advisory Board. Chief among them is opt-outs, the ability of employers to opt out of their state’s workers’ comp system.
“If workers’ comp were a high school, opt-outs would be that mysterious but appealing new kid everyone is clamoring to hang out with,” she says. “Whether more states invite opt-outs into their ‘clique’ remains to be seen — over the course of years — but the debates, interpretations and proposals around this subject make workers’ comp one of the more fascinating practice areas in my portfolio right now.”
Prescription drug abuse is also an issue she is closely attuned to, as it is the number one cause of accidental deaths. Caverly points to the increasing efforts among states to step up their efforts to try to abate the problem within the workers’ comp context as a way to address what she calls the staggering human, financial, and societal costs.
Finally, Caverly is closely watching mental health claims within the workers’ comp arena. “We may finally be nearing a tipping point in terms of engaging in a national conversation about mental health,” she said. “Most of us already accept that mental illness is a serious public health issue, yet it remains a discomfiting and enigmatic subject for discussion. We will eventually reach some shared understandings — and a shared vocabulary — in this area, and we should expect workers’ comp mental claims to play an integral role in this evolution, including a dialogue on the extent of coverage for post-traumatic stress disorder claims and how the new Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition will impact cases involving mental disorders.”
Senior director, Marriott claims services, Los Angeles
Since receiving her J.D. from Western State University College of Law, Dulich’s career has taken off. She has managed workers’ comp, auto, and general liability losses for all Marriott managed operations within eight western states and three satellite offices in Hawaii, Oregon, and Nevada for the past three decades. She is also a former commissioner and 2003 chair of the California Commission on Health and Safety and Workers’ Compensation, having been appointed in 1998 by Gov. Pete Wilson to be the private employer representative.
The former chair of the Board and Executive Committee chair of the California Self Insurers Association, Dulich currently serves as the treasurer and participates on the Nominating Committee, Board of Managers and Executive Committee.
She has been an active participant in the Workers Compensation Research Institute CompScope Advisory committee since 2007, is the Claims Committee chair and trustee for the Self Insurers Security Fund, and acts as program chair and board member for the Self Insurance Guaranty Funds of America. She is also a member of the Legislative Committee of the Oregon Self Insurers Association and the Washington Self Insurers Association and is vice president of the Claims and Litigation Management Orange County Chapter.
Among the major workers’ comp themes she sees are the continuing issues surrounding opioid abuse, and efforts to broaden the definition of compensability in various states by allowing litigation outside the WC arena. “We are seeing a dilution of workers’ comp as the exclusive remedy, and I fear that as time goes on this will continue,” Dulich said. “The crossover with the Fair Employment and Housing Act and Americans with Disabilities Act, among other things, seems to have given a very broad reach to the plaintiff’s bar.”
Principal of Health Strategy Associates LLC, president of CompPharma LLC, Madison, Conn.
A nationally recognized expert in medical and pharmacy management in workers’ comp and author of the popular blog, ManagedCareMatters, Paduda consults with managed care organizations, insurers, and private equity firms. Additionally, he conducts surveys on managing workers’ comp pharmacy, opioid use, utilization review, bill review, and claims systems.
He sees a lack of emphasis on and understanding of medical issues among workers’ comp executives. “There’s far too much focus on network size and discount and far too little understanding of ‘quality,’” Paduda says, “And, no, utilization review, case management, and bill review programs are not sufficient.”
Opioid abuse in workers’ comp is another issue on which Paduda continues to be outspoken. “Very few payers have any idea of the long-term cost implications of opioids,” he says. “Actuaries have not done the math, and when they do, the results are going to be very disturbing.”
Finally, the impact of the Affordable Care Act on workers’ comp has not been adequately addressed. “There is far too much focus on political ideology and far too little willingness to grasp that Obamacare is the law of the land and we better learn to deal with it.”
For more information, visit www.wcconference.com.
Same-Sex Unions Create ‘New Reality’ for Payers and Carriers
“The definitions of ‘spouse,’ ‘dependent’ and ‘marriage’ are changing and these changes affect the handling of casualty claims as we determine who is an eligible dependent or has legal standing to file certain causes of action,” says a thought leadership piece by Sedgwick. “It is important that we are mindful of the state laws and any case law in the particular jurisdiction relating to same-sex unions.”
The third-party administrator is calling attention to the increasing number of jurisdictions that recognize same-sex unions and the potential impact on workers’ comp. Insurers and payers that are caught unaware could find themselves owing retroactive benefits down the road.
“It is something we are getting prepared for,” said Edward Canavan, Sedgwick’s vice president, workers’ compensation practice and compliance. “It’s legal in 17 states and the District of Columbia, and administrators and carriers need a solution.”
Of the 33 states that prohibit same-sex marriage, 29 have used constitutional provisions. But efforts to overturn them have been initiated in the federal courts and have moved or are about to move into federal appellate courts.
In the states that recognize same-sex unions, the legal status of same-sex marriages is identical to opposite sex marriages, so the widow or widower of a worker killed and dependent children would typically be entitled to death benefits. However, questions arise when same-sex couples are involved.
“Temporary total disability amounts can change depending on eligible dependents,” Canavan said. “Also, entitlement to death benefits and reimbursement for attendant care — these are things that come into play when examiners try to determine eligibility based on ‘spouse’ or ‘dependency.’”
Last summer the U.S. Supreme Court ruled as unconstitutional a provision of the Defense of Marriage Act that defines marriage as between a man and a woman. Since the decision, several state attorneys general have announced that they will no longer defend their state’s same-sex marriage bans. But that has little bearing on the state-based workers’ comp system.
“The unique thing about workers’ comp is it is dependent upon the state. That’s what’s really challenging about the same-sex marriage issue,” Canavan said. “You may have someone who was married in California or entered into a civil union or domestic partnership there. Then they secure employment in Nevada and have an injury, and Nevada may not recognize [same-sex couples]. So [the spouse] is not entitled to the same benefits in Nevada. That can be extremely challenging from an administrative standpoint.”
It creates an exposure for payers in jurisdictions that recognize same-sex partnerships. “The indemnity rate could very well increase, and they have to pay death benefits that they did not before,” Canavan said. “It is a new landscape that carriers and payers may not have contemplated.”
Types of Partnerships
Marriages, civil unions, and domestic partnerships mean different things to different jurisdictions. It is incumbent on claims leaders to determine what the relationships mean to each jurisdiction when a workers’ comp claim is presented.
Sedgwick defines them as follows:
A civil union is a category of law created to extend rights to same-sex couples. These rights are recognized only in the state where the couple resides and no federal protection is included.
Domestic partnership is a civil contract between same sex or opposite sex, unmarried adult partners who meet statutory requirements. Laws vary among states, cities, and counties for domestic partnerships. Several states register these partnerships.
A reciprocal beneficiary agreement is a consensual and signed declaration of relationship for two adults unable to marry each other. Reciprocal beneficiary laws in Colorado, Hawaii, and Maryland allow some benefits of marriage such as workers’ compensation survivor and health-related benefits.
Another potential snag arises if a worker who lives in a state that does recognize same-sex marriages is injured in another state that does not.
As Canavan explains, the issue of benefits would depend on the jurisdictional statutory requirement. “It largely depends on individual states and the way their jurisdictional statutes apply.”
Claims handlers need to understand how to address claims involving same-sex partners from the start. One idea is to see who the worker has designated as his beneficiary. If it is a same-sex partner, then check to see how the state defines the arrangement.
“When the examiner is opening that claim and investigating it and trying to figure out who the dependents are, they must really pay attention to this issue and fully explore it and not dismiss it,” Canavan said. “Look at marriage, civil unions, etc. … and be able to record and make sure benefits are being paid accurately. It would be horrible to see a carrier or administrator faulted for not paying benefits that are due and they were not prepared.”
Specialty Drugs Exploding on the Marketplace
Last year, costs for specialty drugs were all but nonexistent for workers’ comp payers. Now, they comprise about 2 percent of the drug spend for clients of myMatrixx with no signs of slowing down.
The pharmacy benefit management and ancillary services company is putting workers’ comp practitioners on notice to watch for the explosion of these costs. The company says stakeholders need to put the issue on their radar screens.
“The question is, why should you be concerned?” said Phil Walls, chief clinical and compliance officer for myMatrixx. “The number one reason is that by 2018 specialty drug costs will rise to 50 percent of total drug cost.”
Walls and Dr. Jennifer Dragoun, vice president and chief medical officer at CompServices Inc./AmeriHealth Casualty, recently conducted a webinar on specialty drugs and their impact on workers’ comp. They say few in the workers’ comp system have a grasp on the issue.
“I don’t think many people understand, even in the physician community, what specialty drugs are,” Walls said. “The awareness is just now starting, but it has the potential to explode in terms of costs.”
Specialty drugs are not the same as compound drugs. While there is no formal definition, the American Journal of Managed Care says a specialty drug is one that costs at least $600 per month and treats a rare condition, requires special handling, uses a limited or restricted distribution network, or requires ongoing clinical assessment.
“These drugs are often used for rare conditions, so frequently there are no other options,” Dragoun said. “That allows for higher pricing.”
“PBMs, payers, and providers need to start thinking about drug therapy in a different way.” —Phil Walls, chief clinical and compliance officer, myMatrixx
The drugs are used for a variety of conditions such as multiple sclerosis, HIV, and rheumatoid arthritis. While they may seem to be conditions that are not compensable for injured workers, many of them can be.
“HIV and hepatitis C can both be contracted from occupational exposure through a needlestick injury,” Walls said. “Rheumatoid arthritis is brought about by genetic predisposition, but it can be impacted by an occupational injury, or an occupational injury can make it worse. So that drug may be compensable.”
Osteoarthritis can be brought on, in part, by heavy labor. Drugs for traumatic brain or spinal cord injuries could be compensable, as might cancer chemotherapy in states with cancer presumption laws for firefighters.
“If I were a payer trying to assess my risk, who would it be?” Walls said. “The population will be very large.”
That could include anyone who has just undergone orthopedic surgery who would need anticoagulants to prevent deep vein thrombosis. Or a health care worker who was exposed to a needlestick injury.
Other workers most at risk of requiring specialty drugs include:
- First emergency responders.
- Public safety personnel.
- Law enforcement officers.
- Correctional officers.
- Certain defined workers in states with cancer presumption laws.
“PBMs, payers, and providers need to start thinking about drug therapy in a different way,” Walls said. “Traditionally, pharmaceuticals has been viewed as a silo mentality. ‘We are spending this much on drugs, this much on providers, this much on hospitals.’ But with specialty drugs, to evaluate the cost and the associated savings these drugs can bring requires us to look at and manage them in a different way.”
For example, noncompliance could become an expensive proposition for an injured worker prescribed specialty drugs. While a three-month treatment of hepatitis C specialty drugs may cost upwards of $90,000, a liver transplant costs about $280,000.