Injury Report Lag Time Remains a Challenge
Workers’ compensation insurers can’t throw their resources into managing a workplace injury until they know about it.
When they eventually learn of an injury after policyholder delays in reporting it to them, the golden hour for providing optimal medical care and facilitating an ideal return-to-work scenario may be lost.
Research results released earlier this summer by NCCI Holdings Inc. document the extent of such losses. The findings confirm the commonly-held knowledge among worker’s comp practitioners that delays in delivering appropriate medical care and applying claims-resolution best practices often drive additional, unnecessary costs.
NCCI reviewed claims data from 44 states before reaching the conclusions contained in its research brief titled “The Relationship Between Accident Report Lag and Claim Cost in Workers Compensation Insurance.” It found that the median cost of claims was lowest for injuries reported to insurers after the day when an accident occurs, but within two weeks of the incident.
Claims reported during the third week following an injury experienced cost increases that were 35 percent higher relative to those reported during week two. For those reported during week four, the median cost rises another 12 percent. It drops a bit for claims reported after week four although costs remain greater than those reported during the first two weeks.
Claims reported to insurers on the same day as an injury occurs, however, experience costs that are 25 percent more than those reported during week one.
“Claims reported on the day of injury likely include very severe injuries that require immediate medical attention,” NCCI’s research brief states. “Such claims often require extensive medical care and an extended recovery time away from work.”
“Really, it’s communication, and the sooner that communication can begin the sooner we as claims people can do our jobs.” — Glen Pitruzzello, VP of workers comp and group benefits claim practices, The Hartford
Several factors drive additional costs when claims are not promptly reported to insurers, sources said.
An injured worker may seek help from a primary, internal-medicine physician or family doctor who may not understand occupational exposures, said Adam L. Seidner, M.D., and global medical director at Travelers.
The doctor may excel at treating family ailments, yet may not be well acquainted with proven occupational-medicine practices, such as applying a sports medicine approach for treating musculoskeletal injuries.
In contrast, claims adjusters and nurse case managers can assist a worker whose injury is promptly reported to an insurer. They can help him, for example, receive treatment from an orthopedic specialist capable of providing the greatest care possible for their specific condition, Seidner said.
The risk of recidivism also increases when the injured worker doesn’t receive appropriate care, he added. They may return to the job too soon, risking reinjuring themselves.
“Then we have to put them back in the system with the right people (providing treatment) and the medical costs really increase because we are trying to get things done correctly,” Seidner said. Medical expenses in such cases can increase 100 percent.
Seidner will speak at the National Workers’ Compensation and Disability Conference & Expo scheduled for November 11-13 at Mandalay Bay in Las Vegas.
WCWCHe will be joined by Marcos Iglesias M.D., VP and medical director at The Hartford along with Mel Belsky M.D. and medical director, workers’ comp program, for Safeway Inc. They will present a breakout session titled “The Workers’ Comp Doctor’s Prescription for Medical Intervention.”
They will discuss how opportunities to manage injuries to their optimal conclusions evaporate when claim handlers ignore medical intervention’s power. Denise Algire, director managed care & disability, corporate risk at Safeway Inc. will moderate the session.
Meanwhile, the NCCI research brief also documents that as report lag increases attorney involvement grows with 13 percent attorney participation in claims reported immediately. That jumps to 32 percent when insurers receive notification after week four.
“This suggests that the complexity of resolving a claim increases as the report lag increases,” the NCCI paper states.
Glen Pitruzzello, VP of workers comp and group benefits claim practices at The Hartford agrees that medical outcomes improve with earlier reporting of a claim.
The insurer can help the claimant navigate the medical system, connecting them with nurse case managers when necessary, and facilitating communication with the treating doctor, he explained.
On the indemnity side, insurers can also help by explaining the benefit process to injured workers and help the employer to develop a return-to-work plan, Pitruzzello said.
“Really, it’s communication and the sooner that communication can begin the sooner we as claims people can do our jobs,” Pitruzzellos said. “Part of it is facilitating payment of necessary medical care and facilitating return to work.”
Indeed, NCCI’s findings suggest that when insurers don’t receive notice of injuries, the related claims become more complex to settle and they involve a longer period before the injured worker can return to the job.
Doctors Test the Promise of Marijuana for Pain
Marijuana helps many chronic pain patients reduce or eliminate their opioid pain medication consumption, said a doctor who makes opioid reduction a condition for certifying his patients participation in New Mexico’s medical cannabis program.
Eligibility for the state’s medical marijuana program requires a doctor’s confirmation that a patient suffers from an ailment among 20 qualifying conditions, including chronic pain.
Dr. Carlos Esparza said he provides the certification only for established patients, not just anyone who walks through the door, because he doesn’t want his practice to become known as a place where people can easily obtain the marijuana program certification.
The goal, he said, is weaning patients off prescription opioid pharmaceuticals, which raise more safety concerns than marijuana.
“That is essentially the goal,” he said. “If they are going to go on the medical marijuana program we tell them that we are going to reduce their [narcotic pain] medications at least by half. And of course if they do really well, the goal is to hopefully wean them off them completely.”
“If I prescribe opioids, I have to be careful because that patient could overuse it, abuse it, and kill themselves. [With] marijuana they can get too high, they can get stoned, but it won’t kill them.” — Dr. Carlos Esparza
Nationally, 44 people die daily from prescription opioid overdoses. Many more become addicted to the medications, according to the Centers for Disease Control and Prevention. Workers’ compensation claimants consuming large opioid doses, often in dangerous combinations with other drugs like antidepressants, remain a concern for claims payers.
Meanwhile, 23 states now have medical marijuana programs with legislation pending in others.
Discussing marijuana use with chronic pain patients consuming large opioid doses makes pharmaceutical sense because existing evidence shows that cannabinoids contained in marijuana reduce pain while evidence that marijuana use leads to other addictions is not strong, said Kathryn Mueller, an M.D. and professor in the University of Colorado’s schools of medicine and public health.
“Personally I think it is appropriate,” Mueller said. “We have a huge problem with opioids and if we can maintain someone on marijuana that is not having a lot of cognitive impairment from it, they are going to be better off.”
Mueller is also medical director for the Colorado Division of Workers’ Compensation. She is highly respected for developing treatment guidelines for injured workers. Mueller is also past president of the American College of Occupational And Environmental Medicine, but the views expressed for this article are her own and do not represent those of the organizations she associates with.
Evidence of cannabinoids’ effectiveness includes known success in treating neuropathic pain with clinically-tested prescription pharmaceutical cannabinoids, Mueller explained. Sativex is one such drug. It is approved for use in Canada and European countries, but not currently in the United States.
While attempting to reduce opioid consumption and address chronic pain with cannabis is not a bad idea, doing so remains a challenge because doctors do not know the amount of cannabinoids and other ingredients patients receive when purchasing marijuana, Mueller said.
With a lack of research establishing how much marijuana consumption is necessary for treating specific medical problems, it’s up to patients to determine the appropriate quantity for their condition, said Esparza, a physical medicine and rehabilitation specialist.
Under New Mexico’s medical cannabis program, launched in 2007, dispensaries selling marijuana must be licensed.
It’s also up to patients visiting dispensaries to determine whether they purchase marijuana that has more pain-reducing cannabinoids than tetrahydrocannabinol or THC, the mind-altering psychoactive ingredient that makes people high.
“But even that helps with certain patients as far as (treating problems with) sleep and anxiety,” Esparza said.
Lack of research and regulations establishing appropriate consumption amounts means, however, that one patient may purchase 10 times more marijuana than another. Then it’s unknown if the buyer of larger amounts does so because of medical necessity, just for the high, or to sell the drug, Esparza said.
Therefore, Esparza doesn’t believe workers’ comp insurers should be responsible for paying for marijuana.
New Mexico’s Court of Appeals disagrees, however. Since May 2014, the court has ruled in three cases that workers’ comp insurers and employers must reimburse claimants’ for their medical marijuana purchases.
In the most recent case decided in June, Dr. Esparza certified the claimant to participate in New Mexico’s medical cannabis program. The case involved a lower back injury with a patient consuming numerous drugs for chronic pain, including oxycodone, Soma, Norflex, gabapentin, Lyrica, Percocet, fentanyl, and Zantac.
Court records show Esparza certified that the injured worker suffered from debilitating, painful peripheral neuropathy and that the “benefits of medical marijuana outweigh the risk of hyper doses of narcotic medications.”
Prescribing opioids presents a safety hazard absent with marijuana use, Esparza said in an interview. Opioid toxicity levels can kill while that is not so much the case with marijuana, which also has much lower addiction risk, he explained.
“If I prescribe opioids, I have to be careful because that patient could overuse it, abuse it, and kill themselves,” he said. “[With] marijuana they can get too high, they can get stoned, but it won’t kill them.”
With approximately 50 to 100 of his patients participating in the medical cannabis program over the past five years, Esparza said many of them are functioning better than when they consumed more opioids.
While some patients want marijuana more for recreational use, “certainly there have been those that we have reduced or actually got them completely off their narcotic medications,” he said. “In fact, a lot of them have felt it was more effective because they didn’t have the same side effects that they did from the opioid medications.”
Bright Spot in California’s Costly WC Landscape
The mere mention of California usually causes workers’ compensation claims payers to cringe.
Yet there is one bright spot where the Golden State outshines other jurisdictions despite its infamously exorbitant claim expenses and workers’ comp insurance costs.
California’s workers’ comp medical inflation is growing at 40 percent of the rate of increase that most other states are experiencing, according to a Workers’ Compensation Insurance Rating Bureau of California report published July 29.
The “State of the California Workers’ Compensation Insurance System” report summarizes several forces shaping a system insuring more than 500,000 employers and generating the highest insurance rates in the nation.
Those 500,000 insured employers fund medical and wage replacement benefits for nearly 800,000 injured workers annually. During 2014, California’s employers paid a total of $16.5 billion in premiums, or 27 percent of the nation’s total.
On average, employers nationwide pay workers’ comp insurance rates of $1.85 per $100 of payroll while California employers pay more than $3.00 per $100 of payroll.
Factors contributing to California’s markedly higher rates include the highest frequency of permanent disability claims in the nation, medical costs driven by prolonged treatments and larger than average costs for claims handling and benefit delivery.
The high cost of delivering benefits is documented by a ratio of loss adjustment expense to losses of 28.2 percent for California, nearly 10 percent greater than the nationwide median.
California’s 2014 workers’ comp costs would be nearly $3 billion greater had it posted similar growth in medical inflation as the other states did.
California’s greater-than-average proportion of permanent disability claims, excessive litigation rates, and a high frequency of independent medical reviews contribute to its disproportionate loss adjustment costs.
Expenditures for medical cost containment programs also drive California’s high loss-adjustment costs, the WCIRB reports. The state’s total medical cost containment expenses reached $471 million during 2014.
Bill review and utilization review services comprise the largest components of WCRIB’s calculation of medical cost containment expenditures, said Dave Bellusci, the rating bureau’s executive VP, chief operating officer and chief actuary.
The WCIRB did not include expenses such as nurse case management in its calculation of cost containment services.
While California’s spend on medical cost containment services has nearly doubled over the past seven years, rising from $245 million in 2007 to the $471 million in 2014, the spending contributes to the state’s bright spot of lower than average medical inflation.
California’s average annual cost of medical inflation per indemnity claim grew only 1.9 percent between 2001 and 20014. In contrast, a similar measure for 35 other states showed an average annual growth of 5 percent in medical inflation.
California’s 2014 workers’ comp costs would be nearly $3 billion greater had it posted similar growth in medical inflation as the other states did.
The lower medical inflation over the past decade is narrowing the gap between workers’ comp medical expenses paid in California and those paid in other states, Bellusci said.
Yet California is still no bargain.
The WCIRB report shows that California’s average medical benefit per claim cost exceeds 90 percent of the countrywide median despite more than a decade of the lower rate of medical inflation.
California still has such high medical costs per claim because its medical expenses rose more than in other states before California workers’ comp reforms in 2003, 2004 and 2012 helped tackle the inflation, Bellusci explained.
“California started from a very high level,” he said.