Insurance Implications of Ebola
Dealing with an Ebola patient at your health care facility presents many risks. There are a few that stand out like employee safety, safety to the general public and patient population, environmental exposures, and even risk to your company’s directors and officers.
All of these could be tied together with one Ebola case, especially if the case isn’t properly handled.
First and foremost, update all your policies and procedures relating to infectious diseases. Stay current with the Centers for Disease Control and their requirements. Appoint a response team.
Train all those in your facilities to spot a potential Ebola patient and the proper procedures for isolation, treatment, and transfer. It’s likely your emergency department will be the front line and most exposed.
A general liability policy insures against third-party liabilities. In this case, third parties could claim they were infected at your facility and you failed to provide a safe environment in which to conduct regular business.
Your policy should have a duty to defend, however. I would suggest reviewing your coverage, paying close attention to wording associated with expected bodily injury and other policy exclusions.
Workers’ Comp Implications
Employee safety in treating infectious diseases is paramount to delivering effective care to patients. Have your employees practice taking on and off all appropriate protective gear.
In the event a health care worker contracts the virus, workers’ compensation would likely provide coverage. Review your policy and tie it to any umbrella or excess liability coverage. This is crucial because your work comp policy most likely has a disease limit, per claims and disease per policy limit.
An infected employee may also elect to file suit against an employer alleging negligence. If you have workers that work or volunteer outside the U.S. then you may want to look into foreign voluntary workers’ compensation and couple it with an accident and disability policy.
The hospital that treated the first casualty in the United States, Thomas Eric Duncan, and also had two nurses contract the virus is currently dealing with reputational loss and lost revenues.
The first place to look is your facility’s business interruption coverage. Be cautious, as coverage is typically triggered only when there is direct physical damage. Even more so, most contain a communicable disease exclusion or a severely sub-limited amount of coverage and require a governmental agency requiring limited or no access.
Allegations of Negligence
A directors’ and officers’ policy provides defense and protection for allegations of executive mismanagement. These claims can arise from a variety of sources: the state attorney general, financial donors, even employees.
Allegations could include failure to follow CDC protocol, not properly safeguarding the institution’s assets, or lack of proper training. A situation handled incorrectly could cause negative publicity thus leading to declining revenues and admissions as well as a loss of reputation.
In summary, updated procedures and training is crucial to avoiding the pitfalls of such high profile infectious disease situations. Check with your broker to ensure what, if any, coverage is available under your current program and what triggers the coverage.
Speakers Put Finishing Touches on Presentations
This year’s conference kicks off Wednesday, Nov. 19 at 8:30 a.m. with the keynote address. Dr. L. Casey Chosewood, senior medical officer and director of the Office for Total Worker Health Coordination and Research for the National Institute for Occupational Safety and Health, will discuss Integrating Employees’ Health and Well-Being to Improve the Bottom Line. His keynote address will be followed by two-and-a-half days of more than 30 breakout sessions. They are categorized within five tracks: Claims Management, Medical Management, Program Management, Disability Management, and Legal/Regulatory Issues.
Below is an in-depth look at several of the sessions.
The Productivity Challenge: Engaging Injured, Absent and Disconnected Workers
Wednesday, Nov. 19; 11 a.m.-12:15 p.m.
The personal touch is key to getting a company wellness program to translate to reduced workers’ comp costs, said Kevin Confetti. As director of employment practices and workers’ compensation for the University of California, he said placing coordinators at individual facilities has made the difference in getting workers involved in the various health promotion activities available.
“The biggest plus is actually having someone sit down and talk to these employees about how these programs can benefit them,” Confetti said. “We get so much junk mail at home — written literature falls on deaf ears. If someone can talk to them, they are more apt to give it a try.”
Confetti will be joined in the session by Dr. Teresa Bartlett, senior vice president of medical quality at Sedgwick. They will discuss ways to engage employees in wellness programs in order to reduce absences and ultimately improve productivity.
“Successful companies understand the importance of employee engagement and creating a culture of wellness,” Bartlett explained. “When employers embrace these concepts and focus on a quality health care experience, the results are demonstrated by having a positive impact on productivity and safety.”
Despite the robust wellness programs the University of California has implemented at its individual campuses and medical center, getting workers to participate has been challenging. Nearly three years ago, the company developed work-strong, an occupational wellness program.
“The reason we went into it as a prevention effort is that our employees like to stay with us. … They tend to be long term. What we were finding was it was not uncommon for them to have two to four workers’ comp claims in their tenure. If we can improve the health and wellness of our employees, it will help prevent them from being injured,” Confetti said. “We have definitely seen that. The rate of repeat injuries has definitely declined. That’s the number one benefit.”
Confetti said he’s also heard impressive stories from the employees as a result of the company’s wellness activities. For example, some have been able to control their diabetes through diet and exercise rather than medications.
“They’ve committed to making these changes,” he said. “We have people saying it’s changed their lives.”
Companies of all sizes can gain valuable insight from the session. The organization is something of a microcosm of the employment world.
“The best way to look at the university is they are really small cities; each with a police force, our dorms are like hotels, the dining commons are restaurants. You name it, we have it — teachers, researchers, construction workers, pipe fitters, plumbers, custodians,” Confetti said. “Really what we do can translate to any business. Other than manufacturing we have close to every type of industry on our campuses.”
Approaches to Managing Nontraditional Claims: Including Unions, Legacy Claims and Co-Morbidities
Thursday, Nov. 20; 1:30-2:45 p.m.
While workers’ comp practitioners typically seek to close claims as soon as possible, that’s not always the best approach. An injured worker who’s been on a long-term medical pharmaceutical program, for example, should be weaned off inappropriate medications before a settlement is discussed, especially if a Medicare set-aside is involved.
“That would be a claim where it looks like you could settle it, you think you should settle it, there is no jurisdictional impediment to settling, and there might be interest for the claimant and his attorney to settle,” said Julie Fortune, senior vice president and chief claims officer for Arrowpoint Capital. “But when you do the calculations based on current medical spend, the Medicare set-aside might be reviewed and returned by CMS at an amount that would exceed your expectations. So you don’t want to settle until you get the medical appropriately managed pursuant to the guidelines of the jurisdiction.”
That’s just one instance where it might be in the best interests of all parties to spend more time addressing some of the issues in the claim rather than trying to resolve it quickly. Fortune will join Patti Colwell, manager of national workers’ compensation program for Southwest Airlines and Tron Emptage, chief claims officer for Helios to look at nontraditional claims and out-of-the-box thinking to achieve optimal outcomes.
“Since 2004 Arrowpoint Capital has settled more than 40,000 workers’ comp claims,” Fortune said. “Our approach is fine-tuned, and we are pretty aware of what claims we can and cannot resolve or when we should or should not resolve them.”
Some states dictate the procedures for handling claims. Texas, for example, doesn’t allow claims with a date of injury after 1991 to settle future medicals on them. “That doesn’t mean we don’t aggressively use every tool and technique permitted by Texas regulations to manage the medical treatment,” Fortune said.
Among the biggest factors prolonging claims and preventing recovery are comorbidities. While comorbidities may not have been present when the worker was injured, they may develop as the person ages. In some cases there might be multiple comorbidities such as obesity and diabetes.
“The loss of function can be profound and their ability to do anything is extremely limited. They haven’t worked for 10 or 15 years, they are now obese, some morbidly obese. They can barely get around the house let alone exercise or attempt to seek other work,” Fortune said. “Complicating this further is the fact that many of the workers wind up on Social Security disability or Medicare, which now requires all parties to take into account Medicare’s interest as a secondary payer.”
Comorbidities can acutely impact workers’ comp settlements in terms of life expectancy. Fortune says through the use of data management and predictive modeling, the industry is just beginning to get a better handle on predicting life expectancy of injured workers with comorbidities to accurately calculate workers’ comp settlements.
“Part of what we are doing is carefully tracking body mass index because there are some recent studies showing that morbid obesity can reduce your life expectancy dramatically,” she said. “If you’re attempting to figure your total cost with a normal claimant with a back strain without surgery, it’s fairly easy to calculate. But if you have a person with multiple surgeries and lots of comorbidities, you need to determine how such factors are going to impact their normal life expectancy. That’s part of what needs to go into the calculation of these claims. It’s really challenging right now. There is no easy-to-use tool.”
Modeling Managed Care for Program Impact
Thursday, Nov. 20; 10:45 a.m. to noon
To bundle or not to bundle. That’s one of the questions employers are asking these days, i.e., whether it is more cost effective to put all managed care services into the hands of a single vendor.
“We reject that thought. We don’t want to put all our eggs in one basket,” said John Riggs, manager of workers’ compensation for the Disneyland Resort. “In my opinion you lose the expertise in that niche product if you go into bundle.”
The idea of bundling — bill review, utilization review, nurse case management, and other managed care services — is among the topics to be discussed by Riggs, along with John Smolk, principal manager of workers’ compensation for Southern California Edison, and Barry Bloom, principal of The bdb Group. Where he and Smolk are opposed to bundling services, “Barry will talk about his clients who have gone both routes,” Riggs said.
Employers need to be aware of the many managed care services available and how they function “so there’s an understanding of what the terms and programs are,” Riggs said. “The number of insured employers and those handled by third-party administrators is much greater than those self-insured or self-administered. They may have an agreement with the TPA that includes services. The employer needs to understand what the programs are all about and how the costs can become intermingled — and it becomes a cash cow for the provider.”
The evolution of managed care has been driven largely by the state of California. Workers’ comp payors there have been required to obtain authorization for most medical procedures.
“It’s like a big machine,” Riggs said. “It’s become more complicated, more expensive, and the outcomes are suspect and always subject to challenge … so unless your program is operating on all cylinders 24-hours a day, you can find yourself in a world of hurt.”
Riggs said the panel will offer in-depth insights into the various managed care services available, discuss how to pick the most appropriate ones depending on a company’s needs, and demonstrate how to evaluate them.
Workers’ Compensation and Its Secondary Payers: Medicare and Medicaid
Thursday, Nov. 20; 8:30-9:45 a.m.
As if the Medicare Secondary Payer Act didn’t create enough headaches for workers’ comp stakeholders, there’s a new law threatening to cause more consternation.
The Bipartisan Budget Act signed by President Obama last year strengthens Medicaid’s third-party reimbursement rights in terms of ensuring it does not pay for medical care when there is a primary payer such as workers’ comp. That, combined with another law on the books, could open the floodgates for reimbursement efforts.
“Traditionally, we haven’t see a lot of Medicaid recipients [in the workers’ comp system] because once you are gainfully employed you are generally disqualified,” said Jennifer Jordan, general counsel of MEDVAL, LLC. “Under the expansion of the Affordable Care Act, that will change.”
The Medicaid program will be open to more than just those making minimum wage. As Jordan explained, the head of household for a family of four could have an income of approximately $35,000 and still be eligible.
“We’re going to see a lot more people in the workforce who qualify for Medicaid and if also receiving Social Security Disability Insurance, could be dually eligible for Medicare as well,” she said. The real challenge will be “identifying your red flags with regard to who else is out there and knowing to check with them.”
The goal of the law is to enforce Medicaid’s position as the secondary payer, so it, like Medicare, would be the provider of last resort. However, unlike Medicare, Medicaid is administered on a state rather than federal level.
“The programs are very different. You can’t go to the Centers for Medicare and Medicaid Services with questions because they are state programs,” Jordan said. “It’s going to be a new layer of bureaucracy at the settlement level because now you have to go to someone else and ask them too if they want money.” Add to that the possibility of the injured worker moving to another state during the course of the claim, and there is yet another government agency with which to deal.
Jordan, and fellow speakers Vernon Sumwalt, a partner at the Sumwalt Law Firm, and Tim Nay, founding principal of the Law Offices of Nay & Friedenberg, will discuss the ins and outs of Medicaid and what the law change might mean for workers’ comp practitioners.
Additionally, regulations continue to be developed for the Strengthening Medicare and Repaying Taxpayer, or SMART Act, which reformed some of the Medicare Secondary Payer rules. The speakers will discuss that as well.
“None [of the regulations] have been finalized; they are a work in progress,” Jordan said. “We will cover where they are with regard to changes.”
Policy and practice changes at CMS will also be addressed, along with practical strategies to comply with the Medicare Secondary Payer itself, whether participating in the voluntary CMS approval program or not.
Holding Your Insurer/TPA Accountable With Customer Service Instructions
Thursday Nov. 20; 3:45-5 p.m.
High-quality service is a must these days, and there is no reason employers can’t work with vendors who offer the most advantages for their companies. That’s the message two veteran claims and risk management professionals hope to get across.
“I had an instance recently where we were using a vendor and couldn’t get copies of X-rays. … It caused delays for the employee who couldn’t get return to work. It can be a big problem,” said Darin Hampton, a workers’ compensation regional coordinator for International Paper. “That’s why we say you have a right to tailor [your program] to who you want to use.”
The particular vendor partners an employer uses do not have to be dictated by an insurer, third-party administrator, or attorney. A mainstream vendor that many companies use for a particular service might not always be the right one for the organization.
“You have these national programs,” Hampton said, “One that might be great in Florida but not in Texas. So you must tailor what you do.”
Where there can be snags is convincing claims adjusters to get on board. They may not realize they don’t have to use an inferior vendor.
“We had a diagnostic vendor [for radiological services]. There are only so many radiological facilities in the U.S. so what they have to sell is service,” said Jodie L. Massingill, senior manager of casualty claims for Sysco Corp. “But the adjuster said, ‘I have to use them; nobody is going to listen to me.’”
Building solid relationships is key. “It’s all about managing that relationship and about income streams,” Massingill said. “I tell my adjusters, ‘if you don’t want to use [XYZ] company call me and tell me who you want to use.’”
Effective partnerships with claims adjusters can go a long way — not only for more effective claims handling but for keeping adjusters happy and in their jobs. “I have adjusters that stay with us because they like my claims team,” Massingill said. “We help them. They feel like they are part of this and not a piece of meat just handling a claim.”
As Hampton describes it, claims examiners should be an extension of the company. “A big thing for me is ‘Don’t call me and say the attorney wants me to do blah, blah, blah,’” he said. “I tell them, ‘It’s your claim. You tell me what you want to be done.’ I don’t want them to feel that the attorney has the upper hand.”
Adjusters who are empowered in their jobs to use the vendors they deem the most appropriate tend to stay with an organization for the long term. The two say avoiding turnover among adjusters can save a company headaches and money.
“At the end of the day, a claim is a claim is a claim. It’s handled basically the same way. So how is your adjuster going to make it better for them and for you?” Massingill said. “It’s the partnership.”
Medical Case Management: How to Position Your Program for Best Outcomes
Thursday, Nov. 20; 8:30-9:45 a.m.
Managing the medical aspect of a workers’ comp claim involves doing the right thing at the right time. It requires all hands on deck. There is no silver bullet, just hard work. But employing a companywide commitment that focuses on all aspects of the claim cycle leads to best outcomes — for everyone.
“It’s a collaborative effort among all appropriate parties to make an effective outcome,” said Kim Weaver, director of professional services for M Hayes.
“It’s a coordination of benefits — integrating all the moving parts of a claim and identifying a basic operating philosophy so the decision making is consistent,” added Anita Weir, director of medical and disability management, Corporate Risk Department at Safeway Inc. “That means you’re always talking about taking care of your employees, timely quality care and you set your programs up with that in mind.”
The two industry veterans will share strategies to design and implement the best case management program for each organization. They say while the strategies work for larger employers, many of the same tools can also be used by midsized and small companies.
“They may not be into the total integration of long-term disability and short-term disability, but even just integrating the workers’ comp pieces — more companies are doing that,” Weir said. “I’m talking about making sure we have vendors who practice the same philosophy and have the same goals. That more of us are looking at quality care issues than cost mentality. There are a lot of employers who are doing that. … People in workers’ comp now are beginning to realize that the best cost savings is good quality care.”
While employers seek to contain costs, they are also demanding value-added services from vendor partners. It’s about more than just the bottom line.
“People are willing now to develop programs and willing to put out a little money because they are seeing that medical is a high cost driver and it’s not getting any better without that value-added service from all parties,” Weaver said. “So they are looking at that as well.”
So what are some of the elements that make for a successful case management program? “Accountability and authority,” Weir said.
“Again, addressing the right things at the right time with the right resources,” Weaver concurred. “Making sure that is happening and evaluating the process — not just going with the status quo.”
Employers must be willing to really look at their case management programs to see what is working and what is not, then take steps to improve it.
“We’re in an unprecedented time. A lot of things are changing,” Weaver said. “People are either going to look at their programs and improve them, or they are not going to survive.”
Six Best Practices For Effective WC Management
It’s no secret that the professionals responsible for managing workers compensation programs need to be constantly vigilant.
Rising health care costs, complex state regulation, opioid-based prescription drug use and other scary trends tend to keep workers comp managers awake at night.
“Risk managers can never be comfortable because it’s the nature of the beast,” said Debbie Michel, president of Helmsman Management Services LLC, a third-party claims administrator (and a subsidiary of Liberty Mutual Insurance). “To manage comp requires a laser-like, constant focus on following best practices across the continuum.”
Michel pointed to two notable industry trends — rises in loss severity and overall medical spending — that will combine to drive comp costs higher. For example, loss severity is predicted to increase in 2014-2015, mainly due to those rising medical costs.
Debbie discusses the top workers’ comp challenge facing buyers and brokers.
The nation’s annual medical spending, for its part, is expected to grow 6.1 percent in 2014 and 6.2 percent on average from 2015 through 2022, according to the Federal Government’s Centers for Medicare and Medicaid Services. This increase is expected to be driven partially by increased medical services demand among the nation’s aging population – many of whom are baby boomers who have remained in the workplace longer.
Other emerging trends also can have a potential negative impact on comp costs. For example, the recent classification of obesity as a disease (and the corresponding rise of obesity in the U.S.) may increase both workers comp claim frequency and severity.
“The true goal here is to think about injured employees. Everyone needs to focus on helping them get well, back to work and functioning at their best. At the same time, following a best practices approach can reduce overall comp costs, and help risk managers get a much better night’s sleep.”
– Debbie Michel, President, Helmsman Management Services LLC (a subsidiary of Liberty Mutual)
“These are just some factors affecting the workers compensation loss dollar,” she added. “Risk managers, working with their TPAs and carriers, must focus on constant improvement. The good news is there are proven best practices to make it happen.”
Michel outlined some of those best practices risk managers can take to ensure they get the most value from their workers comp spending and help their employees receive the best possible medical outcomes:
1. Workplace Partnering
Risk managers should look to partner with workplace wellness/health programs. While typically managed by different departments, there is an obvious need for risk management and health and wellness programs to be aligned in understanding workforce demographics, health patterns and other claim red flags. These are the factors that often drive claims or impede recovery.
“A workforce might have a higher percentage of smokers or diabetics than the norm, something you can learn from health and wellness programs. Comp managers can collaborate with health and wellness programs to help mitigate the potential impact,” Michel said, adding that there needs to be a direct line between the workers compensation goals and overall employee health and wellness goals.
Debbie discusses the second biggest challenge facing buyers and brokers.
2. Financing Alternatives
Risk managers must constantly re-evaluate how they finance workers compensation insurance programs. For example, there could be an opportunity to reduce costs by moving to higher retention or deductible levels, or creating a captive. Taking on a larger financial, more direct stake in a workers comp program can drive positive changes in safety and related areas.
“We saw this trend grow in 2012-2013 during comp rate increases,” Michel said. “When you have something to lose, you naturally are more focused on safety and other pre-loss issues.”
3. TPA Training, Tenure and Resources
Businesses need to look for a tailored relationship with their TPA or carrier, where they work together to identify and build positive, strategic workers compensation programs. Also, they must exercise due diligence when choosing a TPA by taking a hard look at its training, experience and tools, which ultimately drive program performance.
For instance, Michel said, does the TPA hold regular monthly or quarterly meetings with clients and brokers to gauge progress or address issues? Or, does the TPA help create specific initiatives in a quest to take the workers compensation program to a higher level?
4. Analytics to Drive Positive Outcomes, Lower Loss Costs
Michel explained that best practices for an effective comp claims management process involve taking advantage of today’s powerful analytics tools, especially sophisticated predictive modeling. When woven into an overall claims management strategy, analytics can pinpoint where to focus resources on a high-cost claim, or they can capture the best data to be used for future safety and accident prevention efforts.
“Big data and advanced analytics drive a better understanding of the claims process to bring down the total cost of risk,” Michel added.
5. Provider Network Reach, Collaboration
Risk managers must pay close attention to provider networks and specifically work with outcome-based networks – in those states that allow employers to direct the care of injured workers. Such providers understand workers compensation and how to achieve optimal outcomes.
Risk managers should also understand if and how the TPA interacts with treating physicians. For example, Helmsman offers a peer-to-peer process with its 10 regional medical directors (one in each claims office). While the medical directors work closely with claims case professionals, they also interact directly, “peer-to-peer,” with treatment providers to create effective care paths or considerations.
“We have seen a lot of value here for our clients,” Michel said. “It’s a true differentiator.”
6. Strategic Outlook
Most of all, Michel said, it’s important for risk managers, brokers and TPAs to think strategically – from pre-loss and prevention to a claims process that delivers the best possible outcome for injured workers.
Debbie explains the value of working with Helmsman Management Services.
Helmsman, which provides claims management, managed care and risk control solutions for businesses with 50 employees or more, offers clients what it calls the Account Management Stewardship Program. The program coordinates the “right” resources within an organization and brings together all critical players – risk manager, safety and claims professionals, broker, account manager, etc. The program also frequently utilizes subject matter experts (pharma, networks, nurses, etc.) to help increase knowledge levels for risk and safety managers.
“The true goal here is to think about injured employees,” Michel said. “Everyone needs to focus on helping them get well, back to work and functioning at their best.
“At the same time, following a best practices approach can reduce overall comp costs, and help risk managers get a much better night’s sleep,” she said.
To learn more about how a third-party administrator like Helmsman Management Services LLC (a subsidiary of Liberty Mutual) can help manage your workers compensation costs, contact your broker.
Debbie discusses how Helmsman drives outcomes for risk managers.
Debbie explains how to manage medical outcomes.
Debbie discusses considerations when selecting a TPA.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Helmsman Management Services. The editorial staff of Risk & Insurance had no role in its preparation.