2016 NWCDC

Risk Scenarios Live: Lessons in Managing Chronic Pain

Working through realistic scenarios, veteran workers' compensation experts pointed out flaws in claims management.
By: | November 30, 2016 • 2 min read

When a patient is in pain and in fear of pain, physicians face a dilemma. How to manage that pain in the best way without creating a dependency on pain medications?

When an injured worker is already floundering in a haze of prescription medications and denial, how best to intervene in a way that respects the worker’s rights, preserves the bottom line and most importantly, keeps that person productive?

These and other questions were on the table in the fourth installment of the Risk Scenarios Live presentation at the Ernest N. Morial Convention Center in New Orleans on Wednesday.

“Forget the money. Focus on the outcome.” — Michael Paladino, director, insurance services and claims, VCU Health System

As they watched filmed enactments of fictitious workers’ compensation claim scenarios, a veteran panel of workers’ compensation professionals had plenty to share.

“Forget the money. Focus on the outcome,” said Michael Paladino, director, insurance services and claims, VCU Health System.

The award-winning risk manager went on to say that an organization pays for an injured worker whether it is on the group health side or under workers’ compensation.

So, focusing on where that payment is coming from is less important than bringing the worker back to health, he said.

“We do have to treat the patient as a whole,” said Jill Leonard, assistant vice president of claims operations, Louisiana Workers’ Compensation Corp.

In three vignettes, the panel examined a chronic pain case, a case where a worker was ingesting a wide range of pharmaceuticals, and a scenario where a worker with an injured back failed to understand or comply with his return to work options.

Too often, according Dr. Robert Goldberg, chief medical officer, Healthesystems, there is a rush to surgery or a failure to fully educate an injured worker on their treatment and recovery options.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]
Share this article:

Workers' Compensation

Survey Tracks Claims Success

A workers' compensation benchmarking study gains greater traction in its fourth year of existence.
By: | November 28, 2016 • 5 min read
Male worker sitting with sprained ankle on the floor in warehouse

What makes a claims organization successful? They tend to measure their performance using outcomes-based metrics, employ claim decision support tools such as workflow automation and predictive modeling, and use an “advocacy-based” claims model that puts employees’ needs first.

So says the 2016 Workers’ Compensation Benchmarking Study by Chicago-based Rising Medical Solutions, which surveyed 492 claims leaders representing large carriers, third party administrators and employers, as well as midsize and smaller organizations such as risk pools and government entities.

This year, for the first time, the fourth annual study identified claim operational best practices in higher-performing organizations, as defined by having a claims closure ratio of 101 percent or greater.

Proof that the study is gaining industry-wide traction was evidenced in that more than 600 people signed up for an early-November Risk & Insurance webinar on the topic.

“One of the major goals of the report is to provide an opportunity for like organizations to benchmark what other organizations are doing to drive better results,” says the study’s author, Denise Zoe Algire, director, managed care and disability, corporate risk management at Albertsons Cos. in Pleasanton, Calif.

“Within that, the report shows a really clear picture of what higher-performing organizations are doing and what initiatives are moving the needle.”

According to the study, such organizations are more likely to use key performance indicators (KPIs) that clearly show how desired claim outcomes are being achieved or not achieved. About half of all of the claims leaders who responded to the survey said they do not yet apply KPIs that measure their desired outcomes.

Dan Holden Director of Corporate Risk Management Daimler-Chrysler

Dan Holden, Manager, Corporate Risk And Insurance, Daimler Trucks North America

“Looking at what organizations say are the most important outcomes to a claim, I was really pleased to see that the highest priority was functional recovery of injured workers,” Algire says. “I think we have some work to do in terms of how we connect KPIs to what we say is most important. Through current KPIs, how do we measure and reinforce performance focused on desired outcomes?”

Dan Holden, manager, corporate risk and insurance at Daimler Trucks North America in Portland, Ore. and one of the members of the advisory council for the study, says he was surprised that in 2016 professional claims organizations are either still trying to figure out how to measures outcomes, are incorrectly measuring outcomes, or just aren’t measuring them at all. Of the 40 percent of organizations that do not measure outcomes, just under 50 percent of that group stated it wasn’t a business priority.

“If gauging outcomes isn’t a business priority for a claims outfit,” Holden says, “I’m not sure what is?”

Two-thirds (66 percent) of the survey’s participants use workflow automation and just over 50 percent use push technology or predictive modeling to some degree, a significant improvement from prior studies. Higher-performing organizations are particularly more likely to use claim decision support tools and use them more frequently throughout the claim lifecycle.

“One of the major goals of the report is to provide an opportunity for like organizations to benchmark what other organizations are doing to drive better results.” — Denise Algire, director, managed care and disability, corporate risk management at Albertsons Cos.

Holden says there is “finally” an understanding that predictive modeling isn’t meant to replace the claim professionals’ thought process, but rather a tool to support the claims professionals in their decisions.

The study also showed that higher-performing organizations are also more likely to have implemented an advocacy-based claim model and are more likely to be early adopters, front runners and innovators – including implementing value-based care models, linking provider quality and outcome measures to provider agreements, and employing formal knowledge transfer strategies.

Holden says that while the adoption of an advocacy-based claim model isn’t a new concept, especially for self-insureds, it has yet to be adopted by the majority. However, he anticipates that more claims organizations should switch to that model in the future.

Holden was also pleased that the latest study placed increased emphasis on succession planning and knowledge transfer.

“This can be a challenge for claims departments with limited staff and thin profit margins,” he says. “Be that as it may, the Boomers are in the process of vacating so employers need to figure out how to attract the best and brightest.”

The study also found that claims organizations rank psychosocial/co-morbidity factors as the top barrier to achieving successful outcomes, indicating recognition that these factors – not litigation or return-to-work accommodation – are the most significant drivers of disability and cost.

Dr. Marcos Iglesias, medical director at The Hartford and another member of the study’s advisory council, says he was gratified to see that this issue has reached “the level of attention that it has today.”

“The medical community has known for many years that oftentimes it is not medical or biological issues that keeps injured workers from returning to work, but rather psychosocial risk factors that delay recovery,” Iglesias said.

Such barriers are not necessarily psychiatric issues like schizophrenia or major depression, but pertain more to the way people think, feel and behave, he says.

“The medical community has known for many years that oftentimes it is not medical or biological issues that keeps injured workers from returning to work, but rather psychosocial risk factors that delay recovery.”– Dr, Marcos Iglesias, medical director at The Hartford.

“Fear of activity, fear of re-injury, catastrophic thinking and even perceived injustices – blaming something or someone else for their situation – can become the barrier to function,” he says. “These thoughts are powerful in terms of how they can delay recovery.”

The Hartford has “very robust” data analytics to help identify such claimants, and the Hartford, Conn.-based carrier has developed a number of solutions to help individuals overcome these barriers.

“That’s the challenge the industry faces – what to do with that knowledge,” Iglesias says. “It’s now incumbent upon payers and other carriers to start looking for how to identify how they are going to help.”

Other key findings of the study include:

— Claims leaders have embraced employee functional recovery as the main benchmark for claims success; however, only 24 percent actually measure functional outcomes.

— Claims organizations rank access to care as the lowest-ranked barrier to successful outcomes, indicating that the Affordable Care Act didn’t have the impact some in workers’ compensation thought it might.

— Claims leaders say how they measure the performance of medical providers, and what they do when they identify sub-optimal performance.

Katie Kuehner-Hebert is a freelance writer based in California. She has more than two decades of journalism experience and expertise in financial writing. She can be reached at [email protected]
Share this article:

Sponsored: Liberty Mutual Insurance

From Drones to Defects: Planning for Construction’s Top Challenges

Construction buyers must be more vigilant about protecting projects before breaking ground.
By: | November 2, 2016 • 6 min read

The construction industry is firing on all cylinders. New projects spring up every day, but not all go according to plan.

Three out of every four construction projects fail to finish on time. Every party involved – owners, designers, contractors and subcontractors – expects perfection, with the final product delivered on schedule and on budget. Those expectations leave little room for uncertainty, so even a small hiccup can have ripple effects that disrupt a project for everyone.

As outlined in a recent report by McGraw Hill Construction “a lack of thoroughness of preconstruction planning, estimating and scheduling” is a leading cause of uncertainty.1

“There’s often a big disconnect on the front end of project planning,” said Doug Cauti, Senior Vice President, National Insurance, Chief Underwriting Officer, Construction, Liberty Mutual.

Proactive risk mitigation is also important to manage emerging challenges facing the construction industry ‒ drone regulations are evolving, commercial auto losses are rising, and so is uncertainty about which party might be held responsible for a construction defect. Without the proper planning, these issues can easily be overlooked and result in major losses and project disruption.

Liberty Mutual’s Doug Cauti discusses key challenges facing the construction market.

“Key risk management strategies have to be aligned among all parties from the beginning to minimize these uncertainties.”

Before construction begins, there are actions that project owners, designers and contractors can take to address these challenges and better protect their projects and businesses:

Drone Dangers

Drones can be useful tools on construction sites, providing an extra set of “eyes” for large commercial projects or tall buildings. They provide a real time aerial glimpse of works in progress, giving supervisors an added perspective to spot potential flaws, assess safety hazards, and check on workers. But many challenges remain in the safe — and legal — operation of drones.

Liberty Mutual’s interactive infographic highlights risks related to managing drones at construction sites, and also includes a pre-planning drone use guide and a pre-flight checklist that includes making sure to review the latest drone regulations.

How construction buyers can manage the insurance implications of using drones in their operations.

General contractors and project owners need to stay up to speed on FAA regulations, which changed in August, 2016.

“For one thing, operators need to have the drone in sight at all times,” Cauti said.

“And you need to make sure any operators are appropriately licensed and trained, that the drones are regularly maintained, and that the machines don’t impede on others’ safety and privacy.”

Clear flight paths and work zone boundaries can minimize the risk of a drone striking another property, or worse, a person. Operators should also know how to conduct an emergency landing if the drone suddenly loses power. It’s also important to consider how you are going to manage and use drone footage. Advertising liability can be a concern if third party images are captured and released. Know who is in charge of the data collected, who has access to it, and how you are going to protect it.

“If the contractor owns the drone, it takes on more liability. The contractor should review its insurance policies to make sure the coverage will respond to that risk,” Cauti said.

SponsoredContent_LM“As an insurance carrier, we may have a role to play in those proactive discussions. We are uniquely positioned to help project stakeholders see their risks and work to minimize them.”

— Doug Cauti, Senior Vice President, National Insurance, Chief Underwriting Officer, Construction, Liberty Mutual Insurance

Contractors and project owners can protect themselves through enhancements to their commercial general liability policies or through separate aviation policies, he said.

If a general contractor leases a drone through a third party, “they bear the responsibility of making sure the vendor is fully insured,” Cauti said. Vendors should have “non-owned” aviation coverage with limits suitable to handle the size of the risk.

Fleet Safety

Commercial auto losses challenge many business sectors, and construction is no exception.

More vehicles on the road and more miles driven, combined with fewer experienced commercial drivers, are driving up the frequency of accidents. On construction sites in particular, congestion created by closed roads, piles of materials and roving heavy machinery may lead to work zone accidents. Rising medical costs and repair and replacement costs of high-tech vehicles increase claim severity.

“I don’t see this trend reversing any time soon,” Cauti said.

Mitigating commercial auto losses begins with driver hiring practices.

“Pay attention to who you put behind the wheel,” Cauti said.

“Motor vehicle reports (MVRs) and driving history can alert employers to previous accidents or tickets. But there also needs to be regular communication with the drivers you do hire, and clear protocols in place that define expectations of how the job should be performed,” he added.

Ways construction buyers can manage rising commercial auto loss costs and better protect their fleets and employees.

Those protocols include requiring the use of seat belts, prohibiting cell phone use while behind the wheel, mandating scheduled breaks, outlining maintenance procedures, defining if company vehicles can be used for personal use, and establishing crash report procedures that delineate who to contact and what information to collect in the event of an accident.

Contractors can also monitor fleet performance through telematics systems. These on-board systems can track unsafe driving behaviors like hard braking, sharp turns, and speeding. But the data is only as good as the person analyzing it. Contractors and project owners should partner with an insurer who can use fleet telematics data effectively to pinpoint common causes of accidents and recommend specific risk mitigation strategies.

Liberty Mutual’s Managing Vital Driving Performance is one tool that leverages insureds existing telematics data to identify unsafe driving behaviors and accident patterns.

“Our risk control consultants can drill deeper into the data and interview drivers to identify patterns and find out the root causes of bad driving behaviors in the first place,” Cauti said.

For example, a post-accident interview with a driver could reveal that he had been skipping breaks and spending too many hours on the road, leading to fatigue and inattentive driving.

Identifying those connections enables consultants to make specific risk mitigation recommendations, such as adjusting drivers’ schedules and workloads to reduce overtime, or adjusting dispatch protocols so employers can ensure drivers aren’t working too many shifts in a short period of time.

Construction Defects

Another uncertainty project owners, designers and contractors have to face is how insurance coverage will apply should a project end up in a dispute. “The struggle is around the definition of ‘faulty workmanship’ and who is responsible for the defect. Is it in the design or the build?” Cauti said.

“There can be a lot of finger pointing involved. This reinforces the need for contractors to have a systematic quality assurance (QA) program that adheres to best practices, and for every party to have a role in it.”

Elements of a QA program could include testing of construction materials, conducting regular walk-throughs and obtaining approvals from the owner at key phases, and final sign-off by the owner at the project’s completion.

How construction defects and the current legal climate are affecting projects.

Construction defect claims can affect a business’s reputation, profits, and ability to maintain insurance coverage. That’s why it’s so important to be vigilant about avoiding construction defects, whether you’re a designer, developer, owner or general contractor.

Ultimately, though, these risks should be addressed before ground is broken. Discussing these challenges and collaborating on loss prevention strategies up front reduces the likelihood that any “hiccups” will throw off project timelines or increase costs for the various stakeholders.

Pre-planning discussions also offer the opportunity for these parties to take advantage of carrier partners’ risk control services.

“As an insurance carrier, we may have a role to play in those proactive discussions,” Cauti said.

“We are uniquely positioned to help project stakeholders see their risks and work to minimize them.”

To learn more about Liberty Mutual’s solutions for the construction industry, visit https://business.libertymutualgroup.com/business-insurance/industries/construction-insurance-coverage.

[1] Managing Uncertainty and Expectations in Building Design and Construction SmartMarket Report



This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.

Liberty Mutual Insurance offers a wide range of insurance products and services, including general liability, property, commercial automobile, excess casualty, workers compensation and group benefits.
Share this article: