When a Claim Runs Off the Tracks
Mike is a 54-year-old construction worker. One day, he strains himself picking up a piece of lumber and goes home with shoulder pain. He reports his injury and five weeks later is taking Vicodin, an opioid, and Naproxen, an anti-inflammatory, and given an occupational therapy regimen.
That was the scene set for a crowded roomful of attendees at “Risk Scenarios Live! Navigating the Challenging Claim” session, presented at the 2014 National Workers’ Compensation and Disability Management Conference & Expo in Las Vegas.
Mike begins taking more Vicodin per day than he’s prescribed, and performing duties at work that do not allow his injury to heal.
Eventually, he sees an orthopedic surgeon. She suggests Mike may have a rotator cuff tear, which would require surgery and an extensive recovery period that would keep Mike out of work for six months, at least. She orders an MRI to determine if there is a tear.
Even at this early stage of treatment, there are several red flags on Mike’s case, said experts on the panel that included Dr. Kurt Hegmann, associate professor at the Rocky Mountain Center for Occupational & Environmental Health; Dr. Robert Goldberg, chief medical officer at Healthesystems; and Tracey Davanport, director-national managed care, Argonaut Insurance Co.
Using an anti-inflammatory medication alone, without an opioid, often yields better outcomes and avoids the risk of addiction that comes with opioids, said Hegmann.
In Mike’s case, Vicodin was not medically necessary. His condition was not improving, and he was commuting to and from work and performing his job under the influence of an opioid, said Goldberg.
What should have been done to get this claim back on track? Every party involved – worker, employer, claims organization and prescribing physician – should have been communicating directly. That would have helped catch early abuse of painkillers and ensured that the physician is adhering to evidence-based guidelines.
Assignment of a nurse case manager may have also been necessary.
MRIs should be administered with caution, experts said. Such tests often turn up problems unrelated to the original injury, opening up a can of worms in terms of appropriate treatment and compensability.
“You have to treat the entire patient, not just the injury that brought him in,” Goldberg said, such as taking pre-existing conditions into account. Mike’s age, for example, significantly increased his risk for a slow recovery.
The MRI scan revealed a full-thickness tear of the rotator cuff. After surgery, Mike was prescribed Oxycontin to manage post-op pain. He then sat at home, gaining weight and drinking while taking his pain medication and neglecting to perform the at-home exercises his orthopedic surgeon advised.
When he went in for a check-up, the doctor decided to switch him back to Vicodin, although Mike still had a refill left on his Oxycontin. He envisioned doubling up the medications to achieve a new high.
At this point in the case, someone needed to step in to track Mike’s refills and limit his dosage.
“The patient can’t be the one to control the prescription pad,” Goldberg said.
Employers should also try to have workers return to modified-duty positions as soon as possible, which helps to maintain social connections and motivates the employee to get back to their pre-injury capacity.
“The patient needs to be engaged and motivated to get better,” Hegmann said. “If they choose not to do the work, then there’s nothing else a doctor can do for them.”
Mike was not motivated. He did not adhere to the restrictions placed on him in a light-duty position; he failed to dedicate himself to physical therapy and stay active; and he abused the opioids prescribed to him.
A year after his injury, he was 20 pounds heavier, had not progressed in strengthening his shoulder, and his employer’s workers’ comp claims organization was looking at a six-figure settlement for permanent disability.
Presentation Asks ‘What Would You Do?’
A middle-aged construction worker undergoes rotator cuff surgery but fails to adhere to his therapy regimen in the second annual installment of Risk Scenarios™ Live!, which kicks off at 2:30 p.m. today.
Risk Scenarios™ are fictional but realistic narratives written by Risk Insurance®, which are designed to showcase a risk management or insurance coverage dilemma.
This year’s multimedia presentation of Risk Scenarios Live! will feature a panel discussion moderated by Tracey Davanport, director of managed care for the Argo Group.
Also appearing on the panel will be Dr. Robert Goldberg, the chief medical officer of Healthesystems, and Dr. Kurt Hegmann, director, the Rocky Mountain Center for Occupational & Environmental Health.
Join us to participate in the CM2 session at 2:30 p.m. today in Mandalay Bay’s Islander D&E room.
The panelists will analyze each segment of a three-part story, told using videotaped professional actors, still photos and voice-over narration.
The story dramatizes the challenges that occur when a middle-aged worker suffers a rotator cuff tear, fails to adhere to his therapy regimen, gains weight and begins overusing addictive painkillers.
Drawing on their deep knowledge of claims management, pharmacy benefit management and occupational medicine, the panelists will highlight the treatment failures that resulted in a negative outcome: A worker who failed to heal properly and who eventually receives a sizable settlement from his employer.
In a Q&A session following the presentation, audience members will be able to discuss the nuances of the fictional case study and the lessons to be learned from it.
Last year’s session was attended by nearly 300 conference attendees, so make plans to reserve your seat early for this popular afternoon session.
Passion for the Prize
In his 1990 book, The Prize: The Epic Quest for Oil, Money and Power, Pulitzer Prize winning author Daniel Yergin documented the passion that drove oil exploration from the first oil well sunk in Titusville, Penn. by Col. Edwin Drake in 1859, to the multinational crusades that enriched Saudi Arabia 100 years later.
Even with the recent decline in crude oil prices, the quest for oil and its sister substance, natural gas, is as fevered now as it was in 1859.
While lower product prices are causing some upstream oil and gas companies to cut back on exploration and production, they create opportunities for others. In fact, for many midstream oil and gas companies, lower prices create an opportunity to buy low, store product, and then sell high when the crude and gas markets rebound.
The current record supply of domestic crude oil and gas largely results from horizontal drilling and hydraulic fracturing methods, which make it practical to extract product in formerly played-out or untapped formations, from the Panhandle to the Bakken.
But these technologies — and the current market they helped create — require underwriters that are as passionate, committed and knowledgeable about energy risk as the oil and gas explorers they insure.
Liability fears and incessant press coverage — from the Denton fracking ban to the Heckmann verdict — may cause some underwriters to regard fracking and horizontal drilling with a suppressed appetite. Other carriers, keen to generate premium revenue despite their limited industry knowledge, may try to buy their way into this high-stakes game with soft pricing.
For Matt Waters, the chief underwriting officer of Liberty Mutual Commercial Insurance Specialty – Energy, this is the time to employ a deep underwriting expertise to embrace the current energy market and extraction methods responsibly and profitably.
“In the oil and gas business right now, you have to have risk solutions for the new market, fracking and horizontal drilling, and it can’t be avoidance,” Waters said.
Matt Waters, chief underwriting officer of Liberty Mutual Commercial Insurance Specialty – Energy, reviews some risk management best practices for fracking and horizontal drilling.
Waters’ group underwrites upstream energy risks — those involved in all phases of onshore exploration and production of crude oil and natural gas from wells sunk into the earth — and midstream energy risks, those that involve the distribution or transportation of oil and gas to processing plants, refineries and consumers.
Risk in Motion
Seven to eight years ago, the technologies to horizontally drill and use fluids to fracture shale formations were barely in play. Now they are well established and have changed the domestic energy market, and consequently risk management for energy companies.
One of those changes is in the area of commercial auto and related coverages.
Fracking and horizontal drilling have dramatically altered oil and gas production, significantly increasing the number of vehicle trips to production and exploration sites. The new technologies require vehicles move water for drilling fluids and fracking, remove these fluids once they are used, bring hundreds of tons of chemicals and proppants, and transport all the specialty equipment required for these extraction methods.
The increase in vehicle use comes at a time when professional drivers, especially those with energy skills, are in short supply. The unfortunate result is more accidents.
“In the oil and gas business right now, you have to have risk solutions for the new market, fracking and horizontal drilling, and it can’t be avoidance.”
— Matt Waters, chief underwriting officer, Liberty Mutual Commercial Insurance Specialty – Energy
For example, in Pennsylvania, home to the gas-rich Marcellus Shale formation, overall traffic fatalities across the state are down 19 percent, according to a recent analysis by the Associated Press. But in those Pennsylvania counties where natural gas and oil is being sought, the frequency of traffic fatalities is up 4 percent.
Increasing traffic volume and accidents is also driving frequency trends in workers compensation and general liability.
In the assessment and transfer of upstream and midstream energy risks, however, there simply isn’t enough claims history in the Marcellus formation in Pennsylvania or the Bakken formation in North Dakota for underwriters to rely on data to price environmental, general and third-party liability risks.
That’s where Liberty Mutual’s commitment, experience and ability to innovate come in. Liberty Mutual was the first carrier to put together a hydraulic fracking risk assessment that gives companies using this extraction method a blueprint to help protect against litigation down the road.
Liberty Mutual insures both lease operators and the contractors essential to extracting hydrocarbons. As in many underwriting areas, the name of the game is clarity around what the risk is, and who owns it.
When considering fracking contractors, Waters and his team work to make sure that any “down hole” risks, be that potential seismic activity, or the migration of methane into water tables, is born by the lease holder.
For the lease holders, Waters and his team of specialty underwriters recommend their clients hold both “sudden and accidental” pollution coverage — to protect against quick and clear accidental spills — and a stand-alone pollution policy, which covers more gradual exposure that unfolds over a much longer period of time, such as methane leaking into drinking water supplies.
Those are two different distinct coverages, both of which a lease holder needs.
Matt Waters discusses the need for stand-alone environmental coverage.
The Energy Cycle
Domestic oil and gas production has expanded so drastically in the past five years that the United States could now become a significant energy exporter. Billions of dollars are being invested to build pipelines, liquid natural gas processing plants and export terminals along our coasts.
While managing risk for energy companies requires deep expertise, developing insurance programs for pipeline and other energy-related construction projects demands even more experience. Such programs must manage and mitigate both construction and operation risks.
Matt Waters discusses future growth for midstream oil and gas companies.
In the short-term, domestic gas and oil production is being curtailed some as fuel prices have recently plummeted due to oversupply. In the long-term, those domestic prices are likely to go back up again, particularly if legislation allows the fuel harvested in the United States to be exported to energy deficient Europe.
Waters and his underwriting team are in this energy game for the long haul — with some customers being with the operation for more than 25 years — and have industry-leading tools to play in it.
Beyond Liberty Mutual’s hydraulic fracturing risk assessment sheet, Waters’ area created a commercial driver scorecard to help its midstream and upstream clients select and manage drivers, which are in such great demand in the industry. The safety and skill of those drivers play a big part in preventing commercial auto claims, Waters said.
Liberty Mutual’s commitment to the energy market is also seen in Waters sending every member of his underwriting team to the petroleum engineering program at the University of Texas and hiring underwriters that are passionate about this industry.
Matt Waters explains how his area can add value to oil and gas companies and their insurance brokers and agents.
For Waters, politics and the trends of the moment have little place in his long-term thinking.
“We’re committed to this business and to deeply understanding how to best manage its risks, and we have been for a long time,” Waters said.
And that holds true for the latest extraction technologies.
“We’ve had success writing fracking contractors and horizontal drillers, helping them better manage the total cost of risk,” Waters said.
To learn more about how Liberty Mutual Insurance can meet your upstream and midstream energy coverage needs, contact your broker, or Matt Waters at email@example.com.
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.