EEOC Targets Wellness Programs
The Equal Employment Opportunity Commission has filed suit against three employers for violating the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA) with their company wellness programs.
Honeywell, Orion Energy Systems and Flambeau Inc. are all facing litigation over penalties and fines levied against employees who refused to participate in company wellness programs.
Employers that offer voluntary programs may ask participating employees disability-related questions and collect results from biometric testing and other medical exams, as long as they keep the information confidential — and the program is truly “voluntary.” The EEOC has determined that if an employee faces any kind of discipline for refusing to participate, such as a fine or becoming responsible for the full cost of their health plan premium, then the program is in essence involuntary.
“The EEOC describes it as ‘you can’t penalize employees,’ but they have not defined what constitutes a penalty,” said Debra Friedman, attorney with Cozen O’Connor’s labor and employment practice group.
On its surface, the EEOC stance appears to collide with the ACA. The federal rule on “Incentives for Nondiscriminatory Wellness Programs in Group Health Plans,” in fact, allows for penalties in certain circumstances. By defining “reward,” for the sake of the ACA, as meaning either incentives or penalties, the law’s language allows a maximum permissible wellness program incentive (or penalty) of up to 30 percent of the cost of health care coverage, jumping up to 50 percent for programs designed to prevent or reduce tobacco use.
However, the ACA is clear that these reward rules apply to health-contingent wellness programs that are tied to a desired outcome. The law contains no direct guidelines for rewards associated with participatory wellness programs, such biometric testing programs where employees are not obligated to take further action to meet a specific standard (such as attain a specific blood-pressure range or BMI level).
Is It Really Voluntary?
In its litigation against Honeywell, the third employer sued by the commission, the EEOC pointed out that employees not participating in the company’s program would have to pay up to $2,500 in “direct surcharges,” as well as lose “up to $1,500 in contributions” to their health savings accounts. While they don’t need to achieve any particular results, employees must submit to biometric testing in order to receive a premium discount.
“The EEOC describes it as ‘you can’t penalize employees,’ but they have not defined what constitutes a penalty,” — Debra Friedman, attorney, Cozen O’Connor’s labor and employment practice group
At Flambeau and Orion Energy, employees who opted out of the wellness program were forced to pay 100 percent of their health insurance premium. The EEOC asserted that these penalties were so extreme and had such “dire consequences” that, in practice, they rendered the wellness programs involuntary.
In programs and required medical exams that are involuntary, the ADA states that employers cannot ask disability related or other personal medical questions that are not “job-related and consistent with business necessity.” There are some exceptions to this rule, but none that apply to the three employers facing suits.
On Nov. 3rd, however, the U.S. District Court for the District of Minnesota denied the EEOC’s request for a temporary restraining order and preliminary injunction against Honeywell, stating that the company’s program aims to raise awareness among its employees about their health indicators, but does not break any laws because it doesn’t require any behavior changes. The court did note, though, that the case raises interesting questions as to how the ACA, ADA and GINA will work together.
Wellness and Workers’ Comp
The Affordable Care Act requires employers to make wellness a priority in the workplace, and employers have much to gain by doing so. While there’s little research that shows a direct effect of wellness programs on workers’ comp costs, more information is coming out that supports how reducing certain risk factors can shorten claim duration and minimize claim costs. Modifiable risk factors like obesity, COPD and depression can lengthen injury recovery time.
“We see a trend in employers implementing wellness programs because they are interested in the health, welfare and longevity of their workforce,” said Bob Stoner, SVP of operations for BTE Workforce Solutions. “Healthier employees are more productive employees.”
While wellness programs typically fall in the realm of employee health benefits, administrators of workers’ comp programs should take an equal interest and work internally to coordinate their efforts.
“If you’re 50 years old and depressed, your workers’ comp claim is going to cost more than someone who is 50 but has a great support network and positive outlook,” said Karen Curran, director of health risk management at Pinnacol Assurance.
“Employers need to understand this is an evolving area, and there’s a lack of guidance from the EEOC, so we need to wait and see whether EEOC and courts will find wellness programs that are compliant with the ACA regulations to be compliant with ADA and GINA,” Friedman said. “Employers should make sure there is no discipline against an employee for refusing to participate, and I would recommend not shifting full costs of premium to employee. The safest route is to stick to participatory programs.”
Participatory programs would include things like no-cost health seminars and positive rewards for submitting to a health risk assessments, said Terri Rhodes, executive director of the Disability Management Employer Coalition. The ACA also allows for biometric screenings to be considered participatory as long as employees are not penalized based on the results or required to take further action to change the results.
Health-contingent or outcome-based programs, on the other hand, attach significant rewards or penalties to meeting specific goals, such as in a smoking-cessation or weight loss target, or anything measured around biometric standards, such as blood pressure or cholesterol. These types of programs run a higher risk of running afoul of the ADA and GINA.
“Employers need to be very careful about collection and handling of any family medical history,” Stoner said. “Employee information must be provided voluntarily and with clear written consent, and kept separate and confidential from personnel records. Wellness programs that incorporate financial penalties or incentives must be carefully crafted in order to be compliant.”
Culture Is Key
Curran said the best way for employers to avoid running afoul of the ADA and GINA is to retool their workplace safety culture to make unhealthy behaviors more difficult.
For example, one of her clients had an enclosed sunroom on their property where workers were permitted to smoke. The room was equipped with picnic tables, comfy couches, and plenty of windows and natural light.
“They were making it an enjoyable environment and making it easy for people to smoke,” she said. “That makes it hard for people to quit.” She advised that the smoking area be moved from the sunroom to an outdoor area underneath an umbrella, with no tables or chairs. That makes smoking less enjoyable and quitting a little bit easier to commit to. It also doesn’t violate any laws because the company was not taking away any employee’s right to smoke nor asking them to join a cessation program, but simply asking them to smoke in a different area of the campus.
“It’s not so much about the program as it is about engaging your workforce,” Rhodes said. “I think that’s something employers struggle with, especially with a multi-generational workforce.”
Curran also advised sprucing up stairways with colorful paint and adequate lighting and slowing down elevators to encourage taking the stairs. Adding healthy snacks to vending machines and raising the price of candy bars slightly to offset the expense is another way to “make the healthy choice the easy choice.”
“Look at what you can do to create a culture of wellness, and the ADA doesn’t even come into play,” she said.
National Workers’ Comp Event Kicks Off
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®.
As the 2014 conference begins, here’s a look at several highly anticipated breakout sessions.
Managing the Costs of Medical Containment and Cost Control Services
Wednesday, Nov. 19 from 2:30-3:45 p.m.
The workers’ comp system has become ever more complex and with it are additional costs, especially when it comes to the medical component. But while there are some big expenses, there are ways to hold costs down and measure the return-on-investment.
“We all know about medical costs, but many of us don’t peel back the onion,” said Joe Picone, claim consulting practice leader of the risk control and claim advocacy practice at Willis. “[The session] will also allow industry professionals to see how other companies are looking at it and measuring their ROI.”
Picone, who will be joined in the session by David Abbene, a managing director for Marsh, says it boils down to the medical costs, of which managed care is a driving force. Many industry practitioners see managed care as something of a mystery and are not sure where their dollars are exactly going.
Do things such as physician performance or outcomes-based networks work? What about your pharmacy benefit manager? How do you measure it? What should you be measuring? Or nurse case management, Picone said. “Every one is a piece of the onion that people don’t understand.”
While workers’ comp practitioners understand the importance of ROI and measuring effectiveness, they don’t seem to be doing it. A recent study by Healthesystems on managing ancillary medical services to control costs bears that out.
“Eighty-five percent [of respondents] said it’s important to measure ancillary services,” Picone said, “but only 5 percent do.”
Often, workers’ comp payers use a variety of managed care resources and hope for the best. But Picone said using everything from specialty networks, nurse case management, and other tools is like throwing everything against the wall, which is inefficient.
The situation is especially complicated by the plethora of available vendors, all claiming to be superior to the rest. Stakeholders need ways to determine which best fit their needs. Picone will offer a variety of strategies to help.
“Liberty Mutual did a study and peeled back the onion, matching claims and patient characteristics. They tried to find claims that were the same then said, ‘which have nurse case managers and which ones did not? They said there was an 18 percent net savings [in medical costs] with nurse case managers,” Picone said. “Liberty did a great job with that study. That’s what analytics are finally showing us — you actually can compare two claims and see what you are saving.”
Additional strategies involve ways to measure the effectiveness of tools such as pharmacy benefit managers, physician performance, physical therapy, medical bill review, nurse case triage, and Medicare set-aside agreements. Doing so will allow for better decision-making and better outcomes.
“The next generation of managed care is peeling back the onion, determine if it’s working,” Picone said. “Do you switch providers? Why? When? How do I measure it and determine if the next guy is going to be better than last vendor?”
The industry is not properly measuring what matters, Picone said. In the session, the speakers will identify where unwarranted costs can creep into a workers’ comp program, discuss how to apply strategies for eliminating unnecessary expenses, and describe how to evaluate medical management spend for optimal outcomes.
Ethics for HR Specialists, Risk Managers and Claims Adjusters
Thursday, Nov. 20 from 1:30-2:45 p.m.
If a plaintiff’s attorney tells you which defense lawyer, expert, or vendor to hire, what would you do? What if a lawyer starts acting unlike a lawyer? In fact, how do you ensure someone contacting you about a claim is actually an attorney?
These are just a few of the many scenarios that could lead to unethical decisions and severe penalties.
“I’ve seen everything from potentially unethical decisions to criminal [activity] in a 35-year career,” said Eugene F. Keefe, a partner with Keefe, Campbell, Biery & Associates in Chicago. “I’ve probably seen a dozen people get criminal convictions.”
During his session on ethics, Keefe will provide details about two particular claims handlers who made somewhat “comical” mistakes and ended up in prison. While incarceration is not a typical outcome, there are many questionable situations facing those involved in claims management.
“I’ve also seen adjusters make what I would consider to be challenging decisions where they really don’t have the evidence to support what they are doing and do it on a personal basis,” Keefe said. “The anonymous phone call, and somebody shuts down all benefits. You have to find a more ethical basis for the decision to support denial of benefits.”
The good news is that many scenarios that raise ethical questions tend to resolve themselves. “With most ongoing claim decisions, the day-to-day business of adjusting doesn’t involve even close to criminal behavior,” Keefe said. “The system itself brings lawyers on both sides to the table. There are a lot of different resources for claims managers to look to. That’s something that’s good about our industry. There are checks and balances throughout our system that should lead to ethical behavior.”
Nevertheless, suspicious incidents do happen in claims handling. Keefe says he often is asked by clients how to address certain situations.
“I get asked all the time by adjusters and in-house risk people, ‘I saw this happen. What is the best approach?’” he said. “There are some basic standards everybody should follow. If you see something anomalous, ask somebody. If you are satisfied, put that in place.”
Documentation is one of the key strategies to keep everything on the right path. Without that, a claims handler could, for example, bear responsibility for a vendor who acts in bad faith.
“You may be asked to do invasive, questionable or shocking things,” Keefe said. “Always discuss and analyze such requests with management and your defense attorneys.”
It’s also important to be cognizant of privacy and other laws. The provisions of HIPAA and GINA, for example, must be followed.
“Managers and adjusters get sued, fired, or criticized all the time for any small breach of confidentiality,” Keefe noted. “Don’t be the first in your office to blab.”
Claims managers and risk managers who have been in the industry for a while will get the most benefit from the session. Keefe will discuss the risks and solutions to a variety of ethically challenging scenarios and offer best practices.
“If something doesn’t appear accurate or you note there may be any type of problem, solid ethics requires you report it and correct it,” he said. “By being ever-vigilant, you protect your job, yourself, and your employer.”
Top 10 Ways to Reduce Your Legal Expenses NOW
Wednesday, Nov. 19 from 2:30-3:45 p.m.
It may seem odd that an attorney would co-present a session on ways to pay less in legal fees. “I’m probably not the most popular member of the defense bar by telling clients how to pay less,” said Richard Lenkov, a partner with Bryce Downey & Lenkov LLC. “My goal is to be a business partner first. It’s important for me to deliver a product in the most cost-effective way possible.”
Lenkov, along with veteran workers’ comp practitioner Jill Dulich, senior director for Marriott Claims Services, maintains there is way too much unnecessary legal expense in the workers’ comp system.
Anyone who reviews and pays litigation bills may be surprised by the data the two will show detailing the wasted legal expenses.
“Suffice to say there is an incredible amount of excess inherent in the system,” Lenkov said. “It’s not getting better it’s getting worse as different layers get added to the system. So there’s always going to be some excess. It’s our mission to have takeaways to get rid of some of that.”
From an attorney’s standpoint, Lenkov says one strategy is to make sure vendors stick to a budget. He shares a way to avoid paying unnecessary costs to them.
“One way is to not pay them more than they have quoted or you have budgeted,” Lenkov said. “It’s very important for clients that those folks stay within the parameters of reserves and budget, or what is already incredibly expensive is more so. So it is important for my clients for them to stick to budgets.”
The session will also address the issue from a claims viewpoint. “It presents a unique opportunity to hear from Jill, one of the foremost members of the workers’ comp community,” Lenkov said.
The two will offer practical tips to reduce and even eliminate legal expenses sooner rather than later. Examples of some of the strategies to be explained are:
- Manage your vendors.
- Manage your TPA.
- Hire the right attorney.
- Conduct negotiations skillfully.
Lenkov said the session won’t be all work.
“While we are going to deal with important topics, [it will be] in a very interesting and fun way as well,” he said. “We’re going to have some real-world examples, hypotheticals and some trivia too – maybe even a giveaway or two!”
Loss Mitigation of High Value Workers’ Compensation Claims
Friday, Nov. 21 from 10-11:15 a.m.
High-value workers’ comp claims can be a nightmare for companies. But they need not be.
“We were able to take down some significant reserves; very significant reserves in some of these older cases,” explained Christianne Quinn, the national workers’ compensation manager for The Pep Boys. Quinn will outline the steps her company took and, along with co-presenter David R. Kunz, managing partner at Kunz & Germick, will discuss risk analyses to identify and close claims thought to be lost causes.
“Comp has a long tail; cases can be open and sometimes stay open for many years when they really should be closed. So you end up with a long tail that affects the actuarial calculations that go into reserving,” Quinn said. “You also have old claims, or new claims involving preexisting injuries. Many of these claims involve excessive medications where you’re paying thousands a month for medications.”
With medical taking over indemnity as the driving costs in a claim, that needs to be the focus of high-value claims — how to reduce those expenses. They require special attention to get them off the books.
“You can’t apply the same analyses and strategies to high-value claims as you can for run-of-the-mill claims. The size of the high-value claim dictates a greater degree of aggressiveness on your loss mitigation strategies. You must be a lot more active,” Kunz said. “What we see a lot is all cases [being] handled the same, rather than vetting them to identify high-value claims that need more attention.”
The first step is to identify those high-value claims that are appropriate for closing sooner rather than later. “Many times they’re just on a payment schedule,” Quinn said. “On a lifetime claim, often ongoing medication is simply paid out and years go by without any activity by the employer.”
The interactive session will seek audience input to help determine claims that have a good probability of being closed successfully. Quinn said often a fresh set of eyes looking at a high-dollar claim can help determine if it ultimately can be closed. “We’ll present new ideas people can take away and review their claims.”
For more information, visit www.wcconference.com. To post your thoughts on the conference, join the conversation on LinkedIn’s National Workers Compensation and Disability Conference & Expo, a subgroup of the Work Comp Analysis group.
Changing the WC Medical Care Mindset
Controlling overall workers’ compensation medical costs has been an elusive target.
Yet, according to medical experts from Healthesystems, the Tampa, Fla.-based specialty provider of innovative medical cost management solutions for the workers’ compensation industry, payers today have more powerful options for both offering the highest quality medical care and controlling costs, but they must be more thoroughly and strategically executed.
Specifically as it relates to optimizing patient outcomes and controlling pharmacy costs, the key, say those experts, is to look beyond the typical clinical pharmacy history review and to incorporate a more holistic picture of the entire medical treatment plan. This means when performing clinical reviews, taking into account more comprehensive information such as lab results, physician notes and other critical medical history data which often identifies significant treatment plan concerns but frequently aren’t effectively monitored in total.
Healthesystems’ Dr. Robert Goldberg, chief medical officer, and Dr. Silvia Sacalis, vice president of clinical services, recently weighed in on how using a more holistic, comprehensive strategy can make the critical difference in the ongoing medical care cost control battle.
Fragmentation, Complexity Obscure the Patient Picture
According to Dr. Goldberg, fragmentation remains one of the biggest obstacles to controlling overall healthcare costs and ensuring the most successful treatment in workers’ compensation.
Robert Goldberg, MD, discusses obstacles to controlling overall medical costs and ensuring the best treatment in workers’ compensation.
“There are several hurdles, but they all relate to the fact that healthcare in workers’ comp is just not very well coordinated,” he said. “For the most part, there is poor communication between all parties involved, but especially between the payer and the provider. Unfortunately, it’s rare that all the stakeholders have a clear, complete picture of what’s happening with the patient.”
Dr. Goldberg explains that health care generally has become a more complex landscape, and workers’ comp adds another level of complexity. Physicians have less time to spend with patients due to work loads and other economic factors, and frequently there isn’t adequate time to develop a patient specific treatment strategy.
“Often we don’t have physicians properly incentivized to do a complete job with patients” he said, adding that extra paperwork and similar hurdles limit communication among payers, nurse case managers and other players.
In fact, Dr. Sacalis emphasized that it’s not only the payer, but often the healthcare provider who is not getting a complete picture. For example, a treating doctor may not be the primary care physician and therefore they may not have access to the total healthcare picture for the injured worker.
“Most of all, payers need to adopt a more collaborative approach in their relationships with physicians, employers and patients, as well as networks involved. It will result in getting people back to work through appropriate medical care and moving the case along to a prompt closure.”
– Robert Goldberg, MD, FACOEM, Chief Medical Officer, Healthesystems
“It’s often difficult for multiple physicians to communicate and collaborate about what’s happening because they may not be aware of each-others involvement in that patient’s care,” she said. “Data sharing is lacking, even in integrated healthcare systems where doctors are in the same group.”
Done Right, Technology Can Bridge the Treatment Strategy Gap
Dr. Sacalis explained the role technology advancements can play in creating a more holistic picture of not only an injured workers’ post-accident state or pace of recovery, but also their overall health history. However, the workers’ comp industry by and large is not there yet.
“Today’s technology can be very useful in providing transparency, but to date the data is still very fragmented,” she said. “With technology advancements, we can get a more holistic patient view. However, it is important that the data is both meaningful and actionable to promote effective clinical decision support.”
Silvia Sacalis, PharmD, explains the role that technology advancements can play in creating a more holistic picture of an injured worker’s overall health.
Healthesystems, for example, offers an advanced clinical solution that incorporates a comprehensive analysis of all relevant data sources including pharmacy, medical and lab data as part of a drug therapy analysis. So, for example, the process could uncover co-morbidities – such as diabetes – that may be unrelated to a workplace injury but should be considered in the overall treatment strategy.
“Healthcare professionals must ensure there are no interactions with any
co-morbidities that may limit or affect the treatment plan,” Dr. Sacalis said.
In the majority of cases where Healthesystems has performed advanced clinical analysis, information gathered from the various sources has uncovered critical information that significantly impacted the overall treatment recommendations. Technology and analytics enable the implementation of best practices.
She cites another example of how a physician may order a urine drug screen (UDS), yet the results indicating the presence of a non prescribed drug were not reflected in the treatment regimen as evidenced by the lack of modification in therapy.
“Visibility and transparency will help with facilitating a truly effective treatment plan,” she said, “Predictive analytics are necessary tools for proactive monitoring and detection of trends as well as early identification of cases for intervention.”
Speaking of Best Practices …
Dr. Goldberg highlighted that the most important overall best practice needed to secure the optimal outcome is centered around getting the right care to the right patient at the right time. To him, that means identifying patients who need adjustments in care and then determining medical necessity during the entire case trajectory.
“It means using evidence-based medical treatment guidelines that are coordinated,” he said.
“You must look at the whole patient, which means avoiding the typical barriers in the workers’ comp treatment system, issues such as delays in authorizations, lengthy UR processes or similar scenarios that are well intentioned but if not performed effectively they can get in the way of expedited care.”
Dr. Goldberg and Silvia Sacalis provide recommendations for critical steps payers should take to achieve the best outcomes for everyone.
Dr. Goldberg noted that seeking out the most effective doctors available in geographic locations is another critical best practice. That requires collecting data on physician performance, patient satisfaction and medical outcomes, so payers and networks can identify and incentivize them accordingly.
“This way, you are getting an alignment of incentives with all parties,” Dr. Goldberg said, adding that it also means removing outlier physicians, those whose tendencies are to over-treat, dispense drugs from their office or order unnecessary durable medical equipment, for example.
“Visibility and transparency will help with facilitating a truly effective treatment plan. Predictive analytics are necessary tools for proactive monitoring and detection of trends as well as early identification of cases for intervention.”
– Silvia Sacalis, PharmD, Vice President of Clinical Services, Healthesystems
“Most of all, payers need to adopt a more collaborative approach in their relationships with physicians, employers and patients, as well as networks involved,” he said. “It will result in getting people back to work through appropriate medical care and moving the case along to a prompt closure.”
Dr. Sacalis added that from a pharmacy perspective, another best practice is becoming more patient-centric, using a customized and flexible approach to help payers optimize outcomes for each patient.
“Focus on patient safety first, and that will naturally drive cost containment,” she said. “Focusing on cost alone can actually drive results in the wrong direction.”
Dr. Goldberg explains how consolidation in the health care and WC markets can impact the landscape and quality of care.
Dr. Goldberg and Silvia Sacalis discuss if injured workers today are getting better treatment than they were twenty years ago.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Healthesystems. The editorial staff of Risk & Insurance had no role in its preparation.