Integrated Programs Pay Off When Employees Come First
Employers that place equal importance on managing all disability claims — regardless of whether their cause is occupational or non-occupational — experience better return-to-work outcomes, said a senior workers’ compensation manager who evaluated practices at nine companies.
Yet she has often heard employers that fully insure their long term disability claims say they don’t pay equal attention to those claims as they do when disabilities are work-related, said Catherine Duhigg Gannon, senior manager of workers’ comp at Eaton, a company with about 100,000 employees including 37,000 across North America.
Such thinking hurts employee relations and diminishes all return to work efforts.
“Focus on disability and return to work should not cease when the perceived cost to the employer decreases,” Duhigg Gannon said. “By that I mean long-term disability plans that were insured and had no [employer] oversight oftentimes resulted in the employee not returning to work. It was amazing how many people basically said, ‘We are not paying for it, so we stopped caring.’ ”
Duhigg Gannon presented her comments as part of a panel that addressed program integration during the recently concluded Worker’s Compensation Institute’s annual conference. She evaluated the practices at nine companies as part of a strategic assessment conducted every five years to help set the future path for her own company’s workers’ comp and disability management efforts.
Care of employees should be the first priority of integrated programs, said Chris Mandel, senior VP strategic solutions at Sedgwick Claims Management Services.
Integrated programs focus on combining the oversight of claims that are often separately managed by corporate risk management or benefits management domains. The claims can include those generated under the Family Medical Leave Act administration, short-term disability, long-term disability or workers’ comp.
“It was amazing how many people basically said, ‘We are not paying for it, so we stopped caring.’ ” — Catherine Duhigg Gannon, senior manager of workers’ comp, Eaton
“Employee care needs to be the first priority,” Mandel said. “We are after outcomes that benefit the employee most.”
The benefits of integration include aligned communications, a single contact for the intake of claims, better handling of data, and improved coordination of specialty case management that supports all causes of work absences, he said.
Other advantages include unified return-to-work planning, unified case management, and the improved communication of benefits, Mandel continued.
“But again, all of that for the benefit of helping employees navigate what could be rather bureaucratic and complex processes that often don’t touch each other, let alone talk and communicate effectively together,” he added.
Eaton has an “integrated disability platform” with the third party administrator handling workers’ comp, STD and LTD claims among others, Duhigg Gannon said. That helps provide continuity in the way the company views all disability claims.
Internally, however, Eaton’s insurance and risk management department oversees workers’ comp while the benefits department manages STD and LTD claims.
A recommendation has been made to Eaton’s senior management that a single, internal department managing all disabilities would be more effective.
“The best return to work outcomes were demonstrated when programs treated all disability claims the same, occupational versus non occupational and efforts to return an employee to gainful employment was equally invested in all disability claims,” Duhigg Gannon’s assessment found.
The Man on the Jack
Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.
On the Muscle
When his supervisor waved to him, Early Hart took one hand off of the jackhammer trigger, plucked the earbud out of his right ear and picked up his head in acknowledgement.
“Whatcha got?” Early shouted to his boss, the clattering, echoing din of the jackhammer coming momentarily to a halt.
“Break time!” shouted his boss. “Put that hammer down and come get out of the sun!”
“Don’t want to break. Wanna work,” Early shouted back at him, smiling.
Early wiped at his brow with a grimy backhand. Sweat was pouring down his face, the bulging muscles of his arms and his burly torso.
“Break!” the boss said as an answer, still smiling back. Early did as his boss said and set the jackhammer down to rest on the pile of broken asphalt he was creating in the middle of Green Avenue.
Early strode confidently to where his boss and a handful of other workers were already gathered under an enormous sycamore. The gate to his boss’ pickup truck was down and the guys were pulling drinks of iced tea out of an enormous orange thermos.
The son of a local alderman, Roger Hart, Early made a name for himself at a young age, as a Gloucester County New Jersey high school football star. College wasn’t for him though, and he thought himself lucky to have landed a job with KMF Energy Solutions, working on a gas line replacement crew for the utility.
It didn’t hurt that his boss was his father’s cousin, Frank Walter. Frank eyed Early admiringly as he came forward to join his co-workers under the shade of the tree.
“You’re a strong young man, but if you want to stay strong in this heat you better hydrate!”
Early took the cup of iced tea Frank offered. He had no argument with a cold drink of tea in this heat and humidity.
“It’s all good,” he thought as he sipped his tea. Lowering his cup, he spied his SUV, with two surfboards strapped to the top of it. In two and half hours he’d be in the water.
When Early paddled into the surf break, the other nearby surfers gave him plenty of room.
Early had a reputation as one of the best amateur surfers on the East Coast.
Even without knowing his reputation, anyone with sense could deduce that the owner of muscles like those didn’t need to worry about objections over sharing a wave. He could clearly take care of himself or any shoreline disputes that came his way.
The swells that day were big. Some kind of a storm must have been working its way up from the Caribbean.
Early surfed one big wave, then another. He was joyous in the feeling of immeasurable strength that a young man has in taking on the ocean and feeling no fear.
That’s when it happened.
Early knew these waters well, but no one knows everything, and in this case Early’s undoing was a sand bar that had built up where he wasn’t expecting one. A big breaker drove him into it.
The wave flipped Early and he hit the sand bar hard, with his lower body extending over the edge of it and his lower back taking the brunt of the wave’s force.
It was all Early could do to stagger to the beach. He felt crippled.
“Hey! Hey Early!” one of the other surfers yelled.
Early was mobile, but after being examined by a doctor, he was placed on eight weeks of short-term disability with a severely strained lower back.
An Uneasy Feeling
Back at work, Early was under orders from the doctor to take it easy for a while. His injury was expected to fully heal, but for now a dull pain and unfamiliar physical limitations remained for the normally strong and capable man. But Early’s relative Frank Walter knew the way of the world. Frank felt he needed to protect Early and shield his condition.
Frank gave Early lighter duty, but he didn’t formally ask for an accommodation for Early from human resources. Early was given jobs like operating the hose to keep dust down or working traffic control, but his pay rate and job classification remained the same.
Frank walked up to Early one day as Early stood morosely at the edge of the job site, holding a sign that said “stop” on one side and “slow” on the other.
“What’s the matter with you?” Frank asked Early.
“I’m bored,” Early said.
“Be happy you’ve got a job,” Frank said under his breath.
“What do you mean?” Early asked.
“Things are getting tight around here,” Frank said. “I’m hearing some rumors about layoffs.”
One of Early’s co-workers walked by. He was the kind of person who tended not to mind his own business and he liked to start trouble.
“Same pay, lighter duty. Must be nice,” the co-worker said, eyeing Frank and Early malevolently.
“You mind your own business Johnny,” Frank said to him. “Get over there and load the concrete saw onto the truck like I told you to do a half hour ago!”
Johnny ambled off, in no big hurry.
“I’d fire that coyote tomorrow!” Frank said under his breath, for only Early to hear.
But it was Frank who lost his job, the very next day, as part of a KMF management reshuffle.
Early had been back at work only three weeks when he got a new boss, Del Miller. Miller didn’t know Early, but Early’s ginger approach to his work gave Miller a bad first impression, albeit a mistaken one.
“That guy’s just flat-out lazy,” Miller said to himself as he watched Early pick up a single two by twelve at a time instead of two or three like his co-workers did.
“Is there something the matter with you, young man?” Miller asked Early one morning, after they’d been working together for a week.
“No sir, nothing,” Early said, not anxious to be overly candid with a new supervisor he barely knew.
“Mama’s boy,” the troublemaking Johnny said under his breath to Del Miller the next Monday, as Early ducked working the concrete saw and instead picked up a hose and watered the street to keep the dust down.
With KMF’s managers under pressure to cut costs, Early was terminated by the disapproving Del Miller, five weeks after coming back from short-term disability. Del Miller wanted someone who could perform all the requirements of the job.
Roger Hart was not the type to baby his son, but when Early was terminated, Roger consulted with a friend, Avery Fischer, who was known as one of the best labor attorneys in the state of New Jersey.
The Thursday after Early was terminated, he had a meeting with Avery Fischer in Avery’s office in Trenton.
“When you got back to work after your injury, did anyone within KMF discuss with you what you were and weren’t able to do within your job duties?” Avery asked Early.
“No sir, they didn’t,” Early said.
“Did the company offer you any kind of accommodation, say a desk job or a job driving where you wouldn’t be called on to do so much physical labor, or an official adjustment in your current job?” Avery asked Early.
“Not officially. After Frank lost his job, I was back to normal expectations on the same job, working as a laborer on the road crew.”
Roger Hart was at the meeting with Avery and Early, and it was at this point in the conversation that Avery turned to Roger with a meaningful glance.
“It looks to me, Roger, that KMF is in clear violation of the Americans with Disabilities Act Amendments Act here.”
“How so?” Roger said.
“The company initiated no dialogue with Early, made no effort to check in with him, talk to him about his back injury.”
“And?” Roger said, guessing that there was more to it.
“And they made no attempt to determine if a reasonable accommodation would allow him to continue employment. By leaving him on the road crew – in the same job with the same expectations – to get picked off by this new supervisor, they hung an injured man out to dry. That’s a clear violation,” Avery said.
Roger Hart needed to hear no more. KMF had gotten rid of his cousin, who worked for the company for 14 years, and then they’d terminated the apple of his eye, his son Early, who he knew as a hard-working young man, bent on achievement.
“So, what do we do?” Early said, turning to the two older men.
“We sue,” Roger said.
Avery nodded his head in agreement.
KMF’s defense attorneys, displaying the same inadequate knowledge of the ADAAA as the company’s line managers, decided to take the case to court.
They got hammered.
Avery Fischer argued that KMF Energy Solutions failed to comply with the ADAAA in three substantial ways:
- The company failed to maintain a dialogue, in fact didn’t dialogue at all with a worker who had a lingering disability, in Early’s case, an injury-weakened back.
- The company made no attempt to recognize the limitations of their employee and determine whether his current job could be modified to allow him to continue to perform the essential job requirements – or if there was another job within the company he would be qualified for and would be possible within his limitations – a clear violation of the act.
- The company terminated an employee for performance issues without first reviewing all of the facts to ensure whether the situation was truly a performance issue or if the performance issue was due to a medical condition from his recent and known eight-week short-term disability.
The judge agreed and KMF Energy Solutions was hit with a penalty judgment that ran in the low to mid six figures.
The next one to lose his job was Del Miller.
Upcoming Webinar: Compliance crossroads: How are you navigating the intersection of ADA/ADAAA and workers’ comp, disability or leave?
Join Sedgwick, on Wednesday, October 7, 2015 at 1:00pm ET as they delve deeper into ADA/ADAA compliance with our sister publication, Human Resource Executive®. Register here.
Risk & Insurance® partnered with Sedgwick to produce this scenario. Below are Sedgwick’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance®.
1. Appoint your experts: When compliance is on the line, someone in your organization needs to be well-versed in ADA/ADAAA and the interactive process. This may not be your front line managers. Appoint someone to be responsible for triggering the accommodation process and engaging appropriately when employees return from a workplace injury, a non-work injury or illness or another medical need.
2. Document, document, document: Companies need to make sure that standard procedures regarding leave or accommodation under the Family Medical Leave Act or the Americans with Disabilities Act are in place, up to date and triggering interactive process review – as well as clearly communicated to employees and supervisors. A robust information management platform is key to supporting the process and necessary documentation.
3. Alternative options: If you are able, offer a chance for those in need of accommodation to be reassigned to another job, even temporarily. Sometimes time off from work may be the best or only option; although the goal of ADA/ADAAA is to keep people at work and every effort should be made to meet an accommodation request, supervisors need to keep in mind that there may be cases where an accommodation within someone’s current position isn’t possible or advisable due to the nature of their job or the significant hardship it would place on the business.
4. Consistency: Different injured employees with debilitating conditions should be treated with consistency under the Americans with Disabilities Act, regardless of whether their need for accommodation is due to a work-related injury, a non-occupational injury or illness or for another medical need. Don’t treat employees differently based on whether they need temporary vs. permanent accommodation, based on their type of leave or based on personal feelings.
5. Medical review: Make sure you request and document medical reviews of any request for accommodation as part of the overall interactive accommodation process.
Additional Partner Resources
Specialty Drugs Show No Signs of Slowing Down
A decade ago, high-cost specialty drugs were commonly referred to as “injectable drugs” and were used to treat conditions not typically covered in workers’ compensation, such as cancer, rheumatoid arthritis and multiple sclerosis.
“Today, however, new specialty drugs are emerging that will be used to treat other chronic and inflammatory conditions,” said Joe Boures, president and CEO of Healthcare Solutions, an Optum company providing specialized pharmacy benefit management services to the workers’ compensation market.
“Payers in the workers’ comp market are just beginning to feel the cost impact of greater utilization of these drugs, which come with expensive price tags.”
Specialty drugs are often manufactured using biologic rather than chemical methods, and they are no longer just administered by injections. New specialty drugs can also be inhaled or taken orally, likely contributing to the rise in their utilization.
“There isn’t a standard definition of specialty drugs, but they are generally defined as being complex to manufacture, costly, require specialty handling and distribution, and they difficult for patients to take without ongoing clinical support or may require administration by a health care provider,” said Boures.
In 2014, more than a quarter of all new therapies that the FDA approved were through its biologics division. Biologics, and similar therapies, are representative of a future trend in prescription drug spend.
“As the fastest growing costs in health care today, specialty drugs have the potential to change the way prescription benefits are provided in the future,” said Jim Andrews, executive vice president of pharmacy for Healthcare Solutions.
Workers’ Compensation payers may not recognize how specialty drugs are affecting their drug spend.
Specialty drugs like Enbrel®, Humira® and Synvisc® can be processed in conjunction with other medical procedures and, therefore, not recognized by payers as a pharmacy expense.
This leaves payers with little visibility into the costs of these medications within their book of business and a lack of tools to control these costs.
Due to the high costs of specialty medications, special due diligence should be utilized when claimants receive these medications, up to and including utilization review, said Andrews.
“Healthcare Solutions recommends that claimants using specialty drugs are monitored for proper medication handling and that the medication is administered appropriately, as well as monitoring the claimant to determine whether the medication is having its desired results and if there are any side effects,” he said.
“At $1,000 per pill for some of these specialty medications, making sure a claimant can tolerate the side effects becomes vital to making sure the claimant achieves the desired outcomes.”
Hepatitis C drugs have made their way to the workers’ compensation market, largely through coverage of healthcare workers, who have exposure to the disease.
“Traditional drug treatments that began in the 1990’s had a success rate of 6% and costs ranging from $1,800 to over $88,000,” said Andrews.
“The new Hepatitis C specialty medications have a treatment success rate of 94-100%, but cost between $90,000 and $226,000.”
Although the new treatments include higher drug costs, the payer’s overall medical costs may actually decrease if the Hep C patient would have required a liver transplant as part of the course of treatment without the drugs.
While the release of new Hepatitis C medications in 2014 demonstrated the potential impact specialty medications can have on workers’ compensation payers, there are some specialty medications under development that target more common conditions in workers’ compensation.
Pfizer Inc. and Eli Lilly and Company are currently developing tanezumab, a new, non-narcotic medication to treat chronic pain, which is common in workers’ compensation claims.
Tanezumab has demonstrated benefits of reducing pain in clinical trials and may provide non-addictive pain relief to claimants in the future. This may change how pain management is treated in the future.
Healthcare Solutions has a specialty medication program that provides payers discounted rates and management oversight of claimants receiving specialty medications.
Through the paper bill process, Healthcare Solutions aids payers in identifying specialty drugs and works with adjusters and physicians to move claimants into the specialty network.
A central feature of the program is that claimants are assigned to a clinical pharmacist or a registered nurse with specialty pharmacy training for consistent care with one-on-one consultations and ongoing case management.
The program provides patients with education and counseling, guidance on symptoms related to their medical conditions and drug side effects, proactive intervention for medication non-adherence, and prospective refill reminder and follow-up calls.
“The goal is to improve patient outcomes and reduce total costs of care,” said Boures.