Industry Research

High ROI on Publicly Funded Stay at Work Programs

Governments as well as employers stand to benefit significantly by investing in programs that keep employees at work after an illness or injury.
By: | April 7, 2016 • 4 min read
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Publicly funded stay-at-work/return-to-work programs could help employers that may face reduced productivity from injured workers returning before they are at 100 percent of functionality, suggests a new report.

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State and/or federally funded SAW/RTW programs could also save the governments themselves unnecessary expenses for injured workers who are laid off or cannot return to their jobs. While the authors focus on employees not covered by workers’ comp programs, the case can also be made for covered workers who do not receive the help they should.

“Despite the clear benefits to workers and taxpayers, no federal agency is in charge of preventing job loss after injury or illness.”

“Millions of hard-working Americans leave the labor force every year, at least temporarily, because of injury or illness. Without steady earnings, these workers and their families often end up in public programs such as Social Security Disability Insurance, Supplemental Security Income, Medicare, and Medicaid. The resulting costs to state and federal governments are steep,” the report begins.

“But the public sector could help to reduce those costs by adopting strategies to help people stay at or return to work, rather than fall through the cracks of a fragmented system.”

The brief, The Case for Public Investment in Stay-at-Work/Return-to-Work Programs, was developed for the SAW/RTW Policy Collaborative, housed in the Department of Labor’s Office of Disability Employment Policy. The document is part of the collaborative’s efforts to promote positive SAW/RTW programs.

“Despite the clear benefits to workers and taxpayers, no federal agency is in charge of preventing job loss after injury or illness. And state workforce and vocational rehabilitation agencies have not traditionally focused on workers who are at risk of losing their jobs because of injury or illness,” the brief states.

“State-regulated workers’ compensation systems provide cash and medical benefits to workers who experience work-related injury or illness. But they do not help the millions of employees whose medical conditions are not work related, and they often fail to help even those who are covered.”

The Costs

The authors looked at the costs and benefits of an early intervention SAW/RTW program at the state level. They compared the costs to state and federal governments, the injured worker, and employers for a worker returning after an injury in a state with a hypothetical SAW/RTW program to one with no such program.

“Under our baseline assumptions, the state government would save about $83,000 in net benefits for each worker who is retained rather than replaced, following the onset of long-term disability,” the report says. “About $71,000 (or 85 percent) of the net benefits to the state would come from higher tax revenues under the SAW/RTW scenario than under the no-SAW/RTW scenario. The rest would predominantly be a result of avoiding the costs of Medicaid and unemployment compensation.”

Such a program would save the federal government even more — an estimated $292,000 in net benefits until the worker’s retirement. Much of those costs would result from avoiding public assistance expenses with the rest from higher tax revenues. The injured worker under the scenario would gain about $422,000 in net benefits from keeping his job and the associated compensation.

“The state government would save about $83,000 in net benefits for each worker who is retained rather than replaced, following the onset of long-term disability.”

Retaining an injured worker would admittedly be an expense for the employer. While the costs of recruiting, hiring, and training a new employee would be eliminated, the anticipated loss of productivity for an injured worker at less than full capacity equates to an estimated $185,000 — mainly from the assumed 16.3 percent reduction in productivity. However, those costs could be lowered.

“States may need to make larger investments, including subsidizing the wages of those with greatly reduced productivity, to sharply increase the number of workers who stay in the labor force,” the report says. “But states may not be willing to make these investments unless the federal government or workers (possibly via a payroll tax) help pay for them.”

Government Tools

States already have a variety of ways in which to help foster SAW/RTW efforts. “The workers’ comp system can make regulatory, process or service changes to improve the SAW/RTW services for workers with job related conditions,” according to the collaborative. “Some states have reemployment subsidies until the workers return to 100 percent functional capacity.”

State governments can include aggressive SAW/RTW strategies in their Workforce Innovation and Opportunity Act plan. The act, implemented last summer, requires states to strategically align their workforce development programs.

Workforce agencies can help employees and employers identify and access SAW/RTW services, support development of, and state agency cooperation with, employment resource networks that facilitate SAW/RTW support, and leverage capabilities developed under the state’s Disability Employment Initiative.

Several states have tools in their short-term disability programs that allow wage subsidies or partial benefits for RTW. And state personnel agencies can help state workers by improving their access to evidence-based SAW/RTW services and improving incentives for workers and their managers to use SAW/RTW services effectively.

Washington State’s Model

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A unique program in Washington State pays employers to help injured workers stay on the job. Stay at Work “is a financial incentive that encourages employers to bring their injured workers quickly and safely back to light duty or transitional work by reimbursing them for some of their costs,” the Washington State Department of Labor and Industries website states.

Employers may be reimbursed for 50 percent of the base wages paid to injured workers, as well as some of the costs of training, tools, or clothing the worker needs to undertake the transitional or light-duty work.

The program “has increased return to work and reduced workers’ compensation costs,” according to the SAW/RTW Policy Collaborative.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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Workers' Comp Technology

Bringing Workers’ Comp Management Into the 21st Century

A software-based system leverages comprehensive data to give employers the best chance of turning indemnity claims into medical-only claims.
By: | February 26, 2016 • 5 min read
Doctor using his smartphone

A worker at a facility in Kansas is injured on the job. His company was recently acquired by a larger organization that has completely different policies and procedures for handling workplace accidents.

Add to that the fact that he’s in a rural area where few medical providers are available — especially any who understand the nuances of the workers’ comp system and its emphasis on returning injured employees to work.

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Now imagine his supervisor goes onto a computer and immediately has access to all the information he needs in a way that adheres to the procedures of the new parent company. Add to that the ability for whatever physician is involved to look on his smartphone and immediately see the exact tasks the injured worker’s job entails, plus a proposed temporary light-duty solution, ultimately saving time and money for the organization.

Such a solution is being widely used in Canada and is making its way into the U.S.

“What this system does is it gives employers the best chance of turning indemnity claims into medical-only claims through the rapid use of data immediately and with more urgency,” said Richard Pimentel, veteran and well-known disability rights activist and associate with Milt Wright & Associates.

Richard Pimentel, speaker and disability rights activist, Milt Wright & Associates

Richard Pimentel, speaker and disability rights activist, Milt Wright & Associates

“It is a solution that “not only expedites your return-to-work process, it improves it by bringing together HR, safety, claims, the medical community, absence management, and occupational/nonoccupational RTW efforts into a seamless package.”

Pimentel, who has been espousing and consulting on effective disability and RTW solutions for several decades, has become one of its most vocal supporters. He’s hoping companies in the U.S. will soon embrace the system through his partnership with WorkSTEPS.

Based in Austin, Texas, WorkSTEPS provides functional employment testing throughout the U.S. With the goal of matching a worker’s functional capabilities with the needs of the job, its services include post-offer preemployment testing along with post-employment testing, which includes fit-for-duty testing, functional capacity evaluations, and sincerity of effort testing.

Software Solution

XILO, as the system is known in Canada, is called WorkSTEPS Enterprise Solution in the U.S. It was the brainchild of Grenville Lock, CEO and president of Canadian-based EARA Technologies. The former entrepreneur came from a software background and saw a need among his customers.

“Working within an organization here he was bombarded with questions as far as ‘how do we help sharing our data when it comes to health and safety,’” said Monica Kyveris, vice president of sales and customer relations for EARA. “He started to think about what it is that was lacking. A lot of organizations have this information, but nobody had thought about bringing it all together.”

“What this system does is it gives employers the best chance of turning indemnity claims into medical-only claims through the rapid use of data immediately and with more urgency,” — Richard Pimentel, Milt Wright & Associates

He started with a return-to-work system that included job demand analyses. The company’s research and development team looked at other areas of health and safety that required the same information and expanded the program. As Kyveris said, they saw a need.

“There was a lot of software out there that addressed specific areas in health and safety, but nobody really brought it all together,” she said. “Our app does everything. It crosses all silos.”

Described as a “one stop shop health safety information management system,” it allows users to store, search, retrieve, update, integrate, and share information with the click of a mouse from any computer, anytime, anywhere in the world. The company rolled out the finished product in 2005; however, it did not take off immediately.

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“People were like ‘why do we need a health management system,’” Kyveris said. “We had to educate the Canadian market. You get early adopters, and then it takes off.”

With so many company acquisitions occurring in the U.S., organizations are increasingly finding it difficult to integrate their various legacy systems and ensure consistency, especially when there are multiple facilities located in different jurisdictions. Advocates see the system as a game changer here.

“As near as I can tell, there are systems [here] for data but they tend to be compartmentalized,” Pimentel said. “This is the only system I’ve seen where you can have job descriptions, policies and procedures, and reminders. It’s the only system I know of that integrates it all.”

As he explained it, the system allows for a supervisor to quickly identify and locate all jobs that meet the needs of an injured worker. For example, it can pinpoint jobs that require just eight pounds of lifting.

“The sense of it to me is that effective RTW needs to be done with a controlled urgency. So anytime you’re waiting for data, you’re losing money,” Pimentel said. “My theory is I don’t even want to wait for a physician to give someone a limited duty release. I want to hit the physician with a proposal to bring someone back to work, based on the limitations they see.”

Importing Success

Pimentel took his enthusiasm for the system to WorkSTEPS in the hopes the company could incorporate it into its existing framework. For the last three decades, WorkSTEPS has provided evaluations and assessments for new hires to determine whether a worker can safely perform the essential functions of a particular job. Additionally, the company provides an in-depth analysis of the worker’s physical capabilities at the moment the person begins the job.

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“If there are preexisting conditions you haven’t identified, you own it,” said Pete Gallaher, president and managing director of WorkSTEPS. “Once there is an incident you can tell the physician what their condition was when they started and an exact picture of what that person does on the job, so the physician can make decisions based on real information.”

The company addresses privacy concerns by ensuring only specific people at a company can access certain information. “It’s shared access by all stakeholders depending on their level in the [company] hierarchy,” said Cindy Gallaher, WorkSTEPS’ vice president of business development.

“It’s information that’s so critical in goal setting for treatment of these injured workers. So you’re getting them back to work safely and as soon as possible, which we all know is critical in keeping them in the workforce.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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Sponsored Content by IPS

Compounding: Is it Coming of Age?

Prescription drug compounding is beginning to turn a corner in managing chronic pain.
By: | April 28, 2016 • 5 min read
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The WC managed care market has generally viewed the treatment method of Rx compounding through the lens of its negative impact to cost for treating chronic pain without examining fully the opportunity to utilize “best practice” prescription compounds to help combat the opioid epidemic this nation faces. IPS stands on the front lines of this opioid battle every day making a difference for its clients.  

After a shaky start cost-wise, prescription drug compounding is turning the corner in managing chronic pain without the risk of opioid addiction. A push from forward-thinking states and workers’ compensation PBMs who have the networks and resources to manage it is helping, too.

Prescription drug compounding has been around for more than a decade, but after a rocky start (primarily in terms of cost), compounding is finally coming into its own as an effective chronic pain management strategy – and a worthy alternative for costly and dangerous opioids – in workers’ compensation.

According to Greg Todd, CEO and founder of Integrated Prescription Solutions Inc. (IPS), a Costa Mesa, Calif.-based pharmacy benefit manager (PBM) for the workers’ compensation and disability market, one reason compounding is beginning to hit its stride is because some states have enacted laws to manage it more effectively. Another is PBMs like IPS have stepped up and are now managing compound drugs in a much more proactive manner from an oversight perspective.

By definition, compounding is a practice through which a licensed pharmacist or physician (or, in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist) combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.

During that decade, Todd explains, opioids have filled the chronic pain management needs gap, bringing with them an enormous amount of problems as the ensuing addiction epidemic sweeping the nation resulted in the proliferation and over-consumption of opioids – at a staggering cost to both the bottom line and society at large.

As an alternative, compounded topical cream formulations also offer strong chronic pain management but have limited side effects and require much reduced dosage amounts to achieve effective tissue level penetration. In fact, they have a very low systemic absorption rate.

Bottom line, compounding provides prescribers with an excellent alternative treatment modality for chronic pain patients, both early and late stage, Todd says.

Time for Compounding Consideration

IPS_SponsoredContentThat scenario sets up the perfect argument for compounding, because for one thing, doctors are seeking a new solution, with all the pressure and scrutiny they’re receiving when trying to solve people’s chronic pain problems using opioids.

Todd explains the best news about neuropathic pain treatment using compounded topical analgesic creams is the results are outstanding, both in terms of patient satisfaction in VAS pain reduction but also in reduction potentially dangerous side effects of opioids.

The main issue with some of the early topical creams created via compounding was their high costs. In the early years, compounding, which does not require FDA approval, had little oversight or controls in place. But in the past few years, the workers compensation industry began to take notice of the solid science. At the same time, medical providers also were seeing the same science and began writing more prescriptions for compounding – which also offers them a revenue stream.

This is where oversight and rigor on the part of a PBM can make a difference, Todd says.

“You don’t let that compounded drug get dispensed when you’re going to pay for it without having a chance to approve it,” Todd says.

Education is Critical

IPS_SponsoredContentAt the same time, there is the growing, and genuine, need to start educating the doctors, helping them understand how they can really deliver quality pain management to a patient without gouging the system. A good compounding specialty pharmacy network offering tight, strict rules is fundamental, Todd says. And that means one that really reaches out to work with the doctors that are writing the prescriptions. The idea is to ensure that the active ingredients being chosen aren’t the most expensive sub-components because that unnecessarily will drive the cost of overall compound “through the ceiling.”

IPS has been able to mitigate costs in the last couple years just by having good common sense approach and a lot of physician outreach. Working with DermaTran Health Solutions and its national network of compounding pharmacies, IPS has been successfully impacting the cost while not reducing the effectiveness of a compounded prescription.

In Colorado, which has cracked down on compounding profiteering, Legislative change demanded no compound could be more than $350.00 period. What is notable, in an 18-month window for one client in Colorado, IPS had 38 compound prescriptions come through the door and each had between 4 and 7 active ingredients. Through its physician education efforts, IPS brought all 38 prescriptions down 3 active ingredients or less. IPS also helped patients achieve therapeutic success (and with medical community acceptance). In that case, the cost of compound prescriptions was down to an average of $350, versus the industry average of $788. Nationwide IPS has reduced the average cost of a compound prescription to $478.00.

Todd says. “We’ve still got a way to go, but we’ve made amazing progress in just the past couple of years on the cost and effective use of compound prescriptions.”

For more information on how you can better manage your costs for compound prescriptions, please call IPS at 866-846-9279.

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




Integrated Prescription Solutions (IPS) is a Pharmacy Benefit Management (PBM) and Ancillary Services partner to W/C and Auto (PIP) Insurance carriers, Self Insured Employers, and Third Party Administrators who specialize in Workers Compensation benefits management.
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